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Bridging Equity & Accountability: Advancing Just Transition

Bridging Equity & Accountability: Advancing Just Transition

September 22nd, 2025

As of 2025, extreme heat and climate-related disruptions are already exacerbating inequalities, with projections indicating that apparel export earnings from countries such as Bangladesh, Cambodia, Pakistan, and Vietnam could plummet by $65 billion by 2030 due to heat and flooding (1). This underscores the need for a holistic approach that balances environmental imperatives with social equity. The transition to a carbon-neutral economy is no longer a choice, it is an urgent necessity for the future of our planet. However, this crucial shift cannot come at the expense of workers, who are the backbone of industries worldwide.

This is why the concept of a Just Transition is so critical. It goes beyond environmental goals, to ensure that as we decarbonise, we protect people. Workers and communities must be part of this journey, with guaranteed fair opportunities, job security, robust labour protections, access to grievance mechanisms and remedy, and meaningful participation in shaping the changes affecting their lives.

Recognising this critical challenge, the ReThink HK 2025 conference, held on 11 September 2025, featured a vital discussion on Just Transition. Moderated by Clemence Aron, our Director, Membership & Advisory, the session brought together expert speakers, Archana Kotecha, Founder & CEO, The Remedy Project, Michelle Mak, Head of ESG, Dun & Bradstreet (HK) Limited, Sarah Obser, Senior Sustainability & Regulatory Supply Chain Manager, Lidl & Kaufland Asia Pte. Limited, and Alan To, Chief Executive Officer, Climate Finance Asia, to explore how to advance equitable and accountable pathways for decarbonisation that protect workers and communities.

1. Workers Already Bearing Climate Impacts

The effects of climate change are tangible today, especially for workers in sectors vulnerable to environmental changes. Globally, excessive heat affects over 2.4 billion workers worldwide, with heat-related risks projected to intensify in supply chains (2). For instance, in Bangladesh alone, over 70 million workers are exposed to excessive heat annually, leading to health issues such as dehydration, heat exhaustion, and reduced productivity (3). In Vietnam and India, similar issues arise in apparel and manufacturing, where high heat stress days are increasing, impacting worker health and supply chain stability (4).

As companies invest in climate goals, the cost of the transition is often shifted down supply chains, raising urgent questions about who ultimately bears these costs and assumes responsibility.

2. Shared Responsibility Across Sectors

Ensuring a fair transition is a collective responsibility shared among corporates, policymakers, banks, and suppliers. Corporates are embedding sustainability and human rights clauses throughout their supply chains, while policymakers must create enabling frameworks for social protection and labour rights. According to the UN Global Compact’s Business Brief, corporates should integrate Just Transition into risk management, addressing environmental and social impacts through policies and multilateral frameworks (5).

In April 2025, the Facility-level Just Transition (F-JT) Guidelines for Banks, Assessment Tools, and Scorecard, were released by Climate Finance Asia and the Secretariat of the Facility-level Just Transition Working Group, to help banks assess their alignment with Just Transition principles and engage with clients to achieve a sustainable and equitable transition.

By leveraging tools like the F-JT Guidelines, stakeholders can align investments and policies to ensure a Just Transition that balances environmental sustainability with social equity and economic resilience.

3. Supporting and Incentivising Suppliers

Suppliers, especially SMEs, need support and incentives to build climate-resilient operations that protect workers. Fair purchasing practices are essential to rebalance the power dynamics between buyers and suppliers. When suppliers are asked to install energy-efficiency systems, adopt renewable energy, or obtain environmental certifications, brands and retailers must share the costs and provide practical support, whether through longer-term contracts, financing options, or technical assistance. This approach fosters shared responsibility, ensuring that the burden of meeting climate goals does not fall disproportionately on suppliers operating with thin margins.

Institutions like IFC are stepping up to bridge the SME finance gap by partnering with Li & Fung to provide loans for improving environmental and social practices and performance among suppliers in the apparel sector in Asia (6). By integrating Just Transition principles into supply chain practices, companies can empower suppliers to build resilient, equitable operations that safeguard workers and drive sustainable progress.

4. Mitigating Risks Upstream

Equally important are investments in worker protection. Climate change and the transition to a low-carbon economy often hit the most vulnerable workers hardest, particularly those in the lower tiers of supply chains, where oversight is weakest and employment is often informal. These workers are frequently invisible to brands, yet they face the greatest risks from extreme weather events, shifting production patterns, and new regulatory demands. They must have their voices heard through mechanisms such as worker-led monitoring, collective bargaining, and meaningful consultation in climate adaptation planning.

To make this possible, companies need robust supply-chain traceability and transparency tools. There is a need to map complex supplier networks far beyond first-tier factories. With this visibility, companies can identify and address climate-related and social risks upstream, safeguard workers’ rights, and strengthen the overall resilience of their supply chains.

5. Meaningful Worker Participation

A fundamental pillar of a Just Transition is meaningful participation of workers and their representatives. Social dialogue, collective bargaining, and accessible grievance mechanisms empower workers to shape the changes affecting their lives. This inclusion fosters trust, improves implementation, and ensures that transitions deliver real benefits rather than unintended harms.

The Dindigul Agreement in India’s Tamil Nadu garment sector exemplifies this approach: Led by a worker union, it involves a worker-led programme for training and monitoring gender-based violence and harassment, alongside independent grievance mechanisms and brand-enforced accountability, covering female workers in factories. This union-driven initiative, signed by international brands, demonstrates how collective action can drive equitable labour protections in supply chains (7).

This model provides valuable inspiration for ensuring worker participation in a Just Transition. As companies and governments move to decarbonise supply chains, they can adopt similar principles:

Union-driven engagement so that workers help design adaptation plans and climate policies.
Independent, trusted grievance channels to surface risks early and ensure accountability.
Brand-backed commitments that give suppliers the resources and incentives to uphold agreed standards.

6. Collaboration for an Inclusive Future

No single actor can deliver a Just Transition alone. Collaboration across corporates, banks, governments, suppliers, and workers is essential to build low-carbon economies that protect livelihoods and communities. Governments play a critical role in setting policies that level the playing field, such as enacting legislation that mandates companies to conduct due diligence on social and environmental impacts within their operations and supply chains.

By putting people at the centre, the transition to a low-carbon economy can deliver not only environmental sustainability but also social justice, creating a future that leaves no one behind.

Corporates can start by auditing their supply chains for Just Transition principles. Begin today with the resources below: