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Investment in Upskilling Could Boost Global GDP by $6.5 trillion by 2030

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Accelerated investment in upskilling and reskilling of workers could add at least $6.5 trillion to global GDP, create 5.3 million (net) new jobs by 2030 and help develop more inclusive and sustainable economies worldwide. These are the key findings of a World Economic Forum report published today.

The report, Upskilling for Shared Prosperity, authored in collaboration with PwC, finds that accelerated skills enhancement would ensure that people have the experience and skills needed for the jobs created by the Fourth Industrial Revolution – boosting global productivity by 3%, on average, by 2030. The newly created jobs will be those that are complemented and augmented – rather than replaced – by technology.

“Even before COVID-19, the rise of automation and digitization was transforming global job markets, resulting in the very urgent need for large-scale upskilling and reskilling. Now, this need has become even more important. And – as we highlight in our new insight report with the Forum – upskilling is key to stimulating the economic recovery from COVID-19 and creating more inclusive and sustainable economies. To make this happen, greater public-private collaboration will be key. We’re delighted to be part of the Reskilling Revolution platform, which will help foster greater action, collaboration, accountability and progress on this important topic,” said Bob Moritz, Global Chairman, PwC.

One year of impact through the Reskilling Revolution

The research on upskilling supports the work of the Reskilling Revolution platform. Launched at the World Economic Forum Annual Meeting in Davos-Klosters in January 2020, the Reskilling Revolution set out to provide better education, skills and work to one billion people by 2030. In its first year, despite the pandemic and economic downturn, the platform’s initiatives are estimated to have benefitted more than 50 million people globally through rapid reskilling, upskilling and redeployment.

“Millions of jobs have been lost through the pandemic, while accelerating automation and digitization mean that many are unlikely to return. We need new investments in the jobs of tomorrow, the skills people need for moving into these new roles and education systems that prepare young people for the new economy and society. Initiatives like the Reskilling Revolution hold the key to converting ideas into action and creating the necessary coordination between the public and the private sectors. There is no time to waste,” said Saadia Zahidi, Managing Director, World Economic Forum.

After focusing in 2020 on setting up systems for rapid reskilling and upskilling – particularly vital in the midst of the pandemic – the initiative will continue to scale up its skilling work in its second year, while expanding its work in education, job creating investments and work standards.

“Investment in job creation, particularly climate-friendly jobs, is key to ensuring a Reskilling Revolution, and concerted action by governments and by business is needed urgently,” said Sharan Burrow, General-Secretary, International Trade Union Confederation (ITUC).

Developing a common language for skills

The absence of a shared language for skills poses a significant obstacle for the reskilling and upskilling agenda. An additional report by the World Economic Forum, also launched today, provides a common taxonomy for skills to help employers, government and learning providers more efficiently match talent to jobs and learning opportunities.

The Global Skills Taxonomy: A Common Language to Unlock the Reskilling Revolution includes specific definitions and categorizations of skills, creating a common taxonomy for the labour market to adopt, from online training providers and universities to hiring managers in companies and education ministries. It consists of an interactive taxonomy with definitions as well as recommendations for adoption to inform hiring, reskilling and redeployment practices in the workplaces of the future.

More about the Reskilling Revolution

The Reskilling Revolution works through three action tracks: Forum-led initiatives that engage the public and the private sectors in joint initiatives; public-sector and multistakeholder initiatives; and company-led initiatives.

The Closing the Skills Gap country accelerators are developing and implementing national strategies for reskilling and upskilling. Accelerators are active in 10 countries with Georgia, Greece and Turkey having recently established accelerators, and a further six accelerators under discussion. Commitments made by established and planned accelerator countries and their member companies to reskill and upskill their employees are expected to reach up to 47 million individuals.

Comprised of major online learning providers, including Udacity and Coursera, and reaching 200 million learners worldwide, the Forum-led Skills Consortium aims to elevate online learning as an accepted route to employment to provide more opportunities for reskilling, upskilling and redeployment. Building on this success, the Chief Learning Officer Community brings together industry leaders in learning and development to transform workplace learning for 2.9 million employees.

