SSE worked with institutional investors to develop plan for managing social implications of its net-zero strategy.
Active engagement from institutional investors was instrumental in the development of UK energy group SSE’s recently published strategy for a ‘just transition’ to net-zero emissions, according to chief sustainability officer Rachel McEwen.
Speaking at the launch of a campaign to address the social impacts of the transition to a net-zero economy, McEwen said support from institutional investors and stakeholders, including Royal London Asset Management and Friends Provident Foundation, had been a key factor in the plan’s development.
“The catalyst [for the strategy] could be described as textbook investor engagement,” said McEwen, explaining that investors had given prior notice of their request for the publication of a just transition strategy, made at SSE’s annual general meeting in August.
“Since the summer we’ve continued to engage as we developed our thinking. And we’re very grateful to [our investors] for both the encouragement and their support for the statement published,” she said.
Published on November 18, the plan maps out how the firm will support workers, suppliers and communities as it transitions out of carbon-based energy supply, as part of its shift to providing power to customers from 100% renewable energy sources. SSE currently generates electricity from both renewable sources and gas at ratio of approximately 50:50, having phased out coal-based sources earlier this year.
SSE is the first UK energy provider to publish a strategy outlining how it intends to handle the social aspects of decommissioning its carbon-based energy generating infrastructure. The firm has also published Paris-aligned targets, approved by the Science Based Targets initiative. for its route to being operationally net zero by 2050.
“We all know from history that transformations can bring about – if we’re not super-smart – social injustice,” said McEwen.
Guiding principles for just transition
The strategy includes 20 guiding principles across five core themes: good green jobs; consumer fairness; building and operating new assets; looking after people in high-carbon jobs; and supporting communities.
In terms of employment, commitments outlined in the report include a tripling of the SSE’s graduate intake including diversity targets, and the creation of a STEM education programme in Scotland, in partnership with schools located near its main sites. It also includes plans to offer new jobs to those impacted by decommissioning programmes citing initiatives already in train in Warrington, location of a coal-fired power station closed in March.
McEwen was speaking at the launch of the Financing a Just Transition Alliance, an initiative aimed at encouraging practical steps to ensuring a socially just transition to a low-carbon economy in the run up to COP26, held during London Climate Action Week. The alliance includes banks, investors, academics and other stakeholders and is coordinated by the London School of Economics’ Grantham Research Institute on Climate Change and the Environment.