Enterprises must be key actors in the Just Transition -ILO

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Enterprises can play a crucial role in protecting the environment and creating a just transition based on equity and the participation of all stakeholders, says new International Labour Organization (ILO) report.  

Greening Enterprises: Transforming processes and workplaces, is the first ILO research study that focuses specifically on the green transition of enterprises. It finds that an increasing number of businesses are taking steps to reduce their carbon emissions, in response to the scarcity of resources, the frequency of natural disasters, and calls from consumers and clients to be more proactive on climate issues. These issues have acquired growing importance since the 2010s with the Rio+20 Conference and the adoption of the Paris Agreement. 

Some of the drivers of enterprise greening include regulations on sustainable transport and the sustainable use of resources at the workplace, legislation governing green procurement, working time organisation, teleworking and sustainable business model, the report finds.  

“Values of entrepreneurs and aspirations of workers to work in a healthy work environment are powerful drivers of change for green enterprises”, said Catherine Saget, Chief of the Work Income and Equity Unit of the Research department of the ILO, the unit that drafted the report.  

The report notes that two-thirds of the regulations in force in 2019 were introduced after 2004 – implying a vast adaptation effort in that period by businesses in all regions. 

For example, in 2021 nine out of ten enterprises surveyed by Eurobarometer (a survey by the European Union that also covers EU candidate countries such as Turkey, and the US), said they were taking action to support a green transition, although the percentage varied from 99 per cent in Norway to 58 per cent in Albania.  

In lower and upper middle-income countries outside Europe, most formal sector enterprises are also taking measures to support the green transition. Amongst the 65 countries and territories reviewed for the report, Asia, Europe, and Latin America have been the most active regions in promoting workplace sustainability.  

The study found that larger enterprises are more likely to take resource-efficient measures and offer green products and services, partly because they have easier access to green technology and have more legal obligations. But many micro, small and medium-sized enterprises (MSMEs) are also implementing energy, resource, and waste management savings.  

Both workers and employers increasingly say that greening workplaces is important to them, including issues such as sustainable transport, consuming resources in a sustainable way, waste management, work organization and sustainable food at work. 

However, enterprises face many hurdles in going green. The issues for multinationals include uncertainty about climate policies, limited availability of green technology, and questions on return on investment. MSMEs face issues such as limited access to finance and skills, lack of information and knowledge on innovation, and inconsistent regulation enforcement.  

The report includes recommendations to help enterprises adopt good environmental practices and achieve a just transition. These include supporting an enabling business environment by improving policy and regulatory frameworks; giving businesses and other actors greater clarity on strategy; helping managers and workers prepare for the effects on jobs, skills, and wages (in both sectors that need to be downsized and those where jobs will be created); and tackling gender segregation, including through skills development, so that women can benefit from the creation of green jobs.

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