In the year ahead, the Consortium, the community of Chief Human Resources Officers and Chief Learning Officers of the Reskilling Revolution platform will work on the adoption of the skills taxonomy to help make skills the key currency of the labour market and create greater efficiencies in the labour market.

The Preparing for the Future of Work industry accelerators are estimated to have reached nearly 8 million employees to prepare them with future-oriented skills. In addition, the Chief Human Resource Officer Community brings together companies’ HR leaders to share best practices and mobilize action to provide better jobs and skills to a further 4 million employees.

Multistakeholder coalitions that joined the Reskilling Revolution, led by UNICEF and the ILO among others, have been focused on delivering better education and skills, through equalizing access to digital learning (mass teacher reskilling, or identifying, supporting and amplifying new approaches.

Company-led initiatives are helping future-proof their workforces, even in an economically constrained environment. Reskilling Revolution companies are leading new approaches to support their workforces, and their supply chains and communities through access to education, skills and better jobs. In addition to founding members of the platform, such as Adecco Group, LinkedIn and ManpowerGroup, the initiative recently welcomed new partner commitments from Royal Bank of Canada, Unilever and Verizon.

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Ten years of Afghan economic growth, reversed in just 12 months

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photo © UNICEF Afghanistan

A year on from the Taliban takeover in Kabul, Afghanistan is gripped by “cascading crises”, including a crippled economy that humanitarian aid alone cannot address, according to a new report from the UN Development Programme (UNDP) on Wednesday.It says that the already-declining regular economy, as opposed to the black market, lost nearly $5 billion after August 2021 and is reversing “in 12 months what had taken 10 years to accumulate.”

Soaring prices 

The cost of a basket of essentials needed to avoid food poverty has meanwhile risen 35 percent, forcing poorer households to go deeper into debt or sell off assets, just to survive.

Nearly 700,000 jobs have vanished, said UNDP, further threatening a population reeling from impacts of the COVID-19 pandemic, conflict, drought, and war in Ukraine.

“The Afghan people have been relentlessly subjected to extremely difficult circumstances. They have survived numerous challenges in the last 40 years and shown enormous resilience”, the report states, officially entitled, One Year in Review: Afghanistan Since August 2021.

“Yet the last 12 months have brought cascading crises: a humanitarian emergency; massive economic contraction; and the crippling of its banking and financial systems in addition to denying access to secondary education to girls and the restrictions on women’s mobility and participation in the economy”.

‘Strong response’ by UN

The head of UNDP, Achim Steiner, praised the UN’s “strong, coordinated response to the crisis” saying it proved critical in averting a catastrophe last winter.

“Building upon what worked last year including tailored efforts across multiple sectors to improve the livelihoods of more than half a million people, there is a pressing need to support further measures to prevent a deeper crisis.”

“We need to help Afghans cope with the coming winter including through our ABADEI programme which aims to support two million people with livelihood and job opportunities over the next two years – with a focus on particularly vulnerable groups such as women entrepreneurs and young people.”

Expanding connectivity

The report paints a bleak fiscal picture of the country, dating back more than a decade before the Taliban ascendency.

With GDP in steady decline since 2008, Afghanistan had come to rely on international aid to sustain its economy, which accounted for a staggering 75 percent of total Government spending and nearly 40 percent of GDP at the time of transition. But foreign donors largely suspended aid after the transition, UNDP notes.

Without support from outside, Afghanistan must now rely on limited domestic revenue from agriculture and coal exports.

Authorities have sought to address revenue shortfalls by cracking down on corruption in key revenue streams, such as customs, and by reaching out to the private sector and foreign investors.

“Two decades of heavy dependence on international aid and imports, a lack of industrialization and competitiveness, and limited mobility and connectivity among regions, among other factors, have hindered Afghanistan’s forward momentum,” the report says.

