WHEREAS: The Paris Agreement underscores the “close links between climate action, sustainable development, and a just transition.” To support implementing a just transition, the International Labor Organization (ILO) provides guidelines highlighting the anticipated employment impacts, importance of skills development and decent work during the energy transition, and adaptation needed by companies and communities to avoid lost assets, livelihoods, or involuntary migration.1
Investors increasingly acknowledge the importance of providing greater market certainty in the just transition to a low-carbon economy. Climate Action 100+, an initiative comprised of over 700 investors managing $68 trillion, outlines shareholder expectations for corporate Just Transition disclosure in its Net Zero Company Benchmark.2
Much of the ground transportation sector recognizes the need to transition business models from high-emitting internal combustion engines to zero and lower-emissions technologies. All major U.S automakers have goals that up to 40-50 percent of all vehicles sold will be electric by 2030.3
Cummins is a leading vehicle parts manufacturer enabling transportation decarbonization, fuel-agnostic solutions, and vehicle electrification. Decarbonization efforts will likely impact stakeholders through changes in workforce size, skills required, and manufacturing facility location, leading to impacts on local communities. Inadequate stakeholder engagement, consultation, and transparency about the impacts of decarbonization may contribute to misunderstanding or breakdown in employee engagement or trust, as observed in the sector during the 2023 United Auto Workers strike.4
While Cummins’ commitment to environmental justice is commendable, the scale and reach of its programs, or application to employees affected by its decarbonization efforts, is unclear. Its commentary on attracting a workforce of the future lacks a link to the climate strategy. For example, it does not include how it will align workforce capacity with demand or prepare the workforce through training and upskilling programs, as peers have begun to do.5
Just transition considerations are meant to empower, not delay, decarbonization and improve corporate productivity, agility, and social license to operate. Furthermore, the Inflation Reduction Act and Infrastructure Investment and Jobs Act include incentives and support for a just and inclusive transition.