Green Economy Growing Pains

Estimates vary, but the transition to a green economy is expected to create plenty of new employment opportunities. Unfortunately, filling them will be far more challenging than most employers think.

According to a 2021 energy sector report published by the International Energy Agency, the drive to reach net-zero emissions via clean energy generation will create 14 million new jobs by 2030, along with an additional 16 million jobs in related activities like producing fuel cell vehicles and energy-efficient construction. The World Economic Forum is even more optimistic, estimating in a 2020 report on the future of nature and business that the transition to a green economy has the potential to create almost 400 million new jobs if supported by the world’s citizens and governments.

At Accenture, our own research on the future of the green economy in the Asia Pacific region also shows strong employment growth potential, with 32.6 million jobs expected to be created by 2030 in five countries that are among the region’s top greenhouse gas emitters. At first glance, you wouldn’t expect filling these jobs to be an issue. After all, in a survey of 17,000 young people between the ages of 15 and 39, we found that 77 per cent aspired to land a role in the green economy within the next 10 years.

But here’s the rub. Our research also identified a significant disconnect between youthful demand for “green” employment and where most green job growth is taking place. While surprising on the surface, this disconnect makes sense when you take into account that most new green jobs are not in industries that have been traditionally considered “green.” In fact, it is the sectors not known for being sustainable that are driving most green job creation. Training and salary expectations also don’t match the emerging opportunities, since the majority of green jobs will not require advanced qualifications, nor command relatively higher salaries.

Where the green jobs are growing

To understand the green jobs landscape in the region we targeted, we first identified four pathways to reducing greenhouse gas emissions: transitioning transport, supplying low-carbon electricity, decarbonizing the built environment, and greening agriculture and land use. For each pathway, we then estimated the number of jobs that can be created by projecting the levels of investment in each industry and calculating the number of jobs created per dollar of investment using the labour productivity of each industry.

Our results showed that transitioning transport had the greatest jobs potential, accounting for 38 per cent of the total 32.6 million new jobs expected to be created by 2030. The 12.4 million jobs in this pathway came from projected growth in electric vehicle usage, urban transit, and inter-city rail networks and investment in Internet infrastructure to enable telecommuting. These activities will require a range of employees, from factory workers manufacturing batteries and construction workers laying fiber optic cables to engineers designing new battery chemistries.

By breaking down the jobs created across the four pathways into specific industries, we found that 76 per cent of the 32.6 million new jobs would be in construction (18.1 million) and manufacturing (6.7 million). Other labour-intensive industries such as agriculture (2.2 million) and transportation and warehousing (2.1 million) have the next highest share of jobs. In contrast, industries that tend to attract knowledge workers—professional services, financial services, and information technology—together account for only 2.4 million new jobs.

Tech-intensive roles requiring a highly trained workforce will undoubtedly be part of the equation, particularly as digitalization continues to transform even the most traditional of industries. However, our results suggested that these relatively better paying jobs will be the minority, accounting for less than 8 per cent of the total jobs potential in the region.

Nevertheless, our research found that most young people interested in green employment expect that they will need advanced training to land and advance in a green job. And not only do they expect employers to pay for advanced training and skills development in green jobs—they also expect to receive relatively higher starting salaries.

These findings obviously have immediate implications for companies in the Asia Pacific region. But we believe companies around the world should take note of the regional disconnect we found between youthful expectations and actual green job opportunities. After all, it is a safe bet that a similar disconnect exists in other markets, where competing for talent amid “the great resignation” is already highly challenging.

“Left unattended, we believe the mismatch between green economy employment opportunities and labour market expectations risks hindering the transition to a greener economy at a time when that shift needs to accelerate, not sputter.”

Paving the way for Gen Green

The situation as it stands is troubling. Left unattended, we believe the mismatch between green economy employment opportunities and labour market expectations risks hindering the transition to a greener economy at a time when that shift needs to accelerate, not sputter.

For business leaders, this means it is time to ask: Are we being clear about the opportunities we are offering the rising generation of workers?

And if the answer is “no,” it is time to reset market expectations to attract and retain a new wave of employees. We believe forward-thinking companies can turn youthful labour market expectations into an opportunity to get ahead in the race for talent by a) playing to their green potential and b) tapping into the demand for training.

