ESG experts are in demand
As ESG has become increasingly important for investors and regulatory compliance, demand for ESG professionals has taken off. Although the popularity of ESG has driven an influx of entry-level and career-changer ESG professionals, the field’s extreme growth has made experienced ESG professionals a tough catch.
Companies with the resources are competing for highly qualified and well-compensated ESG professionals. The desired professionals frequently have subject matter expertise relevant to ESG work, often in environmental disciplines, and may also have experience in finance, law, supply chain management, communications, or other areas related to the operational or regulatory implications of ESG.
Unfortunately, the demand for highly qualified ESG professionals can make them inaccessible for many companies who are unable or unwilling to devote such significant resources to a single employee. So, do companies really need an expert to make impactful progress toward their goals?
Experts are helpful, sometimes
Many companies can meet most, if not all, of their ESG needs without an in-house expert.
The status of ESG as a consistently changing field means that experience is not necessarily an indication of future success.
A decade ago, sustainability was a nice-to-have. Professionals came from or were placed within marketing and communications departments, and efforts focused heavily on public perception. Now, ESG is expected or required by consumers, investors, and regulators. Companies that put ESG responsibility under marketing are now seen negatively, because they may be prioritising public perception or reporting over actual implementation and impact.
Instead, many companies are gradually moving ESG toward compliance and finance departments, or even to its own department with C-suite representation. ESG must be a more integrated part of the business, and as a result, companies are increasingly looking for talent with broad business knowledge, including the financial acumen and strategic knowledge that were unnecessary for ESG professionals in the past.
These shifts mean that experienced ESG professionals may not always fit corporate needs. Instead, experienced ESG professionals should be utilised selectively, when their high level and specialised environmental, social, or governance knowledge can be directly applied and built upon.
For companies with more general ESG needs, a review of the actual competencies needed can help to identify the best strategy to move forward without a full-time expert.
Managing corporate ESG without a staff expert
The ongoing changes in the field of ESG mean that any ESG professional, whether entry level or experienced, must be constantly on top of the changing demands. The terminology, standards, frameworks, and regulations are always changing, requiring a continuous learning perspective from anyone working with ESG. This fluidity leaves the door open for alternative solutions to ESG needs.
Here are some options to consider before committing to an experienced ESG professional:
1. Develop from within
Due to the skillset required, many small and medium companies or those just getting started with ESG can manage their ESG initiatives and reporting by upskilling current employees. Even for larger companies or those with specialised initiatives, many ESG needs can be met by training existing talent, with specialists brought in only for highly complex challenges that require a deeper understanding of process development, materiality, scientific or legal issues that are beyond the scope of existing talent.
Supporting internal development in ESG is worth the resources because it meets ESG management and reporting needs while also reiterating and driving a fully integrated ESG practice, in which ESG is part of every aspect of the organisation’s existence and therefore more likely to be successful.
General ESG program management requires a broad understanding of the business and is therefore well-suited to generalists. Individuals with an overview of the business’ operations, strong stakeholder management skills, proficiency with quantitative data, and an understanding of corporate strategy, can be positioned to lead or manage ESG programs and its accompanying reporting with some additional knowledge about ESG.
Companies can bridge the gap by providing internal or external training about ESG practicalities, including regulatory conditions, common frameworks, and ESG due diligence and materiality assessment tools. With the support of leadership, strong generalist employees will be able to analyse the company’s situation and apply their new knowledge to create or support relevant ESG goals.
Even more focused ESG roles can be developed from existing talent pools. For example, individuals working with procurement or supply chain management may be well-positioned to learn more about the implications of ESG initiatives in their work and can be empowered to apply their learnings. Training members of the finance team to better understand and vet green funds can ensure that the company is not reliant on a single individual to provide essential knowledge in a growing field.
Many of the required skills for the primary business functions of ESG are transferable from other business areas. Devoting resources to teaching individuals across functions can be worthwhile for both the company and the individuals. Internal training for individuals across corporate functions helps to ensure that ESG goals are well-integrated into the corporate operations and sends a message that ESG is an important part of strategy and daily operations, not just a side activity. It also reduces the need for specialised ESG skills by dispersing the knowledge across the organisation.
