A note from Brad Smith, Vice Chair & President, Microsoft:
Today Microsoft is publishing a new report, Closing the Sustainability Skills Gap: Helping Businesses Move from Pledges to Progress. Thousands of companies around the world have issued climate pledges – but globally, we don’t currently have the workforce with the necessary skills to move from pledges to progress.
This report represents the culmination of intensive research conducted by Microsoft and Boston Consulting Group (BCG) with roughly 250 employees at 15 companies that are at the forefront of sustainability innovation and change. It highlights the formidable sustainability skilling challenges we must overcome around the world. Even more important, it offers several concrete recommendations, both for business leaders and government policymakers. It leaves us optimistic that this global skilling crisis can be solved with collaboration, data, and global effort.
You can read the foreword I authored below and the report in its entirety here. I want to add a special note of thanks to the 15 companies that participated in this study and especially to the team at BCG. We benefited from the sponsorship of Rich Lesser, the Global Chair of BCG, and two leaders inside BCG who have repeatedly provided indispensable help to me and my team at Microsoft, Derek Kennedy and Simon Bamberger. The project pushed us collectively to think hard about new multi-disciplinary sustainability and skilling frontiers. Making sense of a nascent space is never easy; I hope you’ll find the lessons we’ve crystallized in the final report as useful for you as it has been for me.
It’s hard to ignore the effects of climate change. In recent weeks, a heavy blanket of smoke from nearby wildfires has enveloped the region I call home, an eerie phenomenon that has become an unfortunate seasonal event in the Pacific Northwest of the United States. At the same time, the American West and parts of Europe are experiencing historic drought. And halfway around the world, Pakistan is recovering from catastrophic summer floods that killed 1,500 people, displaced 33 million more and caused $40 billion in ruin. All devastating events. And all believed to be fueled by climate change.
The gravity of the problem has led more than 3,900 companies, including Microsoft, to announce climate pledges. As we work, internally and with a large majority of these companies, it’s clear that the coming business changes will be massive. They will impact a wide variety of processes and operations, in part based on new applications for digital technology, including cloud services, AI and dedicated services like our Cloud for Sustainability. But, as we’ve learned, this will also require an equally vital effort to equip companies and employees with a broad range of new skills needed for climate adaptation and sustainability transformation.
The historical importance and current breadth of the sustainability skilling challenge are difficult to overstate. A clear analogy has emerged from our study of the issue. Humanity’s initial quest to reach the moon required the spread of physics into a broadly accessible academic discipline across the United States. The world’s entry into the digital age then required that computer science move into every school. In a similar way, the creation of a net zero planet will require that sustainability science spreads into every sector of the economy.
That’s the focus of this report.
During the past year, Microsoft and Boston Consulting Group (BCG) studied the work of 15 companies at the forefront of sustainability innovation and change – including across Microsoft itself. Our teams interviewed or surveyed nearly 250 employees whose jobs have sustainability commitments. We identified new jobs that have emerged. We studied the impact on the many jobs that existed before. And we considered what our data says about in-demand knowledge and skills.
The impact on jobs across companies falls into two broad categories. The first is specialized sustainability positions emerging quickly across the global economy. For example, a company like Microsoft now employs individuals who pursue full time the purchase of long-term, high-quality carbon removal. The second is much broader, as existing jobs expand to encompass sustainability subject matter. A good example involves engineers and materials scientists who design hardware devices. They now have to assess not only the capabilities of materials that go into a new device but also the sustainability implications of those materials.
As companies move to create and fill these jobs, they are confronting a huge sustainability skills gap. This gap encompasses three categories. First, some employees need deep and specialized sustainability knowledge and skills in areas like carbon accounting, carbon removal and ecosystem services valuation. This includes the skills needed to address these issues through new climate-specific digital tools. Second, broader business teams need readier access to more limited but sometimes deep knowledge in specific sustainability subject areas, such as climate-related issues that have become important for procurement and supply chain management. Third, a great many employees need basic and broader fluency in sustainability issues and climate science fields that impact a wide variety of business operations and processes.
Ultimately, it’s important to recognize that the sustainability transformation will need people who can combine specialized sustainability knowledge and skills with varying degrees of other multidisciplinary skill sets. These will need to combine knowledge from STEM and other fields in the liberal arts and encompass skills that span across business, the use of data, and digital technology. This combination currently is hard to find and often doesn’t exist naturally.
Perhaps unsurprisingly, we’ve also learned that the sustainability skills gap is creating an increasing sense of anxiety for business leaders. This reflects not only the enormity of the climate crisis but two other factors as well.
First, there are growing public expectations that companies will turn their climate pledges into progress. In the next 24 months, regulators in multiple countries will likely require that public companies report their carbon emissions. A great many businesses are not yet equipped with the skilled personnel, business processes and data systems needed for this step. Business leaders understandably fear that, if their reports are incomplete or show a lack of progress, they will confront growing public criticism.
Second, this pressure for performance is growing while economic concerns are rising. Economic turbulence is putting added pressure on companies to find new ways to do more with less. In some instances, companies may even be tempted to postpone or forego new business initiatives, including pursuing their climate pledges.
Yet ongoing scientific observations and data show that the world cannot afford to wait. In late October, new reports underscored the need for accelerated action. In particular, the United Nations Environment Programme made clear in its annual Emissions Gap report that current national climate plans fall short of what will be needed to meet the world’s climate targets.
Clearly the business community will need to do more. Other institutions must as well. Climate pledges and performance are equally important for every organization on the planet, including nonprofits and even government institutions themselves. In short, we’re all in this together, and we need to come together to chart a successful path forward, including by investing in sustainability skills.
Yet, today, the gap between sustainability workforce needs and the number of qualified people available is growing. According to the LinkedIn Green Jobs report, green jobs grew at an annual rate of 8% between 2015 and 2021, while the talent pool grew at only 6%.
