Tackling the climate emergency requires a socially just transition. The world is not equal under climate change, as both its impacts and the resources needed for mitigation and adaptation are distributed unequally.
Last December’s 27th Conference of the Parties, or COP27 saw a small breakthrough on the central climate justice issue with an agreement to establish a loss and damage fund, paving the way for the ‘Global North’ to support the ‘Global South’ in fighting climate change and mitigating its impacts. The Intergovernmental Panel on Climate Change estimates 3.3 billion people already live in climatically vulnerable areas. The private sector can play a large role in financing a just transition and climate adaptation in communities that need it. For investors, this means ensuring social factors are integrated into capital allocation and stewardship activities or investing in social bonds, among other actions.