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HUMAN RESOURCES AND THE GREEN JOB MARKET

PART 1 - DEFINING GREEN JOBS The emergence of issues related to the environment has created a significant impact in the employment market. Organisations now have to respond to both the pressures that green legislation is creating, such as legislative compliance, and the commercial opportunities that are emerging. Employment needs are being created in a range of areas including energy generation, energy efficiency, waste and resource management and corporate responsibility. This job creation is not limited to any single market sector; it is impacting the public and private sector, charities and NGOs, large corporates and SMEs. It is important to understand what is meant by the green job market in the UK and how it is going to affect the Human Resource function in the near term. It is in the interest of politicians to loosely define green jobs; this allows them to claim credit for a wide range of newly created jobs even if the connection to the green job market is tenuous. Such loose definitions are of no help to anyone involved in workforce planning and the creation of green jobs. To facilitate this activity it is necessary to put some definition around the green job market. We divide the market into two key segments; Dark Green Jobs: these are jobs where people are hired specifically for their knowledge of sustainability, the environment or climate change. They are likely to have a qualification in one of these areas and may well have the job title of ‘sustainability consultant’ within a consultancy firm or be an in house expert such as ‘Head of Environment’ or ‘energy manager’. This is a small and specialist market place but due to current and upcoming legislation is likely to expand quickly. Pale Green Jobs: these are roles that have been created by climate and environmental policy, but where the person is hired for specialist knowledge of another area. An example might be a carbon trader in an investment bank, whose value to the company lies in his/her trading skills rather than their knowledge of sustainability. The area of Pale Green jobs is hard to measure. We estimate that these jobs could account for over 500,000 new UK jobs over the next five years, assuming that appropriate legislation is put in place. At least half of these should come from renewable energy. We expect the following Pale Green Job category to comprise:

• Environmental lawyers • Carbon traders • Accountants (including carbon auditors) • Scientists (especially for Nuclear) • Management (including Non-executive directors) • Sales people • Support roles


Beyond Pale and Dark Green, we split the green job market into three further categories:

• Environmental jobs - this is a well established market and includes environmental management, environmental planning and waste management. Example job titles in this area would include ‘environmental manager’, ‘ecologist’ and ‘air quality consultant’.

• Climate Change and Energy jobs - this is a newer feature within the job market and has been building pace over the past three years. This category includes carbon finance, clean tech, emission reduction, energy management and renewable energy. Example job titles in this area would include ‘energy or climate change manager’, ‘biofuel supply chain manager’ and ‘renewable energy engineer’.

• Corporate Responsibility jobs - this includes socially responsible investment, ethical supply chain, community engagement and internal and external communication. Example job titles in this area would include CR/sustainability manager and ethical supply chain manager. Many of these jobs may not be traditionally classified as ‘green’, particularly those that focus towards the social side of the spectrum, such as poverty alleviation and labour and human rights. This is a relatively small market but is likely to continue to grow over the coming years, particularly as climate and energy issues become increasingly central to the economy.

Across all of the above categories common job titles such as regulatory lawyers, accountants, engineers and scientists are found. There is a degree of cross over between these three categories - for instance, a CR Manager may often oversee some of an organisations environmental obligations. The vast majority of green jobs fall into what is known as the Low Carbon Goods and Services sector of the UK economy. According to the Department for Business Enterprise & Regulatory Reform (BERR), in 2007-08 the UK market value of this

“For Human Resources to be able to respond effectively to current or future impact on the organisation the function will need to understand the content and impact of environmental / climate change legislation”. __________________________________________________ sector was estimated to be worth £107 billion with the UK claiming a 3.5% market share of the entire global market. BERR also concluded that there were 881,000 jobs in the UK in this sector, but it is realistic to expect that this figure could grow by half as much again by 2015.


The green job market, sooner or later will end up affecting all sectors. It does not matter whether it is public service (central or local), the charitable sector or the private sector, all will be impacted to a greater or lesser degree. For some it has already started. For Human Resources to be able to respond effectively to current or future impact on the organisation, the function will need to understand the content and impact of environmental / climate change legislation.

