Is ESG a Good Career? Exploring Roles, Skills & Long-Term Prospects

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) or private equity focused on sustainable investments.

For the unfamiliar, ESG is a framework used to evaluate how well an organization 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 ESG career a good option? First, 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.

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Growing Demand for ESG Professionals

The demand for ESG professionals is growing rapidly as companies and investors increasingly recognize the importance of sustainable investing and responsible business practices. According to a report by Mercer, global investment in ESG was approaching $700 billion as of 2021, and is expected to reach $1 trillion by 2030. This surge in ESG investments has created a larger need for professionals with expertise in ESG analysis, reporting, and strategy.

As more companies integrate ESG factors into their business models, the need for skilled ESG analysts, sustainability managers, and corporate responsibility officers continues to rise. These professionals play an outsized role in helping organizations understand the complexities of ESG investing and implement sustainable business practices. The growing emphasis on environmental sustainability and corporate responsibility ensures that ESG careers will remain in high demand for the foreseeable future.

Impact of ESG on Business and Society

ESG considerations can have a significant impact on both business and society. Companies that prioritize ESG factors are more likely to attract investors, customers, and top talent, while also reducing their environmental footprint and contributing to a more sustainable future. For instance, businesses that invest in renewable energy and sustainable practices not only lower their operational costs but also improve their reputation and customer loyalty.

On the other hand, companies that neglect ESG factors may face reputational damage, regulatory risks, and financial losses. Poor environmental practices can lead to legal penalties and loss of consumer trust, while inadequate social and governance policies can result in employee dissatisfaction and management scandals. As a result, ESG is becoming a bigger part of business strategy and decision-making, driving positive change and building long-term growth.

Types of ESG Roles and Industries

ESG roles can be found in a variety of industries, including finance, energy, technology, and healthcare. Some common ESG roles include:

• ESG Analyst: Conducts research and analysis on ESG factors to inform investment decisions and business strategy. ESG analysts play an increasingly important role in identifying sustainable investments and assessing the environmental and social impact of business operations.
• Sustainability Manager: Develops and implements sustainability strategies to reduce a company’s environmental impact and improve its social responsibility. This role often involves coordinating renewable energy projects and promoting sustainable business practices.
• Corporate Responsibility Officer: Oversees a company’s corporate responsibility initiatives and ensures compliance with ESG regulations and standards. This position is important in driving corporate responsibility and developing a culture of ethical business practices.
• Environmental Consultant: Provides expert advice on environmental issues and helps companies develop sustainable practices and reduce their environmental footprint. Environmental consultants are essential in guiding businesses towards more sustainable operations and mitigating their environmental impact.

These roles may involve conducting ESG research and analysis, developing sustainability strategies, and engaging with stakeholders on ESG issues, making them integral to the success of sustainable business practices.

Skills and Qualifications Required

To pursue a career in ESG, you will need a combination of skills and qualifications, including:

• Strong Analytical and Research Skills: The ability to analyze data and conduct thorough research is crucial for understanding ESG factors and their impact on business and society.
• Knowledge of ESG Factors: A deep understanding of environmental, social, and governance factors and their relevance to business operations is essential.
• Understanding of Sustainability Principles: Familiarity with sustainability principles and practices, including renewable energy, waste management, and resource conservation, is important for developing effective ESG strategies.
• Excellent Communication and Stakeholder Engagement Skills: The ability to communicate complex ESG concepts clearly and engage with stakeholders is vital for driving ESG initiatives and fostering collaboration.
• Ability to Work in a Fast-Paced Environment: ESG professionals must be adaptable and able to thrive in dynamic and rapidly changing environments.
• Relevant Professional Certifications: Certifications such as the CFA Institute’s Certificate in ESG Investing or the EFFAS’ Certified ESG Analyst (CESGA) program can back your credentials and show your expertise in ESG.

By developing these skills and obtaining relevant qualifications, you can position yourself for a successful and impactful career in ESG.

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.

ESG knowledge is of paramount importance for managing sustainable processes within the supply chain, ensuring that environmental and social standards are maintained throughout.

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.

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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.

Consumers are increasingly aware of their carbon footprint and are choosing products that help reduce it.

Businesses have changed their strategies to incorporate sustainability into their products and services as consumers prioritize 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 ratchet up 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 organization'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 and stakeholder engagement 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 center of their operating process.

ESG certification can also improve corporate governance within SMEs by ensuring that sustainability practices are integrated into the overall management and decision-making processes.

ESG is not a stand-alone idea that solely benefits recognizable businesses and brands. Regardless of the industry or size of the organization, ESG, in some form or another, is crucial for everyone. ESG thinking within the team will also help others in the organization learn new technical skills, thinking, and how to encourage sustainable growth.

Choosing to enroll 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 in Sustainable Investing

According to a report by PwC, globally, it is anticipated that ESG-related assets under management (AuM), which were USD 18.4 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 ESG investing into the mainstream. The younger generation is increasingly motivated by ESG issues and is looking to support long-term sustainability objectives. This shift is part of a broader investment strategy that prioritizes ESG-focused businesses, which typically have lower financial and reputational risk, translating 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 and ESG Jobs

As consumer awareness of sustainability has increased, job searchers, particularly young people, have shown a greater interest in pursuing ESG careers. Whether an organization 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 like ESG analysts 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%. ESG professionals are crucial for risk management in industries like energy, technology, and healthcare.

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 ESG roles and green growth. Mumbai came in second with a year-over-year growth of 216%, followed by Bengaluru and a growth of 174% in the Delhi National Capital Region. ESG job postings are increasing as more private and public firms integrate ESG practices into their daily operations and adopt renewable energy strategies.

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Takeaway

The most essential benefit of a job in ESG is that it puts professionals with the right qualifications at the center 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 every day. The greatest question perhaps is how effectively we can economize 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.

A career in ESG aligns with corporate ethics and the broader goal of sustainability, making it a compelling choice for those committed to ethical business practices and long-term environmental stewardship.

Remember: All our jobs will be sustainability jobs. The time to act is NOW!

To enroll yourselves in specialized ESG courses, click here.