With growing concerns about climate change and the necessary mandates, jobs in the environmental, social, and governance (ESG) sector have grown over 468% in India in the past three years, between April 2019 to April 2022, shows recent research by global job site Indeed.
ESG job offers are accelerating in other Asian nations too. In Malaysia, the number jumped ten-fold (986% growth) in three years. The same happened in Singapore (257% increase) and Hong Kong (442% rise).
However, there is a demand-supply mismatch for leadership talent in the ESG space, says Anshul Lodha, Head of Page Executive India, the global executive search brand of PageGroup.
ESG roles are most in-demand in sectors like healthcare and pharmaceuticals, banking, financial services and insurance (BFSI), and consulting sectors. However, when it comes to catching up on hiring people in the ESG roles, the top three sectors are mining, FMCG, and manufacturing.
In an exclusive interaction with People Matters, Lodha, who, currently leads the BFSI, sales & marketing, legal and property & construction practices for PageGroup and has extensive experience recruiting for C-suite level positions in these sectors, talks about challenges and opportunities that exist in leadership hiring in ESG space and key strategies that organisations can adopt to win this war of ESG talent.
Here are some excerpts:
How real is the war for ESG talent? How does ESG change an organisation's leadership talent needs?
Yes, there is a real war for talent observed right now and there is definitely a talent crunch in the ESG space. ESG is becoming an important component of boardroom discussions – and not just as a check in the box or compliance.
ESG is so much more... there is increased customer consciousness, employee consciousness, and thus a reputational issue for organisations. Therefore, shareholders also want to see a more serious and measurable commitment to ESG.
In this major war for talent, everyone from companies, consultancies, and investors are looking to hire.
Since when has the demand for ESG roles in senior positions risen? By how much?
We have seen this growing steadily but in the past 2-3 years, there has been a huge spike. This is also observed for a different kind of ESG talent who are more technically sound and at senior level positions. Companies want people who can look at the larger picture and strategise ESG initiatives. This is driven by COP26, SEBI Guidelines plus a general push from inbound investors.
This is difficult to quantify by how much. When regulatory requirements kicked in, it has become a reputational issue so it was a huge demand with a severe paucity of qualified ESG talent. There is a shortage in all aspects of ESG recruitment including reporting, assurance, etc.
What do you think are the reasons for the demand-supply mismatch for senior ESG professionals?
A lot of that stems from confusion on what ESG is, which is a definition requirement problem. It’s a new area, so overall understanding, as well as the talent pool, is quite limited in India.
Right now, ESG reporting and measurement is relatively mature and that’s where the Big 4 firms operate. The real talent shortage is in ESG strategy and implementation. Companies are increasingly looking for talent in this space. Very few boutique consulting firms operate here, so we are seeing companies hiring talent from abroad, returning Indians with experience in ESG strategy consulting and implementation are sought after in this space.
What are the top ESG qualities valued by organisations?
Technical understanding of ESG – especially around standards, etc would be the typical hygiene check.
ESG professionals need to be on top of the continuously changing regulatory landscape and standards as well as compliance. Ideally, they should have a global outlook and bring in ideas about what companies around the world are doing. They will then need to combine this with an Indian perspective on how to implement these in India. Good commercial acumen is also required to be able to see the bigger picture for the company and see how to deliver the most impact in the context of the larger business goals and operations.
What kind of opportunities does the ESG space present for senior executives?
This is a good time for professionals with the right skill sets. Companies are also more aware of what they should be looking for in the right ESG leadership, therefore experience of ESG strategy development and execution is critical.
This, of course, creates demand for good talent but more importantly, also gives ESG professionals the opportunities to deliver much more impact with companies and the market at large than ever before.
What should organisations do right to win this war of ESG talent?
Companies have now started looking at specific qualifications in jobseekers for ESG roles, such as energy, environmental science, sustainable business management, and environmental studies, among others.
Many companies have succumbed to the fallacy that bringing on strategy experts will ‘create ESG solutions’. Few are simply adding the ‘E & G’ tag to their CSR teams with expectations of them running the business function of ESG.
Without building a culture around ESG-thinking in an organisation, its journey will not even take off. Hence, assessing the desired competency, mapping with the existing talent pool, and market-driven talent acquisition has to reflect a degree of open-mindedness by the companies.
Companies are looking at handing out pay packets of Rs 1.5-2 crore before stock options to leadership talent. The hunting ground for this pool is among consulting companies including the Big 4, as well as sustainability and CSR-focused enterprises. With a paucity of this talent pool, companies are also looking for people outside India and building talent within the organisations. Example - Marico’s ESG function is headed by a sustainability leader, who is a home-grown talent with over two decades of experience, and has a team of dedicated sustainability and CSR experts.