A lot of ink (including mine) has been spilled covering the ESG job market, and there’s no doubt that it’s hot.
One of the most significant drivers of the growth of ESG employment is the abundance of emerging standards and measurement frameworks for reporting, disclosure, performance, you name it. Described by TSC.ai in its new ESG Notebook as an “increasingly connected and data-hungry” ESG ecosystem, the authors counted more than 2,000 reporting frameworks, requirements, methodologies and protocols that include more than 1,424 indicators of potential ESG performance. Check out his visual below:
My own research and conversations have revealed some additional factors driving the demand for talent in this space: a move from voluntary to mandatory reporting; an increase in the amount of information companies must disclose; and the need for data that is (like a corporation’s financial statements) robust, auditable, secured and standardized.
As a recruiter, I have noticed a sharp increase in requests from hiring managers in the financial services industry, including asset management, insurance, private equity and others, who require new hires to have the experience and skills to collect, decipher, analyze and disseminate information to meet the requirements of a range of different stakeholders (many in acronyms). This includes the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-Related Financial Disclosures (TCFD), the Task Force on Nature-Related Financial Disclosures (TNFD), the Glasgow Financial Alliance for Net Zero (GFANZ) and The Corporate Sustainability Reporting Directive (CSRD).
CDP conducted an analysis on my behalf that revealed a surprising increase in the number of CDP capital market signatories, from approximately 530 in 2019 to 680 in 2022.
At the same time, the number of financial institutions supporting TCFD has more than tripled, from 287 in 2018 to 1,069 in 2021.
So what does all this mean for people looking for ESG jobs and those hiring them in the financial sector? For perspective, I asked a number of leaders representing different angles of ESG the following question:
Given all the changes in the ESG reporting landscape, what skills and/or job titles will exist in your space in 2025 that you don’t have now?
Here’s what they told me, organized by the ESG perspective each individual represents:
Sustainable finance
As companies expand their reach, new roles in ESG and climate alignment will emerge: “In the coming years, there will be increasing demands to have appropriate governance frameworks, relevant expertise in data management and operational integration, and a coordinated leadership team focused on ESG. We will see new jobs, such as ‘Head of With scope 3 ESG” for when companies expand their reach within supply chains or “head of climate alignment” to lead efforts for future net zero commitments. Some positions will evolve as ESG is incorporated into business functions such as accounting, compliance, legal and investor. What will remain are ‘translators and directors’ – experts who can bring these different verticals together and work together to drive change as reporting requirements increase.”
— Lissette Jorgensen, COO, Goldman Sachs Sustainable Finance Group
Alternative asset management
Cultivating “adaptive teams” built to learn and evolve: “I’ve always built adaptive teams with skills and experience that evolve with the profession. At Apollo, we’ve built a strong talent bank that includes reporting, engagement, communications, strategy, climate, impact, human capital, ESG data/tech, citizenship ” .
— Dave Stangis, partner and chief sustainability officer at Apollo Global Management
ESG advice
Movement of ESG jobs towards operational and value-creating roles: “One of the changes I hope to see is a shift in where ESG talent sits on the org chart. Traditionally, we’ve seen ESG as close to [investor relations]focusing on informing a [limited partners] and collect portfolio-wide data for the ESG Data Convergence Initiative and other frameworks. I expect the next wave of ESG jobs to sit closer to the portfolio operations team and focus on value creation and operational improvements to the company’s ESG performance.”
– Ryan Werffeli, Chief Operating Officer, Malk Partners
Impact investment
A push to improve trust in all sectors: “Future leaders in 2025 will need to produce solutions that can be designed and implemented across all sectors: businesses, nonprofits, and governments. So the skills of quantitative impact investing analysts, portfolio managers high-impact and impact directors must include (1) analytically rigorous multi-sector solution design, (2) outcome mapping and impact accounting at 17 [United Nations Sustainable Development Goals](3) collaborative entrepreneurship and teamwork, and (4) being a member of the ‘nice people network’.”
— R. Paul Herman, CEO and Founder, HIP Investor
Reports and data
Depth and breadth of disclosure requirements: “Sustainability disclosure has increasingly required skills due to more complex disclosure requirements. Asset managers must add resources to support ESG reporting. Large firms have dedicated teams focused on reporting ‘reporting. Journalists must have a deep understanding of current reporting standards as well as what is happening. Leaders’ reporting skills include a sharp analytical mind along with the vision and determination to set strategy “.
— Elaine Cohen, CEO of Beyond Business Ltd.
Private capital
Improving the skills of teams according to: “By 2025, we will see significant changes in ESG skills and job titles within private equity. While we are seeing an increase in the number of ESG director roles today, in a few years, as ESG will become a investment process, there will be less need for an ESG advisor at the heart of the PE firm. Instead, lead firms will have direct partner or portfolio manager oversight of ESG principles and how to apply them. We expect ESG skills and capabilities to become central to all roles in the firm, from analyst to managing partner.”
– Amy Silverstein, Partner and ESG Leader, e2p
insurance
Demand for expertise at the intersection of sustainability and business: “As insurance companies continue to integrate sustainability and climate education into their business models, we will see more and more roles that demand both sustainability and business acumen. Climate scientists who can translate evolving climate data into risk for internal and customer education, as well as specialists who understand biodiversity-related risks, will also be in high demand.”
— Rakhi Kumar, Senior Vice President, Sustainability Solutions and Business Integration, Liberty Mutual Insurance
data
Specialists and experts who can prepare for mandatory disclosures: “Given global regulatory developments, more companies will need to disclose ESG data. Quantifiable data, such as carbon emissions, are already increasing in breadth and depth. Verification or assurance of this data is also increasingly expected . Specializations are already emerging in climate. science and data collection, and management, as well as accounting for carbon and natural, social and human capital. This will only increase as more financial institutions scrutinize their portfolio companies.”
— Mike Wallace, Senior Vice President, Strategic Market Engagement, Persefoni
Three predictions for ESG jobs in the financial services industry
So what does this all mean when it comes to ESG talent trends in the financial sector? I foresee three trends:
- Continued growth: Despite the economic slowdown on many fronts, the volume of jobs will continue to grow in line with the growth hockey stick of the standards used to assess ESG progress.
- ESG roles will move closer to the CFO: As ESG disclosures become more standardized, they also become more integrated into the financial reporting and risk disclosures that live in the CFO’s office. I foresee more CSOs reporting to the CFO as their work going forward will require more alignment.
- “E” specialists will have the steepest growth curves: The urgency of climate change is undeniable, and for many companies net zero by 2050 (or even 2030) is on the horizon. The work was supposed to start yesterday. In addition, younger generations who are particularly attuned to global warming will seek employment with companies that take the issue seriously, increasing the demand for these jobs.
On September 14, I’m leading a discussion at Private Equity International’s Responsible Investment Forum in San Francisco specifically about winning the war on talent. We’ll dive deeper into these trends and discuss what hiring managers can do to attract and retain ESG professionals. Join us or get in touch to share your perspective on the explosion of ESG jobs in the financial sector.
