# Firm creation in "green" sectors

Soon COP26 climate conference takes place in Glasgow and we measure firm creation in sectors with “green jobs”.

In almost a week, the UK will host the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow. This motivates the question to see how many firms are still active in sectors where “green jobs” exist.

## Which are the “green jobs” sector?

ONS acknowledges how difficult it is to define a “green job”. Our work uses the United Nations System of Environmental Economic Accounting definition as ONS. This includes 17 relevant activities. However, it is challenging to match all 17 activities to UK’s Standard Industrial Classification (SIC).

The following table outlines our match between the “green activities” and SIC codes. NA denotes a not available match.

Green ActivityDescriptionSIC
DivisionGroupClass
Wastewater - WasteThese activities relate to the collection, treatment and disposal of various forms of waste, such as solid or non-solid industrial or household waste, as well as contaminated sites. The output of the waste or sewage treatment process can either be disposed of or become an input into other production processes.37, 38, 39(exclude 38.3)
RecyclingThis activity includes the salvage of wrecks (automobiles, ships, computers, televisions and other equipment), and the processing of metal and non-metal waste and scrap and other articles into secondary raw materials. It also includes the separating and sorting of materials from waste streams and mixed recoverable materials into distinct categories.38.3
Water quantityThis category includes natural water, water treatment and supply services for domestic and industrial needs. Management of water comprises of activities aimed at minimising the intake of inland water through in-process modification as well as the reduction of water losses and leaks, and the installation and construction of facilities for water reuses and savings.36
Production of renewable energyThis activity includes the production of physical renewable energy (exploitation phase) which consists of renewable electricity, heat, and biofuels for transport.35.1, 35.2, 35.3
In-house environmental activitiesThis activity includes activities that businesses undertake in-house to protect the environment against the damaging or depleting impact of the business' activity. It includes activities such as waste management and wastewater treatment on site.NANA
Management of forestsThis activity includes activities relating to forests available for wood supply (but not currently cultivated) and for forests not available for wood supply (e.g. protected forests, nature reserves, national parks). Associated activities carried out for their maintenance and management (restoration activities and prevention and control of forest fires) are included. This includes restoration activities (reforestation and afforestation) as well as the prevention and control of forest fires. Activities and products concerning measurement, control, laboratories and the like are also included as well as education, training and information and general administration activities linked to the management of non-cultivated forest and forests not available for wood supply. This division does not include cultivated forests for wood supply or reforestation activities of cultivated forests.021, 024
Organic agricultureThis activity relates to agricultural production with the avoidance of artificial fertilisers and pesticides, and the use of crop rotation and other forms of husbandry to maintain soil fertility and control weeds, pests and diseases.01
Insulation activitiesThis activity includes activities for reducing heat and energy losses by thermal insulation and vibration insulation in both new and existing (renovation) buildings. In the current development phase, this activity only includes the production (not the installation) of double or triple glazing nor does it include insulation in commercial buildings.4329, 2312
Environment related educationThis activity includes education aimed at enviornmental protection and management of natural resources. This activity includes tertiary education (non-university tertiary education and university tertiary education).NANANA
Managerial activities of government bodiesThis category includes public administration aimed at protecting the environment and management of natural resources. Activities such as the issuing of envionmental permits and licenses, monitoring of air, land and water, protection of biodiversity and landscapes, and the development of environmental policies are included.NANANA
Environmental charitiesThis activity includes charities whose purpose is to protect and/or manage the environment and natural resources. Environmental charities include those providing environmental education and training, conservation and preservation of fauna and flora, and promotion of environmental issues (e.g. pollution abatement and control).NANANA
Energy saving and sustainable systemsThis activity includes activities related to the production of renewable energy systems and companies and institutions active in the production of energy-saving products and technologies. These companies and institutions are engaged in value chains that come before the exploitation phase of renewable energy production (production of renewable energy itself). This activity includes the production of renewable energy systems; R&D focused on renewable energy technologies; installation of renewable energy systems. Production of renewable energy itself (exploitation phase) and insulation works are included elsewhere.NANANA
Environmental constructionActivities aimed at producing construction products for the benefit of the environment and management of natural resources. Among these activities are only activities which are produced by the ‘construction’ industry.41 - 43, 69-7074.90
Environmental low emissions vehicles, carbon capture and inspection and controlThis activity includes the measuring and monitoring of environmental parameters, including water, air and soil quality, meteorological conditions and flow rates, including on site and laboratory analysis. Emission measurements and treatment of exhaust gases and particulate matter from both stationary (electric power fuel combustion, industrial and household boilers and processes, etc.) and mobile sources (motor vehicles etc.) are included here. It also includes low emissions vehicles and the required infrastructure (design and manufacture of vehicles, and infrastructure installation), and carbon capture and storage (design, manufacture, installation and operation of the relevant technologies)NANANA
Production of industrial environmental equipmentActivities aimed at producing environmental industrial equipment for the benefit of the environment and management of natural resources. Only activities which are produced by the ‘manufacturing’ sector are included. Activities aimed at renewable energy production and energy conservation are not included.26-29, 30, 33

Source: Own elaboration based on UK environmental goods and services sector (EGSS) methodology annex.

## Firm creation

Below we present an interactive chart by “green activity” since January 2019.

## Limitations

This allocation is limited to data availability. Some results in firm creation below may be driven by the robustenss of certain sectors during the pandemic.

##### Yannis Galanakis
###### Postdoctoral Research Associate

Yannis' research interests include Labour and Applied Economics.