Skills for a Sustainable Economy - Transformational Change - Tim Balcon (IEMA) - Energy & Environment Expo, 17 June 2014
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The document discusses the need for skills training to support a sustainable economy. It notes that businesses have been slow to respond to environmental drivers and that leadership skills are not currently being taught for sustainability. It argues that governments and industry need to work together to address the rapidly changing skills landscape and keep skills up to date through partnerships and training solutions.
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Skills for a Sustainable Economy - Transformational Change - Tim Balcon (IEMA) - Energy & Environment Expo, 17 June 2014
- 1. www.iema.net Skills For A Sustainable Economy- Transformational Change Tim Balcon Chief Executive - IEMA
- 2. www.iema.net •IEMA 15,000+ members and growing •1500 at Chief Level •1500 international members •More than 80 per cent of IEMA Members are in industry & large consultancies •60 per cent of FTSE 100 companies have an IEMA member. •Strong footprint in Construction, Aerospace, Defence, Security, Energy and Power, Nuclear, Chemicals, Retail, Consultancy and Regulation •Members in 90- countries – global reach. IEMA
- 3. www.iema.net Drivers for environmental management Government reviewing GHG reporting requirement to include all large companies from 2016. Environmental & social issues largest proportion of all shareholder proposals in 2010 – expected half of shareholder proposals in 2011. Requirement for publication of strategic directors’ report on environment and social issues. Increase in Carbon Reduction Commitment tax for the FY2015/16. Larger fines for non- compliance.
- 4. www.iema.net
- 5. www.iema.net Change isn’t an option THE PERFECT STORM 2030 World's population will rise from 6bn to 8bn (33%) Demand for food will increase by 50% Demand for energy will increase by 40% Demand for water will increase by 30% Professor Sir John Beddington, UK Government Chief Scientist (2009)
- 6. www.iema.net WHAT’S THE PROBLEM? OECD Development Centre, Working Paper 285 (Kharas, 2010)gfh 2014
- 7. www.iema.net TRANSITION TO A SUSTAINABLE ECONOMY? 83% of CEOs see government policy making and regulation as critical to making progress Only 33% of CEOs believe that business is making sufficient efforts to address global sustainability challenges 68% of CEOs don’t believe that the global economy is on track to meet the demands of a growing population
- 8. www.iema.net THE BUSINESS CASE Over 1 /3 of UK economic growth in 2011/12 from green business. Green business in the UK has a £5bn trade surplus. UK’s overall trade deficit 2014/15 would be double without green business exports. Government research shows £23bn savings for UK businesses from low cost resource efficiency. GREEN BUSINESS
- 9. www.iema.net THE BUSINESS CASE 62% of business will increase spending on env mgt in 2014 83% investors believe e & s factors can significantly impact long- term shareholder value >285,000 companies have ISO 14001 EMS across 167 countries 29% FTSE350 profit warnings in 2011 attributed to rising resource prices ENVIRONMENT SUSTAINABILITY
- 10. www.iema.net Source - UKCES (2014) The Future of Work: Jobs and Skills in 2030 – Martin Rhisiant, Centre for Research in Futures and Innovation, University of South Wales, Peter Glover, Helen Beck, UK Commission for Employment and Skills, London Trends Driving UK Skills
- 11. www.iema.net Getting your organisation to understand this stuff is hard and complex working for organisation that understands this stuff is hard and complex working together is a far better option
- 12. www.iema.net • Governments and businesses working together is the catalyst for success • Vocational and academic skills and education system is a critical success factor • Innovation to be captured in skills solutions • Fast moving profession supported by speedy skills response • Education and training systems to recognise economic need for Environment and sustainability Some actions needed
- 13. www.iema.net SKILLS GAPS & CURRENT PROVISION LEADERSHIP 24.4% have environment & sustainability integrated at Board level 65.5% have not conducted a strategic evaluation of the skills they will require 13.1% have environment & sustainability skills to compete in a sustainable economy SKILLS GAPS 24.6% leaders & 8.2% workforce, 17.7% procurement, 11.0% finance, 25.7% design/ development, 14.6% logistics, 20.8% operations are capable of addressing the environment & sustainability agenda 80.4% leaders would benefit from further understanding SKILLS SHORTAGES & INVESTMENT 52.6% of organisations are unable to recruit environment and sustainability professionals with right skills 63.2% of organisations spend less than £100 per head on environment and sustainability training per head TRAINING 19.7% of individuals trained in environment and sustainability in the last two years were able to make changes as a result of the knowledge and skills gained 43.4% believe that the quality of materials, trainers and training delivery could be improved
- 14. www.iema.net Setting the standards Leadership Manager / Specialist Operational Entry c o r e u n i t s c o r e u n i t s c o r e u n i t s c o r e u n i t s Associate HR Finance Engineering Manufacturing Logistics FM Knowledge Practice Knowledge Skills Practice & knowledge Behaviors Skills Practice and knowledge
