Towards a Green-Skilled Workforce

Climate change is disrupting the economy, harming health, damaging ecosystems and changing the way businesses operate. Increasingly, businesses are facing a host of climate-related risks, from extreme weather to an evolving regulatory landscape. Businesses without the necessary skills and knowledge risk falling behind.

A new climate and sustainability report, Towards a Green-Skilled Workforce, written by Deloitte Access Economics for RMIT Online, has found that Australian businesses are underprepared for the climate transition despite recognising the consequences of inaction. In a survey of 436 business leaders, more than half (56%) reported that they expect climate change to have a significant financial impact on their operations within the next decade. Financial risks from climate change include not only losses from disrupted supply chains and damaged property, but also rising insurance premiums, which have vastly exceeded CPI increases. 

This year, Australia introduced climate reporting obligations, requiring large businesses to submit annual sustainability reports. Despite non-compliance attracting penalties of up to $751,200, 43% of surveyed businesses reported that they were not adequately prepared for the requirements in December 2024. 

It is clear that businesses have been slow to adapt – an issue compounded by a growing green skills gap.

Green skills are skills and knowledge related to sustainability and climate change. These skills will be needed for sustainability-specific roles (e.g. in the recycling sector), for existing roles with evolving responsibilities (e.g. accountants working in climate reporting) and for new positions that will emerge over the next decade. At present, medium and large businesses report that 25% of their workforce has green skills. This is expected to increase to 36% in the next five years, equivalent to at least one million additional green-skilled workers across new and existing roles by 2030. 

Skills shortages are expected to impact all business levels, with surveyed businesses split on whether leadership (28%), management (30%) or operations (42%) will require the most green skills in the future.

Currently, 43% of surveyed businesses lack both the skills and expertise required to prepare for the climate crisis, with the most critical gaps in engineering, science and technical, as well as climate and sustainability-focused soft skills. 

Businesses are also struggling to hire green-skilled talent. Surveyed medium and large businesses report that they would pay $13,000 more per year for managers with green skills. If the green skills gap was closed, this would be equivalent to an estimated collective wage opportunity of $1.7 billion by 2030. With the shortage expected to worsen as demand accelerates, green upskilling is a business imperative. 

Beyond managing risks, investing in sustainability offers clear benefits for businesses. According to Deloitte’s 2024 Sustainability Action Report, companies can strengthen their market position, reduce costs and provide better value for stakeholders by embedding sustainability goals into their core strategy. While not specific to green skills, last week’s report by the Productivity Commission, Building skills and qualifications for a more productive workforce, also noted that upskilling the workforce can boost workplace productivity, drive innovation and adapt to change. 

There are immediate actions businesses can take to get ahead of the climate transition. To upskill and reskill the workforce, businesses can engage external educators, create secondment opportunities and support continuous learning. Additionally, businesses can conduct workforce mapping to identify skill gaps, allowing organisations to better align recruitment and retention strategies with long-term sustainability goals. 

This newsletter was distributed on 18^th August 2025. For any questions/comments on this week's newsletter, please contact our authors:

This blog was co-authored by Jialu Meng, Economist at Deloitte Access Economics.

Click on the links below to read our previous Weekly Economic Briefings:

• Productivity growth revised down, as labour market cools (14 Aug)
• Today, meet tomorrow – Australia’s Digital Pulse (07 Aug)
• Although price growth is contained, cost of living pressures remain (31 July)
• Australia falls down the World Competitiveness Rankings (24 July)