As these figures reflect, progress is underway, but it’s not moving fast enough. To date, most companies at the forefront of sustainability transformation have been scrappy, growing the “home-grown” talent they need. Our research found that employers so far have tapped 68% of their sustainability leaders by hiring from within their own company. Some 60% of sustainability team members joined without expertise in the field. Employers mostly have tapped talented insiders with the core transformational and functional skill sets needed to create change in a company, even though they lacked formal training in sustainability. They then upskilled those individuals to accomplish critical sustainability work.
The biggest problem with this approach is that it will not scale to meet either the business community’s or the planet’s needs. As we look at the roughly 3,900 companies that have made climate pledges, it’s readily apparent that the work to turn these pledges into progress will require far more talent with sustainability skills and fluency than currently is being trained within these companies’ businesses.
How do we move further and faster?
This is a fundamental question, and we offer in this report both some suggestions and a commitment as a company to do more. Progress will be needed in three areas.
First, we all need to work together to develop a shared understanding, based on better data, regarding evolving jobs and the sustainability knowledge and skills needed for them. Currently, data remains spotty. We need a better and common taxonomy and framework that builds on recent sustainability work by international organizations, national governments, and private companies. As described in our report, we believe sustainability skilling can borrow from recent advances to address cybersecurity skilling to help create a better roadmap linking specific sustainability skills, training, jobs and career paths.
Work will be needed from a broad array of stakeholders. To develop a shared understanding of sustainability workforce needs, Microsoft and LinkedIn will support efforts to define skills and competencies and enable the mapping of sustainability skills and jobs as they evolve. We will achieve this in part through partnerships with organizations like the International Labour Organization and our work with the Development Data Partnership, which includes the Organisation for Economic Co-operation and Development (OECD), the World Bank, Inter-American Development Bank (IADB), United Nations Development Programme (UNDP), International Monetary Fund (IMF) and other multilateral organizations.
Second, employers must move quickly to upskill their workforce through learning initiatives focused on sustainability knowledge and skills. This will require support from a variety of learning partners, including educational institutions, vocational education providers, apprenticeship programs and online training providers. This work must start with the development of new learning materials that can be used both in person and online. This must be supported by expanded learning initiatives to reach employees in companies and more broadly across the workforce. There is an opportunity for government policy and funding to help scale these efforts.
To support this work, Microsoft will work with partners to develop and share new sustainability learning materials. These will include LinkedIn Learning paths for sustainability as well as business-focused sustainability materials provided through Microsoft’s Sustainability Learning Center and our Cloud Solution Center. Additionally, we are forming new partnerships with NGOs to help workers, including those in impacted and transitioning communities, to complete sustainability learning pathways. This will include a partnership with INCO Academy to launch a Green Digital Skills course to support up to 10,000 learners, including in the Global South.
We will also work with our customers to create a network and advanced forum to share new learning and best practices to transform sustainability practices and reduce carbon emissions. This will include a new and focused forum for chief sustainability officers.
Third, the world must prepare the next generation of workers for the sustainability jobs of the future. Just as governments, NGOs and companies have worked to bring digital skilling and computer science into schools, we will need similar partnerships to bring sustainability fluency and science into primary and secondary schools. And higher education institutions will need to strengthen and expand their undergraduate and graduate sustainability programs. All these efforts can move faster if governments and public-private partnerships develop stronger sustainability programs through country-level networks and centers of excellence, foster international professional forums and communities of practice, and create real-world interdisciplinary learning opportunities for students.
To support these efforts, Microsoft is committed to creating and providing new curricular and training materials that can be used by primary and secondary students. This will include our new Minecraft Frozen Planet II worlds, which we will present in partnership with BBC Earth at COP27. This adds to the Climate and Sustainability Subject Kit and Sustainability City learning map, available through Minecraft Education. In addition, Microsoft FarmBeats for Students will provide students with a hands-on experience to explore how big data, AI and machine learning apply to real-world sustainability challenges. Finally, we will join UNESCO’s Greening Education Partnership to deliver strong, coordinated action that will empower learners with the skills required for inclusive and sustainable economic development.
Microsoft will also invest in global capacity-building for post-secondary education. This will include a new partnership with the international research collaboration MECCE (Monitoring and Evaluating Climate Communication and Education) Project to support the implementation, monitoring and reporting of sustainability education worldwide. Additionally, we will partner with the Association for the Advancement of Sustainability in Higher Education, providing support to its Centers for Sustainability Across the Curriculum Program.
The start of this decade has seen more than its share of crises, including the COVID pandemic, a war in Europe and growing economic uncertainty. Although we can’t predict when these current challenges will fade, it seems certain that the climate crisis will outlast all of them.
For almost three centuries since the dawn of the industrial revolution, human ingenuity has produced remarkable inventions and unprecedented prosperity for much of the world. But this has come from the use of fossil fuels that have produced carbon emissions at an unsustainable level. Now we must move to a net zero world in which we both seek to eliminate net carbon emissions and expand global economic opportunity. This will require sweeping changes in every sector of the economy in every country in the world. And we must achieve all this in only three decades.
In the history of civilization, few generations have needed to do as much in as little time as we must do now. At its most fundamental level, this is the single greatest challenge and opportunity of our time.
Like the space age and digital era, the world’s sustainability transformation calls not only for a new generation of technology but a new generation of knowledge and skills. Clearly, no single entity can meet this challenge alone. The key will be to partner broadly and effectively with others to move the world’s workforce into the future. We know the proposals in this report don’t have all the answers, but we believe the world must commit to a Global Sustainability Skilling Strategy based on a concerted and coordinated effort from companies, industry organizations, learning providers and governments. And we are committed to doing our part.