- 15. www.iema.net Sustainability Training Solutions To deliver commercial training products and services through quality partnerships Transform understanding of global demand for sustainability skills. Drive up the quality of sustainability training providers & provision. Grow the training market and build capacity and capability. Broker access to training for sustainability professionals and the wider workforce. Develop training solutions, including Apprenticeships. To become the critical learning and development partner for organisations to up-skill their staff
- 16. www.iema.net Summary • Businesses slow to respond to environmental drivers • Leadership is critical • Leadership skills are not being taught for a sustainable economy • Government/s and industry need to work together • Rapidly changing skills set - Imperative to keep up to date
Editor's Notes
- The business case for investment in sustainability skills is stark. Government is responding to the sustainability challenge by using various policy levers to change corporate behaviour – these include regulation, taxation and economic levers, and shining a light on corporate sustainability performance. Examples include: Changes to the Companies Act in 2013 require mandatory reporting of GHG emissions for all UK listed companies. Currently UK companies listed on the London Stock Exchange from October 2013 – approximately 1,100 companies are required to report greenhouse gas (GHG) emissions. The government has committed to review extending the reporting requirement to all large companies from 2016, which would extend the requirement to 24,000 companies. Changes in 2013 to the Companies Act also requires publication of a strategic directors report on environment and social issues, including human rights, that will impact on the long-term success of the company. Similar requirements have been agreed in EU for all listed companies employing over 500 people. This is already having an impact – in its 2013 Strategic Report to shareholders – Shell highlighted that rising climate change concerns could lead to additional regulatory measures that may result in project delays and higher costs and reduced demand for hydrocarbons. The UK government gave a commitment in the Coalition Agreement 2010 to increase the proportion of revenue from environmental taxes – this was reinforced in the Natural Environment White Paper. This has had a big financial impact on companies, for example: - The Carbon Reduction Commitment in FY2012/13 covered 2071 organisations surrendering allowances (i.e. carbon tax) valued at £656M to HM Treasury. The tax for the FY2015/16 is increased from £12/tCO2e to £16/tCO2e and will rise by inflation in subsequent years. Shareholders have also taken note. According to Ernst & Young (2011) environmental & social issues formed the largest proportion of all shareholder proposals in 2010 – expected that half of shareholder proposals in 2011 would be on environment and social issues. In addition, new Sentencing Guidelines issued to the UK Courts by the Sentencing Council makes clear that corporate fines “must be sufficiently substantial to have a real economic impact that will bring home to management and shareholders the need to improve regulatory compliance”. In determining fined, profitability, dividends to shareholders and directors’ remuneration (including bonuses) will be taken into account.
- The business case for investment in sustainability skills is stark. Government is responding to the sustainability challenge by using various policy levers to change corporate behaviour – these include regulation, taxation and economic levers, and shining a light on corporate sustainability performance. Examples include: Changes to the Companies Act in 2013 require mandatory reporting of GHG emissions for all UK listed companies. Currently UK companies listed on the London Stock Exchange from October 2013 – approximately 1,100 companies are required to report greenhouse gas (GHG) emissions. The government has committed to review extending the reporting requirement to all large companies from 2016, which would extend the requirement to 24,000 companies. Changes in 2013 to the Companies Act also requires publication of a strategic directors report on environment and social issues, including human rights, that will impact on the long-term success of the company. Similar requirements have been agreed in EU for all listed companies employing over 500 people. This is already having an impact – in its 2013 Strategic Report to shareholders – Shell highlighted that rising climate change concerns could lead to additional regulatory measures that may result in project delays and higher costs and reduced demand for hydrocarbons. The UK government gave a commitment in the Coalition Agreement 2010 to increase the proportion of revenue from environmental taxes – this was reinforced in the Natural Environment White Paper. This has had a big financial impact on companies, for example: - The Carbon Reduction Commitment in FY2012/13 covered 2071 organisations surrendering allowances (i.e. carbon tax) valued at £656M to HM Treasury. The tax for the FY2015/16 is increased from £12/tCO2e to £16/tCO2e and will rise by inflation in subsequent years. Shareholders have also taken note. According to Ernst & Young (2011) environmental & social issues formed the largest proportion of all shareholder proposals in 2010 – expected that half of shareholder proposals in 2011 would be on environment and social issues. In addition, new Sentencing Guidelines issued to the UK Courts by the Sentencing Council makes clear that corporate fines “must be sufficiently substantial to have a real economic impact that will bring home to management and shareholders the need to improve regulatory compliance”. In determining fined, profitability, dividends to shareholders and directors’ remuneration (including bonuses) will be taken into account.
