Climate change and a green transition: what’s HR got to do with it?

Blog posts

1 Jul 2025

Dr Duncan Brown, Principal Associate

Follow @duncanbHR

The cost-of-living and energy-price squeezes continue across Europe. President Trump is attempting to end green energy subsidies and corporate DEI policies in US companies. The UK government’s new Industrial Strategy has lower electricity prices at its heart, achieved by exempting 7,000 businesses from paying various green levies.

Climate change and the green transition might not seem, at first glance, to be the most obvious area of focus for the 50 or so corporate HR leaders who gathered for two days last month at the prestigious European HR Directors’ Circle annual Forum in Lisbon. IES has worked with the Circle for some years and I was pleased to represent us there.

By the end of the two days, everyone recognised the importance and breadth, the intense relationships and interactions of ‘bread and butter’ HR concerns - recruitment, training, reward and so on – with this global existential crisis.

The global (and employer and HR) challenge

A better understanding of the climate challenge was the theme of the first day in Lisbon. From escalating climate risk insurance premiums, through to struggling to train up enough green environment engineers and EV specialists, the enormity of this global, national and corporate challenge was comprehensively set out.

But the near halving of Tesla sales in Europe in the wake of CEO Elon Musk’s short-lived but highly controversial role for the Trump administration highlights the complexity of the climate agenda and challenge today. Simply offering an EV car leasing or Cycle to Work option in your employee benefits line-up is no longer a sufficient contribution from HR to the transition.

Circle chair Yves Barou and renowned French climatologist Jean Jouzel described the contemporary complexity of climate agendas in their talks at the Forum opening. Not only are we already breaching the 1.5-degree global warming ceiling agreed at the Paris COP in 2015, but we also have what Yves termed serious ‘confusion and divisions’ frustrating progress. There is an urgent need to demonstrate that as one speaker expressed it, ‘democracy and climate change are compatible’. A key question raised is ‘who pays?’ for what Reform UK’s deputy leader Richard Tice called recently on Radio 4’s Today programme ‘net stupid zero’.

All of our speakers agreed that employers have a critical but sometimes forgotten role to play, in delivering an electrified economy. Government delays in responding to the cost of living crises and with the UK moving its petrol vehicle deadline back from 2030 to 2035 for example, make the timing, not just the planning and delivery, of green policies and investments by employers and HR doubly difficult.

Despite this complexity and political vacillations, the subsequent Forum roundtables and groups detailed the current and planned actions which HR professionals are taking in response, a lengthy list of programmes already, which impressed in its scale and comprehensiveness. This was illustrated on the first evening of the Forum, with a fascinating roundtable on the transformation already well under-way in the car industry.

HR’s role is going way beyond the major tasks of recruiting and reskilling employees, into ‘showing how we transform into something else’ as one HR director expressed it, supporting the broader shifts in cultures required in many long-standing companies. HR is also taking on the full social responsibility for the impact of these changes, particularly on the ‘losers’ whose jobs cannot be refashioned.

The HR leaders in the sector also stressed the essential need for strong and consistent corporate leadership and messaging in the face of opposition. Leaders reinforcing, rather than retreating, from the core purpose and difficult transition to green is key to recruiting and retaining many of the younger people to fill the new roles.

Corporate and HR responses

These themes were detailed on day two of the Forum. It started with a roundtable on the green jobs and skills implications, profiling the current situation of a startingly large and near-universal picture of shortages which I set out using IES’s data. Solving that is perhaps what HR most has ‘to do with it’.

Some companies are adopting a highly structured workforce-planning approach to defining and delivering the changes in job content and reskilling, resulting from electrification. Others are following a more fluid process, with ‘chameleon-like’ responses supported by the often ‘softer’ skills and competency development. Pragmatism as well as principles support their progress. Tailoring your approach to the transition to suit your industry, company and culture was one conclusion to be drawn from these excellent case contributions, reinforcing IES’s work with our clients on workforce planning and skills.

The role of employee relations in climate change and how it could be strengthened was also a key theme of the second day of the Forum. We need improved social dialogue to address the ‘populists successfully exploiting this situation’, was one unanimous conclusion amongst our speakers and roundtable leaders, as well as rediscovered employee relations skills amongst employers and trade unions, which is at the core of much of Nita Clarke’s and the IPA’s client work at the moment.

The possibilities and benefits of the transition, as well as the vital contribution of HR to it, were highlighted by Professor Simon Learmount from Cambridge University. For Simon there is a ‘new socio economic reality… climate risk is business risk and investment risk’. 120 trillion dollars have been invested in CSR funds by asset managers, and our major global corporations can add (or lose) billions to their value based on their ability to manage these risks.

HR’s importance to the successful transition in Europe of many of the HR initiatives he described is not just in delivering the technical skills required, but also in building strong employer brands linking corporate and employee purpose, which Simon sees as motivating large numbers of employees in their work to support the transition.

‘THE right place… NOW!

It was a theme that Circle Chair Yves reinforced at the end of the Forum. The green transition, he said, is a vitally important ‘challenge and responsibility’ for us. The Forum had reinforced that it is rooted as much in our humanistic values and the more human cultures we are aiming to build in our organisations as in our specific ‘technical’ contributions in green rewards and benefits, job design, skills training and so on. It’s why many of us came into HR in the first place.

As one HR director put it in her post-conference thanks to the Circle, with the 1.5 degree ‘ceiling’ on global warming already being breached: ‘The time for action is now!’

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.