Issue Briefs

Green skills for driving the green transition

Green skills and their role in the green transition

The world currently faces significant environmental challenges and the transition towards sustainable practices has become imperative for ensuring a safer planet for current and future generations. By equipping individuals and organizations with the requisite expertise for implementing innovative and sustainable practices, green skills can play a vital role in driving the transformation to a greener economy.

According to United Nations Industrial Development Organization (UNIDO)¹ green skills are the knowledge, abilities, values, and attitudes that are required to live in, develop and support a sustainable and resource efficient society. This encompasses skills in wide-ranging areas including renewable energy, waste management, sustainable agriculture, water conservation and environmental protection, among others.

Enhancing green skills is essential to meet the goals of the Paris Agreement where nations across the world pledged to limit the global temperature rise to 1.5° Celsius (C) and this requires swift and effective action across every sector.

Green skill development is also critical for achieving Sustainable Development Goals (SDGs) that encompass upgrading green infrastructure and use of green technologies for sustainable industrial processes and the efficient use of natural resources by 2030.

Building a green skilled workforce

As societies transition to low carbon energy sources by implementing sustainable practices to meet their net zero commitments, it is crucial to build a skilled workforce equipped with the relevant green skills that can drive resource efficiency and sustainability.

Further, climate change is impacting labour markets across the world along with global supply chains and resulting in significant loss of livelihoods. Environmental impacts reduce productivity and destroy jobs by displacing people and also disproportionately impact the most vulnerable sections. As demand for green skills and competencies rapidly increase in the future of work with the number of green jobs rising, green skilling will play an increasingly important role in promoting inclusive growth.

The Green General Skill Index² highlights four tasks critical for green occupations in this context.

• 1. Engineering and technical skills – The knowhow needed in the area of green infrastructure, for example, eco-buildings, renewable energy design, energy saving R & D projects.
• 2. Science skills – The competencies and knowhow required for fostering innovation activities and demand for such skills are particularly high in the utility sector covering areas such as water, sewage services and electricity.
• 3. Operation Management skills – The knowhow required for organizational changes for supporting green activities which is critical for roles including those of climate analysts, chief sustainability officers and transportation planners.
• 4. Monitoring skills – These encompass skills necessary for assessing technical criteria and legal standards and are essential for roles such as environmental compliance, nuclear technicians and legal assistants.

Current global green skills landscape

As the world continues to combat climate change and transitions to a more green and sustainable economy, the demand for green skills in the job market is also expected to rise manifold. As the nature of work is expected to change, this also requires a shift in jobs for workers – from more carbon-intensive to greener jobs.

As per UNDP, an estimated 8.4 million jobs³ will be created by 2030 as a result of the green transition. However, around 60% of the global youth is projected to lack the requisite skills necessary to survive in the green economy.

As per the findings of the Global Green Skills Report 2023⁴ , only one in eight workers has one or more green skills, globally. The report also finds that the share of green talent in the workforce only grew by a median of 12.3% between 2022 and 2023 in contrast to around 23% growth recorded in the demand for new jobs requiring green skills. The five-year annualized growth rate between 2018 and 2023 also exhibited similar trends, with share of green talent recorded at 5.4% per year, while share of green jobs grew at the rate of 9.2% per year.

These findings reveal that in the last few years, demand for green jobs grew almost twice as quickly as compared to the growth of green talent in the workforce. This highlights the need for urgent global action for bridging the green skills gap, which is crucial for meeting ambitious global green goals.

Sectorwise skill gaps

Green skill requirements will vary across sectors, industries, and regions. Given the impending climate change challenge, all climate related sectors are already witnessing significant growth in green skills including sectors such as electric vehicles, battery production, renewable energy, and others. As per LinkedIN estimates, climate related sectors witnessed hiring at a rate nearly 25%⁵ higher than other jobs in 2023.

As per Boston Consulting Group (BCG) estimates⁶ , the skills gap in the green economy will increase to 7 million by 2030. It also estimates that the skill shortages are particularly severe in critical sectors for energy transition including solar, wind and biofuel technologies.

Source: BCG Climate Migration Model⁷

This estimated skill shortage could delay the green transition and result in a temperature increase of 0.1° C, undermining global efforts to limit the global rise in temperature within the 1.5° C threshold.

Finance is another critical sector that lags behind in terms of green skilled workers, as highlighted by the Global Green Skills Report. The report finds that while the median green talent concentration across all industries is 12.3%, implying one in eight workers have green skills, it is only 6.8% for the finance industry, meaning only one in fifteen workers have green skills. Given the role of green financing and projects that provide environmental benefits in scaling up the sustainable development goals, it is essential to accelerate green skills development in this sector as well for closing the skills gap.

Way Forward

While the journey of green transition poses many challenges, it also offers several opportunities, particularly in terms of providing quality education and gainful employment.

Along with devising smart green policies across sectors, workforce development in green skills is an absolute imperative. Investing in green skill development and reskilling for developing capacities to assess and develop green skills will be critical priorities for bridging skill gaps across sectors. At the same time, policies and measures for protection of workers and labour market mobility and flexibility will also be crucial for a smooth transition.

Governments, businesses, and individual workers will need to work together to intensify efforts for ensuring a successful green transition.

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