Global Sustainable Finance Insights Series • Agency

​​After a sustained period of hiring ESG/sustainability talent across financial services, often in centralised teams, 2023 has seen an increased focus on capacity building via embedding sustainability expertise across all parts of a business. This shift would appear to support the findings of a 2021 McKinsey study that best-in-class companies, in most sectors, are more likely to make sustainability part of their corporate culture and engage employees on how to integrate sustainability into their work.

The mainstreaming of ESG integration is often achieved through organisational design, key senior hires and augmented companywide business processes and communications. The goal is for ESG-integrated business processes to become business as usual, and 2023 has often seen sustainability principles being incorporated into all types of roles for the first time. Significant challenges remain in mainstreaming truly sustainable financial services at scale. Tackling these challenges and integrating each point of additionality is where the centralised teams are continuing to add value.

The subject of this edition of the Insight Series is this concept of agency, that all employees can use their positions to reflect personal ambitions, if they choose to, and create incremental changes necessary to reduce the worst impacts of climate change for a ‘net zero’ culture at work.

So, how does this trend affect the talent pool across financial services?

Many employers are looking for individuals, across both investment and functional roles, interested and motivated by sustainability as a means of achieving excellence and outperforming their peers in their chosen fields. Sustainability concepts and ESG-related requirements now often feature in job descriptions in core business units, including finance, legal, and human resources, as well as capital markets and fund management roles.

Aside from value creation beyond purely financial performance, which is welcomed by investors, shareholders, board members and clients alike, there are obvious benefits to adopting a hiring strategy across multiple roles with sustainability responsibilities/objectives as standard. This will greatly assist the CSOs (Chief Sustainability Officers), and the centres of excellence they often lead, in the delivery of their sustainability strategy, while employee engagement and retention are also likely to improve, according to recent studies.

Here are some examples of our work on leadership roles in core business units where individuals are articulating sustainability principles and ESG practices as key points of difference:

Finance:
• Value creation: forecasting, budgeting, allocation, and score-carding tools to bring sustainability factors into every business process and value creation decision-making
• Risk management: identifying and managing risks associated with climate change and other ESG issues
• Reporting: deliver carbon reporting and materiality assessments that investors and other stakeholders can trust and that can drive behavioural changes

Policy & Legal:
Requiring alignment of net zero targets through the value chain, supported with emissions reporting and reductions. Specifically for one large retail bank, this involved working closely with its procurement function to update supply contract templates to reflect the bank’s climate ambitions.

Human Resources:
Aligning incentives, performance reviews, training and policies with company sustainability goals. Rewarding the leading of (or participating in) sustainability initiatives and setting a travel policy that prioritises car sharing and/or use of public transport for business travel.

Sales & Distribution:
Managing client engagement on sustainable investing and leading sustainable investing education programmes both internally and externally with clients.

Fund management & capital markets:
Leading initiatives to embed ESG considerations into all transactions/investment portfolios and developing specific solutions focused on the sustainability mega trend for client groups. Adopting a sustainability-driven, thematic approach to investment research with a focus on system change by mapping innovation curves.

Relevant articles:
How to Make Sustainability Every Employee’s Responsibility (hbr.org)
Creating value with sustainability: Survey | McKinsey

Acre has focused on sustainability/ESG search, recruitment and advisory work for 20 years. We hope you have found this a useful snapshot of the market. If you would like to discuss the key trends in the talent market in more detail, please get in touch: ian.povey-hall@acre.com.