Cost of excluding women

UNDP analysis forecasts that restricting women from working can result in an economic loss of up to $1 billion – or up to five percent of the country’s GDP.

“The rights of women and girls are critical for the future of Afghanistan,” said UNDP Asia-Pacific Director Kanni Wignaraja. “It starts with education and continues with equal opportunity when it comes to employment and pay.

“UNDP made the support to women-owned businesses front and center of its aid activities: we provided support to 34,000 women-owned small businesses. Our goal is to reach 50,000 women-owned business by the end of this year.

UNDP Resident Representative Abdallah Al Dardari said they was grateful for the $300 million in funding provided for the programme’s work on livelihoods as part of the overall crisis response, “but much more is needed for economic recovery”.

“Afghans are running out of time and resources. Afghanistan needs support from the international community to bring back to life local markets and small businesses which are the backbone of Afghanistan’s economy.”

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Commitment to ESG Reporting is Driving Change within Global Corporations

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New case studies from the World Economic Forum show how comprehensive environmental, social and corporate governance (ESG) reporting has started to drive corporate transformation around the world, particularly in sustainability efforts and company culture.

Based on case studies from companies reporting on the Stakeholder Capitalism Metrics, the white paper found examples of specific strategy and operations changes as a result. These include initiatives such as new approaches to water management in real estate and implementing biodiversity strategies and targets.

The case studies also indicate that despite some progress, companies are still struggling with competing and disparate ESG frameworks around the world. As regulators begin to roll out mandatory ESG reporting across regions, alignment will be key to ensuring that the clarity and efficacy of ESG reporting continues to improve globally.

We’re happy that support continues to grow for this set of metrics even in the face of geopolitical challenges, the lingering global pandemic and economic disruptions of the past two years,” said Emily Bayley, Head of Private Sector Engagement, ESG, World Economic Forum. “As this growth continues and jurisdictions transition from voluntary to mandatory sustainability reporting standards, we hope these learnings can provide valuable insights for companies that are just getting started on sustainability reporting and those that have been doing it for years.”

ESG-Driven Corporate Impacts

The Stakeholder Capitalism Metrics Initiative case studies engaged a global set of companies to gather how, and if, their ESG reporting has informed corporate transformation both internally and externally.

Examples of these transformations include:

Ecopetrol

Stakeholders told Ecopetrol their report was too long – the Forum’s core metrics helped the company focus on reporting topics that are most material and will generate value.

HEINEKEN

The metrics go beyond ESG to capture commercial metrics on employment, economic contribution, investment and tax. This delivers “an annual dashboard of comparable data on both sustainability and prosperity that will provide us with a snapshot of how healthy our company is”.

JLL

The core metric on water consumption and withdrawal in water-stressed areas led the company to encourage its teams and clients to agree water management plans and targets. It may even influence where the company rents office space in the future.

Philips

Accurate reporting on the environmental and social impacts of its operations. For example, the metric on resource circularity points customers towards the most impactful products on the market and drives the company’s innovation agenda to design more sustainable solutions.

SABIC

Reporting on the Forum’s metrics has increased the value of transparency within the company, leading to conversations and progress on difficult issues.

Schneider Electric

The metric on land use and ecological sensitivity contributed to Schneider’s new approach to biodiversity, as it adapted its reporting and asked all sites to set specific biodiversity action plans.

ESG Regulatory Landscape

While progress has been made on the creation and implementation of meaningful and effective ESG disclosures globally, concerns remain about the disparate nature of the competing and complex ESG reporting mechanisms that exist today.

There are also concerns that as reporting becomes mandated there could be less transparency because people will not want to disclose more than they have to. As mandated ESG reporting becomes more widespread, both regulators and internal advocates should ensure corporations understand the full value of transparency on sustainability and other ESG issues.

