Skills implications of moving to a low-carbon economy, including management and leadership skills


Moving to a low-carbon economy provides opportunities for aiding the economic recovery and rebalancing the economy through the creation of jobs. It also offers the opportunity to capitalise on the UK's abundant renewable resources to establish world class competitive advantage in low carbon industries. In 2008/09 the UK had the sixth largest Low Carbon Environmental Goods and Services sector in the world, worth £112 billion per year and employing over 910,000 people. By 2015 it is estimated that 1.2 million could be employed in the sector (Innovas, 2010). For the UK to benefit from the transition to a low carbon economy the right skills must be available. A number of recent reports have considered this issue.

The low carbon economy
Countries around the world are under pressure to reform their economies to enable economic growth without increasing carbon emissions. These pressures include:

• economic - the desire to exploit new markets as well as consumer pressure for ‘green' products and services, and the perception that low-carbon sectors could help meet the need for economic recovery and job growth following the recent recession;

• social - growing expectations about corporate social responsibility;
• environmental - recognition that action is needed to mitigate and adapt to climate change.

This has led to policies at international and national level that address both economic and environmental agendas.
• The 2006 Stern Review set out the economic case for UK action on climate change.
• The Green Jobs Initiative is a partnership established in 2007 between the United Nations Environment Programme (UNEP), the International Labor Organization (ILO), and the International Trade Union Confederation (ITUC). The International Employers Organization (IEO) joined the Initiative in 2008. It was launched to promote the creation of decent jobs as part of green economy.
• The European Commission set out its strategy for linking innovation and green growth to competitiveness in Europe 2020: Strategy for Sustainable Growth and Jobs (2010).
There are also regulatory imperatives: the UK Government has committed to reducing greenhouse gas emissions by 80% of 1990 levels by 2050. Fundamental economic change is needed if the UK is to meet this target. 

The transition to a low-carbon economy will have labour market implications. Although it is not yet certain exactly where growth will occur, low-carbon sectors that are expected to grow include:
• energy generation;
• energy efficiency (especially of buildings);
• energy and carbon accounting/monitoring
• support services (e.g. consultants, climate change economists and financial advisors).
Other sectors will need to diversify or change their products and supply chains, for example transport, agriculture and retail.
Sectoral change will be mirrored by changing occupational demand. Research into skills needs suggests that few of the critical skills for transition to a low-carbon economy are new. Workers in existing occupations should be able to 'upskill' to fulfil new roles in a changed economy (Cedefop, 2010). However, with the expected growth in low-carbon related employment it is likely that more of these skills will be required. This is explored further in a later section.

A report for the UK Commission (PwC, 2010) on Strategic Skills Needs in the Low Carbon Energy Generation Sector in the UK reinforced the essential role of ‘upskilling'. It identified the importance of STEM (Science, Technology, Engineering and Mathematics) skills at NQF levels 3, 4 and 5.

It will also be important to improve generic skills across the workforce, as sustainable development requires a holistic approach and almost every job will need to adapt during the transformation to a low-carbon economy. These generic skills include:
• traditional skills, such as leadership, management and communication;
• green skills relating to preparing for new environmental legislation, and improving resource efficiency;
• technology transfer and commercialisation skills.

Leadership and management
A Defra-commissioned review of evidence on the skills needed for a low-carbon economy highlighted the significance of leadership and management. The review analysed government strategies, academic and grey research literature and sectoral skills agreements, as well as consultation with skills bodies. (Pro Enviro, 2009)
In addition Business in the Community, a membership organisation aiming to encourage responsible business, recently conducted an inquiry into leadership skills for a sustainable economy (2010). This drew on a literature review and 700 survey responses from members of HRH The Prince of Wales's Mayday Network on Climate Change, and of Business in the Community itself.
The inquiry indicated that ‘classical' or traditional leadership skills are crucial for economic transformation, but will need to be applied in a new and more complex situation. The leadership skills identified as most important included:
• the ability to inspire change on sustainability;
• commercial awareness to identify the risks and opportunities presented by a sustainable economy;
• the ability to translate knowledge about sustainability into successful business strategies;
• effective and persuasive communication.
In addition, new styles of management will be needed. The inquiry identified demand for more and better executive education to help businesses make the transition to a sustainable economy. For example, managers will need support to help them utilise the skills their staff have developed.
It concluded that developing the leadership skills needed for the transition to a sustainable economy is both urgent and critical to the UK's future economic success. (Business in the Community, 2010)
To ensure a supply of the required skills, workers will need help to adapt their existing skills to a low-carbon context. In addition, the supply of some skills may need to be increased as a result of demographic changes and the retirement of skilled workers. (Cedefop, 2010). This could mean the education and training system comes under pressure to quickly deliver unexpected competencies.
With approximately 80% of the 2020 workforce already in employment there has to be an emphasis on workplace and vocational training if low-carbon skills needs are to be met. Training provision will also need to be affordable and accessible, and funding systems will have to adapt to the delivery of shorter term courses.
Environmental understanding will have to be mainstreamed into education and training systems. This can be achieved by integrating sustainable development into existing qualifications and National Occupational Standards along with the consciousness of managers and leaders. Cogent (the UK's industry skills body for chemicals, pharmaceuticals, nuclear, oil and gas, petroleum and polymer businesses) is leading other Sector Skills Councils and partners to develop National Occupational Standards and qualifications on sustainable business practice.
The Business in the Community inquiry identified ways in which companies are already embedding sustainability skills into standard business practice, for example through awareness training across the workforce or employee engagement activities such as appointing climate champions.
Business support advisors may need specific low-carbon training to ensure they are sufficiently knowledgeable to provide relevant support.
Further developments
• The recent Spending Review committed funding to a UK-wide Green Investment Bank.
• In the autumn the UK Government will publish a strategy for skills and also a sustainable growth strategy paper (both for England).
• Low Carbon Economic Areas have been set up across the UK, covering a variety of sectors and technologies. These areas are expected to stimulate demand for low-carbon skills, services and products.
• Business in the Community has launched a Sustainability Leadership Skills Initiative to further business leadership on skills development.
Business in the Community (2010) Leadership Skills for a Sustainable Economy. Business in the Community, London.
Cedefop (2010) Skills for Green Jobs: European Synthesis Report. Cedefop, Thessaloniki.
HM Treasury (2010) Spending Review 2010. Cm 7942. The Stationery Office, Norwich.
House of Commons Environmental Audit Committee (2009) Green Jobs and Skills. The Stationery Office, London. .
Innovas (2010) Low Carbon and Environmental Goods and Services: an industry analysis - Update for 2008/09. Department for Business, Innovation and Skills, London.

Pricewaterhouse Coopers (2010) Strategic Skills Needs in the Low Carbon Energy Generation Sector. UKCES Evidence Report No. 16. UK Commission for Employment and Skills, Wath-upon-Dearne. Pro Enviro (2009) Skills for a Low Carbon and Resource Efficient Economy: A Review of Evidence. Pro Enviro, Rugby.
Stern, N. (2006) The Economics of Climate Change: The Stern Review. Cambridge University Press, Cambridge.


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