Addressing the Talent Gap in ESG and Sustainability

Growing Demand for Environmental Experts: Addressing the Talent Gap in ESG and Sustainability

In recent years, there has been a surge in demand for professionals with expertise in environmental, social, and corporate governance (ESG) standards. As companies worldwide face the challenges of sustainability and climate change, finding the right talent in fields such as climate science and ESG analysis has become increasingly difficult. This article explores the reasons behind the talent shortage and highlights the efforts made by organizations to bridge the gap in ESG and Sustainability in India.

Startups like StepChange, which provides tech-based enterprise solutions in sustainability, face significant challenges in recruiting qualified candidates. Despite receiving over 100 applications for climate science roles, they were only able to select one candidate. Ankit Jain, CEO of StepChange, emphasizes the need for training individuals even if they come from relevant backgrounds due to the rapidly evolving nature of the field.

What is ESG?

The demand for green skills extends beyond climate science to encompass various aspects of ESG. According to Nitesh Mehrotra, a partner at EY, there is a shortage of individuals with expertise in the sustainability sector. Job portals reflect the rising interest in “green jobs,” with a significant increase in the number of job postings worldwide requiring green skills. In India, approximately 13% of paid job postings now demand green skills. The role of ESG analyst has the highest number of vacancies, accounting for 19% of green job opportunities.

Sekhar Garisa, founder and CEO of a sustainability-focused organization, acknowledges the significant growth of the green sector and highlights the resulting demand-supply gap. This shortage of green skills is not limited to India but has been observed globally. An OECD report identified a shortage of green skills across OECD countries, hindering sustainable development and the race to achieve net zero emissions by 2050.

Several factors contribute to the uptick in demand for ESG professionals. With Indian companies joining the global supply chain, they must comply with evolving global sustainability regulations. Shivanand Shetty, partner, and head of ESG advisory at KPMG India, explains that clients require assistance in engaging stakeholders, setting goals, developing strategies, and reporting performance according to various standards. Additionally, ESG reporting has gained momentum due to initiatives addressing climate change and the desire to measure and incentivize companies’ emissions reductions.

India’s market regulator, the Securities and Exchange Board of India, has introduced business responsibility and sustainability reporting (BRSR), making ESG disclosures mandatory. The country has also announced sustainability goals at the government and corporate levels, such as achieving net-zero greenhouse gas emissions by 2070. However, hiring for ESG roles poses challenges due to the diverse nature of the field, which encompasses environmental, social, and governance aspects. Anish Sugathan, co-chair of Arun Duggal ESG Centre for Research and Innovation at IIM Ahmedabad, emphasizes the difficulty in finding ESG experts who go beyond compliance, citing the misconception that ESG is merely corporate social responsibility (CSR).

ESG roles are transitioning from reporting and disclosure to driving actual transformation and creating impact within organizations. ESG experts must lead initiatives and collaborate closely with company leadership. Companies are under pressure to set and achieve goals, necessitating hiring individuals with expertise and experience in the field.

A lack of awareness about ESG standards and compliance further compounds the talent shortage. Many C-suite executives and board members express a need for training to enhance their understanding of the subject. To address this gap, companies are implementing in-house training programs and partnering with organizations experienced in the ESG sector to develop learning modules. Corporates such as Deloitte and Reliance Industries have already sought training and lecture programs. Institutes like IIM Ahmedabad have launched courses in ESG and sustainability, catering to different levels of expertise.

LinkedIn India reports a growing number of professionals actively seeking to upskill in green skills, recognizing the demand in the market. However, it is essential to ensure that organizations without sufficient technical expertise do not enter the field, as their recommendations may adversely affect policies and implementations. Building capacity and providing the right exposure are crucial in addressing this challenge.

As the importance of environmental impact continues to grow, the demand for professionals with expertise in this area is expected to increase further. Just as every organization today has someone with technological knowledge, every business in the next decade will require individuals well-versed in environmental impact. The demand for such talent is projected to outstrip supply for the next 30 years.