LinkedIn Audio: How prepared is the UK for a just 'green' transition?

Transcript

Carl: Good afternoon, everyone we are just waiting for a few people to join, so we'll probably start in about 30 seconds or so. I hope everyone that is largely from the UK is keeping warm and it's definitely a little bit on the chilly side out there today. Some interesting challenges getting in for many people into offices and I suspect a few more people sat at home than maybe was the case before.

But we've all got very used to that, I guess, off the back of COVID. So just get another few more seconds and then we will get kicked off.

So good afternoon everyone, I’m Carl Sizer, PwC UK’s Head of Regions, and for the past year I've been working with a fabulous team actually, on a piece of thought leadership, what we have termed the Green Jobs Barometer, and this is doing a vital job, informing us, informing yourselves, informing policymakers and business leaders on some of the really key issues around the greening of society and specifically around the greening of jobs and how well the UK is managing the transition to a net zero economy.

Now, we launched it just over a year ago now when the UK was hosting COP up in Glasgow and we've now just got the second version of that, and this is really now giving us a chance to see how we've done one year on. Now, as you'd expect, as we go through the transition to a net zero economy, there's no doubt that some jobs would of course disappear, some sectors will need to adapt, if not all sectors in some way, shape or form. And some will find this easier than others, and there will be a number, though, of not just challenging situations, but also new opportunities. But it is no doubt there is also going to be some sectors that are going to find this difficult. And we need to make sure that that transition is very much fair and that's why in a lot of ways, this Barometer was created. It was really to help us identify where both from a geographical perspective and from an industry sector perspective, where the targeted support and intervention is really needed. And that will be the subject of conversation today, and I am very pleased to be joined by four fabulous people that will help to get some of that conversation and richness of information to all of us as well.

So before we get into it, let me just ask each of them just to briefly introduce themselves and give a quick summary of where they're from. So Lynne maybe I could start off with you, please.

Lynne: Yeah, thanks, Carl. Great to be with everyone this afternoon. My name is Lynne Baber. I'm a partner in PwC and I lead our sustainability practice for the UK. I'm based in London, but I do have to disclose I am a very proud Bristolian, so West Country is important to me too.

Carl: Thank you very much. Lynne, David, over to you now.

David: Thanks Carl. I'm David Nash. I am director of Strategy and Policy at the Engineering Construction Industry Training Board. So we are a government agency, a non-departmental public body sponsored by the Department for Education, and we are the statutory skills and training body for the engineering construction industry. And that, in a nutshell, is the sort of sector of process engineering responsible for designing, building, maintaining and decommissioning some of some of the UK's biggest plant and process machinery on industrial sites.

So green skills, the just transition, these are phrases that are very much alive to us and resonate strongly in the work that we're doing and delighted to be here today.

Carl: Thank you very much, David. I have no doubt we'll get into a lot of those good discussions very shortly. Madeleine, over to you, please.

Madeline: Thanks, Carl. Hi, everyone. My name is Madeleine McCreanor, and I'm the strategic resources manager for Scottish Power. I'm Australian, but I largely split my time between Glasgow and London, and a large part of my role is working with our business and our wider HR team to ensure we have the right skills and people long term to help us continue to build a network that's powered by renewable energy, and prior to working for our HR team, I spent quite a few years doing resource management globally for our offshore business and I've got a background in business management administration globally, so very, very keen to be involved in the conversations today.

Carl: Fabulous, thank you very much Madeleine. And finally over to Rob.

Rob: Hi, Carl, thanks for asking me to join you and good afternoon, everyone. I'm Robert Dwyer, Head of Infrastructure for Cardiff Capital Region, responsible for transport, housing, strategic premises and of course, our energy agenda. And for those who aren't familiar with the region, CCR embraces ten local authorities in the Southeast Wales area, we have a £1.2 million budget designed to instigate the creation of 25,000 jobs, increased GVA by 5% and leverage of the additional 4 billion worth of additional private sector finances. Our prime focus is around the clusters of compound-semi, cyber, fintech, medtech and creative and from an energy perspective, our area consumes 36% of the total energy consumed in Wales. So really looking forward to a good conversation today. Thanks very much.

