Why SMEs need urgent help for transition to green economy

Sustainability for MSMEs: The net-zero transition means that companies that till now were focused on cost reduction and profit maximization are now expected to also measure and reduce carbon emissions. For instance, when a global fashion brand creates its net-zero targets it sets standards for water, energy use, transportation and materials. The downstream suppliers which also constitute a large number of SMEs get impacted too. These companies may or may not have their own premises and possibly have no control on electricity sources. They also have existing investments in machinery and their people are used to functioning in a particular way. These organizations that typically run on thin margins need funds for the energy transformation, knowledge to drive the necessary changes, digital skills for measurement and reporting and most importantly new skills and knowledge for processes that would now need to be implemented.

Since business is part of society, business needs to be part of the solution. Proactively shaping critical societal issues and helping address the many things that are important can strengthen the social contract between business and society. In the modern world knowledge and trust are the new currency, and equity the by-product. Knowledge can be a great advantage. But this also means that people who don’t have this knowledge or don’t have the ability to access it can be at a significant disadvantage. Knowledge and digital inclusion are now interlinked as the internet is everywhere. The digitally disadvantaged, either because of lack of access, language issues or literacy face huge, disproportionate challenges. Wherever information access is partial, denied or incorrect, it gives rise to inequality.

Skills and knowledge are therefore critical drivers of change for a green economy. SMEs, however, need urgent help in enabling the green economy transition. As governments and businesses look to stimulate growth, a new study from the World Economic Forum found that net-zero solutions can create 395 million jobs by 2030—jobs that have a direct, positive impact on the planet traditionally involve renewable energy, electric transport, energy efficiency or nature conservation. But right now, as more sectors transition to low-carbon models, every job has the potential to become ‘green’. 

As per the ILO, green jobs are jobs that contribute to preserving or restoring the environment, be they in traditional sectors such as manufacturing and construction, or in new, emerging green sectors such as renewable energy and energy efficiency. Green jobs according to the ILO help, improve energy and raw materials efficiency, limit greenhouse gas emissions, minimise waste and pollution, protect and restore ecosystems, and support adaptation to the effects of climate change. 

In this fast-changing world, we need the skills sector to pivot fast for the jobs that are just around the corner and the methodologies to best deliver what is needed. Accelerated learning, quick turnarounds and deep insight from the various business sectors can have a transformational impact. Green jobs linked to digital skills could benefit both the economy and the environment and include everything from alternative fuels to tasty foods. However, significant work needs to be done to enable new kinds of jobs that are good for people and the planet.

First Posted on Financial Express