The ESG brain drain is happening.

Financial News article: The ESG brain drain is happening

Senior sustainability professionals — bogged down by regulation and a lack of support —  are quitting for cushy consultancy gigs

By: Neil Farrell

Thursday 5 September 2024 at 00:00

Can green finance stem a flight of talent? Photo: Chris Ratcliffe/Getty Images

Neil Farrell is the founder of ESG recruitment firm Farrell Associates

There’s a significant recent trend of senior talent leaving sustainable finance to take on a portfolio of advisory work or set up their own consultancy.

This is potentially due to a lack of backing internally at the companies they are leaving, as well as an increase in regulation and a lack of interesting new strategic projects to work on internally. This is leaving senior talent feeling overworked and demotivated.

How many people are we talking about? It’s hard to put a number on it, but I can’t think of many of the top 40 asset managers who haven’t let two or three senior people go from their ESG teams in the past 24 months.

This is maybe similar to other areas, but it is stark when contrasted with how these teams were being built so quickly as recently as 2022. On top of that, you have those who are leaving to find more impact, and less stress.

One contact I spoke to said that he no longer sees the impact of his role, and he wants to take on a portfolio of advisory work so he can broaden his reach and hopefully feel some meaningful purpose again.

Are people happier in these new functions? It’s early days, but we are hearing that those who have set up their own consultancies are brimming with energy because they are busy, and probably not getting bogged down in a particular company’s lack of direction. Get in, solve a problem, get out.