Report launch

What progress has the FMCG sector made with the just transition?

23 May 2023

Business-as-usual is no longer acceptable with the acceleration of the impacts of climate change and biodiversity loss. Business is now anything but usual, much less predictable. The world is changing at an unprecedented rate. To face the current crisis, companies need to quickly transition to more sustainable practices, which protect and incorporate human rights and our planet.

The FMCG sector, and especially the agricultural and food production industry, contributes to climate change, biodiversity loss and ecological degradation. These crises are causing human rights issues for the FMCG sector’s workers and communities. Hotter temperatures have reduced crop yields and animal productivity, leading to less available food and quality nutrition for workers. Ocean fisheries, food safety, transportation and storage are all negatively affected by these crises and impact people’s livelihoods and quality of life.

Many actors across sectors now recognise the links between these issues and advocate for a transition rooted in fairness. This concept is called the just transition. Share on X

Given the gravity of these threats, companies can no longer afford to continue with the status quo. Historically, companies have focused on human rights risks, environmental risks and climate risks as separate issues. Yet these issues are interconnected and therefore the solutions need to be created holistically. New legislation reflects the interconnected nature of these risks and aims to drive environmental transformations that respect people and their human rights.

Many actors across sectors now recognise the links between these issues and advocate for a transition rooted in fairness. This concept is called the just transition.

What is the just transition and what it means for the FMCG sector

The just transition is a whole-of-society transformation to environmentally and socially sustainable economies and societies. This transformation involves several interlocking transitions, including:

  • decarbonisation
  • sustainable development
  • the eradication of poverty
  • the creation of decent work and quality jobs.

People need to be front and centre of these transitions for them to be just. There are many defined transition pathways that companies can take to make their operations more sustainable.

Key reflections and recommendations to advance the just transition

Human Level researched how the FMCG sector is applying just transition, with input from 10 AIM-Progress member companies and external experts.

To support companies to advance just transition, the FMCG sector needs to:

  • Build knowledge of the drivers for a rights-respecting transition in the FMCG sector and helping to build the business case internally for making the interconnections between the climate, the environment and human rights
  • Refine the common understanding of what just transition means for the sector, building on existing reference points for just transition, and fleshing out the draft ‘Just Transition Risks and Impacts Identification Framework’ for the sector
  • Identify what just transition steps can look like in practice, in certain areas of the FMCG value chain and in certain locations and supporting companies to implement these steps
  • Engage with affected stakeholders and their proxies, governments, peers, investors and experts who all play a role to make progress.

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We welcome all practical recommendations that organisations and experts can share to support the practical implementation of the just transition.

Please contact AIM-Progress.