Green Energy Push Must Protect Workers, Consumers and Local Communities: OECD

The OECD warns that the global shift to a low-carbon economy could deepen inequality, trigger job losses and disrupt communities if businesses focus only on emissions cuts without protecting workers, consumers and vulnerable regions. The report urges companies and governments to combine climate action with social justice through fair labour policies, stakeholder engagement, community benefit-sharing and responsible transition planning.

The global push toward renewable energy and cleaner industries is accelerating faster than ever. Governments and corporations are investing billions in solar power, wind energy, electric vehicles and low-carbon technologies as countries attempt to reduce emissions and fight climate change. But a new OECD report warns that the transition could create serious social and economic problems if workers, communities and consumers are left behind.

The report, prepared with research support from organisations including the International Labour Organization (ILO), International Energy Agency (IEA), International Renewable Energy Agency (IRENA) and World Economic Forum, says climate action must go beyond environmental targets. It argues that businesses now face growing pressure to ensure the green transition is also fair, inclusive and socially responsible.

Millions of Jobs at Risk During the Transition

One of the report's biggest concerns is the impact on employment. According to the OECD, around 78 million jobs could disappear globally by 2030 because of the shift away from fossil fuels and carbon-intensive industries. Although nearly 103 million new jobs may be created in cleaner sectors, these opportunities may not appear in the same regions or require the same skills.

Coal mining towns, oil-producing regions and heavy industrial centres could face major economic decline before new green industries are fully established. Workers may struggle to adapt if they do not receive retraining or support. The report warns that job losses, weaker local economies and social instability could increase public opposition to climate policies if governments and businesses fail to prepare properly.

The OECD also stresses that green jobs must offer decent wages, safe working conditions and long-term security. Simply replacing old jobs with unstable or poorly paid work will not create a truly fair transition.

Companies Are Still Not Fully Prepared

Despite growing corporate climate commitments, the report says many businesses still focus mainly on reducing emissions while paying less attention to social impacts. Climate planning is often treated as a technical or financial exercise rather than a human one.

Inside many companies, environmental teams, finance departments and labour specialists operate separately, creating gaps in planning. As a result, workers, suppliers and communities are often consulted too late or not at all. The OECD found that only a small number of companies have seriously integrated social protections into their transition plans.

The report urges businesses to adopt a more balanced approach by combining environmental, social and economic goals from the beginning. Companies are encouraged to create transition plans that include worker retraining, community investment, local job creation and protection for vulnerable consumers.

Some firms are already moving in this direction. British energy company SSE, for example, created a dedicated "Just Transition Strategy" linked to its net-zero goals after pressure from investors and stakeholders. The company included commitments to worker support, skills development and local economic benefits as part of its renewable energy expansion.

Communities and Indigenous Groups Demand a Voice

The report highlights that the low-carbon transition will affect regions differently. Renewable energy projects, mining for transition minerals and new industrial developments are often concentrated in specific areas, sometimes near Indigenous lands and vulnerable communities.

This has created growing demands for meaningful consultation and shared decision-making. The OECD argues that local communities, workers, trade unions and Indigenous Peoples must be involved in planning major projects from the start. Consultation should not be symbolic. Instead, affected groups should have real influence over decisions involving land, jobs, livelihoods and environmental protection.

The report points to examples where communities directly benefit from renewable projects through co-ownership and revenue-sharing models. In Canada, the Henvey Inlet Wind project involves Indigenous co-ownership, giving local First Nations communities both financial benefits and environmental oversight powers. The OECD says such models can reduce conflict, strengthen trust and ensure the economic gains from the transition are shared more fairly.

A Fair Transition Will Decide Climate Success

The OECD makes clear that businesses cannot manage the transition alone. Governments must play a major role by creating strong labour policies, social protections, retraining programmes and investment plans to support affected regions. Without clear national strategies, companies may struggle to balance climate goals with social responsibilities.

Consumers are another key concern. The report warns that cleaner technologies and stricter climate policies could increase the cost of energy, transport and essential goods, especially for lower-income households. Businesses are encouraged to avoid passing all transition costs directly onto consumers and instead support affordability measures where possible.

The report also criticises abrupt corporate exits from fossil fuels or supplier relationships without proper planning. Sudden closures and "cut-and-run" strategies can leave workers and communities devastated. Instead, the OECD calls for responsible disengagement, where businesses provide retraining, financial support and long-term planning before leaving industries or regions.

Ultimately, the report argues that the success of the low-carbon transition will depend not only on cutting emissions but also on whether people believe the process is fair. A transition that ignores workers, communities and consumers could face growing resistance and fail to achieve its climate goals.