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  • Lee Calver
  • 11 November 2014
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Environmental training must be included in business plans

According to a report recently published by the Institute of Environmental Management and Assessment (IEMA), only 13% of companies are fully confident that they have the skills to successfully compete in a sustainable economy.

IEMA published its findings as it launched its new campaign, ‘Preparing for the Perfect Storm – Skills for a Sustainable Economy’, which hopes to shine a light on the transition to a sustainable economy and to catalyse action to address the skills deficit.

The report states that the global economy is heading towards a perfect storm of pressure on all fronts and by 2020, the world economy could be facing a supply deficit driven by global mega-trends, including population growth, increasing demand for natural resources, soaring costs of energy – together with the impacts of climate change and degradation of the ecosystem. According to the new report, all are combining to pose significant challenges to the long-term success of business and the global economy.

Commenting, International Workplace Environmental Consultant, Matt Watkins, said:

“Development has long been linked to fossil fuel consumption. Countries with high GDP and other favourable characteristics are all big oil consumers. With supplies becoming harder to access and increasingly expensive over the past 40 years, it is time to look towards sustainable alternatives to increasing consumption, whether these be in terms of demand reduction (energy efficiency measures and energy use elimination measures) or investment in sustainable sources of energy.”

On launching the campaign, Tim Balcon, Chief Executive of IEMA, said sustainability should no longer be considered as a “bolt on” for businesses, but should be embedded into their DNA if they are to tackle the risk posed by potential resource shortages in the 2020s.

Unfortunately, the report, ‘Preparing for a Perfect Storm’, which looks at results of a study of over 900 organisations, offers some rather bleak reading.

Companies lacking skills and not prepared to provide appropriate training

As well as organisations admitting they don’t possess the necessary skills to successfully compete in a sustainable economy, there appears to be a leadership gap with only 25% of leaders and 20% of senior managers fully capable of addressing the sustainability agenda.

While lacking the skills is clearly a serious problem, there are ways to address these issues, including providing staff with expert training in the relevant areas. However, in 72% of organisations, investment in environment and sustainability skills is less than for other disciplines, with 63% of organisations spending less than £100 per head on environment and sustainability training each year.

Two thirds of businesses also admitted they have yet to conduct a strategic review of the skills they will need to tackle environmental challenges over the coming years.

Explaining the importance of funding training in this area, Matt said:

“Across the EU, green sectors account for as many as 3.4 million jobs, while the green economy is already providing nearly one million jobs in the UK; with significant Government investment in renewable energy, and increasing demand for ‘environmentally friendly’ products. Managing Directors with the ability to observe and exploit the green niches that are now opening up, stand to gain significant competitive advantage. Organisations such as International Workplace can assist senior management in meeting the challenges and maximising the opportunities of greening of the UK economy."

Tim Balcon commented:

“Environmental and sustainability skills are fundamental to ensuring that the global economy, and every business in the world, can survive. Governments, businesses, industries and professions worldwide need to work together to set in place a new skills framework that will equip organisations to survive and thrive in the face of these inescapable challenges.”

IEMA’s skills framework includes the following key actions:

  • Skills for leaders to integrate sustainability into long-term decision making.
  • Enhance skills and capability for environment and sustainability professionals so they can integrate sustainability throughout their organisations and value chains, building in foresight and horizon scanning and creating the business case.
  • Increased environment and sustainability knowledge and understanding for all workers.
  • Environment and sustainability must be integrated into the national curriculum, ensuring that young people entering work are able to play their part at the start of their careers.
  • Skills gaps at all levels need to be filled, from apprenticeships to those in leadership and managerial roles.

IEMA urges that investing in these new skills will enable businesses and economies to prepare for the perfect storm and turn these challenges into opportunities to survive and prosper.

International Workplace Environmental Consultant, Sue Gregson, commented:

“The IEMA skills framework distils what is required in order to improve the level of skills and understanding in environmental and sustainability issues. Training people from a young age will help to improve the general level of understanding in the workforce, making it easier for the principles of environment and sustainability to be integrated into business practice. If organisations are to survive the threats they face and make the most of opportunities, investment in these skills will be crucial.”

The positives

While we have mainly looked at the negatives of the research thus far, there are also positives which should be mentioned.

