latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/groups-claim-america-s-clean-energy-sector-has-a-diversity-problem-66537369 content esgSubNav
In This List

Groups claim America's clean energy sector has a 'diversity problem'

Video

S&P Capital IQ Pro | Powering Your Edge

Video

S&P Capital IQ Pro | Unrivaled Sector Coverage

S&P Capital IQ Pro | Powered by Expert Insights

Blog

Enterprises are missing out on 24B by not optimizing cloud spending not going multicloud


Groups claim America's clean energy sector has a 'diversity problem'

Women and Black Americans have long been underrepresented in the energy sector, but the diversity problem is of special concern for the growing clean energy industry, which risks leaving millions of people behind, a new report warned.

The market-driven transition to a low-carbon energy system, along with billions of dollars in federal and state funding to boost the economy, is expected to create several million new jobs in coming years. However, to help build a more equitable economy, the clean energy industry must also expand its hiring practices, said the Sept. 9 report released by advocacy groups E2, Alliance to Save Energy, American Association of Blacks in Energy, Energy Efficiency for All and Black Owners of Solar Services.

"Clean energy has a diversity problem. Despite its broad range of businesses, including construction, utilities, manufacturing, professional services and repair and maintenance, the clean energy sector is dominated by white men," the report said. "Given the incredible job growth of the energy sector over the past decade, this lack of diversity threatens to cause women and Black workers to miss out on one of America's great economic expansions."

Although women account for nearly 51% of the U.S. population and 48% of its workforce, they hold 27% of clean energy jobs and account for 25% of the total energy sector workforce. Black people make up 13% of both the population and labor force in the U.S. but hold just 10% of all energy jobs and 8% of jobs in renewable energy generation and fuels, energy efficiency, grid modernization, clean vehicle manufacturing and similar industries.

The findings in the report were based on data from the 2021 U.S. Energy and Employment Report published by the U.S. Energy Department, the U.S. Census Bureau, the U.S. Bureau of Labor Statistics and other sources.

SNL Image

The American Clean Power Association, an industry trade group, said it recently began to collect information from its members to better understand how companies are prioritizing diversity from "both the top-down and from the bottom-up."

"As the nation's fastest-growing source of electricity, we recognize the need to take a leadership role in building a workforce that recognizes diversity and inclusion," Michele Mihelic, the American Clean Power Association's senior director for asset management and standard development, said in an email. "We acknowledge the need for more diversity in our sector and are committed to listening, learning and working as an industry to take meaningful action for lasting change."

Other demographic groups represented in the clean energy industry more closely reflect the overall population and share of the workforce, with Hispanic and Latino people lagging by 1 or 2 percentage points, the data from the report shows. Nonwhite people hold 27% of jobs in the renewable sector — a higher share than their overall workforce participation of 22%, the report showed.

But companies that expect to capitalize on massive investments in clean energy technology and services in coming years will miss out unless they diversify, officials with the groups that published the report said during a Sept. 9 event held to discuss the findings. Six out of 10 clean energy jobs today are held by non-Hispanic, white people; three out of 10 by people who identify as multiracial and nonwhite; and one out of 10 by white Hispanics or Latinos.

"Having a workforce that reflects the community you're trying to operate in is always going to help you be more successful," said Paula Glover, president of the Alliance to Save Energy. "Companies are trying to grow business in communities they've never been in before. The way to do that is to have people from that community speaking as a champion for your business."

3 million American workers and counting

As the U.S. recovers economically from the coronavirus pandemic, the country's equitable rebuilding is critical, added Bob Keefe, the executive director of E2, a business group also known as Environmental Entrepreneurs. Unemployment among Black Americans continued to rise even as the national jobless rate decreased slightly in August, showing how uneven the recovery has been.

At the same time, the nation's clean energy industry is adding jobs faster than any other, already employing three times more people than the fossil fuel industry, Keefe noted.

More than 3 million Americans are working jobs related to clean energy, earning wages that are 25% higher the national median hourly rate, "and the overwhelming majority of the people who are getting these jobs are white, and they're men," Keefe said. "That's got to change."

Federal policies, such as the proposed national climate bank, along with targeted workforce training and networking with Historically Black Colleges and Universities, could help open up new opportunities for women and Black job seekers, the groups said.

U.S. President Joe Biden made environmental justice a key priority for his administration and set a goal to steer at least 40% of benefits from federal climate and energy funding to disadvantaged communities. The White House kicked off an initial pilot program last month to ensure agencies are working toward that goal.

A separate report, released Sept. 9 by the independent research firm Analysis Group, also estimated that the adoption of the Clean Electricity Payment Program alone could generate 7.7 million new jobs by 2031 as utilities get incentives to invest in solar, wind and other renewable energy sources.

The House Energy and Commerce Committee released details on the program and is set to vote Sept. 13. The proposal is part of the $3.5 trillion budget resolution underway in Congress.