MHI Solutions Improving Supply Chain Performance
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Overcoming the Sustainability Skills Shortage
Companies that commit to reducing greenhouse gas (GHG) emissions and improving the sustainability of their operations usually understand that this will be a complex, years-long task. What they may not realize until they begin the process, however, is just how big a challenge it will be to find the skilled workers who can help them implement those pledges.
Globally, there are more than 3,900 companies that have announced actions to lower their greenhouse gas (GHG) emissions, and more than one-third of the world’s largest public companies have net-zero targets, according to the Microsoft/Boston Consulting Group report, “Closing the Sustainability Skills Gap: Helping Businesses Move from Pledges to Progress.” The November 2022 study noted that, “To meet global sustainability goals, organizations must make their operations and business models more sustainable across multiple workstreams. Every organization and company will need to fundamentally transform to significantly reduce GHG emissions and address other environmental concerns, including water, waste and ecosystems.”
One essential element in that transformation will be a workforce that recognizes the importance of achieving sustainability goals and that is equipped with the necessary skills and knowledge to support their organization’s efforts to achieve them. But there are simply not enough people prepared to fill those roles today. According to Microsoft, companies and organizations “consistently identify the lack of a trained workforce and inadequate strategies to develop sustainability skills and expertise as major barriers toward progress.”
In Deloitte LLP’s “2023 Global Human Capital Trends” survey, 84% of the responding companies said that they understand the impact that the shift to sustainability will have on their organization and their workforce, but only 21% believe their organizations are ready to address these issues. Even when they’re aware of the gap in their workforces’ skillsets, organizations often don’t have the knowledge or tools to begin to close it.
To develop the team they will need, the key question that leaders need to ask themselves is whether their organization’s workforce strategy and plan is aligned to its sustainability strategy and plan, said Karen Cunningham, managing director at Deloitte, and global and U.S. sustainability & climate human capital lead. “To truly embed sustainability into their way of being, organizations will need to conduct workforce planning in the context of all skills and capabilities needed to operate in a sustainability-forward culture and future.”
Varied skillsets required
There are several steps that organizations have to take when recruiting and developing what Deloitte refers to as the green-collar workforce, Cunningham said. They must first assess what workforce sustainability skills they will require and determine which skills already exist within their organizations. They will need to create a workforce plan to buy, borrow or build the needed skills, and then determine how to retain, compete for and win the battle for talent with those skills.
In its report, Microsoft analyzed the operations of 15 companies at the forefront of sustainability in order to identify the types of skills that companies are likely to need as they move to low-carbon-footprint operations. It found the workforces of those eco-friendly organizations focused on three primary areas of activity: setting and managing sustainability strategy, driving sustainability implementation and activities that enable both. Specific tasks include:
- procuring clean energy and other sustainable inputs for business operations
- carbon accounting
- implementing processes for carbon dioxide removal
- ecosystem services valuation
- assessing climate risks
- product design to make products zero waste.
At present, much of the recruiting and development activity focuses on finding people with highly quantitative and data-driven skills like GHG accounting, said Britt Harter, the partner at Guidehouse in charge of sustainability consulting in North America. “But companies will also require communications and connection skills like disclosure, reporting and engagement. So, you’re really looking at a lot of different needs coming from different places.”
A position like chief sustainability officer (CSO), for example, would require someone with the technical fluency to understand environmental impacts and emissions. But CSOs also require the communications and engagement skills necessary for managing the change that the organization will be undergoing, and the executive presence for making a business case for sustainability to the C-suite and board. “It’s a mix of what you might call qualitative and quantitative skills,” Harter said.
Any time an industry is going through a period of rapid expansion, the demand for certain skills will be high, and there will a limited number of people who possess them, Harter said. Companies trying to recruit people for the supply chain industry who have both supply chain and sustainability experience will have a hard time finding them; only a small percentage of companies in this industry have developed sophisticated approaches to decarbonization. As a result, the total number of workers with real tangible experience in these areas is not that large.
Graduates of sustainability-focused master’s programs at universities like Duke, Michigan and MIT are helping to fill the sustainability skills pipeline, but these schools can produce only a fraction of the number that organizations will require. Additional four-year and community colleges are trying to fill the gap by building sustainability skills degree programs and other organizations offer online and in-person courses that offer sustainability certificates.
The problem is that companies trying to hire for sustainability positions can’t be sure exactly what skills and knowledge their talent will possess. In the accounting world, a company that hires a CPA can assume that they are equipped with a certain skillset, but there’s no equivalent to that in the sustainability world, since there are no generally accepted external credentials for that type of knowledge.
“I think we are filling the pipeline with very smart, very passionate, often young, sometimes mid-career people and they have great energy, great knowledge. But it is very challenging for organizations that are in need of those skills to make meaningful assessments of whether individuals have the specific skills needed,” Harter said.
To hire workers with the sustainability skills that they need, companies must try new recruiting strategies. “Organizations should broaden their scope and consider looking beyond their sector or local area to find individuals with the desired expertise. Exploring partnerships, collaborations, or talent acquisition strategies that extend beyond traditional boundaries can help fill skill gaps more effectively,” said Cunningham.