Just as the digital age forced all companies to become tech companies, the challenge of climate change calls for all companies to become sustainable—especially those that are currently perceived to have a negative impact. As Accenture recently highlighted in a report developed in collaboration with the World Economic Forum, sustainable companies are more likely to deliver financial value while having a lasting positive impact on society and the environment.

This is important to young people, who often avoid jobs with a perceived negative environmental impact. In our survey of 17,000 people aged 15 to 39 in the Asia Pacific region, only 16 per cent indicated that they would consider working in infrastructure, an industry that 51 per cent of respondents said had a major or catastrophic impact on the environment. The trend is reversed for the IT sector, where 36 per cent would like to work and which only 25 per cent said had a severe environmental impact.

What is missing in this perception is the fact that industries thought to be pollutive also tend to be where many green jobs are expected to be created and where the most impact can be made. Infrastructure, for example, may be resource-intensive, but replacing aging roads, water pipes, and electrical grids is critical on the journey to net-zero emissions.

As a result, companies in these industries can flip the script to help attract youthful workers by showcasing how they are making a difference via new sustainability key performance indicators, appointing new leadership, and launching new green services.

For example, Singaporean real estate company City Developments Limited (CDL) abides by the motto “Conserving as we Construct” and has made carbon management a top priority. Through energy-saving initiatives and retrofitting its commercial buildings, the company saved 17.7 million kWh of energy between 2012 and 2019. In 2020, the company managed to reduce carbon emissions by 44 per cent compared to its 2007 baseline levels and is on track to meet its Science Based Targets initiative-validated emissions goal of a 59 per cent reduction by 2030.

While playing to their potential to have a positive environmental and social impact, companies in industries that are not traditionally perceived as “green” can further entice youthful workers by tapping into demand for on-the-job training as the green transition gains traction and the talent required becomes clear. Young people expect this and are actively seeking opportunities to re-skill themselves as needed. In our survey, 68 per cent of the youth in the five Asia Pacific countries we studied said that they would consider re-skilling in order to join the green economy, especially in populous countries like Indonesia (76 per cent) and China (73 per cent).

Companies can tap into this willingness to learn and help secure the talent they need by investing in baseline training programs focused on certifying incoming semi-skilled or unskilled workers. Such programs not only help companies widen their net but also give employees the opportunity to advance through well-designed specialization pathways.

Employers can also look upstream at academic and vocational institutions to develop innovative partnerships designed to attain qualifications tailored to new green jobs that their industry needs to create. Looking within, companies can also create exchange and rotation programs between legacy and new green business lines to give young employees the opportunity to advance their careers.

At the Indian multinational conglomerate Larsen & Toubro Limited (L&T), one of the top five construction companies in the world, pursuing a greener portfolio goes hand in hand with building a pool of young talent. Dotted across the country, the company’s eight Construction Skills Training Institutes provide structured training and certification for 75 different job roles, ranging from solar technician to concrete construction. Since 1995, the institutes have trained over 240,000 employees, many of them previously unemployed and rural youth.

Job creation has always been one of the major ways that companies have had a positive impact on society. But achieving the transition to a sustainable economy requires more than job creation. By being thoughtful and deliberate about the way they position green jobs and being clear about the training opportunities for employees who fill them, companies across all sectors can not only secure a leading market position for themselves but also accelerate the arrival of the green economy.

About the Author

Gianfranco Casati is chief executive officer of Accenture in Growth Markets, with direct responsibility for Accenture’s business in Asia Pacific, Africa, the Middle East, and Latin America.….Read Gianfranco Casati's full bio

About the Author

Vedrana Savic is a global thought leader and published author in top business and academic journals. Her work is focused on the green economy, value creation in the post-digital age, organizational….
Read Vedrana Savic's full bio

About the Author

Amy Chng is a senior manager of thought leadership at Accenture Research. Her latest research at Accenture focuses on the green economy, value creation in the post digital age, industry disruption,….
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About the Author

Rebecca Tan is a senior editor focused on developing thought leadership at Accenture Research.

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