Climate Finance Asia, Secretariat of the Facility-level Just Transition Working Group (F-JTWG), today announced the release of the world’s first Facility-level Just Transition (F-JT) Guidelines for Banks, Assessment Tools, and Scorecard, to help banks assess their alignment with Just Transition principles and engage with clients to achieve a sustainable and equitable transition. This follows the Working Group’s previous announcements: its formation in 2024 and the release of the draft F-JT report.
The F-JTWG, comprised of 13 major global and regional banks, non-governmental organisations, and philanthropies, including Growald Climate Fund, Anthropocene Fixed Income Institute, Climate Bond Initiative, International Labour Organization, and OCBC, was formed to develop practical ways to integrate Just Transition best principals into the financing phasing out coal-fired power plants (CFPP) in the transition to renewable energy. The new F-JT Assessment Tools and Scorecard provide concrete mechanisms for banks and borrowers to implement these principles.
International experts and practitioners have contributed to the development of these resources, ensuring they are grounded in real-world, on-the-ground examples. The guidelines draw upon leading international standards, best practices, and unique mechanisms developed by the Working Group.
The newly released F-JT resources include:
The Facility-level Just Transition Guidelines for Banks: This report introduces the F-JTWG’s work, Guidelines and Scorecard, how they were created, and how they are used.
The F-JT Plan Assessment Tool: This tool assists borrowers in developing a best-in-class Just Transition (JT) Plan for CFPP phase-out projects and also guides banks in their due diligence of a borrower’s project-specific JT Plan. The assessment tool includes topics relevant to the design and oversight of a JT Plan, organised across the 6 focus areas - Energy, Environment, Labour, Livelihoods, Gender, and Governance.
The Bank JT Self-Assessment Tool: This tool focuses on the bank’s internal alignment with JT principles. It helps banks comprehensively understand their internal readiness to oversee borrowers’ JT Plans effectively.
The F-JT Scorecard (to be available later): This scorecard will provide banks with a structured assessment of their performance in managing the JT Plan that a borrower implements when they finance the phase-out of a CFPP. This assessment, which is designed to be conducted by an independent party, covers the bank’s alignment with Just Transition principles, its due diligence and monitoring of the borrower’s JT Plan, and the quality of the borrower’s plan itself. Featuring indicators across 6 focus areas, the F-JT Scorecard offers an overall score and a dimensional view of the 6 focus areas of the JT Plan, identifying strengths and weaknesses in JT planning and enabling comparisons against other JT Plans in similar CFPP phase-out projects.
Mr Mike Ng, group chief sustainability officer, OCBC, says: “We are proud to have contributed to this industry collaborative effort to develop practical applications of Just Transition principles when financial institutions are considering to finance the phase-out of coal-fired power plants. Such efforts are particularly relevant in the context of Asia, where CFPPs still make up a significant share of the power system in many markets. The Just Transition tools provide a good starting point for us to guide our clients in discussions around the elements of Just Transition that they need to consider and manage in the transition from CFPPs to renewable energy.”
“International Labour Organization (ILO) is delighted to be part of the F-JTWG,” says ILO. ”ILO introduced our initiatives such as Guidelines for a just transition towards environmentally sustainable economies and societies for all, also presented the ongoing project Skills Development and Responsible Business Conduct for Transition which has been implemented for creating enabling environment.”
“A Just Transition enables rapid climate action by ensuring support for the net-zero transition and avoiding instability which may threaten implementation. These guidelines can help banks to embed Just Transition into their operations and unlocked increased climate ambition and contribution to a rapid transition,” says Lily Burge, policy manager, Climate Bonds Initiative.
“These tools represent a critical advancement in banks’ ability to translate Just Transition principles into tangible action,” says Alan To, group CEO of Climate Finance Asia. “The F-JT Report, Assessment tools and Scorecard will empower banks and project developers to not only accelerate the phase-out of coal but also to do so in a way that protects workers, supports communities, and promotes a more equitable and sustainable future for all. We look forward to fostering continued collaboration across the financial industry to drive the adoption and refinement of these tools, ensuring a truly just and effective energy transition.”
The F-JT resources are now available for use by working group members, banks and other stakeholders. Climate Finance Asia encourages continuing feedback and collaboration as these tools are implemented and refined.
About Climate Finance Asia
Climate Finance Asia (CF Asia) is a mission-driven business focused on tackling the climate challenge through sustainable finance tools. Founded in 2008 as Carbon Care Asia, CF Asia is a team of experienced environmental and social development professionals across Asia that deliver high-quality advisory services on sustainable finance in the region.
Learn more at www.climatefinanceasia.com
Enquiry: info@climatefinanceasia.com
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