IEMA revealed that there are businesses out there that are recognising the challenges and grasping them and its new campaign has brought together a growing number of businesses, organisations and individuals to raise awareness of this issue including BAE Systems, Rolls-Royce, EDF Energy, EY and Saint-Gobain to collaborate and catalyse action on this issue.

The report includes case studies of organisations that are demonstrating great commitment and benefitting from investment in environment and sustainability skills.

Concentrating on the case study surrounding Rolls-Royce, the report reveals that the famous firm has a three-pronged environment strategy which focuses on supporting customers to reduce their environmental impacts; developing low emission products; and reducing the company’s own impacts. Rolls Royce recognises the importance of environmental and sustainability skills and the Revert programme is an example of the benefits of this. Revert is a closed loop recycling project and has saved the company 20,000 MWh of energy each year – enough to power 1.8 million homes for a day.

This is just one example of the great work some companies are currently undertaking, but more organisations need to invest in environment and sustainability skills to ensure that challenges presented by the global mega-trends mentioned earlier can be overcome.

Global challenges

In presenting this detailed report, IEMA also provided a fact sheet looking at the key facts relating to the global issues of not investing in environment and sustainability skills.

World population of 7.2bn in mid-2013 is projected to increase to 8.1bn in 2025, and to rise further to 9.6bn in 2050 and 10.9bn by 2100. Population growth is clearly a huge international issue as the increase will lead to a rise in global demand for resources. It has been estimated that demand for food will increase by 50%, water by 30% and energy by 40%.

Worryingly, a global survey of 1,000 CEO’s revealed that 68% do not believe that the global economy is on track to meet the demands of a growing population, while just 33% feel that business is making sufficient efforts to address global sustainability challenges.

According to a joint report from CDP, AECOM and C40 Cities Climate Leadership Group (C40) published earlier this year, climate change poses a physical threat to 207 of the world’s largest cities, affecting 50% of the world’s population and putting 80% of global GDP at risk.

Portraying how a disaster in one part of the world can have such overwhelming effects on the rest of the world, IEMA’s fact sheet looked at the floods that engulfed Thailand is 2011. It states that these horrific floods demonstrated how climate impacts in one region can devastate global supply chains.

Nearly 10,000 factories were forced to close, reducing the country’s output by approximately 40%. At the time, nearly half of the world’s hard drives were manufactured in Thailand and the floods resulted in the price of drives doubling. It was estimated that manufacturer, Western Digital, suffered losses of $235m. On top of this, disruption to supply chain reduced production of Honda vehicles in North America by 50%, while Nissan reportedly spent $67m on supply chain flood recovery.

Climatic threats such as this these will of course be repeated in the future and be compounded by resource scarcity. Most UK businesses are simply not currently preparing themselves for the stresses to come. A 2013 report from the Carbon Disclosure Project — based on a survey of 260 firms in the FTSE 350 index — revealed that while 86% of companies are conscious of climate risk, their level of understanding of and ability to manage this risk, particularly in supply chains overseas, is far lower. Almost half of companies do not engage with suppliers on emissions or climate change and the majority of emissions from companies’ value chains are not measured.

As a result, the demand for sustainability training should be on the rise to ensure that organisations are better equipped and have the knowledge and skillset to deal with adversarial situations.

The benefits are not just centred on improving the skills of organisations’ personnel though - by employing skilled and qualified environment and sustainability professionals and taking action on resource efficiency, many businesses are achieving significant financial rewards.

A survey of 500 IEMA members revealed that one in five practitioners working in very large companies reported their organisation has saved more than £1m a year by improving their resource efficiency.

In addition, more than 20% of large firms reported savings of more than £100,000 a year, while nearly 70% of all companies surveyed reported annual savings of more than £10,000.

These figures suggest that annual savings of more than £108m have been achieved by organisations that employ environment and sustainability practitioners.

Further backing up the importance of looking to employ environment professionals or train staff in the area, Defra calculates that businesses adopting resource efficiency measures with less than a one-year payback can save £23bn. Defra adds that when the payback time is longer than 12 months, the savings almost double to £55bn.

Offering a final viewpoint, Sue Gregson added:

“The economic argument for enhancing environmental and sustainability skills in the workforce and integrating these skills into business management is both compelling and critically important if businesses are to survive and flourish.

“As the environmental and sustainability issues to be addressed extend worldwide, encompassing both established and emerging economies, a global approach to improving skills and understanding is required.”