Carl: Brilliant. Thanks, Rob. And I think actually with this panel, we've got a really good group here to get into quite a rich debate and discussion, so let's see where it goes. Now just to give a bit of an overview, very briefly on some of the key findings from the report before we get into the dialogue.

There's no doubt that whilst COVID has touch-wood abated, we're now in a period of energy challenge and shortage in a number of ways, and the cold is really testing us right now, clearly high inflation as well. And there's no doubt as we look forward, there's going to be quite a lot of challenges for people and businesses ahead of us in 2023 and beyond.

But climate change is certainly going to impact every aspect, I think in many of our lives and how we tackle that and how we address some of these energy shortages is going to be absolutely critical. And the key fact, therefore, is this has to be something of a priority. But really, is it? Is it something that is being focussed on in the right way?

Now, the headline of the report actually gives me very good reason to maintain my always optimistic stance on life, and the number of new green jobs since last year that have been advertised has trebled. Now just over 330,000 jobs in the last year were green jobs, and they're growing at four times the pace of the overall jobs market.

However, they only represent 2.2% of the actual jobs that are advertised. And what is more interesting, though, is where are those jobs being created? Once we have some great outcomes up in Scotland, which we'll touch on very shortly, where the majority of jobs are at the moment is in London, in the South East, specifically around science based and professional roles.

And what that really shines a light on is the fact that there is a bit of a gap that is starting to grow with respect to green trade jobs. And those are going to be absolutely critical to many aspects of the transition to net zero. So as we get into this, let's maybe start just a bit about some of the great new jobs that have been created.

And maybe, Madeleine, I can come to you first, you're leading, obviously, the green jobs drive at Scottish Power. Could you talk a little bit about what you've seen recently?

Madeline: Yeah, of course. So there's a couple of catalysts for why we're seeing such an increase in this. But we know the UK and Scotland have renewable energy targets that are very ambitious towards net zero, and also what's really clear is that renewable energy is much cheaper than traditional sources of energy, and it's continually improving its technology.

And look, we only need to look to the recent Scotwind auctions to show part of this. So, previously we hadn't been able to have a large amount of planned offshore wind projects in Scotland as the waters are just too deep. However, floating wind technology has completely changed that. Also, if we increase our capacity for renewables and continue to drive electrification in our homes and businesses, we also need to reinforce our network to be able to deliver this. So this is what we're really seeing is driving the increase in green jobs, we're seeing in the UK. And look at Scottish power, we've seen the increase for ourselves ahead of recruitment, and the recruitment team has the really exciting job of delivering our biggest ever recruitment drive for recruiting a thousand green jobs across the next 12 months. So we're in a really, really good place to start driving that net zero transition.

Carl: And I think you guys up in Scotland and Scottish Power doing especially with that drive those thousand new green jobs is a fantastic thing to go after, I know you're doing a lot on that skills agenda, really driven by the energy transition that Scotland needs to go through. Lynne, maybe from a sort of sustainability expert’s perspective, what are we seeing on that side?

Lynne: Yeah, thanks, Carl. I think I'd agree with Madeleine from what I'm seeing with my clients, this is the decade for action. So the skills around decarbonisation, actually being able to implement the projects that are going to help organisations to achieve those commitments that have been set, is fundamental. There's a huge demand for those implementation skill sets, and to be able to take something from strategy through to actually seeing it realised.

And all of our clients are setting out their demand and I think at the moment we're seeing actually quite a kind of skills shortage across different areas. Our clients are struggling in terms of recruiting in house into their teams, and also combining it with particularly from a professional services perspective, thinking about how do you marry those deep technical skill sets like decarbonisation and climate risk, with that broader business acumen and understanding of the organisation and ability to translate, if you like, for a kind of cross-functional environment.

Carl: Yeah, I think that interaction of the skills and deep technical expertise with business understanding that's going to be so critical to how, how the transition really, really happens. And I think that that interaction between the two could be pretty interesting actually. Now, as we look at the report and as I touched on, we've got that gap between the types of jobs coming on board and the view is that we need at least somewhere in the region of 60,000 new tradespeople each year if we're going to be able to retrofit 29 million homes in the UK. And that clearly is a very big ask around the tradespeople and what is needed. And the Climate Change Committee also just released a report on Scotland's progress so far and the ambitious building of their decarbonisation goals. Madeleine I’m interested, given all the things you've talked about from a Scottish Power perspective, what are you seeing around people retraining or upskilling for the transition?

