With COP 27 now only four months away, businesses, investors, activists, and politicians are once again taking stock of the progress we’ve all made since the Glasgow summit last year, and the scale of the challenges that lay ahead. Although the UK continues to make substantial progress in reducing emissions, a key theme emerging has been the need for us to accelerate our pace of change in order to stay on track and meet our commitment of net zero emissions by 2050.
The urgent pace required, and the breadth of changes households and industry will need to make, means the transition to net zero will be a landmark shift in the UK’s economy. The way almost everything is produced, transported, consumed and recycled will have to change. Whilst for some, this is an exciting time of new innovation. For others, wide-spread economic change raises concerns about whether a number of communities will be left behind.
That’s why over the past few months, teams from across PwC have been hosting conversations about how to ensure a fair transition to net zero. Across the regions of the UK, we have brought together businesses, local political leaders, and skills providers to hear their perspectives and build on the analysis of PwC’s Green Jobs Barometer which looked at where the new opportunities and risks for employment are greatest across the country.
I wanted to share some of the themes from our first discussions in Aberdeen, the West Midlands, and the East Midlands which have resonated most strongly with me.
Collectively, we heard businesses across the UK are increasingly focused on how to reduce emissions - but there are significant practical challenges in coming up with a plan to do so. This helps explain what we heard about jobs, skills, and fairness as part of the transition.
Firstly, businesses are starting to shift from committing to net zero to figuring out the practicalities. While many of the businesses we spoke to had already committed to net zero emissions, few had yet to develop a detailed plan for how to achieve it. Often, companies are struggling to get the right foundations in place – for example we heard regular concerns, especially from smaller companies, about how easy it is to accurately understand and measure emissions as a starting point.
Secondly, there are significant concerns about how the technology, training and investment required for such a seismic shift is going to be paid for. And this concern wasn’t limited to the private sector, with public sector organisations also voicing a similar worry.
Thirdly, in every region, concern was expressed about how to get SMEs on the path to net zero. From local economic partnerships to larger companies speaking about their suppliers, there were stories of how smaller companies faced particular barriers to understanding and reducing their emissions. A common sentiment was that net zero is perceived as a luxury that only big companies can afford, especially at a time when smaller companies are grappling with inflation and a challenging economy.
Collectively, we heard businesses across the UK are increasingly focused on how to reduce emissions – but there are significant practical challenges in coming up with a plan to do so. This helps explain what we heard about jobs, skills, and fairness as part of the transition.
The existing uncertainty of how the transition will unfold, and how the practical challenges will be overcome, means that there is still a great deal of uncertainty around what kinds of skills will be needed to secure a successful transition. We have heard a wide range of views on what kinds of skills would be needed in the transition to net zero. Worryingly, we picked up an anxiety amongst some business leaders that they fear investing in the re-training and upskilling of its existing workforce could increase the risk that those employees could be poached by other companies.
More encouragingly, across the three regions we heard consistent support for securing a fair transition, one that benefited everyone living and working in the local area. But at the same time, there was a strong sense that more clarity is needed on how the transition will develop in order for businesses and local communities to get practical about what a fair transition would look like for their area.
The UK is at the beginning of a decades-long transition to net zero. Although we know the transition will reshape many aspects about how we live and work, the practical details are only beginning to emerge. What is already clear is the need for businesses to work closely with policy makers, local leaders, skills providers and their wider business communities to better understand the specific challenges that their local communities might face. As a firm, our ambition is to help ensure this transition will be a fair one and we will continue our discussions across more regions of the UK throughout this year. We hope that by sharing what we hear will help contribute to a wider discussion of how the country can succeed in tackling climate change.
