Essec Business School

With ESSEC Knowledge Editor-in-chief

Climate change is changing how we live - and how we work. With Gen Z and millennials increasingly engaged inclimate change activism, working for a company that prioritizes sustainability is crucial for many young professionals. Luckily for them - and for the environment - the green economy is booming: the International Labor Organization estimates that climate neutrality and resource-efficient economies have the potential to create100 million new jobs. Stefan Gröschl, professor of management at ESSEC, recently spoke to Mette Grangaard Lund of the International Labor Organization about the future of green jobs.

How is the International Labor Organization supporting green jobs?

 Mette Grangaard Lund is on the Green Jobs team of the ILO.

For more than a decade, the ILO has supported our constituents, i.e. labor unions, employers’ organizations, and governments, on matters pertaining to green jobs and how the world of work will be transformed by climate change.

 We have a three-pronged approach:

1. Research, analysis and capacity development

• We conduct studies on pertinent topics, i.e. on global estimates and country studies on job numbers and skills that are in demand.
• Alongside our training centre in Turin, we provide several courses on how to foster green business growth and support a just transition, which entails maximizing the environmental impact and minimizing the social consequences. We also share and disseminate our findings.

2. Policy development and development cooperation

•  In addition to producing knowledge at the crossroads of the environment, the climate and employment, we also support constituents in knowledge-based policy development. For example, we train policy makers and economists at the country level, by using the Green Jobs Assessment Model, which helps policymakers assess the effects of environmental policies on employment. This helps governments get a clearer picture of how to address climate change and social injustice in a holistic way. We also support green job creation through entrepreneurship development and skill development projects.

3. Strategic partnerships, global and regional engagements:

• We work closely with our partners and constituents across the globe.
• We are leading the UN-wide Climate Action for Jobs Initiative.
• We closely follow global policy agendas related to the world of work, with climate change and environmental negotiations (such as COP and UNEA) increasingly important to our work. The ILO has been present at the COP negotiations for more than a decade, and we can see that the just transition, which refers to taking into account the social dimensions of climate action, is increasingly discussed.

In sum, we incorporate perspectives of the world of work in these climate and environmental negotiations.

What qualifies as a green job?

While there are different definitions available, the ILO uses three main criteria.

1. Green jobs must be “decent” jobs – according to our definition, a green job IS a decent job.  Decent work covers four dimensions: productive employment (i.e. both quality and quantity), social protection, workers’ rights and social dialogue.

2. A green job can be in any economic sector and is one that contributes to preserving and restoring the environment. Of course, the green job can be in renewable energy and agriculture, which is probably what people think of when they think of green jobs – but it doesn’t have to be. For example, a green job can produce goods or provide services that benefit the environment, like clean transportation. However, these green products and services are not always based on green production processes and technologies. That is why a green job also can be distinguished by its contribution to more environmentally friendly processes. For example, green jobs can reduce water consumption or improve recycling systems.

3. A green job doesn’t necessarily have to be a highly skilled or specialized job. It can be, but a job like waste collection is also a green job if it meets the requirement of being a decent job. It can be at any skill or specialization level, as long as the job must offer a decent quality of work and of life and its output preserves and restores the environment. 

There’s an emphasis on the outcome of the job: it can be in any sector, but to qualify as a green job, the products and services it delivers must service the environment.

There are some sectors that are inherently green or important, so the ILO focuses more on these than on others. For example, the energy sector is of utmost importance to decarbonization and meeting the Paris Agreement.

 If we reach the goal of keeping global warming below 2o, 24 million jobs could be created - but around six million could be lost. So while there is a net job growth, they might not be in the same regions or countries. That is why the ILO focuses on the just transition.. The ILO Just Transition Guidelines suggest that one approach for minimizing the negative effect is ensuring people have the necessary skills to transition to new jobs, since jobs like those in the fossil fuel industry will be less in demand, but there will be significant new labor demands in renewable energy and new kinds of mining and other rising sectors and industries.

Are there regional elements when it comes to the just transition?

Yes. There are differences in job gains and losses, both between and within countries. The Middle East and North Africa stand to lose the most jobs, as some of these economies tend to be more fossil fuel dependent in terms of jobs and government revenues.  It doesn’t necessarily mean that the high-income countries are better at developing just transition initiatives - some of the most ambitious just transition policies are in lower-income countries. Lower-income countries nonetheless have a greater need for support, which is where organizations like the ILO come in.

 What are the key sectors?

I want to highlight four main sectors.

Energy: the first sector is energy. We talk about this sector a lot as it has a significant climate and environmental impact, but also because there have been impressive initiatives in renewable energy and energy efficiency.

Agriculture and food systems are very important. Agriculture is the world’s largest employer and is important for employment in rural areas. but more importantly agricultural jobs are also vulnerable to climate change.

