The transition to environmentally sustainable economies is one of the most profound development challenges of our time. It is not only an environmental imperative but a fundamental process of economic and structural transformation. Achieving climate and sustainability goals requires economies to simultaneously reduce emissions, upgrade production systems, and generate productive employment. For many countries—particularly developing and emerging economies—this means pursuing industrialization, economic diversification and climate mitigation at the same time, while ensuring that the transition delivers inclusive growth and decent work.

These structural shifts are already reshaping labour markets. Climate change itself is affecting economic activity and employment through rising temperatures, extreme weather events, environmental degradation and changing resource availability. At the same time, the policy, technological and investment responses to climate change—such as renewable energy expansion, sustainable infrastructure, resource efficient systems and nature-based solutions—are transforming sectors, value chains and skills requirements.

While the green transition can generate new opportunities for job creation, the adjustment process will be complex. Jobs will be created, transformed and displaced across sectors, regions and occupations. Labour markets may experience temporal, geographical and skills mismatches, as workers and firms adapt to new technologies, industries and production patterns. Without well-designed policies, these adjustments risk deepening existing inequalities and weakening public support for climate action. Addressing these challenges therefore requires coherent policy frameworks that integrate climate, economic and employment strategies. Governments must combine macroeconomic and sectoral policies with employment strategies, skills systems, social protection, labour market institutions and effective social dialogue to ensure that the green transition contributes to productivity growth, economic resilience and decent work. Increasingly, policymakers also need better analytical tools to understand how the transition unfolds across sectors and labour markets, moving beyond simple counts of “green jobs” toward a deeper understanding of structural transformation.

Developed by the Employment Policy and Analysis Programme of the ITCILO in collaboration with the Employment, Labour Markets and Youth Branch (EMPLAB) of the ILO, this course provides policymakers and practitioners with the knowledge and tools needed to analyse these dynamics and design employment-centred strategies for the green transition.