The transition to a low-carbon, climate-resilient economy is urgently needed to mitigate the profound impacts of climate change. However, this essential transition presents one of the greatest socioeconomic challenges of our era, particularly in terms of employment. Millions of workers in fossil fuel and carbon intensive sectors face the risks of displacement and economic hardship, with profound implications for their livelihoods, families, and communities. Thus, successfully managing this transition requires placing the creation, protection, and enhancement of high-quality jobs at the heart of climate policy, economic restructuring, and development strategies. A just transition embodies this employment-centered approach, recognizing that social fairness, inclusivity, and economic stability must be integral to the climate response. To avoid exacerbating existing inequalities or creating new forms of economic instability, governments, businesses, and stakeholders must prioritize comprehensive strategies explicitly designed to maintain employment, create new sustainable job opportunities, and support workforce adaptation. Given that the private sector accounts for approximately 90 percent of employment in many developing countries, including formal enterprises, small and medium-sized enterprises (SMEs), and informal jobs, its active involvement is not merely beneficial but critical. The private sector's investment, innovation, and operational decisions significantly affect whether transitioning economies will achieve equitable and sustainable employment outcomes or suffer from increased unemployment, economic stagnation, and social unrest. The Just Transition Tool for Private Sector Activities provides actionable guidance to policymakers for developing place-based economic strategies that leverage the private sector to deliver employment opportunities during a low-carbon transition. While many just transition frameworks acknowledge the importance of private sector engagement, this tool puts firms at the center of the conversation and focuses on practical policies to address transition-related opportunities for workers, as well as suppliers and communities
