Mainstream businesses are already making net-zero and nature-based commitments and taking action on the physical dimensions of climate breakdown. Increasingly, employees, NGO partners and other stakeholders are inquiring about the social dimensions of our changing world — and the impact of corporate climate action on people and rights.

The question being asked of Fortune 500 sustainability chiefs: How is your business advancing climate justice?

Climate justice puts people and rights at the heart of climate action and advocacy. It is a human-centered approach to safeguarding the rights of workers while fairly sharing the burdens (and benefits) of climate mitigation and adaptation. Recent UN recognition of the human right to a clean, healthy and sustainable environment provides real impetus for advancing climate justice globally.

People, companies and nations all over the world are affected by climate change, but they are not affected equally: The most vulnerable withstand the most catastrophic impacts. More than three billion people are highly vulnerable to climate-related hazards, estimates the IPCC Sixth Assessment Report. Absent a just and inclusive decarbonization of the global economy, the most severe harm will fall disproportionately on certain communities, groups and livelihoods.

“A growing number of companies recognize that the risks of inaction on climate change go beyond immediate economic and physical costs,” Zahid Torres-Rahman, Jane Nelson and Tara Shine wrote last October in Stanford Social Innovation Review. “Increasingly, these include risks related to jobs, human rights, supply chain resilience and even business models, security and competitiveness.”

While the risks of inaction rise by the day, applying a climate justice lens to climate action offers real opportunity for businesses. An October 2022 paper by the Business Fights Poverty network and its partners, titled Business and Climate Justice, uplifts three key benefits:

• A more holistic, whole-of-company approach that mitigates unintended negative social impacts of climate action;


• A framework for consultation and dialogue with valued stakeholders, helping to build trust and reinforce the company’s social license to operate; and


• Commercial innovation and investment that drives sustainability, social impact and business competitiveness.

Companies like Unilever, Patagonia and Seventh Generation are leading the charge on climate justice, but what barriers delay a sector-wide embrace?

To begin, companies tend to operationalize climate and social goals in siloed ways. Human rights and social impacts, for example, are typically managed by separate functions and rarely raised to a strategic level. Second, “justice” is a complex term, particularly from a corporate perspective; getting beyond issues of definition and meaning can prove challenging. (Executives may ask: “Why is “x” a corporate responsibility?”) Third, a lack of resources, accountability and diverse voices can slow progress toward climate justice. Other barriers remain.

Encouragingly, a host of tools are available for catalyzing just climate action — and this at a time when intensifying climate change imperils several internationally guaranteed human rights. For business leaders, the foundation of climate justice efforts is respect for human rights in alignment with the UN Guiding Principles on Business and Human Rights. Through environmental and human rights due diligence, companies can map and embed respect for rights in their operations and across their value chains.

The UN Guiding Principles define stakeholder engagement as “an ongoing process of interaction and dialogue between an enterprise and its potentially affected stakeholders that enables the enterprise to hear, understand and respond to their interests and concerns.” It’s a mission-critical practice for understanding a company’s social impacts (direct and indirect), which informs how to scale benefits and mitigate negative impacts (e.g., reputation management and social license to operate). Incorporating input from stakeholder engagement into strategic business planning builds trust and supports more robust decision-making in the short and long term.

A central requirement of the 2015 Paris Agreement, a just transition is defined by the International Labor Organization as “greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind.” Social dialogue between employers and workers and their unions is the basis of a just transition, which also functions as:

• A principles-based approach to a company’s current and future activities in climate mitigation and adaptation;


• A process that prioritizes the needs and voices of those most affected by the transition to a low-carbon economy; and


• An outcome that ensures social and economic opportunities for impacted workers and communities.

The UN Global Compact’s Introduction to Just Transition: A Business Brief affirms that a just transition is “relevant for every economic sector (not only energy), every region and every country — and for the links between them.” Implementation of just transition planning better positions companies to mitigate operational and material risks, increase access to financing and equity capital and build a more resilient value chain.

A few purpose-driven organizations have developed holistic approaches for advancing climate justice. The Business Fights Poverty network and its partners published the 3x7 Business and Climate Justice Action Framework in October 2022, alongside a useful benchmarking diagnostic. B Lab’s Climate Justice Playbook for Business is designed for companies committed to “centering climate action in climate justice.” The Just Transition Resource Platform, co-created by We Mean Business Coalition, BSR and The B Team, provides businesses with practical tools for navigating the shift to a net-zero economy.

More companies are stepping up to catalyze leadership on climate justice. Brazilian cosmetics group Natura &Co partners closely with over 30 local communities in the Amazon to source ingredients for its beauty products. Its 10-year sustainability vision upholds intolerance on human rights infringements across the supply chain, among other commitments. American software company Salesforce has published climate justice policy priorities, a valuable step toward strategic action and advocacy. Iberdrola, the world’s third largest electricity company by market cap, seeks to implement a just transition in the most inclusive way possible, creating decent work opportunities and maximizing the social and economic opportunities that emerge through its climate-related actions.

These trailblazers are embedding “justice” into the DNA of their business operations, inspiring other corporate leaders to jumpstart their climate justice journey.

Commit to climate justice. It’s okay if a company is at the beginning of its journey, so long as there is a commitment from the board and executive team to embark on it. For these leaders, the questions below (under “Principles of Climate Justice”) are a useful guide for assessing progress to date.

Lead by example. Raise company ambition and integrate climate justice into climate action plans. Respect for rights and people-centered climate action are prerequisites to 21st-century business success.

Prioritize diversity at the top and as an integral part of decision-making. Leaders with diverse lived experiences inform new approaches, drive innovation and are essential to building an inclusive economy.

Advocate for systemic change. Bold business leaders are using their voice to mobilize peers and call for the strengthening of institutional and regulatory frameworks that promote inclusion of the most vulnerable. Advancing climate justice also means advocating for more and better finance and investment in climate mitigation and adaptation strategies.