Just Transitions

Social investments for Just transitions

The investor for impact angle

In December 2019 the European Commission announced the European Green Deal through which Europe marked its ambition to become the first climate-neutral continent by 2050. This is the new growth strategy for the next decade, creating new businesses, new jobs and triggering more investment.

As part of the European Green Deal, in January 2020 the Commission presented its first reflections on building a strong social Europe by designing a Just Transition mechanism. It will provide targeted funding to generate the necessary investment in the most affected regions through fundamental restructuring of the economy, structural changes in business models and new skill requirements. Importantly, the European Pillar of Social Rights plays a key role in ensuring that the transitions of climate neutrality, digitalisation and demographic change are socially fair and just for all.

Investors for impact have two key roles to play in the Just Transition:

  • With their problem-focused, tailored and long-term financing and capacity-building approaches, investors for impact are fundamental in directly supporting projects and enterprises that develop innovative solutions with a social angle to the climate crisis.

    Investors for impact play a direct role to finance the innovative solutions needed to reach the ambitious goal of climate-neutrality by 2050 in a fair way. With a solutions-oriented approach, investors for impact are well-suited to support risky trial projects and enterprises. By putting the final beneficiaries at the centre of the solution, investors for impact ensure that the transition works for everyone, in particular for the most vulnerable people that are more exposed to the negative effects of climate change. They are also capable, through their rigorous non-financial support, to assist enterprises in addressing the changing business processes and skills requirements as a result of the green transition. Moreover, they are in an ideal position to seek the most efficient and effective long-term solutions by carefully measuring and managing each project’s impact, and hence developing the ones most promising for the climate and social challenges at stake.

    • Investors for impact are key in leveraging private capital through European guarantee instruments, and in mobilising additional investments from the public and private sector.

      Specifically, the European Commission will use public money to nudge the market towards decarbonisation by providing a de-risking guarantee for private business activities, as put forward in the European Green Deal Investment Plan. The InvestEU Fund will be the main tool to this end, and in particular through the “Social Investment and Skills” window investors for Impact will have access to a European guarantee instrument to invest in certain policy areas such as education and social innovation. Moreover, within InvestEU a dedicated Just Transition scheme will mobilise up to €45 billion of additional private funding. Finally, through collaboration with other private actors, but also with the public sector and civil society, investors for impact can augment the impact of their investments and mobilise a large number of actors to direct more resources towards the just transition.

      While the specifics for delivering a strong social Europe for just transitions are still under negotiation, EVPA keeps track of the discussions at EU level and stays on the look-out for further developments that might impact its members. Stay tuned!

      Read the interview series about the EU Just Transition

      This series of interviews with representatives from EU institutions focuses on the EU Just Transition towards climate-neutrality and its challenges. It highlights the importance of public-private synergies, the financial and non-financial opportunities for the social economy ecosystem (especially for investors for impact).

      Investing in Climate-Neutrality and Social Inclusion cover

      Contact for more info

      Bianca Polidoro , Senior Policy and EU Partnerships Manager, EVPA

      Cătălina Papari , Policy and EU Partnerships Associate, EVPA

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