THE TREND OF TALENT LEAVING THE ESG INDUSTRY TO SET UP THEIR OWN ADVISORY FIRMS. 

There is a significant recent trend of senior talent leaving sustainable finance to take on a portfolio of advisory work, or to 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 regs, and a lack of interesting, new, strategic projects to work on. 
 
What are the long term effects of this brain drain? ESG teams have not got massively smaller, but the levels of ESG recruitment are down year on year, and any hires that have been made have been internal moves, or often junior hires to help with the heavy lifting of reporting and ESG disclosures. 

When firms start growing again, and new products are created. Who is going to meet all the pension funds? Who is going to create the impact framework? Who is going to do the thematic research, and integrate it into an alpha-generating process? 
 
There is less risk for firms because the transient costs of consultant fees means they have less permanent payroll, but will they lose their senior talent, who will help them grow when the new wave of innovation starts? 
 
Will these consultants be tempted back when things get better? Or will they be priced out, or will new people have grown into their roles internally. 
 
Our prediction is that there will be the same ‘war for talent’ we saw before, and firms will be scratching their heads trying to figure out where to find the right fit, and there will be wage inflation, and double promotions for people moving externally.