- The UN predicts global population will grow from 7.2billion currently, to 9.6bn by 2050. In addition to population growth, a significant shift is taking place within the global population such that by 2030, 60% will form part of the ‘middle class’, compared with 22% in 1965. Population growth isn’t just an international issue, the UK’s population is projected to grow by 10.9M people between 2010 and 2035, an increase of over 17%. Population increase will lead to increased global demand for resources: demand for food will increase by 50%, water by 30% and energy by 40% - this is known as ‘the perfect storm’. In a global survey of 1000 CEO’s 68% don’t believe that the global economy is on track to meet the demands of a growing population; and only 33% believe that business is making sufficient efforts to address global sustainability challenges. United Nations (2013) World Population Prospects: The 2012 Revision OECD Development Centre, Working Paper 285 (Kharas, 2010) Office of National Statistics (2011) National Population Projections, 2010-Based Projections Professor Sir John Beddington, UK Government Chief Scientist (2009) http://www.govnet.co.uk/news/govnet/professor-sir-john-beddingtons-speech-at-sduk-09 The UN Global Compact – Accenture CEO Study on Sustainability (2013) Population growth and the perfect storm create other environmental trends that will converge and force businesses to transform the way they operate: Increased demand, new markets and new locations as a result of population growth and urbanisation; Reactive trends such as consumer pull for sustainable products. Disruption to international supply chains, access to resources and regulatory pressure to reduce emissions as a result of climate change; These trends will lead to future sustainability being central to resilience and competitiveness. They will drive the development of alternative business models and the emergence of a circular economy. Change from an economy based on the conversion of raw materials into products which end their lives as waste, to an economy where products are re-used, ‘re-purposed’, repaired, re-manufactured and recycled, cascaded, and recovered (see earlier definitions in this chapter) rather than being used and discarded – definition taken from Foresight (2013) “The Future of Manufacturing – A new era of opportunity and challenge for the UK” –Project Report, Government Office for Science, London.
- UN’s 2013 Global population prediction indicates we are: Currently @ 7.2Billion 2025 will pass 8.5Billion 2050 likely to be @ 9.6 Billion Population growth is not just an international issue, it’s happening in the UK too. In the UK – ONS projections are for UK population to increase between 2010 and 2035 by over 17% (10.9 million people) – this will drive demand for energy, water, ‘material goods’, houses and transport infrastructure etc. But it’s not just about population growth – the growth of the Middle Class consumer is potentially of greater concern if current trends continue – as this will accelerate the demand for natural resources and significantly increase pressure on the environment and ecosystems.
- The UN Global Compact – Accenture CEO Study on Sustainability 2013. Based on a survey of 1000 CEOs of global businesses. While businesses are starting to make the transition to a sustainable economy and embed sustainability – it’s clear that more needs to be done. Business leaders don’t think that we are on course to meet the sustainability challenges from a growing population. They also don’t think that business is doing enough. In a global survey of 1000 CEO’s 68% don’t believe that the global economy is on track to meet the demands of a growing population; and only 33% believe that business is making sufficient efforts to address global sustainability challenges. The UN Global Compact – Accenture CEO Study on Sustainability (2013) Business leaders (83%) see government policy and regulation as critical to providing the framework for business to change.
