Years of Earth exploitation have damaging consequences on our climate; melting glaciers, rising sea levels and shifts in climate zones are just a few examples of what is happening to the planet we call Home. It is high time we start repairing what we have deteriorated. The European Union has come up with a plan whose goal is to coordinate and set common emission reduction goals, making the EU a key player in UN climate change. It is called The Green Deal (“EGD”). This strategy will not only improve the state of the climate but will also give us new opportunities through certain changes in industries and the labour market.
The European Green Deal is a tool that allows the EU to achieve climate neutrality and zero net emissions by 2050 and to transition through a more eco-friendly economy. This legislative framework is believed to have an impact on trade through more strict environmental standards. According to the European Commission’s strategy, one of the first steps in becoming environmentally friendly is to take into consideration the quality of the European food industry. In 2020, the EU launched a program called The Farm to Fork Strategy (F2F), its main premise is an environmentally friendly food system. By 2030, one of the major targets is to reduce the use of chemical pesticides and sales of antibiotics for farm animals by 50%. Also, the EU plans on transitioning 25% of agricultural land to organic production. Changes in European food regulation mean that countries from outside of the region will have to abide by those new rules to continue the trade. The EU imports a vast variety of foods, from exotic spices to different kinds of fruits and vegetables. European manufacturers tend to consider that the materials used to produce food packaging should be fully recyclable. Companies require more information about the origin of the product and provide more disclosure on their labels. Since trading partners will have to comply with new regulations, they will also need employees knowledgeable in the European Union’s recent laws that will help not only the corporations but also European consumers that require more data about the supply chain quality. That is why regulatory affairs positions will play a crucial role in the transition to a greener reality.
The Green Deal will also bring change to the taxation system in the EU. Taxation based on volume will be replaced by taxation based on energy content and environmental performance. According to this new program, the highest taxes will be applied to those fuels that have the worst influence on the natural environment, hence the cost of transportation for businesses will rise. Some of the EU members stated that they will ban the sale of vehicles that use gasoline or diesel. Such vehicles will be replaced by either electric cars or machines that use an alternative source of propellant. Fossil fuels are a convenient source of energy considering the amount of time required to charge cars; when it comes to electric ones, the period significantly expands. It means that companies will have to take into consideration the additional time in the delivery process[1]. The transformation that this brings to industries will drive changes in the job market. It is believed that the EU’s 2030 climate target might lead to the loss of 494 000 jobs or an increase of 110 000. The most significant shifts will be observed in some sectors. It is foreseen that industries such as coal, oil and gas will experience the biggest job drain. Because of the sustainable-friendly future, many industries will have to go through changes to accommodate the Green Deal. A great example of such a situation is the automotive industry; because of the decarbonization, many employees will need reskilling. Workers who manufactured powertrains for diesel and petrol vehicles in Bosch’s plant in Stuttgart Feuerbach will have to switch to working in sectors that are more in tune with the Green Deal. In recognition of these developments, Bosch’s plant is also making an effort to help its employees keep their jobs. The company is retraining its workers „from mechanics to electricians, from mechanical engineers to software developers”[2]. Another sector that is significant to EGD transitions is construction. It is expected that employment in this area will increase by 1.2%, and buildings will need to become more eco-friendly, therefore construction workers will have to gain a broad knowledge of sustainable materials and technologies. An estimated 3 to 4 million construction workers in various occupations such as heat pump boiler installers, carpenters and joiners, bricklayers, and technicians will require training on energy efficiency and renewable energy sources”[3].
Sudden changes can be daunting for people and the European Commission has adopted a Communication, called the Green Employment Initiative which highlights the necessity of slowly introducing employees to the modifications that come with achieving the Green Deal premises[4]. The document mentions maximizing job opportunities because of structural shifts in new, low carbon and resource-efficient economy[5]. Furthermore, the Communication mentions “the importance of securing labor market transitions and strengthening governance and partnership-based initiatives”. It is believed that many jobs will be created due to various ecological transitions in the European market. Changing buildings to be more eco-friendly and more efficient is expected to generate over 400,000 new jobs in construction[6].Examples of jobs that can be created in the mentioned industry are related to new recycling facilities, renovation of buildings to be more sustainably friendly and construction of modern recycling plants. The European Green Deal foresees growing demand for utilities and electricity supply employees due to an increase in recycling activities and manufacturing of appliances/electrical equipment. Companies that provide new technologies will hire more staff due to the rising demand for such products. Another sector that will experience an increase in employment is water supply and waste management. Employees will be needed in such areas as design of waste management and sustainable water (re)use facilities and their operation”[7].
