23 Jun Low carbon cities and the need for high value skills

Following the recent London Climate Action Week (LCAW), industry experts explore the net-zero challenges facing cities nationwide. London is committed to transitioning toward net zero by 2030, but like all urban areas across the country, it must first tackle a lack of green skills.

The Skills Challenge

Without significant reskilling, the energy transition will slow due to a lack of people available to make it happen, but local people could miss out on new green opportunities. More industry support is required to improve this process. For example, EY worked with the skills organisation group OPITO to create a Skills Passport that supports oil and gas professionals moving to the renewables industry. Developed in partnership with the industry, trade unions and the Scottish Government, the scheme supports 70,000 oil and gas professionals to find new careers in renewables, enabling the industry to accelerate quicker and positively impact the UK GDP. Other UK cities must follow a similar path. 

According to the Climate Change Committee’s Skills and Net Zero report, published earlier this year, over 700,000 new UK jobs could be created by 2030 in low-carbon industries like buildings retrofit, renewable energy generation and electric vehicle manufacturing. The transition will generate new opportunities from environmental compliance to sustainable procurement. While the challenge of acquiring these skills in time for the transition is significant, the benefits of the shift expand to all urban residents. The Skills and Net Zero report expects these benefits to include improved health and well-being as a result of reduced air pollution, more comfortable properties, more active travel and significant benefits to biodiversity.

While all UK cities are embarking on similar energy transition plans and opportunities, one key aspect sets London apart from others. Its long-established status as a leading financial centre provides a unique opportunity to become a sustainable finance leader. This year London topped the global green finance index for the third year running. 

As detailed in the 2023 Green Finance Strategy, the UK Government has an ongoing commitment to develop the UK’s leadership in green finance. This is supported by the UK Government’s focus on introducing new initiatives such as the Transition Plan Taskforce and Global Biodiversity Framework. The efforts toward innovation can ensure London remains a leader in green finance and a driving force for other cities to access the funding required to transition to net zero. Skills remain a priority for the green finance drive. The UK’s Green Finance Strategy 2023 highlights several actions that intend to reform the financial structure and generate private capital.

While London’s finance industry is adapting to the evolving landscape, plans must accelerate further, and skillsets are needed to expand. Financial industry skills must adapt from reporting financial performance to similar assessments of non-financials, supporting businesses to meet financial regulations and deliver on environmental compliance and transition plans. Again, there is the challenge of a skills gap and a recent survey by EY explored over 500 sustainability leaders in the UK and discovered that:

35% of leaders voiced concerns over hiring talent with climate-related skills

33% stated that a lack of climate expertise at the board level was a barrier to achieving their net-zero targets. 

Tackling the skills gap

In many industries, especially in finance, the focus is on private sector employees to determine skills gaps and implement the necessary training measures. In the wider workplace, many small businesses lack the resources to upskill and retrain their employees. In this case, sector initiatives, government transition funding and clear structure plans will be critical. There is also an urgent need to involve education, business and young people in these initiatives, which incorporate inclusive climate education.

The Climate Change Committee Skills and Net Zero report highlights various activities, from implementing climate education in schools to employer-focus net zero training and enhanced standards and frameworks. But the report also highlights areas where the government must do more to support skills development in a way that enables everyone to be part of the transition to net zero. 

Similar to other cities in the UK, London faces many challenges on the net zero journey, but collaborating on upskilling can enable us to achieve what is needed.