The global energy transition is necessary, inevitable, and right. That much is obvious. But too many policymakers and corporate executives talk about net-zero targets as a purely technological problem, a simple matter of swapping coal for solar and gas for wind.
They are wrong. This shift is a colossal social and political upheaval, and if we fail to manage the human cost of the green economy, the entire project will collapse under the weight of political backlash and moral failure.
The “Just Transition” is not an optional add-on to climate policy; it is the core of it. As the International Labour Organisation defines it, this is a conceptual framework that captures the sheer complexity of moving toward a low-carbon economy.
It highlights the urgent need for public policy to maximise the benefits and fundamentally minimise the hardships for workers and their communities during this transformation.
For decades, entire towns and regions—from the coal valleys of Europe to the oil fields of the Americas—have literally been built on fossil fuels. When we shut down those plants and mines, we are not just retiring assets; we are erasing livelihoods.
Offering a worker severance pay or a modest unemployment benefit is a catastrophic failure of imagination and policy. These narrow compensation policies are proven to result in the long-term deprivation of former industrial regions because they fail to reorient the workforce toward a viable future.
This is why we need a mandatory policy. Governments must stop treating reskilling as an afterthought and start embedding it into every green investment decision.
Look at the examples where policy is starting to bite. The European Union (EU) is attempting to mobilise billions through its “Just Transition Fund” (JTF), specifically for carbon-intensive regions to support educational and vocational programmes. This is direct, targeted support aimed at upskilling the existing population for new industries like renewable energy maintenance and efficiency.
In the global south, where the transition affects huge populations, the push for mandates is even stronger. Countries like South Africa are moving to establish formal labour transition plans alongside infrastructure decommissioning to create legal and institutional safeguards for energy workers.
Meanwhile, in regions dependent on coal, policy experts are rightly demanding that governments mandate state-level Just Transition roadmaps and provide early workforce planning to ensure women and marginalised workers are not excluded from the new energy economy.
Crucially, some jurisdictions are now using investment mechanisms to force compliance. Spain, for instance, has successfully used Just Transition Tenders to award grid access to renewable energy projects only if those projects limit environmental damage and prioritise local benefits, including the reskilling and upskilling of workers in former coal-dependent areas. This is how you connect public benefit to private capital.
Corporations must step up, too. It is easy for an oil or gas giant to talk about its commitment to ESG. The real test is its commitment to its own employees. Major energy firms have finally begun to acknowledge this necessity.
Shell, for example, is running specific coaching sessions to help its employees manage their careers during the transition, and thousands of its workers have completed courses on new energy areas like hydrogen production and carbon capture and storage. Utilities like Enel are launching dedicated training courses to support communities and partner companies impacted by the closure of large coal-fired plants.
However, the risk of Just Washing remains profound. When companies talk about the transition without dedicating concrete financial instruments to social protection and worker training, it is little more than expensive corporate virtue-signalling.
The concept is gaining political and financial momentum, with players like CDPQ structuring investment to support companies in heavy-emitting sectors like agriculture and transportation, pushing them toward decarbonisation strategies with explicit social impacts. But without consistent metrics and accountability, these promises can vanish.
The Just Transition is not about charity; it is about securing the political legitimacy of climate action. If we allow thousands of skilled workers and thriving communities to be left behind by the green tide, we invite social instability, political resentment, and ultimately a backlash that could derail global climate goals. This is a debt the financial community and governments owe to the people who literally fuelled the industrial era. We must pay for it with comprehensive, mandatory, and immediate action.