Preparing the C-suite for the Green Collar workforce transition

Global risks with local impact

Deloitte’s analysis The Turning Point shows that unchecked climate change, where global average temperatures rise by 3°C, slows growth in every region.

By 2070, mounting global economic losses could total US$178 trillion (in present-value terms), a future that would be marked by significant declines in productivity, job creation, standards of living and well-being. In 2070 alone, global GDP could be 7.6% lower due to climate damage to growth.

More than 800 million jobs as well as the workers who fill them are highly vulnerable to climate extremes and economic transition impacts. This represents more than a quarter of the global workforce and signifies the urgency at which both climate action and planning for a just transition must occur globally.

While risks are global, the impact remains disproportionate to regions and sectors in between.

Identifying the workforces most vulnerable to change

To identify who is vulnerable to climate change and decarbonisation, the Deloitte Economics Institute has constructed a Job Vulnerability Index (the Index).

The Index is not a measure of job losses. Rather, it indicates relative “job vulnerability” based on a region having the most to lose (economically and socially) if the policy does not mitigate both climate change impacts and the costs from the economic transition to net zero.

No region, industry or job is without job vulnerability, but some have a significantly higher level of risk compared to others. This makes the Index a measure of relativity, where all regions globally are exposed to climate and transition risks.

Find the Job Vulnerability Index in the work toward net zero report.

The net-zero economy will create – and require – a Green Collar workforce transition

With rapid decarbonisation and active transition policy in the coming decade, all regions globally can have higher economic growth and more jobs in the long term. The Deloitte Economics Institute modelling shows that more than 300 million additional jobs globally can be created by 2050.

While the transition to net-zero emissions fundamentally changes the global economy, it does not mean that the people or their skills disappear. In fact, workers and their skills will be vital to create a pathway that delivers on the promise of global net zero.

Deloitte Economics Institute’s mapping of existing skills in the workforce shows that 80% of the skills required in the short-to-medium term to achieve net-zero emissions by 2050 already exist.

This means most current workers are likely to only require upskilling (such as on-the-job training), rather than complete retraining to remain in their current job or to gain a new job due to decarbonisation.

Why is an active approach necessary?

In a recent survey of more than 1000 workers and 225 business/HR executives, 65% of workers report that the skills and capabilities required to perform their jobs have changed in the past two years. Meanwhile, only 10% of HR executives strongly agree that they can effectively anticipate the skills they will need over the next three years.

While this report suggests that the traditional operating model based on jobs is stretched to its limits, presenting challenges for organisations to keep up with a rapidly changing business environment, it also underlines the need for a more active approach to the transition ahead.