Many people wonder how much the European Green Deal will cost. According to the European Commission, the value of all transitions will be at least €1tn. Over half will come from the EU’s budget; Brussels also has promised €100 bn for reskilling workers so they can remain employed. Member countries will have to pay €114bn.Moreover, the European Investment Bank will guarantee loans for companies that take risks investing in green projects[8]. Furthermore, Europe could become more dependent on Chinese suppliers because of the growing demand for clean energy, as China is the main producer of rare-earth elements which are crucial in battery production. The EGD might impact the competitiveness of European companies, since becoming more sustainable will increase the cost of services and products offerred[9].
In conclusion, the switch to a sustainable-friendly reality is not effortless but it is unquestionably worth all the struggles if it means a healthier future, not just for us but also for the next generations. We all are responsible for the Earth’s well-being. Moreover, the Council of the European Union refined the European Non-Financial Reporting Directive in the form of a directive on corporate sustainability reporting (CSRD). After 2024, companies will be expected to present more environmental and social data. Corporations will have to share their sustainability goals with sustainable policies as well as how they plan on achieving the objectives. In addition, the document also takes into account corporate political commitments, business ethics, management, and quality of relationships with business partners[10]. As presented above, companies will be held accountable for their influence on the environment, and reports such as CSRD will provide us with the necessary data. On a final note, the cost of becoming sustainable-friendly is high, but so are the stakes. If we do not comply with the Green Deal premises we will suffer the dire consequences of biodiversity loss, forest fires, decreasing crop yields and higher temperatures, leading to natural disasters and detrimentally affecting people’s health.
Consultant Alhambra International
Partner Alhambra International
[1] M. Cohen-Dumani, B. Murphy, Are Europe’s businesses ready for the EU Green Deal? EU Green Deal Survey Report, https://www.pwc.com/gx/en/tax/publications/assets/eu-green-deal-tax-report.pdf
[2] P. Tamma, „Will the Green Deal be a job drain?” (https://www.politico.eu/article/green-deal-job-drain/)
[3] Cedefop (2021), The green employment and skills transformation: insights from a European Green Deal skills forecast scenario, Luxembourg: Publications Office, http://data.europa.eu/doi/10.2801/112540, p.25-28.
[4] Commission to maximise job opportunities in green economy, https://ec.europa.eu/environment/europeangreencapital/opportunities-green-economy/
[5] Employment: Commission presents Green Employment Initiative to support structural shift to green growth by maximising job opportunities – frequently asked questions, https://ec.europa.eu/commission/presscorner/detail/en/MEMO_14_446
[6] The Green Employment Initiative, https://www.switchtogreen.eu/the-green-employment-initiative/
[7] Cedefop, The green employment and skills transformation: insights from a European Green Deal skills forecast scenario, Publications Office of the European Union, 2022, https://data.europa.eu/doi/10.2801/112540, p.25-28.
[8]F. Harvey, J. Rankin, What is the European Green Deal and will it really cost €1tn? https://www.theguardian.com/world/2020/mar/09/what-is-the-european-green-deal-and-will-it-really-cost-1tn
[9]M. Leonard, J. Pisani-Ferry, J. Shapiro, S. Tagliapietra, G. Wolf, The geopolitics of the European Green Deal, https://www.bruegel.org/sites/default/files/wp_attachments/PC-04-GrenDeal-2021-1.pdf
[10]F. Baddache, CSRD Comes Into Effect in 2024 and Breaks New Ground in ESG Reporting, https://ksapa.org/csrd-comes-into-effect-in-2024-and-breaks-new-ground-in-esg-reporting/