Ethical investment key to creation of 350 million jobs across the global food chain

Banks, and investors have been told they need to ensure their investments in the farming, forestry and fishing sectors deliver climate and biodiversity goals in ways that are fair and inclusive for workers, communities and consumers.

A new report by the Grantham Research Institute on Climate Change and the Environment and the ESRC Centre for Climate Change Economics and Policy at the London School of Economics and Political Science warns that failure to place people at the heart of the shift to a nature-positive economy risks negative social impacts such as job losses and human rights abuses.

The report authors referred to a 2020 report estimating that a “nature-positive” economy could create 395 million jobs by 2030. But there will be job losses too: a 2015 study suggested 120 million fewer agricultural jobs in 2030 as a result of net-zero.

To manage the significant social implications, the report calls for the governments, business and civil society to support a “just nature transition”.

The report stated: “We define the ‘just nature transition’ as one delivering decent work, social inclusion and the eradication of poverty in the shift to a net zero and climate-resilient economy that simultaneously delivers biodiversity goals in agriculture, forestry, land-use and the oceans.”

It recommends that the finance sector should “purposely channel finance to companies committed to and making progress to support a just nature transition for workers, suppliers, communities and consumers”.

It added that financial institutions should “engage with policymakers to reform agricultural, forestry and nature policies so that they support a just transition and provide the incentives, rules and catalytic public finance that is needed to scale up private investment”.

The authors stated: “Financial institutions such as commercial banks and institutional investors have been increasing their efforts to support a just transition in the energy system. This needs to be extended to the nature dimension through strategic commitment, corporate engagement, capital allocation and policy dialogue to reform the system conditions.” The report contains 15 examples of practical action that banks and investors are already taking. But the authors argue that: “There is a long way to go to get adequate commitment and real action for the just nature transition.”

They added: “Far greater attention will need to be paid to a range of crosscutting social priorities to accelerate the just transition. These include strengthening the enforcement of human rights and labour standards, making land tenure more inclusive, advancing the rights of Indigenous Peoples, empowering women and promoting gender equality, as well as ensuring meaningful social dialogue and stakeholder inclusion.”

Naïm Abou-Jaoudé, CEO of Candriam, whose Institute for Sustainable Development provided financial support for the report, said: “Building an inclusive economy that protects and encourages nature goes hand in hand with tackling climate change, and it is a fundamental part of creating more sustainable and resilient societies. That is why a just transition should be a top focus area for both the public and private sectors when they consider the impact of their decisions, operations, and investments. This important new report sets out five key recommendations for action required from the financial services industry, so we can ensure that more capital is directed towards the protection and enhancement of our environment and society.”

James Ritchie, assistant general secretary of the International Union of Food Workers (IUF), explained: “As the climate crisis intensifies, a just transition is crucial for re-constructing an economy which serves both people and planet. All sectors require a transition and ensuring that workers and their representatives are included in its decision-making, along with affected communities, is critical to achieving the necessary speed and scale of change. The financial sector has a key role to play in ensuring all investment decisions embed deep sustainability considerations . This report will help financial institutions by setting out recommendations based on international standards and emerging practice.”