Madeline: Yeah, thanks, Carl. It's quite, quite an interesting area. There's a huge, and I think Lynne touched on it before, there's a big skills shortage we have in the UK in different areas. I remember quoting not long ago at a conference that when I was in Manchester that actually for offshore wind you short the equivalent of Old Trafford Football Stadium full of people by 2030. So there's a big gap and we're seeing quite a few people retraining or upskilling for transitions, so we know that not everyone we will need to support these can come from our existing workforces, that's just a reality. And we know we're going to have to help to build the skills to deliver the number of people we do to support the green growth.

And look at Scottish Power, we have a couple of different programmes that we use, in particular our year in industry for new joiners. So people that are new to the workforce to help them transition to a green economy, also a return of programmes for people that might have been out of the workforce for a little while to help them support transition into a green job.

Also looking, and when we're talking about those different skill sets, and also we leverage people that have transferable skills. So people such as military leavers, people from the oil and gas industry are going to be really important to that transition moving forward. And also where people might not always think about green, but I think it's also really important considering the significant demand because of how innovative that renewable industry, is that upskilling people in our workforces in terms of digital and cyber skills is going to be critical moving forward.

Carl: Yeah, thanks a lot for that, Madeleine. I think, you know, the different skills and the different populations of people that we need to be looking at here is really pretty important. And I love that fact about Man United Football stadium and the number of people that and it really brings it to life. Maybe David I could bring you in here and just thinking about from your perspective, what do you think needs to be done to create but also fill the roles in terms of reskilling but also identifying new talent?

David: Well, I think it's going to be a combination, Carl, of getting more people into our industry. So, thinking about how do we grow the pipeline of young people leaving school, college and university to enter into our industry. But also how do you encourage and facilitate existing workers who may be in some of the sectors that are at risk from the transition to net zero or who may be in other sectors? But those sectors are allied industries and they have the sort of requisite skills already. How do you get them to consider transition transitioning across? And I think for trade specific skills, both of those strategies are going to be vital because we're not going to plug for the sort of the labour shortage issue on construction and trade skills, if we just focus on young people leaving school and university and college, partly because actually the time it will take to train them up will exceed actually when they're needed.

We know already we've got a major nuclear newbuild project down in the south west not far from Lynne, which is going to be approaching peak construction in the next few years with 10,000 construction jobs needed. We're going to have to supply those skills through a combination of factors, both getting more young people in, but also attracting workers from other sectors. So it's a two pronged approach here Carl, I think that we need government and industry, and the educational sector all pulling in the same direction.

Carl: Thanks, David. In terms of what do you think could actually shift that change and what's that was the thing that's most urgently needed, whether it be from the government, from education providers or business or anyone else for that matter. What do you think are the things that are priority in that regard?

Rob: Well, I think there's a lot of work going on already. We sit on the UK government's green jobs delivery group. So that includes industry, the educational sector and also the various government departments that have a stake in this. And there's a lot of work going on to try and identify what policy interventions are needed. I think to give you one concrete example of something that's already underway, there's a huge focus on ‘how do we support the transition of specifically oil and gas workers who work offshore into jobs in offshore wind’ and also further on down the track into sectors like hydrogen production and carbon capture.

And we're doing quite a bit of work with partners on the Energy Skills Alliance, including the Scottish Government and the UK Government, to look at the creation of an offshore energy skills passport so that workers who happen to work in, say, oil and gas can transition into offshore wind with minimal retraining. Because I think, as your report identifies, a lot of those core skills are hugely transferable. And so we've got to make it easy to transition, and not put sort of artificial barriers in the way of workers who are looking to make that leap.

Carl: Yeah, I think that's very helpful. And I love the idea of the offshore energy skills passport. You know, there's no doubt that those people that are in the traditional oil and gas sectors, you know, they are some of the people that could in the medium term start to lose out. But clearly they’re very strong engineers, so there are some great skills there that they can transfer.

Rob, maybe to bring you in. Now, your recent climate survey showed the urgency of knowledge and skills across different sectors. What do you think are the key tools that businesses need to make in order to deliver on the transition?