Construction: because it’s energy-intensive, but also because we see many challenges with decent work conditions. For example, heat stress will become an increasingly large problem that impacts both productivity and employee health.

Transportation: Logistics, infrastructure, and transportation is also important for the economy, both to move people and goods around. Decarbonization and job quality are really important in this sector. 

Other sectors of particular interest include the circular economy and manufacturing.

What are the key factors that move these sectors toward green jobs?

Certain economic sectors are critical in the pursuit of climate goals because of their large share of carbon emissions, i.e. energy. Others need to adapt urgently, like agriculture and tourism. Whenever it’s an issue related to the world of work, social partners must be involved. In our approach, we include governments, workers, and employers. Some of the most successful examples have been between the private sector and the labor unions, where workers support the “greening” of the business as they recognize the potential employment benefits. We need to accelerate climate action, but it will not be successful if we don’t incorporate the social dimension and get people onboard.

Where do educators come in? Do we have a particular role?

We work very closely with academia and higher education institutions, since skill development is a huge element of the just transition. As I said before, it’s not only highly skilled labor, it’s also technical and vocational training institutions that are a key part of the green transition. We will need people with those skills in the future: waste collection, water treatment, construction…the list goes on. Education has been often about enhancing the skills of the workforce, including those in the informal economy. Going forward, more must be done to anticipate the skills needed to prepare young people for jobs of the future.

 Many business schools, including ourselves, have introduced sustainability initiatives. What do you think of this?

Indeed, as you said, many institutions are updating their sustainability practices. Green topics are also increasingly important for young people. They will not accept greenwashing and are more critical consumers. If business schools cannot walk the walk, it will backfire. This goes for businesses as well. It’s not enough to pay lip service to green initiatives, there must be actions backing this.

While green jobs are not always managerial or highly skilled, at ESSEC we do focus on people who will be in decision-making positions. How does the notion of a just transition change their competencies and their responsibilities?

I’d like to highlight three things. A key element of decent work is gender equality. Leaders of tomorrow must be far more aware of gender equality, gender identity, sexual harassment, flexible working hours, and generally cultivating a safe work environment. As part of that, leaders must ensure that they offer a good work-life balance for all employees, regardless of gender identity. This is increasingly popular even in demanding industries like consulting, where employees are increasingly encouraged to keep an eye on their hours.

 Another important element is entrepreneurship. If you are an entrepreneur, you will likely become an employer if your idea takes off. You then have a responsibility to your employees: formal employment, good working conditions, living wage, benefits… When you support entrepreneurship, you need to support decent employment for all involved, not just the entrepreneur themselves.

Finally, our world is one of transitions, and as such, there is a need for lifelong learning and upskilling to meet emerging challenges.

What do you consider to be the key challenges of green jobs? What are the different stakeholders and their potential competing demands? The war in Ukraine has had implications for the energy sector, for example.

 While before, some stakeholders may have been resistant, now goals are more aligned. For example, many workers now support decarbonization and the phasing-out of their own jobs, because they have been ensured new green employment opportunities after social dialogue with their companies.

Ensuring green business growth is another important aspect of creating green jobs. For some companies, especially SMEs, figuring out new legislation can be burdensome, so the ILO emphasizes the need to support employers’ organizations and their business members, to better help their members adapt to changes and get past the red tape.

Governments are another key player: it can be very hard for many countries to prioritize decarbonization. But if they invest in jobs and job creation, then you can get a lot of governments on board, since that tends to be a major priority. For example, Biden’s new Green Deal: it proposes creating jobs by greening the infrastructure. There is a strong argument for considering the job effects of environmental and climate change policies, and highlighting this is an effective way to get governments, businesses, workers – and people - on board. We can’t pick between economic growth, development and job creation on the one hand, and environmental sustainability and climate resilience on the other: the two must go together.

 You mentioned SMEs, and earlier you mentioned entrepreneurship. At ESSEC, one of our strategic pillars is entrepreneurship. Do you have any recommendations or any advice for our graduates looking to get into entrepreneurship? 

As I said before, entrepreneurs need to make sure they are offering decent working conditions. Once a company hires their first employee, they should identify their employer organization and join that. Often, those organizations have support systems for startups. These organizations can help startups navigate legislation and take advantage of benefits available to them. These are often also free.

Another piece of advice is to be serious about your sustainability strategy. If it’s a superficial initiative, it won’t help. It will be a reputational risk, rather than a competitive advantage. Think about the coherence of your sustainability initiatives with your mission and measure the impact you have, including any negative externalities or unintended effects your business might have. This will make it more authentic for customers and stakeholders.

Is there anything else you would like to add?

Climate change is real, it impacts all aspects of our lives, and it requires ambitious and urgent action. If we don’t all get onboard, we will not succeed. We need to make people, the planet and prosperity a priority, we can all get behind green jobs and employment creation. By making green jobs a priority and having employees, employers, and governments work together, we can ensure a just transition for all.