Supporting the development of a Just Transition Taxonomy 

In this project for the World Bank, Ecorys contributed to drafting the narrative report accompanying the Just Transition Taxonomy and provided key inputs for its list of activities. This Taxonomy serves as a tool for financiers, policymakers, and other stakeholders to identify investments and interventions that support communities, workers, and regions affected by the shift from carbon-intensive industries, particularly coal, ensuring a just and inclusive transition. 

Coal to clean energy

Governments globally are considering how to manage the transition from coal to clean energy, and how to reach net-zero targets in a manner which ensures a just transition for all. However, despite increasing awareness of the need for a just transition, the financial sector lacks clear guidance on what constitutes such a transition and which projects align with its principles.

To address this gap, the development of a taxonomy is crucial, making it easier and more efficient for the various stakeholders (lenders and investors in particular) to identify activities that they could fund as part of their commitment to support the Just Transition agenda.  

In this context, the World Bank developed the Just Transition Taxonomy. The taxonomy is aligned with the World Bank’s 3×3 matrix and modelled after green taxonomies developed by the EU, other countries and financial organisations. The Just Transition Taxonomy specifically targets activities related to the transition away from coal, including both coal mine closure and decommissioning of coal-fired power plants. 

Key Findings 

Before identifying relevant activities, it was essential to define Just Transition. However, there is no universally accepted definition: interpretations vary across policy circles, campaigns, and social movements, from local to global contexts. To address this, we conducted a comprehensive review of Just Transition definitions, concepts, and values and introduced six foundational Just Transition principles. These principles provide a guiding framework for selecting activities within the Just Transition Taxonomy, ensuring a balance between environmental, economic, and social objectives while leaving no one behind. 

The taxonomy includes 57 activities across its three key pillars. However, it is designed as a living document, meaning activities will likely evolve over time to reflect global sustainability priorities, technological advancements, and market developments. Regular updates will ensure its continued relevance and effectiveness. 

Ensuring the credibility and impact of any financial taxonomy requires continuous implementation efforts. Key activities for successful implementation include monitoring compliance, validation and certification, capacity building, training, and raising public awareness through stakeholder engagement initiatives.