“I just want to make as much impact as possible!” – said every ESG person, ever.
This is something we hear on probably 9/10 calls that we have with sustainability professionals when we are asking them to open up about what their long-term career goals are. Something along the lines of “I’d like to move somewhere where I can make a real tangible impact, and know that I am making a difference to save our planet”.
If this is the vast majority of sustainability professionals desire to achieve, then why do we hear that often there is a disconnect of firms linking this personal desire to the fact that it will change their business strategy?
To break it down, hiring ESG and sustainability professionals has shaped the investment management industry to what it is today. It’s these purpose driven sustainability professionals who drive change, incorporate new ways of thinking to look past the traditional tunnel vision of financial performance of a company. We all know that ESG themes affect the asset valuation of a company, I mean just look at how much a firm now gets dragged down into the depths of cancel culture hell for exploiting workers in it’s supply chain.
Anyone, from any background, located on any part of the planet, from any walk of life, can aim to have their career dedicated to sustainability. If we look at the wider landscape of investment professionals, historically the diversity has been atrocious.
The private markets space is still playing catch up to be as diverse and inclusive as the asset management space, is this because it’s a reflection of their input into ESG and integrating ESG in their DD? Perhaps, I think that with the delay of hiring sustainability professionals into the private markets space means that their own DEI policy has been neglected. Earlier this year McKinsey’s research on the PE space found some unsurprising data. Institutional Investor’s follow up article stated that “the U.S. private equity industry has some of the worst diversity numbers in the capital markets, and despite progress in recent years, it appears that it still has a long way to go.”
I would say that actually, professionals in the sustainable investment industry are probably the most diverse group of people across the investment space. In terms of gender diversity, whilst there is real mix of experts in this space, interestingly over 80% of my placements have been people who identify as women.
So, firms who are ready to step up and integrate ESG, will need to understand that the chances are that this may be a very big transition for their culture. They are most likely going to hire someone who sees the world in a different way to their traditional ways of operating and investing, and to ensure this person does not feel like and be treated like a ‘tree-hugging-alien’, there needs to be a clear link between DEI and the people strategy, to how they want to position their ESG/sustainability strategy.
Especially if we look at the future talent; I can imagine that the shape of corporates and capitalism is going to look extremely different by the time Gen Z reach leadership positions. People seem to have had enough of living in the world we live in today and strive for change and call out the BS. Clear societal divides are happening over pretty much any topic imaginable. So where does that leave us for the next 5-10 years for sustainable investing? Well, firms who adapt to this transition, remain transparent about their position, and hire great people who will guide them through it, will probably do quite well…