The article was written by Murielle Antille with contributions from Marcos Huergo, Juan Luis Goujon and Lucía García.

In 2019, ENEL - Endesa, the largest multinational electric utility company in Spain, announced the closure of 4 thermal power plants (Teruel, Compostilla, As Pontes y Carboneras-Almería), in accordance with the company’s de-industrialization plans. These closures are part of the company’s transformation towards an emission-free future by 2050.

ENEL-Endesa is not the only company with deindustrialization plans. The traditional industrial sector is declining. The urgency to combat climate change, the digital revolution, and the COVID-19 pandemic have given rise to a new industrial model paving the way to a more sustainable future.

The green transition can have a significant impact on labour markets, however, reindustrialization could be the answer for employers and workers alike. Further, and following the LHH Spain practices in this article, career management services can play a key role in fighting unemployment by promoting and implementing holistic human-centred solutions.  There is no doubt that green transition is a global requirement. This is a climate emergency.

Reducing carbon intensity is a huge priority, but implementation of the Paris Agreement requires not only economic but also social transformation. Re-industrialising means to industrialise again in order to stimulate economic growth and to renew outdated industries. However, the reindustrialization shift is not only about the climate, businesses, and redesigning solutions for a declining (manufacturing) sector. It also needs to account for jobs and local community development. “The E and the S are competing for attention, and the greener we go, the more social harm we need to account for,” says IMD Professor of Finance Karl Schmedders. 

Besides unemployment, deindustrialization and job reductions could lead to involuntary part-time work or unsteady employment for long periods of time, which will cause underdevelopment and social exclusion for the communities concerned. Former facilities should be repurposed as part of a solution, although this is not always the case or not always possible.

How can companies mitigate the impact that these closures will have? How could reindustrialisation help bridge the gap and what are some of the measures to take?

The direct impact of reindustrialization in Spain

Let’s take the particular example of ENEL-Endesa and their carboelectric power plant in Carboneras, at the Litoral de Almería, at the gates of what is now the natural park of Cabo de Gata-Níjar.

Although former facilities should be repurposed as part of a solution, for many companies this is not always possible. As part of its commitment to sustainability, Endesa prioritised plans to mitigate the impact on employment. The company has given priority not only to the environmental aspect of the green transition but also to the social and economic consequences for the regions after the termination of its energy generating activities. 

For instance, it announced that the 113 contracted workers will be considered through an internal relocation process and initiated training measures to enable them to also be taken into account for the dismantling of the plant and future operation and maintenance of the new renewable parks. Indeed, when the thermal power plant closes, the first activity will be the dismantling work, which is expected to last for 3 years and which will provide employment in the Carboneras area.  

LHH has helped several power companies in Spain to mitigate the deindustrialisation impact by adopting a holistic and human-centred approach to green transition working together with the local communities, workers and regional stakeholders for the benefits of the region. In the context of the reindustrialization plans, Endesa asked LHH to support the attraction of new investment projects.

"For the LHH reindustrialization team, it represented a highly complex project due to the magnitude of the site, the characteristics of the environment with a very low business and industrial activity and the broadly ambitious objectives in terms of job creation, diversification of economic activity and sustainability," said Marcos Huergo, Managing Director LHH Spain and Cluster Lead for Southern Europe.

In Almeria, it resulted in 14 new investment projects signed a binding offer in a wide range of sectors (bio-fertilizers, fish farms, circular economy, new building materials, water treatment, micro-algae, etc.).

"Positioning Carboneras as the ideal place to undertake new investment projects in the south of Spain has been a huge challenge for LHH, but also a great satisfaction to know that with the identification of these 14 new investment projects, the jobs that will be lost with the closure of the Plant will be more than compensated.

Additional training programmes are planned for former employees and will be implemented to generate local employment. Likewise, the company will promote, for the execution of its new renewable projects, the purchase of materials from local suppliers that promote the green industrial development of the area.

As part of the company’s developing Futur-e Plan, Endesa, together with the local city council, will supervise the transformation of the space with the collaboration of the University of Almeria and with EU funding. This year, Mr Bogas, Endesa’s CEO, committed to the Fair Transition process by announcing the development of new renewable projects and green hydrogen plans in the area, which will drive regional evolution.

ENEL ENDESA worked with the energy companies to: (1) develop training programs aimed at improving the employability of their workers (re-/upskill programs to train employees and contractors), (2) connect potential employers to existing infrastructure and workers becoming available following site closure, (3) support work transitions to help those employees join the labour market in a completely different activity than they had been doing.

Steps to a sustainable green transition

Make social responsibility part of the agenda 

While we transition towards greener and more circular business models, it is inevitable that jobs that depend on unsustainable business models will be lost. LHH’s example illustrated that reindustrialization could provide sustainable employment solutions if a holistic approach involving all interested parties is adopted.

Act fast and retrain the workforce

Besides helping employees to develop new skills for emerging technologies and business models, the labour market of the future requires companies to act fast and reduce the dated jobs while re-training their workforce. 

Career coaching to develop a solutions mindset 

Employees need to be upskilled and reskilled on soft skills. Skills like problem-solving, adaptability, motivation, and self-management will be essential to navigate the new employment challenges ahead. Employees will have to request as much help as they need to readjust, reskill and prepare for the future. 

New-era leadership that will promote solutions

Turning a job loss situation into an employment success scenario will require more than employee skill transformation. It also needs a long-term vision and investment in development projects. Employers should take on part of the responsibility for reinvesting in sustainable solutions.

We need a green transition and to promote green growth industrial models. But rather than focusing on one-sided measures, the responsibility lies with everyone: governments, citizens, employers and employees. In addition, promoting best practices should be top priority.

Transitioning into a sustainable future is challenging. There are, however, steps we can take, as shown by the LHH Spain practices, to accelerate this process sustainably for the affected communities.