Keynote Series: Why a Just Transition Matters

Executive summary

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The move from fossil fuels towards a green economy represents an epochal shift and could threaten the economic wellbeing of workers left behind by the transition to renewable energy.

A just transition is the right thing to do, and it makes good business sense. As industries adapt their business models and embrace new technologies and a clean energy transition, it's crucial that they upskill and reskill the workforce and provide financial safety nets. In addition, these efforts need to be backstopped by social protections and other financial safety nets.

Historic energy shifts risk leaving people behind

As this massive shift towards a green economy rolls out, there's a risk that the people employed in the industries most exposed to the coming changes could find themselves left behind as the world moves into a new era of energy production and consumption. In the West, historically, the phasing-out of older industries has left behind a legacy of neglect and inequity.

A key component of any just transition involves reskilling employees for new roles. Positively, our research shows a strong appetite among workers to retrain. In January 2024, Gallagher commissioned a survey, polling over 1,500 semi-skilled workers around the world across sectors most exposed to the green transition, including oil and gas, mining, transportation, construction and agriculture. The questions gauged workers' appetite for reskilling as part of the transition to net zero. The study, Workforce Attitudes to the Net Zero Transition 2024, found 76% of workers are open to retraining and upskilling within their current role as part of the clean energy transition.

The study, Workforce Attitudes to the Net Zero Transition 2024, found:

• 76% of respondents are open to reskilling within their current role, with younger workers keener to retrain
• Those working in mining, oil, gas or construction demonstrate the most openness towards reskilling in a new industry
• Respondents are concerned about the cost of living and impact of inflation; financial concerns and lack of job opportunities are seen as key barriers to reskilling
• Nearly four-fifths of respondents say the energy transition will impact their industry sector; this is highest in the agriculture (93%) and oil and gas sector (92%)
• Half of employees working in the oil and gas industry are concerned about their future job prospects

Reskilling is wanted, and needed for a clean energy transition

Reskilling is urgently needed to facilitate the transition, as the renewable energy sector is among the industries struggling with skills gaps, adding to companies’ operational costs and slowing the pace of the green transformation. Addressing skills gaps through training is key to unlocking the return on investment of emerging industries and to governments hitting ambitious decarbonization targets.

This Keynote report shines a light on the desire among workers to reskill as part of the green transition and how a just transition is an essential factor in de-risking the energy transition. Additionally, it examines the role of insurers, employers and governments in incentivizing reskilling programs and providing social protection solutions and other financial safety nets to a workforce in flux.

Tom Tropp, Chief Ethics Officer, Gallagher