Supporting Statement: At the 2021 UN Climate Change Conference, the United States and other governments agreed to the Just Transition Declaration. (https://ukcop26.org/supporting-the-conditions-for-a-just-transition-internationally/.)
That Declaration notes the 2015 Paris Agreement underscored the “close links between climate action, sustainable development, and a just transition,” including “the imperatives of a just transition of the workforce and the creation of decent work and quality jobs.” The Declaration cites the ILO’s 2015 Guidelines For a Just Transition as “establish[ing] a global understanding” of a “just transition” as a process towards "an environmentally sustainable economy,” which “needs to be well managed and contribute to the goals of decent work for all, social inclusion and the eradication of poverty.” (https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/_documents/publication/wcms_432859.pdf.)
Guiding Principle E specifies a just transition involves “anticipating impacts on employment, adequate and sustainable social protection for job losses and displacement, skills development and social dialogue, including the effective exercise of the right to organize and bargain collectively.” (https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/_documents/publication/wcms_432859.pdf.) Critically, the success of this Declaration and the Paris Agreement depend not just on government policies, but also, as the ILO states, on the “pivotal role of employers,” particularly in carbon intensive sectors.
Investors increasingly acknowledge the value of a just transition for mitigating material financial risk and providing greater market certainty in the transition to a low-carbon economy. 161 investors representing $10 trillion in assets signed the UN PRI’s “Statement of Investor Commitment to Support a Just Transition on Climate Change,” contending “the responsible management of workforce and community dimensions of climate change are increasingly material drivers for value creation.” (https://www.unpri.org/download?ac=10382.)
Following receipt of this proposal ahead of last year’s shareholder meeting, Marathon published Creating Shared Value Through a Just and Responsible Transition. (https://www.marathonpetroleum.com/content/documents/Responsibility/JustTransitionReport.pdf.) Unfortunately, this report offers no meaningful metrics for investors to measure the success of Marathon’s strategy or map against the Company’s climate scenario analysis and goals.
Rather, we recommend the report include:
–A set of measurable, time-bound indicators, such as those recommended by the World Benchmarking Alliance Just Transition methodology and progress against such indicators (e.g., https://www.worldbenchmarkingalliance.org/research/assessing-a-just-transition-measuring-the-decarbonisation-and-energy-transformation-that-leaves-no-one-behind/);
–Progress to date for achieving those goals for a Just Transition;
–Consistency of the Company’s Just Transition plan with best practices; and,
–Disclosure of the Company’s stakeholder engagement process and participants.