Climate Finance Asia, Secretariat of the Facility-level Just Transition Working Group (F-JTWG), released the world’s first Facility-level Just Transition (F-JT) Guidelines for Banks, Assessment Tools, and Scorecard, to help banks assess their alignment with Just Transition principles and engage with clients to achieve a sustainable and equitable transition.
The F-JTWG, comprised of 13 major global and regional banks, non-governmental organisations, and philanthropies, including Growald Climate Fund, Anthropocene Fixed Income Institute, Climate Bond Initiative, International Labour Organization, and OCBC, was formed to develop practical ways to integrate Just Transition best principals into the financing phasing out coal-fired power plants (CFPP) in the transition to renewable energy. The new F-JT Assessment Tools and Scorecard provide concrete mechanisms for banks and borrowers to implement these principles.
The newly released F-JT resources include:
The Facility-level Just Transition Report: This report introduces the F-JTWG’s work, Guidelines and Scorecard, how they were created, and how they are used.
The F-JT Plan Assessment Tool: This tool assists borrowers in developing a best-in-class JT Plan for CFPP phase-out projects and also guides banks in their due diligence of a borrower’s project-specific JT Plan. The assessment tool includes topics relevant to the design and oversight of a JT Plan, organized across the 6 focus areas – Energy, Environment, Labour, Livelihoods, Gender, and Governance.
The Bank JT Self-Assessment Tool: This tool focuses on the bank’s internal alignment with JT principles. It helps banks comprehensively understand their internal readiness to oversee borrowers’ JT Plans effectively.
The F-JT Scorecard (to be available later): This scorecard will provide banks with an overall assessment of their performance in managing the Just Transition (JT) Plan that a borrower implements when they finance the phase-out of a CFPP. This assessment, which is designed to be conducted by an independent party, covers the bank’s alignment with Just Transition principles, its due diligence and monitoring of the borrower’s JT Plan, and the quality of the borrower’s plan itself. Featuring indicators across 6 focus areas, the F-JT Scorecard offers an overall score and a dimensional view of the 6 focus areas of the JT Plan, identifying strengths and weaknesses in JT planning and enabling comparisons against other JT Plans in similar CFPP phase-out projects.
The F-JT resources are now available for use by working group members, banks and other stakeholders. Climate Finance Asia encourages continuing feedback and collaboration as these tools are implemented and refined.