Just transition” is an innovative idea that is gaining popularity and fame amongst sustainability circles. It is gradually becoming an essential part of corporate companies especially those companies whose operations will be net-zero by the end of this year. This idea can prove to be really essential and effective for supply chain sustainability.
But the main question here is that “just transition” is only a random word that will affect supply chain operations in its minimal capacity or is it something more beneficial and effective?
There are numerous hypotheses and assumptions about the phenomenon of just transition. The European Bank for Reconstruction and Development explains it in this manner, “Just transition basically tries to assure the long-term sustainability outcomes and beneficial aspects of a green economy transition that is shared globally. It also provides rigid support to those companies and units who are losing their economic positions- whether they are smaller or larger countries, industries, companies, production units or facilities, global or regional communities, local workers, big-ship owners or end consumers.”
Is the concept of just transition worth it or not?
Since just transition is a new build concept and its roots are evolving gradually. It is important to know whether this whole concept of just transition is actually worth it or not and will the companies be enduring this concept in future or not. Chairman and Co-Founder of the sustainability journal GreenBiz, Mr Joel Makower shed some light via his words on the evolutionary pathway and building concept of just transition. According to his perspective, the entire pathway of just transition originates when any new or innovative term turns into table stakes inside big production companies. In the end, the concept is either used on a larger scale, it can be overly used or it can also be used to an extent that can be strategically abusive to the company’s finances and economic management. Just transition is implemented without any discrimination where no one’s creditability is questioned. Many professional companies and supply chains are stepping into it and utilizing the phenomenon of a just transition to enshrine their maximum practice.
Just Transition Declaration was officially signed by the governments on October 17th 2020 at a conference which was held in Glasgow, Scotland. At the conference, Mr Makower explained that just transition is in its momentum-gaining stage and will gain popularity very shortly. He also added that they are settling up for its shortcomings as well but for now they are quite optimistic with their approach.
Point to ponder
If Mr Makower’s claim turns out to be true and just transition proves to be a success, then how can we imply it on supply chain sustainability?
Just transition allows the supply chain space wisely:
There are visible and clear signs that just transition is gaining its entrance into the supply chain sustainability space. United Nations designed a “Just Transition Maritime Taskforce” to accelerate the decarbonization of production units and to provide support to hundreds and thousands of seafarers through shipping’s green transition. This move was made at the COP26 event in Glasgow, Scotland which can be a breakthrough in the development of just transition momentary phase.
Ways through which just transition can be impactful:
There are numerous ways through which just transition can have an essential impact on different areas of supply chain sustainability.
Green freight transportation and services:
The first example is the transition and development of green freight transportation services and their specific way of adapting vehicles that are driven by fuel and those practices which can possibly have negative results on human labour. It has been claimed in the recent past that many authorities in California deliberately ask the trucking companies and their owners to transform fuel-driven automobile engines and an extra amount of money is charged to them due to which many employees were thrown out of the business. Just transition is more effective and impactful for fuel-efficient vehicles. It also brings down the cost of diesel engines for small-scale employees and workers.
Second example is Carbon Offsets for Freight Transport Decarbonization in the freight transportation unit which was initially proposed by Suzanne Greene and Christian Facanha. Their idea was the initiation of low-emission means of transportation. The proposal was based on the idea that rather than investing in their own green fleet, they should buy carbon offsets and invest in the fleet of other companies of Western countries where environmental gains are maximum. This will help and support greener freight transportation on a larger scale.
The above examples are highly suggestive of the fact that how the phenomenon of just transition can positively impinge on the sustainability of supply chain management. Almost more than 30 countries are working over this because the rise in just transition came right at the time when supply chain sustainability is already being scrutinized in an increased capacity. As per the report of State of Sustainability for the year 2021, many company owners and stakeholders are emphasizing the relevant companies to enhance their supply chain sustainability performance. If just transition aims towards essentially improving the net-zero valuation of the corporate sector, practitioners will have to be more attentive on working and improving their supply chain sustainability goals.