Office for National Statistics highlights impact of Covid-19 on both employment and turnover in large businesses engaged in the renewable and low carbon economy
The number of people employed in the UK’s low carbon and renewable energy economy is yet to recover to levels recorded in 2014, with official statistics published this morning revealing that 28,000 fewer people were employed in green sectors in 2020 than there were six years earlier.
The latest edition of the Office for National Statistics (ONS) annual survey of the green economy suggests there has been “no significant change” in the number of people in full-time employment in 17 low carbon or renewable energy sectors (LCREE) covering transport, power, heat, products and financial services.
Published this morning, the statistics note that businesses active across the ONS definition of the LCREE economy generated a grand total of £41.2bn in turnover in 2020, employing 207,800 people full-time. That marks a slight increase on 2019 employment figures, when 202,100 workers were counted, but a decrease on the 235,900 jobs counted in 2014, the first year data on the UK’s green economy was collected.
However, Anthony Chant, investment director at sustainable investment firm OnePlanetCapital, cautioned that the ONS figures “should be taken with a pinch of salt” due to the impact of the Covid-19 pandemic on UK economy and employment, and that growing commitments to net zero across Europe and worldwide were “key triggers for emerging growth”.
“We’re seeing lots of evidence of movement and witnessing first-hand the emerging growth occurring in the low carbon and renewable energy sectors, as a vindication that the transition to a green economy is starting,” he said. “The green economy might have been talked about for a long time, but we’re seeing it come to fruition with impact. These figures are simply a reminder that a lot more work remains to be done.”
The ONS release today singles out the energy efficiency products sector as “particularly important” in terms of employment, given that activities within the sector tend to be more labour-intensive than other green industries, such as bioenergy, onshore and offshore wind. In 2020, the energy efficiency products sector – which is counted separately from energy-efficient lighting in the audit – made up 42 per cent of LCREE jobs, it states.
Meanwhile, the energy efficient products sector and low emission vehicles sectors are identified by the report as the sectors in the LCREE economy that generated the most turnover in 2020, accounting for £12.1bn and £6.8bn of turnover respectively.
Elsewhere, it also shows the number of people employed in LCREE-related activities at large businesses rose by 26 per cent between 2015 and 2020, with turnover at these businesses rising by 16 per cent over the six year period. The ONS said this had been largely driven by the rapid growth of the low emission vehicle sector, in particular between 2017 and 2019.
However, the report notes that employment and turnover at businesses with more than 250 employees had fallen between 2019 and 2020 by three and six per cent respectively amid the fall out from the coronavirus pandemic.
The ONS said reduced turnover and employment between 2019 and 2020 could be attributed to the impact of the Covid-19 pandemic on the energy efficient products, low emissions vehicles, construction and manufacturing industries. Employment had been less acutely affected than turnover because 2020 figures included those on furlough, it explained.
However, Chant said there were signs of increasing numbers of green start-ups emerging in the UK, in addition to growing venture capital investment levels in these areas, which were altogether boosting investor interest in the green economy.
“Corporates are starting to make tangible investments and actions, which consumers are quickly responding to,” he said. “But it’s a marathon and there is still a long way to go. COP26 was not definitive enough and much more investment is required to fast-track the green economy. We know that unprecedented change is required to our global economy. The UK’s commitment to global warming by 2050 alone requires a paradigm shift in the UK economy and enormous amounts of investment into the businesses of the future. We are on the verge of a green industrial revolution and the world is waking up to the substantial changes needed to tackle the climate issues we face.”
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