Addressing this issue is particularly important as regulators in different regions begin to roll out their mandatory reporting requirements. Focus on a common set of comprehensive and material metrics will be important for both the efficacy and feasibility of ESG reporting in the coming months. As much as possible, the European Union, the US Securities and Exchange Commission (SEC) and the International Financial Reporting Standards (IFRS) Foundation should align their metrics to ensure companies are able to implement effective ESG reporting globally.

Stakeholder Capitalism Metrics Initiative

The World Economic Forum and the coalition of companies adopting the Stakeholder Capitalism Metrics, engaged with the preparatory working group and are continuing the dialogue with the International Sustainability Standards Board (ISSB) technical teams under the IFRS Foundation as they go through the standard-setting process. The metrics are expected to form part of the ISSB “exposure draft” next year on cross-thematic disclosures and metrics.

Announced at the World Economic Forum Sustainable Development Impact Meetings 2022, these case studies build on the earlier report to showcase progress on the commitment made by companies at the Annual Meeting in 2020. Since then, 186 global companies, with a combined market capitalization of over $6.5 trillion, have adopted the Stakeholder Capitalism Metrics. Of these, 126 companies have disclosed against the metrics in their mainstream reports for either one or two years.

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Trade in 25 Technologies Can Help Climate Action

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Based on 30 interviews with industry and academia, the Accelerating Decarbonization through Trade in Climate Goods and Services report highlights technologies with high, immediate emissions-cutting potential, in five categories – refrigerants, energy supply, buildings, transport and carbon capture and storage (CCS). The list of technologies can guide trade ministers looking to support climate action.


“Climate change is a global concern,” says Sean Doherty, Head of International Trade at the World Economic Forum. “Our response must draw upon the innovation and capacities of the whole world, not be held back by protectionism.”


Trade collaboration on climate has been limited to date with trade and climate practitioners working in separate silos. New efforts are emerging now, however, to address the linkages between these two areas.


“There is no time to waste to limit global warming to 1.5°C,” adds Jean-Pascal Tricoire, Chairman and Chief Executive Officer, Schneider Electric. “We need to decarbonize three times more, three times faster. The good news is that we have the technologies to do it. Solutions are not limited to renewable energy. It actually starts with energy efficiency, electrification and digitization. If deployed at full potential, we can eliminate 70% of what we’re emitting today.”


The report also highlights non-tariff barriers that affect trade in climate technologies. Regulatory cooperation around product testing or labelling requirements, for example, could reduce friction in getting emissions-cutting goods to market. Interviewees also noted that climate action is held back by trade barriers to the services needed to operate climate technologies. The report suggests a way to identify these climate services for priority trade cooperation.


“Our transition to a low-carbon economy will hinge on the deployment of a number of key technologies that are both mature and widely available, as detailed in this important report on the nexus of decarbonization and international trade, including energy efficiency, electric vehicles, green hydrogen, smart buildings and more,” says Björn Rosengren, Chief Executive Officer of ABB. “ABB’s contributions to this new report from the Alliance of CEO Climate Leaders underscore our support for removing and reducing barriers to trade in climate goods and services to speed the drawdown of global emissions.”


More efforts are needed to engage developing countries in trade efforts on climate. Over 750 million people worldwide lack reliable electricity access, mainly in sub-Saharan Africa. Developing economy industries must decarbonize and leapfrog the latest technologies to remain competitive in global value chains moving towards net zero. Some developing economies will need support in creating a climate-friendly trade and technology strategy. Global and local industries can help policymakers understand the criss-crossing of value chains that drive economic activity and how to align these flows to the climate agenda.


“Climate change knows no borders and encouraging better trade between countries can ensure the transfer of valuable knowledge, new technologies and skills to improve energy efficiency in homes around the world,” says Hakan Bulgurlu, Chief Executive Officer of Arcelik. “It is critical to our ultimate goal of achieving net-zero targets.”


To support an increased understanding of trade, value chains and climate action, the Climate Trade Zero community will host dialogues and support countries with actionable analysis.

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