The Institute for Economic Justice (IEJ) delivered the following statement during the first meeting of the G20’s Inclusive Economic Growth, Industrialisation, Employment, and Reduced Inequality Task Force (Task Force 1) on Monday, 17 March 2025. This statement was presented during Session 2: Towards Developing G20 High-Level Principles on Green Industrial Policy.
South Africa’s G20 Presidency comes at a critical juncture, as the world grapples with overlapping crises—from climate change and economic underdevelopment to inequality, poverty, and geopolitical instability. Addressing these challenges requires bold, transformative policies that promote inclusive, strong, balanced, and sustainable development.
The IEJ fully supports the South African government’s commitment to this agenda, guided by the principles of Solidarity, Equality, and Sustainability, and looks forward to the opportunity to bring to bear its extensive research and policy expertise on green industrial policies in Africa.
We are honoured to be part of this conversation and believe the G20 is uniquely placed to initiate discussion on green industrial policies. We believe green industrial policies have significant potential to bolster employment, raise real incomes, promote industrialisation, advance environmental sustainability, and secure inclusive growth. We commend the South African government for driving this important discussion.
Noting previous work on this area in the G20
The G20 countries have taken commendable steps in dealing with the matters raised by this Task Force. These steps include the 2016 G20 Initiative on Supporting Industrialisation in Africa and Least Developed Countries and the 2017 G20 Compact with Africa (CwA), which shows a clear awareness of the need for sustainable industrialisation. There is a growing awareness of the importance of industrialisation to support development. However, this is largely constrained within a limited framework, with an emphasis on de-risking, private sector leadership, compliance with existing forms of trade and financial liberalisation, and export orientation. While there is some recognition of the importance of environmental concerns and promoting gender equity, there is not a sufficient framework to ensure that industrialisation is aligned with a broader vision of equitable sustainable development.
Currently, thirteen African countries have joined the G20 Compact with Africa. Those countries included in the Compact with Africa have continuously economically outperformed non-Compact peers. There was also a reported increase in exports of goods and services and climate-related policies to promote green private investment. However, a direct causal link to the initiative has not been proven.
Necessity of a global green transition for people and the planet
A global green transition is no longer just an option – it is a necessity for both people and the planet. Bold action to combat climate change and protect natural resources is crucial to build a more just and sustainable world for the present and generations to come.
Green industrial policies are central to achieving the goals of green growth and carbon-neutral industrialisation. Through green industrial policies, we can achieve industrialisation that drives growth, expands employment opportunities, and narrows inequality gaps. The UN’s 2030 Agenda for Sustainable Development acknowledges the pivotal role of industrialisation as both a pathway to, and a catalyst for, achieving the Sustainable Development Goals (SDGs). The 2030 Agenda calls for industrialisation as a pathway to create a more inclusive and equitable world, ensuring that no one is left behind. This echoes sentiments expressed in the Addis Ababa Action Agenda on Financing for Development, the UN Framework Convention on Climate Change and Paris Agreement, the Sendai Framework for Disaster Risk Reduction, the Convention on Biological Diversity and the Kunming-Montreal Global Biodiversity Framework.
Green industrial policy refers to a set of state-led policies aimed at changing industrial structures to address urgent mitigation and adaptation needs related to a range of ecological crises, most notably climate change while meeting the basic needs of the world population sustainably. It may also have a range of secondary goals such as decent work creation, development and structural transformation of underdeveloped economies, and the promotion of gender equity. Green industrial policy often intersects with a range of other policies including social policy, macroeconomic policy, labour market policy, energy policy, and technology and innovation policy.
This opportune time for engagement on green industrial policy follows the expanded use of industrial policy globally. Green industrial policy is required to achieve the large-scale restructuring of our economies demanded by climate change and developmental imperatives. Greater global alignment of such policy offers an opportunity to ensure that national policy supports a tide of green industrialisation that lifts all boats, rather than one that fosters unhelpful competition, excluding some countries from green value chains or locking them into subordinate positions of commodity extraction.
By aligning green industrial policy and the G20 High-Level Principles on Green Industrial Policy with the SDGs and international human rights, we can ensure that industrial transformation is not only strong and sustainable but also balanced and inclusive.
Green industrialisation can promote inclusive economic growth through public-led investment plans, domestic and regional value addition, and redistribution. Governments can play a catalytic role in directing green industrialisation by formulating strategic public investments; facilitating systems of innovation; initiating state-led financing instruments; and creating demand for green industries.
As the world moves towards a green economy, there is potential for an estimated twenty-four million new jobs to be created globally if global green industrial policies are anchored in sustainable technologies and industries. The G20 can harness the potential of these emerging sectors to generate millions of new jobs, particularly in regions hit hardest by industrial decline or environmental damage.
Green industrial policies provide a powerful opportunity to address global inequality by ensuring that the benefits of industrialisation are shared equitably across all populations. Global and local environmental degradation threaten jobs and worsen working conditions, especially in developing countries and among women and the world’s most vulnerable people, making environmental sustainability an issue of social justice. Fostering access to green technologies and energy, improving education and skills training for women, youth, and marginalised groups, and ensuring that green jobs offer stronger social security and a fairer income distribution, are all policies that catalyse green industrial policy to reduce inequality.
An approach that centres structural transformation–the ability of countries to climb value chains–particularly targeting green manufacturing sectors, is critical. This creates diversified and resilient economies to foster domestic technological capabilities, rather than extractive and commodity-dependent models of industrialisation. It is smart economics for the whole world when developing economies shift from natural resource-based development to socially inclusive and sustainable environmental development.
Conclusion
The South African Presidency presents a pivotal opportunity for all member states to advance the SDGs and promote human rights. The work of this Task Force on green industrialisation is instrumental in shaping a sustainable and equitable future for all. The Institute for Economic Justice stands in full support of the priorities of this task force. We thank you.
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For media inquiries, please contact:
Dalli Weyers | dalli.weyers@iej.org.za | 082 460 2093