Why climate justice must start with living wages

The document highlights a structural tension in the green transition where companies set climate targets but fail to ensure living wages for workers. It argues that ignoring social equity leads to a fragile political economy, eroding the social licence for climate policy and creating economic brittleness. The author calls for companies to apply the principle of common but differentiated responsibility to wages, aligning decarbonization metrics with inequality metrics to ensure a just transition.

• There is a significant gap between corporate climate ambition and social reality; while a majority of the world's most influential companies report near-term operational emissions targets, less than 3% can prove that workers in their operations and supply chains earn a living wage.
• Climate strategies are often layered onto business models that rely on suppressing labour costs and externalizing social risks, which can make climate policy feel extractive to workers and lead to material backlash against carbon pricing and energy reform.
• Corporate transition plans are predominantly carbon-centric, focusing on emissions trajectories and capital expenditure for renewables while neglecting wage trajectories and the income security required for workers during industrial shifts.
• Failure to protect wages in climate-exposed regions creates systemic risk for companies, as climate stress lowers productivity and increases income volatility, eventually resulting in higher turnover and deeper regional divides.
• Successful models for workforce mobilization during the transition include Spain's coal phase-out tripartite agreements, Denmark's Offshore Academy for oil and gas workers moving into offshore wind, and green steel initiatives pairing hydrogen production with employment guarantees.

APA

Agarwal, N. (2026). Why climate justice must start with living wages. World Economic Forum. https://www.weforum.org/stories/climate-action/why-climate-justice-must-start-with-living-wages/

Chicago

Agarwal, Namit. Why climate justice must start with living wages. World Economic Forum, 2026. https://www.weforum.org/stories/climate-action/why-climate-justice-must-start-with-living-wages/.

Wikipedia

{{cite press release |last1=Agarwal |first1=Namit |title=Why climate justice must start with living wages |publisher=World Economic Forum |date=25 February 2026 |url=https://www.weforum.org/stories/climate-action/why-climate-justice-must-start-with-living-wages/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{agarwal2026why, author = {Agarwal, Namit}, title = {{Why climate justice must start with living wages}}, publisher = {World Economic Forum}, year = {2026}, month = feb, url = {https://www.weforum.org/stories/climate-action/why-climate-justice-must-start-with-living-wages/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }