Is ESG A Good Career?
Choosing a career can be a stressful task, given the ample options one is provided with. However, it is important to choose a career that is a private investment, one that helps personal development while creating a safe and greener environment. Well, here's your chance to do both by selecting a career in environmental, social, and governance (ESG).
For the unfamiliar, ESG is a framework used to evaluate how well an organisation performs in its commercial operations and in relation to numerous ethical and sustainable challenges. It also offers the tools to gauge business opportunities and hazards in certain fields.
So, is a career in ESG a good option? Firstly, ESG is not just a short-lived trend, it represents the evolution of corporate social responsibility (CSR), to instead consider a comprehensive spectrum of initiatives that deliver fundamentally greater impact in the transition to sustainability.
Not Just Environmental Impact
In the coming years as the global economy retools itself to focus on sustainability, it’s perhaps worthwhile to follow the axiom that every job is now a sustainability job. There is opportunity everywhere to reorient towards sustainable processes. ESG knowledge is thus in high demand, its practical application is necessary at a time when the world is already witnessing the devastating effects of climate change and how it is impacting livelihood, safety and businesses.
It is also a search for social equity, improved energy use, human rights, biodiversity and pollution concerns, and the growing importance of the fact we must find out how to balance sustainable development via the appropriate use of environmental resources with the pressures of rapid growth. Yes, environmental concerns, but the 'green economy' will encompass a broad range of everything to become the regular economy.
Rising Public Awareness of Sustainability
Climate change is drastically altering the environment of the planet. Whether through South Asian floods, European forest fires, or record-breaking high temperatures, the climate crisis has brought to light the negative environmental risks of business as usual in an economy powered by fossil fuels. This is closely related to the fact that consumption practices are changing and more customers are choosing goods and services that are more ecologically friendly.
According to a new Capterra survey, although inflation has increased the cost of necessities, customers are nevertheless prepared to pay more for sustainable goods. 95% of consumers questioned believe that a product's sustainability is important, and 84% of these consumers—up from 67% in 2021—have bought a sustainable product in the last six months.
Businesses have changed their strategies to incorporate sustainability into their products and services as consumers prioritise sustainable items. Implementing ESG will assist businesses in achieving larger objectives, including reducing carbon emissions along the value chain, providing employees with fair salaries and working conditions, and promoting diversity and inclusion.
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How is ESG different from CSR?
ESG is similar to corporate social responsibility (CSR), but best understood as an evolution of the concept to incorporate a more comprehensive set of values. CSR is a concept in management that encourages businesses to incorporate social and environmental issues into their everyday operations and relationships with stakeholders. Businesses have increasingly relied on CSR to make a difference and enhance their company's reputation.
CSR initiatives enhance reputation with clients and invested communities through relevant reporting, and is an internal process of corporate culture. ESG, in contrast, is fundamentally outward-facing. It requires reporting and disclosure to satisfy the needs of investors and stakeholders. ESG considers an organisation's environmental sustainability and the social and governance impact it is having through its business, and pushes a business into a position of public transparency in order to do so.
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ESG Certification for SMEs
If you run a small or medium-sized enterprise (SME), obtaining ESG certifications or hiring certified staff is a solid step in preparing for the sustainability transition. There are distinct difficulties SMEs face in implementing sustainability, and more than anything it’s a case of having people on board who put sustainability and the change required for it at the centre of their operating process.
ESG is not a stand-alone idea that solely benefits recognisable businesses and brands. Regardless of the industry or size of the organisation, ESG, in some form or another, is crucial for everyone. ESG thinking within the team will also help others in the organisation learn new technical skills, thinking, and how to encourage sustainable growth.
Choosing to enrol in an ESG course will help professionals from a variety of backgrounds not only advance their skills, but will also give them insight into how sustainable their company actually is, at this moment, and how they can use sustainable practices and technologies to stay competitive in the future.
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ESG Investments Are Popular
According to a report by PwC, globally, it is anticipated that ESG-related assets under management (AuM), which were USD18.4 trillion in 2021, will rise to USD 33.9 trillion by 2026. ESG assets are expected to account for 21.5% of total worldwide AuM in less than five years, with a predicted compound annual growth rate (CAGR) of 12.9%.
Wall Street Journal research found that, in contrast to earlier generations, young people are driving ESG investments and bringing sustainable investing into the mainstream. The younger generation is increasingly motivated by ESG issues and is actively looking to support long-term sustainability objectives. ESG-focussed businesses typically have lower financial and reputational risk, which translates into more steady returns for many investors. There is a clear ‘win-win’ in the logic, yet the major hurdle, especially for older generation ‘traditional’ investment views, is often the inability to perceive longer-term value.
Focusing on long-term sustainability shows confidence in growth beyond 'conventional' short-term horizons, which can lead to longer-term, higher financial rewards. According to a study, in terms of stock market performance, businesses with good ESG performance have outperformed their peers. This, and future information indicating similar, is key to establishing the connection between transparent reporting and greater potential for sustainable, measured, long-term growth.
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Rise of Green Jobs
As consumer awareness of sustainability has increased, job searchers, particularly young people, have shown a greater interest in pursuing green livelihoods. Whether an organisation is working towards long-term sustainability goals will often determine their level of interest.
According to a CSE research team on the rise of ESG jobs, it was found that the need for ESG hiring by tech industry enterprises expanded in North America in 2021. 52.3 percent of all global ESG positions were in North America, an increase from 42.1 percent in the same period the previous year. The biggest increase in ESG responsibilities in North American technology and communications businesses over the previous quarter was seen in the US.
The research teams also found that the demand for sustainability professionals is increasing quickly in the following industries: energy and mining, technology and communications, healthcare, agriculture, transportation, manufacturing, and renewable energy. More significantly, between 2016 and 2021, the demand for workers with expertise in diverse disciplines such as sustainable textiles, responding to oil spills, ecosystem management, and understanding solar power generation systems increased by more than 50%.
According to a report by Foundit, in India the need for green jobs increased 81% between 2022 and 2023. Metropolitan areas in India have the most potential for green growth. Mumbai came in second with a year-over-year growth of 216%, followed by Bengaluru and growth of 174% in the Delhi National Capital Region. Green job postings are increasing as more private and public firms integrate ESG practices into their daily operations and adopt renewable energy strategies.
Takeaway
The most essential benefit of a job in ESG is that it puts professionals with the right qualifications at the centre of what is, and will continue to be, the greatest economic transformation in human history. ESG, whether in its emerging framework forms, or as an evolution into tomorrow’s framework that guides the transition to sustainability, is crucial.
Pursuing a career in ESG is urgent, both professionally and from a humanitarian standpoint, given that we are now dealing with the effects of anthropogenic climate change everyday. The greatest question perhaps is how effectively we can economise the challenge of climate change and seek multiple beneficial outcomes, for the planet, for people, and yes, for profit.
In this regard, ESG should be more than just a job choice for people who want to have a positive impact on the environment. Indeed, a career in ESG is beneficial for people who are enthusiastic about sustainability and willing to use their knowledge, expertise, and skill sets to achieve positive change within their companies and globally. Also, as the effects of climate change unfold, all jobs will in turn be affected. The question isn’t so much whether ‘ESG is a good career’, rather how you can do what you do, but focus it towards the emerging economic model of sustainability and, eventually, regenerative economics.
Remember: All our jobs will be sustainability jobs.The time to act is NOW!
To enrol yourselves in specialised ESG courses, click here.
