Knowledge Is Power: ESG / Sustainability Recruitment

In the last post, my colleagues Chris and Charlotte discussed the landscape and hiring challenges in the banking and financial market. Now, let’s talk about sustainability, and it’s time to walk the talk. The message may sound blunt, but following this year’s devastating drought in China, floods in Pakistan, and heatwaves in Europe and the United States, organizations are under unprecedented pressure to demonstrate action on the “E” in ESG – strategies that take a company’s environmental, social and governance factors into consideration.

Momentum has been building for a while – McKinsey reports a fivefold growth in Internet searches for ESG since 2019 – with ESG evolving from a “nice to have” to a core driver of business success. To remain competitive, corporates must adapt quickly and get equipped to understand and oversee the issues. They need to source and hire the right talent across various roles with specialist ESG skills and knowledge to succeed.

ESG and Sustainability recruitment challenges

Demand is fierce as ESG is a relatively young sector with a small pool of experienced talent. LinkedIn’s Global Green Skills Report 2022 reveals that jobs in sustainability have grown by 38.5%, with up to 10% of job postings requiring at least one green skill. Another challenge for hiring managers is that “sustainability” is a title often used loosely, with no definition. Add to that the fact that making any change to existing business practice is expensive, and it’s clear how important it is to sieve out the genuine practitioners who can deliver results.

Candidates face pain points, too, mainly linked to the market’s general lack of understanding of ESG/Sustainability. Practitioners often have to educate internal and external stakeholders to create awareness and get buy-in, which some might call a change-management role. And perhaps most frustrating of all, very few recruiters truly understand ESG/Sustainability or bother to stay up to speed with developments.

BTI powers up ESG and sustainability solutions

To help businesses and candidates navigate this fast-evolving landscape, BTI Executive Search has established a dedicated ESG/Sustainability practice with deep knowledge of the nascent market, including, in my case, extensive experience in the energy sector.

ESG roles cut across all industries and sectors, and even within the same industry, different companies will have different ESG profiles depending on their stage in the business life cycle. For example, enterprises at the seed and development stage have distinct ESG requirements from mature firms. This is one of the reasons we’ve launched a new social initiative, RootEX, designed to help sustainable and innovative startups find talent in the early days of their journey.

Let’s take a closer look at trends and opportunities in ESG.

Benefits of an ESG strategy

• Deeper customer relationships and loyalty
• Improved ability to attract and retain talent, especially in these highly competitive times
• Reduced regulatory risk
• Greater ability to attract capital
• Increased resilience, driven by a more nuanced understanding of stakeholder expectations

[Source: EY]

Pressure to accelerate ESG and Sustainability strategies

Calls for ESG action are coming from multiple stakeholders, and they’re getting harder to ignore. According to a PWC survey, 83% of consumers think companies should be actively shaping ESG best practices, and 86% of employees prefer to support or work for companies that care about the same issues they do.

Investors are seeking accountability, too. Research by Gartner suggests they identify organizations with credible ESG disclosures as stable and less risky investment propositions. At the same time, Bloomberg expects global ESG assets to exceed US$53 trillion by 2025, representing more than a third of the US$140.5 trillion in projected total assets under management (AUM).

And regulators worldwide are pressing for greater scrutiny, increasingly prompting companies to embed ESG metrics in their business strategies and advance their sustainability initiatives with practical steps with measurable outputs. The world’s leading proponent of responsible investment, the PRI identified 225 new or revised policy instruments in 2021, more than double the number in any previous year.

In Singapore, Singapore Exchange (SGX) is making climate reporting mandatory in the financial year (FY) commencing 2023. These rules will be enforced in phases, starting with listed businesses in the financial, energy, agriculture, food, and forest products industries. Other issuers are required to report on a ‘comply or explain’ basis.

Policies driving up ESG and sustainability job demand

We expect to see growing numbers of general sustainability roles partly triggered by SGX’s new policies. Researchers and analysts are needed to assess the financial impact of changes to regulations on an industry’s future profitability, for example. Meanwhile, financial institutions need risk assessors and advisors to quickly and quantitively estimate any potential climate risk–related losses associated with moving to a low-carbon economy.

Growing scrutiny and market expectations also mean companies have a new focus for their ESG efforts – the supply chain. This task requires talent who can systematically review the suppliers’ sustainability actions and goals and grasp sustainable supply chain management best practices. Such roles demand skills in using digital tools to track performance and analyze progress and the ability to carry out follow-up audits.

The decarbonization drive

Across the world, climate agenda-driven government policies, including net zero commitments tied to the Paris Agreement ­– limiting global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels – are also shaping corporate responses to ESG. For example, China’s “30-60” goals and “1+N” Policy Framework and Singapore’s Green Plan outline decarbonization targets and plans.

These initiatives boost interest and the need for more technical roles associated with carbon emissions measurements and reduction targets. Organizations are also motivated by growing evidence that Science Based Targets cut emissions faster, with Bloomberg reporting how 300 firms reduced emissions by 25% between 2015 and 2019, even as global emissions rose.

To compete, companies urgently need people who can develop transition roadmaps toward decarbonization. But as science-based targets only emerged in 2015, specialists in this area are rare. This issue becomes particularly pressing in smaller markets like Singapore, where the talent pool is limited. Singapore’s recently announced new work pass measures for specialist leaders in their fields should make it easier to recruit from overseas.

Trading opportunities

Alongside the decarbonization movement, demand for renewable energy and financial products like carbon offsets has also increased. Trading carbon credits can help companies meet ambitious goals for reducing greenhouse-gas emissions. In Singapore, a joint venture between SGX, Temasek, SCB, and DBS is starting a carbon exchange, Climate Impact X, to bring greater transparency and credibility to carbon trading in this world. This move follows the launch of emissions trading systems in China ­– the largest carbon market in the world – and the EU, where participation is mandatory in many energy-intensive industry sectors.

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ESG/Sustainability is one of the most dynamic recruitment areas, and BTI Executive Search embraces it wholeheartedly with our dedicated functional practice and a detailed understanding of the solutions required. We have a growing network of candidates primed to address evolving market needs and a team ready to build long-term relationships with our clients and candidates beyond jobs.

Looking for expert support in hiring ESG talent in the Asia Pacific? Chat with BTI Executive Search’s specialists today. Click here to contact us, or you can email me at winnie_tan@btiexecutivesearch.com. Let’s connect on LinkedIn!