Building the Foundations of Just Transition Finance

As part of this, we spoke with both Laudes grantees and the Lab's network about just transition in relation to current finance initiatives to understand the sentiments and needs of each stakeholder group, including (i) the potential role of learning communities in helping bring greater coherence in understanding and strategies both between the horizontal and vertical stakeholder groups, (ii) their perceptions of the current landscape and what it needs in terms of learning and community building, and (iii) the role the Lab could or should play in building the field through a Centre of Excellence.

In the early stages, the research identified two layers of collaboration. At one level, we saw a need for a Community of Practice (CoP) - a group of mature practitioners who have deeper practice-informed insights and want specific insights and results as well as to generate practical solutions together. 

On the level above this, a Community of Interest (CoI) began to emerge - a more strategic layer that helps connect people working at different levels of maturity within Just Transition Finance. This space is particularly suited to newer practitioners who are less informed and looking to build networks and deepen their understanding of the field. It serves as a funnel into the movement, helping actors see who’s doing what, what’s being learned, and where duplication or opportunities lie across regions. For those deeper in the work, it’s about sharing lessons and case studies; for others just entering the space, it’s about orienting themselves and learning how to engage effectively.

Early insights from this phase pointed to a clear set of needs: building early awareness and strengthening connections across a fragmented landscape; supporting each other’s asks in a more coordinated, less reactionary way; connecting siloes across different strands of financing; and creating an ongoing convening structure to help people navigate and map this complex field. There was also a strong appetite to connect regional hubs to share learnings and build coherence across geographies.

The research also surfaced key regional differences between the Global North and South. In “developed” economies, the will to act was there, but cultural and mindset barriers among decision-makers limited progress - for example, how boards think about risk or how investors perceive informal work. It became a question of how to scale what’s already possible.

This translated into practical needs - for example, finding ways to tailor financial instruments to address sector- or region-specific challenges, educating and upskilling investors (such as improving understanding of the creditworthiness of informal workers), and leveraging the expertise of smaller local investors to better harness the power of larger global investors.

In “developing” economies, the enabling conditions just weren’t there: little policy alignment, few tools, and low appetite to take on additional ESG layers when business as usual was already difficult. The external environment simply doesn’t support this work in the same way.

Here, the needs were more foundational: to engage and educate Global South investors in regions where ESG awareness is only beginning to grow, to create networks that provide mutual and practical support for project building, and to move beyond dialogue toward developing practical methods and tools to apply just transition principles in real contexts.

A third cross-cutting theme also emerged: to make Just Transition meaningful, we need effective engagement with affected communities. That means building capacity for labour groups, CSOs, and local actors to participate in financial processes in a way that’s not extractive.

In practice, this points to several priorities: creating infrastructure that enables mainstream investors to engage with communities on equal and meaningful terms, supporting collaboration and understanding between the public and private sectors, and building the capacity of informal or underground labour unions to engage more effectively with financial institutions.

From this foundation, several threads evolved, including the Bonds and Social Workstreams, and later, the Macroeconomics Workstream, which looks at the external enabling conditions for Just Transition Finance.