Environmental, social and governance (ESG) factors have been brought into the spotlight in recent years as companies around the globe face pressures to be socially responsible and embrace sustainable business practices.
Accordingly, the demand for ESG talent has never been higher – yet professionals in the field are scarce. The dearth of ESG talent can be demonstrated with a LinkedIn job search in 2022, which shows more than 20,000 jobs in sustainability and ESG are waiting to be filled across APAC.
Below, we explore the state of the sustainability and environmental jobs market, and what it means for candidates seeking a career in ESG.
What is ESG?
Let’s take a look at the elements of ESG and how they apply to modern organisations.
Environmental criteria relates to an organisation’s energy and resource consumption, waste creation and the impact these factors have on the environment and people. This includes carbon emissions and sustainability practices.
Social criteria covers the impact an organisation has on the communities in which it operates, and broader society. This includes labour relations, diversity and inclusion initiatives and community participation. Importantly, social criteria also encompasses modern slavery, which refers to any form of indentured or forced labour.
Governance refers to the internal processes, controls and procedures an organisation adopts to comply with laws and regulations, make effective decisions and meet the needs of shareholders and stakeholders. Every company, which is itself a legal creation, requires governance.
Together, ESG criteria form a framework for running a sustainable, responsible and ethically sound company. Although each element serves its own purpose, they often overlap. For example, environmental criteria overlaps with social and governance criteria when it comes to complying with local environmental laws and addressing environmental concerns in the community.
ESG matters more than ever
With social and environmental conscientiousness becoming an increasingly important concern for investors, customers and employees alike, ESG is now critical to safeguarding an organisation’s success.
Data shared by McKinsey shows that a strong ESG proposition correlates with higher revenue and positively impacts an organisation’s bottom line by:
- Facilitating top-line growth
- Reducing costs
- Minimising regulatory and legal interventions
- Increasing employee productivity
- Optimising investment and capital expenditures
In addition, ESG can also drive business loyalty. The Global Sustainability Study in 2021 found that 85% of consumers have become ‘greener’ in their purchasing habits in recent years, signalling a shift in what matters most when making buying decisions.
Even employees will see the value in a company with a strong ESG stance. When a business can highlight their social responsibilities, it can become part of an attractive Employee Value Proposition, as it may better align with a worker’s personal values and beliefs.
ESG jobs are booming, but talent is in short supply
Given the indisputable business benefits of ESG, it’s not surprising that organisations across every industry are ramping up their hiring efforts in this area. However, the sector has grown faster than the market can keep up with, creating a widespread race for talent.
In 2021, Lisa Carroll, chief executive of CFA Societies Australia, wrote an article for Investor Daily about the shortage of specialist talent in the ESG field.
“The demand for ESG professionals is rising fast as more funds flow into the sector,” she explained.
“The deeper and more specialised the ESG expertise needed, the more specialists who hold those skills will command a premium salary, and indeed, participants in our survey noted the relative scarcity of talent.”
For the right candidates, ESG jobs are attracting lucrative salaries. Talent Nation’s FY22 Environment and Sustainability Remuneration report found that the average salary for a head of environment role increased by 35% to $360,600 over the past two years. Sustainability managers’ average salary increased by 23% to $233,730, and the head of sustainability average salary package increased by 9% to $366,250.
If you’re interested in learning more about job opportunities in ESG, talk to a Michael Page recruitment consultant.
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