Rob: Thanks, Carl. I mean, as COP 27 came to a close, we were keen to understand from a local business perspective what they were really up against. And we undertook the survey to gage the views of the climate concerns across South East Wales, and it definitely revealed an overwhelming number of businesses with fundamental concerns about the future of their organisations, And a critical requirement from their perspective, was the requirement for relevant information, transparent knowledge sharing and practical action by businesses of all sizes, big and small. The survey also explored actually where organisations sit currently on their decarbonisation journeys, and that was quite surprising. 43% had taken significant steps, 14% implementing a full environmental sustainability review, but 36% wanted much more support and the reasons that businesses were providing to us through the survey for not doing enough and wanting more support was a lack of time, a lack of budget and a gap in skills and knowledge.

So what we've decided to do in collaboration with the local businesses of South East Wales, is to establish a CCR climate coalition with four main purposes: one to share best practice, secondly, to promote green behaviours, thirdly, to provide a platform for accountability, particularly in areas of carbon monitoring, and finally to provide potential support mechanism for funding and financing going forward, particularly with the skills shortage, so that the coalition is really looking to provide that extra level of support for its membership and we found 80 businesses within the region already interested in joining the coalition to try and get much more reliable datasets, best practice case studies and toolkits, frameworks to access consultant support, training opportunities, business health checks, those sort of things. So actually, if there's anybody on the call today that looks as though they could probably take advantage of the coalition, please get in touch with me and we can certainly help.

Carl: That's brilliant. Thanks a lot, Rob. And actually, when we did our first report a year ago, we managed to get across the country and see 100 different businesses around all of the UK and actually the messages around time budgets, skills gaps and all came across loud and clear. And it's, you know, it's not just the big businesses in fact, actually in a lot of cases it's the SMEs that really do need this help. And obviously they're the heart and core of the UK economy in lots of ways, and actually provide a lot of the scope three emissions of some of the bigger organisations so a critical role that that plays. And so I'm sure many will sign up for that coalition. So thanks Rob.

And a number of you as we've talked there have talked a bit about the importance of education and the younger generation, and there's no doubt we need to find people to move into that green job market. I guess question to any of you, what do you think would be the best way to attract some of that younger generation into these roles? And just give me a sense of any areas of focus that some of you may have on that particular bit of the agenda?

Rob: If I can perhaps come in there…

Carl: Perfect Rob thanks.

Rob: Yeah thanks, I think there's a huge amount of additional work we can do with schools and colleges. We really need to start developing those new skill sets, the qualifications, the training programmes, really build some of those green skills into the curriculum from an early age, actually from primary school upwards.

You know, in some of our other clusters, we've really seen the positive benefits of going into primary schools with STEM ambassadors from industry and really providing additional outreach activity to work with governors, headteachers and parents to persuade children of what opportunities will exist as they move through their academic life, through comprehensive school, through to colleges, and really start to build that in as a requirement of some of our investments and projects.

So much stronger ESG requirements into our investments, asking businesses to sign up to green growth pledges, that sort of thing, data insights platforms, maybe conducting some skills audits, but really looking to do everything we can for children at a very early age. I think that the problem we've got is one that faces us right now, but I think over the next ten years it's going to get even worse. So the more we can do at that low level of education, early level of education, I think that will really pay dividends as we go down over the next few years.

Carl: Thanks, Rob and Lynne, maybe I'll come to you and I certainly know from a PwC perspective, that power of purpose and the importance of that brings on the younger generation is something we're certainly seeing.

Lynne: Yeah, I mean, it's something I'm really passionate about actually in terms of our offer as, as PwC. It is quite an interesting space at the moment for us in the applications that we're getting, particularly the graduate level. So less around the school age, and we're just actually going through that advertisement of our next round of graduate placements for sustainability to come and join my practice. And you know, we have 30 specific spots in the team and we have just had the latest statistics and we've had over 2000 applicants for those roles. And I would say, you know, that is specific for our sustainability team. Couple of things I am looking at in relation to our team and our focus, I think we do need to rebalance a bit outside of London so actually thinking about that regional footprint and where we should be based as a team supporting our clients in the transition, as there's no doubt that we will be looking at investing in other offices.

