At the heart of ESG, millions of jobs threatened by climate change!
The June heat wave in Western Europe was particularly intense, long and early. June 2019 is the hottest June ever recorded in the world, according to data published on Tuesday by the European Copernicus climate change service (+0.1°C compared to June 2016). But it was mainly Europe that was hot, with a temperature about 2°C higher than seasonal norms. Several records were broken last week in various European countries suffocated by heat, due in particular to hot air from the Sahara in the MENA region. Temperatures exceeded seasonal norms by 10°C in Germany, northern Spain and Italy, and France, which reached an all-time high of 45.9°C on Friday 28th of June (+1.8 °C above the previous record level).
We now know that these early heat waves will intensify in the near future and our adaptation will be long and complex. A recent International Labour Organization (ILO) report warns about the dramatic consequences that global warming and climate change could have on employment in the coming decades. The document returns to “the impact of heat stress on labour productivity and decent work”. Defined as “heat received in excess of that which the body can tolerate without physiological impairment”, its effects are potentially devastating: “Such excess heat increases workers’ occupational risks and vulnerability; it can lead to heatstroke and, ultimately, even to death”. One of the main conclusions of the report is that “heat stress is projected to reduce total working hours worldwide by 2.2 % (i.e., a loss equivalent to 80 million full-time jobs) and global GDP by USD 2,400 billion by 2030” (a loss equivalent to France's GDP). Moreover, it appears that this estimate is conservative because it is based on a maximum temperature increase of 1.5°C by 2100, which corresponds to the target of the 2015 Paris Climate Agreement. Catherine Saget, Chief of Unit in the ILO’s Research Department warns that “the impact of heat stress on labour productivity is a serious consequence of climate change... We can expect to see more inequality between low- and high-income countries and worsening working conditions for the most vulnerable”. In other words, global warming is expected to lead to a decline in employment in sectors directly affected by rising temperatures and an increase in inter- and intra-country inequalities.
Furthermore, the ILO points out that 10 of the 17 Sustainable Development Goals (SDGs) will be directly impacted by heat stress (see table below). The horizon here is again short but relevant to the report: 2030. Obviously, some SDGs will be more impacted than others, such as the 3rd goal “good health and well-being” or the 8th “decent work and economic growth”. But it is indeed about 10 SDGs that will be impacted! To mention only a few examples supported in the report, it is important to note that, depending on their level of development, some areas possess greater adaptive capacities than others. First, demographic pressure in already densely populated areas that are more vulnerable to the effects of climate change (e.g., Asia and the Pacific) is expected to lead to even more altered working conditions. Second, an ageing population is expected to exacerbate the detrimental effects of heat stress because older people generally have more difficulties in adapting to high heat levels.
Heat stress impacts on work in relations to the Sustainable Development Goals (SDGs)
Source: Adapted from UNDP, 2016
Meanwhile, an Oxford Economics report on the effects of robotics on manufacturing employment and the creation of a Robot Vulnerability Index forecasts that “the rise of the robots will boost productivity and economic growth. And it will lead to the creation of new jobs in yet-to-exist industries. But existing business models in many sectors will be seriously disrupted and millions of existing jobs will be lost”. They estimate that up to 20 million manufacturing jobs are set to be lost to robots by 2030. Innovative mechanisms combining artificial intelligence (AI) and robotics would be useful in manufacturing sectors directly affected by heat stress. Let us hope, however, that the net job losses will not be too high because it is difficult to predict how the labour market will evolve over the next 10 years.
At the end of the day, certainties about current and future trends in the labour market require us to understand how the disrupted climate will affect our societies. Climate change is global in nature and will be present in all sectors of our modern societies. A 3.0 society is needed. A society in which AI and robotics would be used to perpetuate important sectors of our economies endangered by global warming. A society in which production, transport and consumption modes become more equitable, durable and sustainable. A society that takes care of itself and fights climate change effectively but also with solidarity.
Julien Moussavi, Ph.D., Head of Economic Research
Sources: Beyond Ratings, ILO, Oxford Economics