15 Sep What does the future hold for ESG jobs in finance?

Among the reasons influencing the demand for ESG-focused talent are a move to mandatory reporting, an increase in the information companies must disclose, and a requirement for data to be reliable and standardised.

The abundance of new standards and measurement frameworks for reporting, disclosure and performance has driven the rise of ESG jobs. The shift from voluntary to mandatory reporting has also influenced the demand for talent in this space. Recruiters are experiencing a change in requests from the hiring managers in finance who demand new hires to have the experience and skills to handle and assess information to meet the requirements of a range of stakeholders. 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, and others.

The number of financial companies supporting TCFD has tripled in the last few years. What does this mean for people looking for ESG jobs and hiring managers in the finance industry? New opportunities in ESG and climate measures will increase businesses and continue to extend their reach. In the next few years, there will likely be an increased demand for structured governance frameworks, appropriate expertise in data management and a coordinated ESG-focused leadership team. New jobs will likely emerge, specifically focusing on areas of ESG as businesses extend their reach or pursue their net-zero targets.

Some positions will continue evolving as ESG becomes further embedded in business functions and focus more on value creation roles. Industry professionals believe the next wave of ESG jobs to be closer to portfolio operations and focus more on value creation and operational improvements to the ESG performance of a business.

Sustainability disclosure has become increasingly involved in additional skills due to more complex disclosure requirements. Asset managers must add resources to support ESG reporting, and reporters require more knowledge of current disclosure standards and potential new ones emerging further down the line.

Private Equity

Industry experts believe that in the next few years, we will see significant changes in ESG skills and job titles within private equity. At present, we’re experiencing a rise in senior ESG roles, but in a few years, as ESG becomes a critical part of the investment process, there will be less of a need for ESG subject matter at the core of a private equity business. Instead, leading companies will have a direct partner or portfolio manager overseeing ESG principles and how to apply them. Furthermore, ESG skills and experience will likely become critical to every role in a business, from an analyst to a managing partner.

Insurance

As insurance companies continue to integrate sustainability and climate action within their business models, we will likely see roles incorporate sustainability and business experience. Climate scientists that can interpret climate data into potential risks for a company and their clients, and professionals who understand biodiversity-related risks, will also be in high demand.

Data

With emerging regulations worldwide, more businesses must disclose ESG data. Quantifiable data, like carbon emissions, is already increasing in volume and detail. Verification or assurance of such information is rising in expectations. Specialist areas are emerging in climate science and data collection, as well as within carbon, social and human capital accounting. This rise of new sections will continue to increase as more financial organisations examine businesses they have within their portfolios.