- Of course, for businesses that make progress in the transition to a sustainable economy – there can be rewards in terms of gaining competitive and productivity advantages. The key issue here is the huge POSITIVE contribution that is made by businesses taking a greener approach. It’s an economic and business OPPORTUNITY to take advantage of regulatory and taxation changes. CBI uses the term “Green Business” to refer to businesses taking green action across the economy......not just the green sector and estimates that: Over 1 /3 of UK economic growth in 2011/12 from green business (CBI); Green business in the UK has a £5bn trade surplus (CBI); UK’s overall trade deficit 2014/15 would be double without green business exports (CBI); CBI (2012) “The colour of growth – maximising the potential of green business” Defra calculate that UK businesses implementing resource efficiency measures requiring investment with less than a one year payback period can save £23 billion. Where the payback period is beyond 12 months, the savings actually almost double to £55bn.
- This is a core business issue. Businesses themselves are predicting an increase in spending on environmental management initiatives in 2014. More than 62% of corporations worldwide will increase spending and 31% will increase by double-digits. This is supported by the fact that 29% of profit warnings issued by FTSE350 companies in 2011 were attributed to rising resource prices. The revision to ISO14001 will drive demand for currently accredited businesses to rethink their approach to sustainability – it is being reviewed to meet the challenge of the next decade leading to a significant up-skilling requirement. In 2012, there were 15,884 businesses with ISO14001 accredited certification. This equates to just 0.3% of the 4.9 million businesses in the UK with a workforce of 24.3 million. Sources: Defra (2011) “Evidence-based study of the Benefits of EMSs for SMEs” – Dr Ruth Hillary & Paul Burr, WYG Environment research report completed for the Department for Environment, Food & Rural Affairs (Defra), London. ISO 14001 was developed to provide a management system to help organisations reduce their environmental impact. It is currently being revised. Taken from Federation of Small Businesses statistics at http://www.fsb.org.uk/stats According to a new report from market analyst Verdantix in its survey of 250 heads of environment, health and safety (EH&S) based in a total of 13 countries: Global Survey 2014: EH&S Budgets – February 2014.
- The business case for investment in sustainability skills is stark. Government is responding to the sustainability challenge by using various policy levers to change corporate behaviour – these include regulation, taxation and economic levers, and shining a light on corporate sustainability performance. Examples include: Changes to the Companies Act in 2013 require mandatory reporting of GHG emissions for all UK listed companies. Currently UK companies listed on the London Stock Exchange from October 2013 – approximately 1,100 companies are required to report greenhouse gas (GHG) emissions. The government has committed to review extending the reporting requirement to all large companies from 2016, which would extend the requirement to 24,000 companies. Changes in 2013 to the Companies Act also requires publication of a strategic directors report on environment and social issues, including human rights, that will impact on the long-term success of the company. Similar requirements have been agreed in EU for all listed companies employing over 500 people. This is already having an impact – in its 2013 Strategic Report to shareholders – Shell highlighted that rising climate change concerns could lead to additional regulatory measures that may result in project delays and higher costs and reduced demand for hydrocarbons. The UK government gave a commitment in the Coalition Agreement 2010 to increase the proportion of revenue from environmental taxes – this was reinforced in the Natural Environment White Paper. This has had a big financial impact on companies, for example: - The Carbon Reduction Commitment in FY2012/13 covered 2071 organisations surrendering allowances (i.e. carbon tax) valued at £656M to HM Treasury. The tax for the FY2015/16 is increased from £12/tCO2e to £16/tCO2e and will rise by inflation in subsequent years. Shareholders have also taken note. According to Ernst & Young (2011) environmental & social issues formed the largest proportion of all shareholder proposals in 2010 – expected that half of shareholder proposals in 2011 would be on environment and social issues. In addition, new Sentencing Guidelines issued to the UK Courts by the Sentencing Council makes clear that corporate fines “must be sufficiently substantial to have a real economic impact that will bring home to management and shareholders the need to improve regulatory compliance”. In determining fined, profitability, dividends to shareholders and directors’ remuneration (including bonuses) will be taken into account.