2. Bring in less experienced ESG specialists
The relative recency with which ESG has been incorporated into business education is one of the drivers behind the highly competitive and expensive search for experienced ESG talent. Historically, education in sustainability was focused on environmental impact, leading to highly scientific and specialised talent with strong activist roots, and creating a limited number of currently available ESG business talent.
Now, however, general business education increasingly includes content on sustainability, and there are distinct business degrees solely focused on ESG, sustainability, circularity, and corporate social responsibility. Of course, individuals who have completed these degrees in the past decade are unlikely to bring more than a few years of work experience, but they have highly relevant academic knowledge. With a bit of support and professional development, early-career ESG specialists can provide the needed understanding of the ESG ecosystem, its challenges, and common approaches, at a much more affordable price point than a more experienced ESG professional.
Career-changers are also increasingly interested in ESG due to growing demand for ESG specialists and a desire for values-alignment in professional roles. Many come in with strong transferable skills but have limited ESG-related experience on their CVs. These individuals can also be a great solution, as they may be available at below market rates while still bringing significant academic knowledge of ESG based on their desire to change fields, as well as strong relevant professional experience.
Companies that are willing to hire a recent grad or a career-changer and give them the needed practical support in the application of their knowledge stand to benefit from their academic expertise and eagerness to learn.
3. Hire an external consultant
Sometimes, companies need ESG expertise. For companies that are not sure what expertise they need, only need it for a short period of time, or want help getting started, a consultant can be the best strategy to meet their needs while limiting their costs.
The implementation of new ESG processes can be a great time to bring in external help. Companies that lack expertise in ESG benefit from experienced consultants who can help to identify the most material issues for the business, discuss ESG strategy and implications, and establish processes for ongoing ESG analysis and reporting.
ESG consultants can also help by reviewing existing policies and procedures, structuring ESG data and calculations, training internal staff, and navigating the vast pool of frameworks, guidelines, and research, so that the company is well-positioned to proceed on its own.
Consultants who focus on ESG implementation and reporting understand the many ways in which ESG priorities can be integrated into corporate strategy and operations to reduce risk and create value for the business.
Companies that need specific scientific or operational support may also benefit from ESG consultants with a relevant specialisation. Consultants who focus specifically on quantifying and scope three emissions or establishing circular waste management processes in manufacturing can often provide a unique perspective that is beyond the expertise of even the most experienced ESG professionals. For companies that are considering these types of projects, a consultant can advise on the necessary infrastructure and provide insights about whether such highly specialised talent is needed on a more ongoing basis.
Every company is different
The best way for a company to determine whether it truly needs an experienced ESG professional is to outline its current ESG status and goals. Although ESG is now seen as equally important as finance, its talent pipeline is far behind. Businesses in search of ESG knowledge can manage their needs through other knowledge acquisition strategies.
Companies that are just beginning their ESG journey, are exempt from regulations due to size, or are operating in industries with limited environmental impact, are unlikely to require experienced, in-house ESG professionals. Even big companies with broad operational impact can often reduce their costs by hiring experienced ESG talent only when it is truly necessary. Instead, companies can better utilise their resources by investing in training current talent, supporting less experienced ESG specialists, and bringing in external consultants on as-needed basis to provide the expertise and support needed to reach ESG goals.
Do you need help structuring your ESG program? Are you looking for guidance with your ESG strategy or ongoing ESG operations? Reach out to talk about how we can help you take internal ownership of your ESG planning, or to learn more about our ESG services.
Har I behov for hjælp til at strukturere jeres ESG programmer? Ønsker I hjælp til jeres ESG strategy eller igangværende ESG aktiviteter? Kontakt os for at blive klogere på, hvordan vi kan tage internt ejerskab på jeres ESG planlægning, eller lær mere om vores ESG ydelser.