The world is in the throes of a green revolution, with the global economy, notionally at least, in the process of decarbonizing. Wind turbines, solar panels, and biofuels are displacing fossil fuels, electric vehicles are gradually making the internal combustion engine obsolete, and plant-based foods are competing ever more strongly with meat and dairy products.
It would be easy to regard these changes as natural evolution, but they require directed human resources and revised business strategies. Moreover, they will give rise to new jobs and, by extension, create demand for new skills. In its Global Green Skills Report 2022, LinkedIn says that the number of jobs requiring green skills has grown by an average 8% annually over the past five years. It expects millions of new jobs to be created globally in the next decade, driven by new climate policies and commitments. Similarly, the International Energy Agency (IEA) estimates that green energy infrastructure alone will need to fill 14m new roles around the world by 2030.
However, the need for green skills spreads far beyond the traditional environmental sectors such as ecosystem management, environmental policy, and pollution prevention. The LinkedIn report flags that the vast majority of green skills are now being used in roles that aren’t traditionally thought of as green, including fleet managers, data scientists, and health workers, and now affect roles from fund managers to farmers, and aircraft makers to accountants.
These skills will not emerge unassisted. Governments and companies need to plan now for how they will train new entrants to the job market and upskill scores of existing workers to ensure they are prepared to make the decarbonized economy a reality.
It starts in the boardroom
This need for upskilling applies throughout the workforce, but it is imperative that it begins at the top. If boards and C-suites lack the necessary skills to navigate the energy transition and sustainability’s move to center stage, then companies will struggle to adapt. Some markets have begun to acknowledge this. The Climate Governance Initiative, for example, mobilizes boards of directors around the world to address climate change through their businesses. The initiative, which has networks in 31 countries around the world, aims to give members the skills and knowledge to make climate a boardroom priority, building on the World Economic Forum’s Principles for Effective Climate Governance.
Legal opinions have been formally issued in Singapore, Australia, New Zealand, and Canada, concluding that board directors must consider taking measures to mitigate climate risks part of their remit. This is part of a growing global trend: the UK has made it mandatory for companies to report on their climate risks, in line with the findings of the Task Force on Climate-Related Financial Disclosures (TCFD), while the Securities and Exchange Commission (SEC) in the US has just released guidance on a similar initiative.
Boards can no longer get away with paying lip service to climate risks. A new government in Australia is set to bring climate change to the forefront of policymaking. In 2021, Shell was ordered by a court in the Netherlands to accelerate its emissions-cutting schedule (it is currently appealing this decision). Meanwhile, the highlight of a host of climate-related shareholder resolutions in the US saw ExxonMobil mandated to appoint three climate-focused directors to its board after years of resistance.
Risk and opportunity
Beyond the risk management aspect of sustainability, there’s also huge opportunity. The global market for green energy is set to exceed $1.1tn by 2027, while new economic models such as the sharing economy provide a wider perspective on developing green businesses. While exciting, these opportunities will require new skills to be brought in or developed in-house.
This presents a challenge to human resources leaders, but also the chance to refresh companies’ skillsets. So, where should HR leaders focus their attention?