- The business case for investment in sustainability skills is stark. Government is responding to the sustainability challenge by using various policy levers to change corporate behaviour – these include regulation, taxation and economic levers, and shining a light on corporate sustainability performance. Examples include: Changes to the Companies Act in 2013 require mandatory reporting of GHG emissions for all UK listed companies. Currently UK companies listed on the London Stock Exchange from October 2013 – approximately 1,100 companies are required to report greenhouse gas (GHG) emissions. The government has committed to review extending the reporting requirement to all large companies from 2016, which would extend the requirement to 24,000 companies. Changes in 2013 to the Companies Act also requires publication of a strategic directors report on environment and social issues, including human rights, that will impact on the long-term success of the company. Similar requirements have been agreed in EU for all listed companies employing over 500 people. This is already having an impact – in its 2013 Strategic Report to shareholders – Shell highlighted that rising climate change concerns could lead to additional regulatory measures that may result in project delays and higher costs and reduced demand for hydrocarbons. The UK government gave a commitment in the Coalition Agreement 2010 to increase the proportion of revenue from environmental taxes – this was reinforced in the Natural Environment White Paper. This has had a big financial impact on companies, for example: - The Carbon Reduction Commitment in FY2012/13 covered 2071 organisations surrendering allowances (i.e. carbon tax) valued at £656M to HM Treasury. The tax for the FY2015/16 is increased from £12/tCO2e to £16/tCO2e and will rise by inflation in subsequent years. Shareholders have also taken note. According to Ernst & Young (2011) environmental & social issues formed the largest proportion of all shareholder proposals in 2010 – expected that half of shareholder proposals in 2011 would be on environment and social issues. In addition, new Sentencing Guidelines issued to the UK Courts by the Sentencing Council makes clear that corporate fines “must be sufficiently substantial to have a real economic impact that will bring home to management and shareholders the need to improve regulatory compliance”. In determining fined, profitability, dividends to shareholders and directors’ remuneration (including bonuses) will be taken into account.
- Leadership 24.4% of organisations have environment and sustainability fully integrated at Board level 65.5% of organisations have not conducted a strategic evaluation of the skills they will require to compete in a sustainable economy 13.1% are confident that they have the environment and sustainability skills to compete in a sustainable economy Gaps 24.6% believe those in leadership positions and 8.2% of the wider workforce are capable of addressing the environment and sustainability agenda 17.7% of procurement, 11.0% of finance, 25.7 %of design and development, 14.6% logistics, 20.8% production and operations professionals are capable of addressing the environment and sustainability agenda 80.4% of businesses identifying that leaders would benefit from further sustainability and environmental understanding Shortages & investment 52.6% of organisations are unable to recruit environment and sustainability professionals with the required skills, of which 4.2% were unable to recruit at all and 48.4% recruited someone with a skills gap to the role required. 63.2% of organisations spend less than £100 per head on environment and sustainability training per head Training 19.7% of individuals trained in environment and sustainability in the last two years were able to make changes as a result of the knowledge and skills gained 6.3% believe that the quality of materials, trainers and training delivery could be improved (i.e. All three can be improved) OR 43.4% believe that training can be improved in terms of the quality of materials, trainiers or training delivery – or a combination of these (i.e. One or more of these areas)
- Our purpose is -To deliver commercial training products and services through quality partnerships Our vision is - To become the critical learning and development partner for organisations to up-skill their staff to ensure that they meet their strategic environmental and sustainability goals. Our objectives are to – Transform understanding of global demand for sustainability skills and develop a strategy to embed the UK as the world hub of practice. Drive up the quality of sustainability training provision to meet global standards and create commercial advantage for employers. Grow the training market and build capacity and capability of training providers to operate effectively in this market. Broker access to training that will enable sustainability professionals to implement resource efficiency programmes across the business and the wider workforce to support strategic sustainability goals. Develop training solutions, including Apprenticeships, for employers to support sustainability skills development across their businesses.
- Our purpose is -To deliver commercial training products and services through quality partnerships Our vision is - To become the critical learning and development partner for organisations to up-skill their staff to ensure that they meet their strategic environmental and sustainability goals. Our objectives are to – Transform understanding of global demand for sustainability skills and develop a strategy to embed the UK as the world hub of practice. Drive up the quality of sustainability training provision to meet global standards and create commercial advantage for employers. Grow the training market and build capacity and capability of training providers to operate effectively in this market. Broker access to training that will enable sustainability professionals to implement resource efficiency programmes across the business and the wider workforce to support strategic sustainability goals. Develop training solutions, including Apprenticeships, for employers to support sustainability skills development across their businesses.