Introduction

Job markets globally are undergoing an unprecedented transformation driven by a convergence of technological change, demographic shifts, geopolitical tensions, and the climate transition. These forces affect a person’s ability to earn a livelihood, support a family, and engage in society. While governments and industries have long emphasised job creation, investments in the human capital needed to power this transformation have not kept pace. Education and labour market spending are stagnating or declining, widening the gap between ambitious economic and climate goals and the workforce capacity needed to achieve them. Global government expenditure on education declined from 4.3 per cent of GDP in 2020 to 3.5 per cent in 2023. Preparing the labour force is essential to unlocking new opportunities, managing risks, and ensuring an inclusive and resilient transition.

The social dimension of the climate transition in the context of wider global shifts

A new economy is emerging, defined by converging megatrends reshaping the foundations of economic and social systems. The climate transition sits at the centre of these shifts, leading to job gains, losses, and changes in existing roles. Unlike other megatrends, the climate transition has clear potential to generate a substantial net increase in employment. A well-managed transition could help to buffer the dislocation from other disruptive forces, such as artificial intelligence (AI) and geoeconomic fragmentation. However, capturing these synergies requires bridging communities that too often work in silos, from economics and business to climate science, education, and social policy.

What does the transition mean for jobs?

The transition to a low-carbon, resilient development model stands out for its strong potential to create net employment gains, with a midpoint estimate of 375 million jobs over the next decade. In four key sectors (energy, construction, manufacturing, and agriculture), net job gains are estimated in the range of 225–530 million jobs. However, this net creation will result from substantial labour market churn, impacting between 255 million and 1 billion jobs, with a midpoint estimate of 630 million. This corresponds to 18 per cent of the total workforce. Agriculture and land use could become the largest sources of new employment, with net impacts of 115–275 million jobs. Construction may add the largest relative gain, with an estimated 80–270 million net jobs. The energy and fuels sector will undergo profound restructuring, adding 20 million net new jobs while experiencing churn equivalent to 35–90 per cent of current workers. Adaptation investments are estimated to create 15–30 times more jobs per dollar invested than mitigation on average, driven by high labour intensity in developing countries.

How is the transition impacting skills?

As the transition accelerates, so will the need for workers with new skills. Currently, global skills gaps are leaving hundreds of millions ill-prepared. More than 760 million adults lack basic literacy and numeracy skills, and 70 per cent of children in low- and middle-income countries (LMICs) cannot read and understand a simple text by age 10. The report projects that 60 per cent of the existing workforce will need reskilling or upskilling by 2030. Demand for climate-related skills is increasing faster than supply; LinkedIn analysis found green talent demand grew at 12 per cent between 2023 and 2024, twice the rate of supply. Workers will need both sector-specific technical skills (such as renewable energy engineering) and transversal skills (including adaptability, communication, and problem-solving).

How is the transition impacting inequalities?

The climate transition offers prospects for prosperity but risks deepening existing inequalities. Opportunities and risks are unevenly distributed, with high-value segments of the low-carbon economy remaining concentrated in advanced economies and urban centres. Globally, men hold nearly two-thirds of climate-related jobs, and women represent less than one-third of STEM graduates worldwide. Caregiving kept 708 million women out of the labour force in 2023, compared to only 40 million men. Indigenous Peoples, who steward about 80 per cent of global biodiversity, face systemic exclusion despite their vital knowledge of adaptation and resilience. Furthermore, older workers and people with disabilities face steep barriers to reskilling and accessible employment.

What is at stake for economies, societies, and the climate?

Investing in people generates a triple dividend: stronger labour utilisation and productivity, greater social and political cohesion, and faster environmental action. Improving education can credit nearly 45 per cent of global economic growth. Closing current skills gaps could raise labour productivity by 3 per cent by 2030. Conversely, a shortfall of 14 per cent (6 million) renewable energy workers by 2030 could lead to an additional 0.7°C of warming by 2100 compared with current national policies. For businesses, early investment in skills and workforce planning strengthens resilience, unlocks innovation, and reduces regulatory and climate-related risks.

Harnessing the job opportunities of the climate transition

International experience shows that employment outcomes are the result of deliberate, integrated strategies combining supply-side measures, demand-side interventions, and matching mechanisms. The report proposes an Action Agenda structured around three interlinked pillars: intentionality, innovation, and investment.

Intentionality: Bringing people into the heart of transition strategies

Governments should hardwire jobs and skills strategies into national transition policy and budget planning. The report recommends establishing place-based, multistakeholder workforce transition pacts to align job development with regional economic strategies. It also calls for developing stronger workforce intelligence systems that use real-time data and AI to anticipate impacts on vulnerable workers. For example, the Philippines has institutionalised workforce priorities through its Green Jobs Act (2016), linking climate goals to job creation through fiscal incentives.

Innovation: New models for education and workforce transition systems

Traditional supply-driven training models are failing to keep pace with rapid environmental changes. The Action Agenda recommends designing agile, modular, and inclusive skills programmes that leverage technology. It also suggests building smart accreditation and job-matching platforms to validate formal, non-formal, and informal learning. Industry-led training consortia should be formed to pool resources and codesign curricula responsive to employer needs. Flagship initiatives include Kenya’s 360° AgriJobs Approach and Pakistan’s Roshni Baji programme, which trains women as certified electricians.

Investment: Making jobs, skills, and workforce transitions a financial priority in the climate transition

Current financing is insufficient, with an estimated $97 billion annual gap for basic education in LICs and LMICs. Financing for jobs and skills has been virtually absent from climate finance, with less than 0.5 per cent of international climate finance directed to capacity-building. The report suggests reframing human capital as a strategic growth asset in accounting frameworks. It calls for increasing public finance through skill levies, currently used in over 70 countries, and incentivising business investment through tax credits and public procurement. Multilateral development banks (MDBs) are urged to dedicate a share of lending expansion (e.g., 5–10 per cent) to labour market and social transition purposes.

From analysis to implementation

The convergence of global forces is creating a new reality that is faster moving and less predictable. Leaders must confront the dual challenge of adapting to rapid change while building resilience and equity. The report calls for a major collaborative global effort to support governments in pursuing the Action Agenda through shared knowledge, technical assistance, and national and global advocacy. Decisive country- and industry-led responses are required to put people at the centre of the new economy.