The race for new talent in ESG

The demand for individuals with experience and skills concerning environmental, social and governance issues has reached an all-time high, exceeding the existing number of qualified people available in this market. With climate change now firmly embedded in future strategies, the race for talent in ESG presents a particular challenge to the development of climate and sustainability solutions.

The requirement for ESG experts is surging within professional services, particularly within finance, investment and management consultancies. Many businesses need to collect and report on ESG data to associated stakeholders and restructure their strategies moving forward. The shift towards ESG has been so significant that there is a concern that there is not enough talent available to meet the current level of demand. 

In other words, there is a rising battle for talent, and so it seems to be a promising time to be an ESG professional. Robert Bischof, the MD and European ESG leader is managing this battle for talent on behalf of PwC. In the last month, PwC confirmed a staggering $12 billion plan to develop approximately 100,000 new jobs in ESG by 2026. This equates to a 36% rise in their existing employee base. Other competitors, including Deloitte, EY, KPMG and McKinsey, are also accelerating their efforts in hiring in ESG.

Collectively with all these recruiting plans from big major businesses, there is unlikely enough talent out there to meet the demand. It will require a combination of recruiting talent and developing the talent further to meet the requirements of other businesses.

The factors surrounding ESG and how the market has developed over the last year has exceeded the expectations of everyone. The ESG industry expanded much quicker than most people anticipated and became a priority subject across many industries worldwide.

The ESG market has become increasingly complex and challenging. Over a relatively short time space, ESG jobs have expanded beyond data collection and analysis to a vital element of business strategy. ESG has become closely associated with sustainability, particularly in Europe, where ESG grew beyond being a measure of financial markets. As the industry progresses, the challenge to find qualified professionals is becoming more challenging.

ESG has risen to a level where people need to work closely with a range of stakeholders and have a real grasp of business, strategy, finance and regulation. The difficulties concerning ESG talent are already having an impact in several industries. Online news portal Infrastructure Investor recently stated that a skills shortage is impacting real assets and investors from reaching their ESG goals. A survey conducted by the CFA Institute in 2020 discovered a clear imbalance in the level of supply and demand for ESG professionals within the financial industry. 

The race for finding ESG talent is happening at all levels. There are entry-level roles available for professionals capable of measuring and assessing data about ESG commitments and performance. But what is apparent is these roles are quickly evolving into more challenging and complex positions. Businesses are looking for people who understand data and perform analysis and analytical studies to deliver the necessary information to implement sustainability measures.

This is just the beginning, according to industry analysts. ESG roles are progressing towards leading a business forward and influencing what investors need. ESG professionals have a direct impact on capital spend and continue to drive sustainable outcomes.

Environmental consultancy business ERM is another organisation that is accelerating its ESG plans. The company intends to add a further 160 jobs within its ESG and climate-related field. This includes focusing on net-zero, climate-related measures and compliance with the Task Force on climate financial disclosures. 

The company explained that attracting talent to senior-level positions has been relatively easy, but retaining the talent within ESG and Sustainability has become difficult. It seems that everyone is looking for experience within ESG, but the average years of experience in this market are relatively low. Less-established industries are attempting to place junior people into more senior-level roles. 

At the same time, those with some experience in ESG are being offered significant pay increases by other competing businesses. Competition has become very fierce and candidates are often receiving counteroffers and competing for offers from rival companies. Salaries and promotions are rising fast, with several employers claiming candidates regularly have multiple offers on the table to choose from.

Jobs in ESG are, however, still in a relatively early stage, which means compensation ranges are complicated to determine. Presenting a clear picture of what people in ESG jobs do makes it harder to develop a standard criterion for potential candidates.

As with anything new and the lack of specific qualifications means it’s harder and takes longer to assess new talent. It can be more complex when hiring for ESG because a business needs to spend more time exploring the candidate and their experience, as it’s relatively easy to incorporate the trending words into your CV or portfolio.

What do businesses need in terms of candidate skills and experience?

Firstly, having clear business experience enables candidates to come into a company and implement decisive action on sustainability on ESG. Multiple skilled and talented people in business are capable of making the transition into becoming ESG professionals.

Strategic and critical thinking is another area that stands out as a priority to recruiters. Employers are looking for creative and agile minds, conceptual thinkers and people capable of adapting as the industry evolves.

One other key area within ESG talent is finding someone that explores and works on a broad range of ideas. This means that individuals with a core environmental background, for example, may offer an added element to a prospective business. 

Finally, ESG talent requires motivation and belief, a sense of due diligence and care in how ESG can contribute and provide a positive impact. In the race for attracting talent, recruitment efforts must go beyond finding the best technical skills and incorporate the attitude and passion required in ESG.

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