And then as part of that, also looking at actually other routes to professional services. One of the things I'll be looking at with university partners is around a Sustainability Degree Apprenticeship, as well to open up access for those who want to work in this space.

I think the final thing I would say is, you know, for all of our graduates actually who join now, the level of demand on us in terms of what are we doing in relation to sustainability, it matters to all of our graduates. And not only if you're, you know, applying to join specifically into my team, but actually in any role within PwC. They want to know how are we building this into all of the different type of work we do? And also about our own credentials as well.

Carl: Yeah, there's no doubt it's absolutely a core expectation now of all of our people, and really helpful thoughts around that, the younger generation. Maybe Madeleine, I'll just come back to you in terms of Scotland, and obviously Scotland continues to have actually a very good story in terms of the number of green jobs that are created in the benefit that this will bring hopefully to to the region more broadly. But what do you see as how you think this is going to shape the future of the Scotland economy?

Madeline: I mean, unfortunately, by no means an economic expert I can wish, but I think, I can only imagine that it's going to strengthen the economy long term. I mean, look, there's a real security and growth in green jobs and our people that work with us, at Scottish Power and also the people that apply for jobs for this, they know this as well.

Green jobs are extremely desirable because in the current economic climate we're in, they're secure. There's also significant potential for opportunity and growth for people's careers long term. So for us, as part of having a huge part of our workforce in Scotland, being able to build greater skills capability in Scotland and leverage different workforces to help us deliver it. And also touching on some of the points that Lynne made before about leveraging that, harnessing the Gen Z workforce and bringing them across and getting them invested, it's only going to help make the Scottish workforce more resilient long term. And I can't see how that wouldn't improve the economic outlook in Scotland. It's only going to strengthen it.

Carl: Yeah, and clearly that's a critical part of the Scotland story as it goes through the energy transition it inevitably needs to go through. Maybe moving across back to Wales, rather, maybe just looking again. Wales has had a pretty strong year, moving significantly up the table from a green jobs perspective, up into 4th and a 150% increase in the green jobs that it's had.

Maybe just very briefly, do you think that Wales can actually meet that demand and what do you think Wales can do to attract the talent that's needed?

Rob: Yeah, those numbers are very encouraging, but it's clearly fair to say that following Brexit and COVID, as we as we emerge from COVID, and know during the current energy crisis, there has been that major skills and labour gap in many industries. And I think the solar energy sector is a good example of that. The 50 gigawatts of installations, £25 billion worth of investment, up to 190,000 acres of land during the planning pipeline at the moment, but with very small supply of suitable contractors and labour. UK installers that are definitely facing the possibility of having to turn down some of that very lucrative commission.

So I mean, this is clearly could have a major impact on government net zero targets, projects falling behind schedule, costs will inevitably go up and maybe even some projects will be unable to start. So definite shortage in that sector and I think we’re seeing also a shortage in sustainability professionals generally to manage decarbonising energy, in both the public and private sector, shortage of project managers to manage projects that finally come to fruition.

Definitely a lack of, a shortage of high voltage energy experts, which is proving to be a particular problem on some projects at the moment. Certified HV engineers have always been a shortage there, but that's exacerbated now with the current climate, and also I'd say in the offshore wind and marine sector, a shortage in secondary supply chain resources, as well as digital and IT for the energy supply, is very much in short supply as well.

So I think there's a definite requirement for upskilling of our existing workforce and that's particularly the case in South Wales where you've got some suitable energy with an opportunity, suitable businesses rather, with an opportunity to transition, to be retrained, rapidly expand the workforce in those green growth areas from the more traditional South Wales industry. So I think if we focus on that, work around the skills audit, instigate the more diverse opportunity for all of our society, we will build up that requirement, that labour supply, for some of these problem areas.

Carl: Brilliant, thanks a lot Rob. It's amazing how, when you get into conversation, how quickly time flies. I think what I would take away from this conversation is just the huge scale of opportunity that is there, whilst there are some significant challenges and getting the right skills in the right place is absolutely critical, there is also a lot of intervention and support that is also coming into this bit of the market as well.

And so hopefully for people on the call, that was an interesting insight into that. Please obviously do message on the LinkedIn site should you want to have any further follow ups and we'll look to do that. But thanks to all of the guests for joining and I hope you found it very useful. And thank you very much.