This is essential so that it is able to plan the future organisation and resource necessary to support it, be that in the area of utility management, the development of energy efficient systems or legislative compliance. 2. AN EXAMPLE DRIVER FOR GREEN JOB CREATION The major piece of current legislation that will impact large public and private sector organisations initially (followed by a large number of others over time) is the Carbon Reduction Commitment Energy Efficiency Scheme (CRC). This legislation is designed to stimulate energy efficiency in organisations that might otherwise be resistant to implementing energy efficient measures. Approximately 5000 organisations will be initially affected by the CRC but on the basis that there is an increasing international drive to adopt similar cap and trade schemes, the CRC is highly likely to be expanded over time. The immediate concerns for those organisations affected by the CRC are:

• The cost of measuring and reporting annual emissions • The cost of buying allowances to cover emissions • Penalty costs for not having enough allowances to cover emissions • Cash flow problems associated with the timing of recycling emissions back to

the company • Bonuses and penalties based on positions in the CRC league table • Reputational damage caused by poor performance on the published league

tables And, of course having staff resource to manage this issue. This is not an issue that will happen in the distant future. For the estimated 5000 organisations affected, the legislation will be enacted in April 2010 when any organisation with half hourly electricity meters – an estimated 20,000 – will have to register with the Environment Agency. For about 15,000 organisations that is all that happens until 2013 when they will be required to re-register. The remaining 5000 will be legally obliged to calculate their carbon emission for 2010/11. We have already experienced an increase in demand for energy managers and carbon reduction specialists which we consider to be a direct result of the Carbon Reduction Commitment.


PART 3 - THE IMPLICATIONS FOR THE HUMAN RESOURCE FUNCTION Given this background we believe that there are three major areas where the Human Resource function needs to demonstrate leadership in the in the area of green jobs. These are:

• Energy Management • Corporate Responsibility • Performance Management

Firstly Energy Management: although the CRC is extremely important, it is by no means the sole driver of sustainability and energy management initiatives. Many organisations, irrespective of whether they are immediately impacted by the CRC, have still proceeded to hire energy and sustainability managers because it is organisationally important that appropriate strategies are in place to manage energy and utility procurement and to ensure cost containment and reduction. The profile of these roles has been significantly heightened

“There is very little evidence of the HR function providing leadership in this area in the joint definition of organisational need, financial imperatives and role definition”. __________________________________________________ over the past two years; we have seen some extremely selective hiring at senior levels with the aim of introducing effective long term energy management strategies. The imperatives are now becoming apparent particularly to the organisation, not only in terms of the carbon footprint, but also in terms of cost reduction. When it comes to the creation and coordination of green job opportunities within organisations, the HR function has to date, worked in a reactive fashion, responding to the requirements of particular job functions or general management. There is very little evidence of the HR function providing leadership in this area in the joint definition of organisational need, financial imperatives and role definition. By joint definition we mean working with the appropriate functional management and the finance function to drive the issue of energy management within the organisation. There is some worrying data pertaining to the current CRC legislation. A survey commissioned in November 2009 by SAP a global provider of software solutions, observed that only one third of companies were fully prepared for the CRC despite it only being 130 days away at that time. 20% had not even started planning or had no idea what measures they needed to take. Functional Management led by Human Resources should be ensuring that these major issues are addressed. Irrespective of the CRC there is an overwhelming need going forward, for organisations to manage the issue of energy be that in the area of utility management,


emission reduction or the use of renewable energy. The financial implications clearly need to be understood whatever the size and nature of the organisation and the appropriate resource needs to be put in place to manage these issues for the long term. There needs to be a robust workforce plan in place to ensure that the critical organisational needs are met. There is little doubt that the resource available on the job market, be it core or complementary, is going to become increasingly scarce. Secondly Corporate Responsibility: In the light of the recent economic downturn and recession there has been a loss of trust between the public and many organisations and corporations. We see many corporations working hard to rebuild bridges and to restate and demonstrate their commitment on a range of issues. There is certainly an acceleration of activity in this area that we expect to continue for the foreseeable future. Corporate responsibility requires that organisations be:

• Economically viable • Environmentally sound • Exercising responsibility to their employees • Socially responsible • Adaptive to stakeholder interests • Responsive to shareholders, customers and local and global stakeholders

We additionally see the area of diversity and inclusion being included under the banner of corporate responsibility. Human Resources is in an ideal position to apply considered advocacy in this area. The 2006 Companies Act had the impact of bringing a number of stakeholder issues into legislation. The Board now has responsibilities that extend beyond the

“Someone has to bring together the strands that now comprise corporate responsibility within the organisation in terms of defining the organisations position on this issue”. ___________________________________________________________________ shareholder. It must take into account issues such as the business’s impact on employees and society and the environment. It is important that the HR function displays leadership in this area at the most senior level to ensure that organisations are aware of all the issues and ramifications both currently and in the future. In 2001 the Economist stated: “The next big thing in brands is corporate responsibility - it will be clever to say that there is nothing different about our product or price but we do behave well” That may well have been the perception at the beginning of the decade but things have moved on at a pace since then and what was then perceived as a “soft” activity


has now evolved into one where the outcomes include enhanced financial performance, brand value, long term sustainability for both the company and society and enhanced relationships with government and communities.

