Recent research from Schneider Electric has revealed the impact of the energy crisis on businesses' sustainability goals. The new report ‘Missing the target: What the energy crisis means for UK and Irish businesses’ net zero plans’ Reveals that 4 out 5 large UK businesses now say that the energy crisis has hindered their ability to meet decarbonisation targets. The vast majority (88%) of organisations surveyed in the study said they have a net zero plan in place, yet 82% of UK businesses and 85% of Irish businesses believe that the energy crisis has impacted their ability to meet their emission reduction targets.
The energy crisis has seen prices skyrocket and heavily impact firms- at the end of 2022, the IMF (International Monetary Fund) reported that in Europe, wholesale prices of electricity and gas had increased by as much as 15-fold since early 2021.[i]
Schneider Electrics survey reveals that in response, almost half (49%) of businesses are delaying planned investments in green initiatives, 40% say that meeting carbon emission targets is no longer an issue for their stakeholders, and a third (33%) are tackling more immediate business challenges.
In terms of challenges faced over the past 12 months, 52% of respondents said that economic pressures had impacted their business, 46% said cyber security and 43% stated that skills shortages were an issue.
Source: Schneider Electric
Worryingly, the research revealed that business confidence remains low, with few saying they are optimistic that the economic climate will improve (4%), and only 22% believe that energy prices will fall. In a sign that long-term business strategy has been sacrificed for the near-term, 37% of respondents said that they had been forced to defer investment plans as a consequence of the energy crisis.
However, the researchers argue that businesses should be looking to make changes to address business sustainability now, in preparation for the future, arguing that short-term actions should always be taken with a view to the future and through a long-term lens. David Hall, Vice President of Power Systems UK & Ireland, Schneider Electric, said:
“Any crisis gives you the opportunity to re-assess the current state of things and emerge more efficient and sustainable as a result. Smart businesses are finding that their net zero measures go hand-in-hand with long-term efficiencies that are helping them navigate uncertainties in the energy market.”[ii]
When asked about impacts on their organisations in the medium term (the next three years), business leaders highlight digitalisation and investment in automation (41%) as well as e-mobility and electrification (33%). Schneider’s study also reveals that just under 4 in 10 business leaders recognise that climate change and net zero ambitions will become more of a priority in the coming 36 months.
We have seen much discussion around skills shortages and a skills gap over recent months, and Schneider Electric’s survey also raises concern on the matter, particularly regarding companies hoping to digitalise, automate, and implement green technologies- features which demand specific skill sets. Their study finds that 28% of respondents hope to address skills shortages within the next 6 months and 35% over the coming 12 months. Almost a third (30%), however, state they will address this within 2-3 years’ time, and 4% say they don’t know when they will rectify their skills shortage.
Particularly with regards to green energy, demand for skilled workers is set to be a major hurdle- global renewable capacity is expected to increase by almost 75% between 2022 and 2027, and this growth will require a highly skilled workforce operating in the correct locations, given the varying maturity levels between markets. Presently, the International Renewable Energy Agency (IRENA) estimates that over 38 million people globally could be employed in renewable energy by 2030[iii].
An earlier study into the opinions of 806 energy industry experts and leaders from across the globe conducted between February and April this year by Bureau Veritas found that sourcing and retaining skilled staff could prove costly in terms of meeting net zero goals. Respondents specified recruiting engineers and technical staff, retaining qualified staff, and recruiting construction site workers in the right location as the top three obstacles in mobilising the necessary workforce. They also noted concerns regarding current employees, with 30% of survey respondents saying that reskilling and the associated cost of this is a key challenge. Of course, this will be critical given that many skilled workers currently employed in the energy industry are engaged in activities relating to fossil fuels; thus, this segment of the workforce will need to transition into clean energy roles. However, respondents noted that with demand growing for skilled workers, the market for such individuals is becoming increasingly competitive and could see the roll-out of clean energy hampered. Over two-thirds (70%) of survey respondents said that recruitment was a challenge, and 40% stated that they are struggling to retain talent.[iv]
In our upcoming research, we will explore the growing concern around a global green skills shortage. Further, it will analyse current Gen-Z attitudes towards the workplace, including results from our recent survey of Gen-Z individuals; the research will also be supported by market forecasts looking at the green skills gap. Lastly, the research will summarise our key findings and explore potential solutions for employers as they seek to attract green talent over the coming months and years.
Register your interest via the form below to be notified as soon as this research launches.
[i] Beating the European Energy Crisis (imf.org)
[ii] Missing The Target - Schneider Electric Energy Crisis Report.pdf (dropbox.com)
[iii] irena.org/-/media/Files/IRENA/Agency/Publication/2022/Sep/IRENA_Renewable_energy_and_jobs_2022.pdf
We have an upcoming report on green skills and gen-Z. To learn more about this, please register your interest using this form.
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
