As I reflect​​​​​​ on what our partners have accomplished in 2023, I am struck by events at the year’s end.

The final text from the COP28 negotiation included, for the first time, a reference to transitioning away from fossil fuels in a way that is fair to all.

This is unprecedented.

Specifically, it recognises that the transition needs to be a fair one. And as Mary Robinson said, “a truly just transition will not be just a transition — it should tackle the inequalities and injustices caused by and exacerbated by the climate crisis and lead us to a better future.”

But what does it mean for an industry — like the ones we work with — to transition in a way, as the International Labour Organization (ILO) says, that ‘leaves no one behind?’. With three years of grantmaking under our belts, we have been gathering evidence from across all of our partners of the near-term changes we are seeing. And alongside scientific data, it became clear to us that we – collectively – are not moving fast enough. We know we need to cut emissions by 45% by 2030 to be in line with 1.5 degrees. Yet we continue to see deep, systemic barriers to accelerating industry action that can enable that. Mindsets are not shifting fast enough. Rules are not yet creating the incentives for change. And power imbalances persist.

And let’s not forget that 2023 was the hottest year on record.

Accordingly, we made a decision. We would focus our funding on those brave and bold partners working to accelerate just transitions in each of the industries we target. And in doing so, we would continue to pull those systemic levers which we think can bring about the deepest change. This means supporting partners who can spark innovation, or advocate for policy change, spur collective action, or shape a powerful narrative. You can read some of their inspiring stories in this year’s report.

However, this wasn’t exactly a strategy pivot. When we began in early 2020, we always had the aspiration to work where industry meets climate, inequality and nature. Since then, we have been privileged to support 623 partners with EUR 274.5 million in grant commitments to accelerate change across four industries: fashion, built, finance and food.

And in doing so, we continue to learn and iterate with our partners. As I reflect on this past year, six things are becoming increasingly clear to me, particularly when applying a just transition lens to our work.

Business as usual isn’t good enough. Although we all recognise this, often it is extremely difficult to break out of the pattern of simply optimising (as opposed to transforming) business models. Yet, for a just transition, transformation is absolutely essential. That’s why we continue to invest in business transformation initiatives — such as Fashion for Good or Built by Nature — which work to inspire and challenge business to change. I’m particularly proud of the almost EUR 2 billion in new capital that Fashion for Good has been able to unlock, supporting innovators who challenge the fashion industry’s status quo.

Money can move things faster. This is particularly true when it comes to accelerating just transitions across our target industries. If, for example, the built environment is to embrace bio-based solutions to lower its carbon footprint, it needs investment to flow (and insurance to de-risk). This is why we support 75 partners in our finance and capital markets programme, all aiming to unlock the investment needed.

But it’s (really) hard to move money. We need EUR 3-5 trillion per year to enable a just transition. Our finance system is valued at USD 486 trillion. Unlocking this potential requires unprecedented shifts in how this system works, as we have seen with partners working to embed climate considerations into the mandate of important institutions, such as central banks (as you will read in our report). We’re still learning what this takes and new partners, such as the Just Transition Finance Lab, can help pave the way.

Transformative change comes both from the top... In this year’s report, we showcase some of our partners who are working to change the rules of the system. Getting the incentives right at a policy level is critical for both rewarding those businesses stepping up to the challenge and lifting those moving (a bit too) slowly. In the fashion industry alone, we are seeing at least 15 pieces of European legislation which can enable the push we need.

…and, crucially, also from the bottom. At the same time, we know that successful just transitions, even in global industries, need to be led locally. The place-based nature of industry transitions makes it even harder for large multinationals with geographically dispersed supply chains. That’s why we need strong, local, grassroots organisations to lead the change. At Laudes, we continue to deepen our organisational support to all partners. Over the past year, we have supported 103 partners to access a range of services to strengthen their own organisations. We have dispersed EUR 1,150,000 to support partner learning, wellbeing, and resilience – critically important in these difficult times.

And philanthropy — with its systems lens — has an important role to play. In our first year, we took the time to define what exactly is this system that we’re trying to influence — an exercise that helped us understand the deeply rooted issues behind the symptoms that we see every day. Reflecting back on 2023, I find that one of the more powerful things we can do as a philanthropic foundation is create the platforms for unlikely allies to collaborate. We’re doing that with other donors (through the newly launched Just Transition Donor Alliance), with partners (through our first partner retreat, where we explored the interconnections across topics, industries, geographies), and with industries (where we support multiple coalitions in fashion, built, finance and food). Authentic collaboration across public and private realms is not easy, which is why we’ve also supported partners such as The Partnering Initiative and World Economic Forum who both highlight best practices in how philanthropy can accelerate public private partnerships.

Looking forward, with this sharper focus on accelerating just transitions in industries, I remain cautiously optimistic. This is due to both the courage and conviction of our 300+ partners (all working on the frontlines of change) and our global team, who bring creativity and adaptability to how we as a foundation operate. Such nimbleness is critical to helping us, as a foundation, make sure we are doing the right things and doing things right.

We don’t have time to lose.

With gratitude,