Someone has to bring together the strands that now comprise corporate responsibility within organisations in terms of defining the organisation’s position on this issue. This will involve working with the finance function to define the financial advantage, working with the marketing function to establish brand value, and with the communicators to establish a strategy for community and government relations. With its clear interest in worker commitment Human Resources would appear to be in a strong position to facilitate this effort and drive it through to Board or Executive Management level. Working with other functional leaders, it will also allow HR to establish the workforce needs in all of the appropriate areas. Thirdly Performance Management: Always a contentious issue for both the organisation and the HR function. The ability of organisations to face up to the issues of measurement, evaluation and the reporting on individuals and teams along with the organisation itself, has presented issues that have often failed to be addressed. Whilst there is no doubt that issues of energy management, sustainability and corporate responsibility create huge challenges for both organisations and the HR function, they also create opportunities in the area of performance management. The performance criteria within these areas are mostly easily definable and measurable

“As far as the Carbon Reduction Commitment is concerned the kudos of a high position in the CRC tables and conversely the penalties arising from low positions in the tables and the consequent damage to the organisation’s reputation will be immediately apparent”. _______________________________________________ and in most cases it is difficult for organisations and individuals to fudge issues in terms of definition or outcome. We believe that the HR function should assume leadership to ensure that the organisation understands what it needs to measure in these areas. It needs to ensure that where performance management is directly linked to reward then both the individual and the organisation are incentivised to achieve pre-defined and objective goals. Both the positive and negative consequences for an organisation will be immediately apparent in such areas as high energy and utility costs. As far as the Carbon Reduction Commitment is concerned the kudos of a high position in the CRC league tables and conversely the penalties arising from low


positions in the tables and the consequent damage to the organisation’s reputation will be immediately apparent. These outcomes should be reflected in the rewards made to the organisation and individuals.

In this article we have tried to define what we believe are the major issues for HR practitioners and leaders in the vast majority of organisations. There is no doubt that energy management, sustainability and corporate responsibility create huge challenges and opportunities for the HR function in multiple areas. There is a significant opportunity for the HR function to assume a leadership position in addressing these issues. It should not be ignored. ABOUT THE AUTHORS Andrew Cartland: Managing Director of Acre Resources Andrew is the Managing Director and Co-founder of Acre, having established the company in 2003. Since this time, with the support of his colleagues, he has built Acre to be a globally recognised recruitment brand within the fields of sustainability, environment and climate change. For more information, contact Andrew Cartland on 020 3170 8031 John Cartland: Non-Executive Director of Acre Resources John is a Non-Executive Director at Acre and previously held positions with several North American corporations including Digital Equipment Corporation and Nortel Networks where his most recent positions were those of Vice President Corporate Compensation and Vice President of Human Resources for Europe Africa and the Middle East. For more information, contact John Cartland on 0118 940 3309 Notes to editors: • Established in 2003, Acre Resources is the leading specialist recruitment

company for the Corporate Responsibility, Climate Change and Environmental sectors.

• Acre was the first recruitment agency of its type, established by Andy Cartland and Tom Leathes, both of whom have extensive experience in the ‘green’ sector and providing top quality recruitment solutions

• Acre is the first choice for a range of clients, from the biggest global corporations to market-leading consultancies and NGOs


• Acre’s head office is located in central London with a satellite office in

Chicago • Acre Resources is one of the organisations behind the market leading CSR

Salary Survey which is now in its third year. The survey provides unique insight and data on the roles, salaries and backgrounds of CSR professionals. Acre also undertakes the Carbon Salary Survey, a global report about the Climate Change job market.

Acre Resources: www.acre-resources.com Acre’s submission to the governments Environmental Audit Commission: http://www.publications.parliament.uk/pa/cm200809/cmselect/cmenvaud/memo/greenjobs/uc2602.htm

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