Investment professionals with ESG skills requiring salary bonuses

A new report from the CFA Institute, The Future of Sustainability in Investment Management: From Ideas to Reality, found that 85% of CFA Institute members surveyed now say they consider environmental, social and / or governance (ESG) factors when investing, up from 73% just three years ago. The study found that 90 percent of investment professionals expect their company’s commitment to ESG research to increase, up from 72 percent just two years ago.

The global study includes the views of more than 7,000 industry participants, including investors, investment practitioners and ESG specialists, who noted the scarcity of specialist talent. Indeed, the demand for ESG professionals is increasing rapidly as more and more funds flow into the sector. The more in-depth and specialized the necessary ESG expertise, the more specialists who hold these skills will receive a higher salary, and indeed, our survey participants noted the relative scarcity of talent.

The lack of qualified professionals is also revealed by the career networking site LinkedIn. An analysis of around 1 million investment professionals found that less than 1% disclosed skills related to sustainability in their LinkedIn profiles, according to the report.

Across all investment roles with sustainability-related expertise, these professionals received on average more LinkedIn Recruiter InMails over the past 12 months compared to all other investment professional talent pools on LinkedIn. , according to the report.

The main argument for the long-term need for specialists is that the data becomes increasingly complex and the generalist approach of the past will no longer work. It is not possible for someone with other ‘day job’ to stay abreast of developments in sustainable investing and ESG; not following is a risk. Asset managers are therefore hiring more ESG investment experts, which opens up expanding career opportunities for ESG specialists.

Opportunities for rare talent

Yet not all companies can afford ESG specialists. Some small businesses choose to outsource their sustainability capabilities while slowly building in-house expertise. We suggest, however, that all companies have at least one ESG champion who is a strong leader, to meet investor demand for sustainable investments.

While it can be difficult to find talent, keeping it can be difficult too. Because sustainability experts tend to be people who want to make a difference, it’s not just about pay; if a business is not growing fast enough, these professionals move more easily to another asset manager that better matches their values ​​and may offer a more engaging career path.

While the gender breakdown for all investment professionals is 74% men and 26% women, among ESG analysts, it is more balanced: the breakdown is 58% men and 42% women, and among ESG portfolio managers, it is 65%. percent male-35 percent female. About a third of investment organizations have dedicated ESG specialists, and a third have portfolio managers who perform ESG analysis. ESG training has increased over the past three years, but less than half (31%) of respondents said their company provides ESG training.

Broad skills needed

To master sustainable investing, investment teams need to fully understand all parts of what sustainability means for the investment proposition. Asset managers who integrate sustainability into their business models need access to specialist knowledge to enrich their investment capabilities and to obtain the data needed to make investment decisions.

Experts in sustainability need many skills, including technical expertise as well as good communication skills. ESG experts can be called upon to perform many different tasks, and a combination of technical skills, soft skills, and T-shaped skills will distinguish top performers. A greater focus on reporting will require technical expertise, and increased client interest will mean ESG professionals may need to spend more time interacting with clients.

ESG experts may also need to perform data analysis, including looking at alternative data from news sources, social media, government websites, and satellite data, among others. Natural language processing and related programs are used to process this data in some businesses. Skills in quantitative modeling are increasingly in demand to integrate ESG data into decision-making.

The role of an ESG specialist may also involve speaking to many internal stakeholders to explain issues and relevance and engage with companies and clients externally. Good communication skills are necessary. ESG professionals should be able to sit down with company management or ask tough questions at Annual General Meetings and be able to listen well and build trust with external organizations.

Thus, the career opportunities are many and varied and for professionals who develop ESG expertise, the benefits may include a salary bonus. Finding new areas of investment while having a positive impact in the real world is also a source of inspiration for many who are embarking on a career in sustainable investment management.

Lisa Carroll, Managing Director, CFA Societies Australia

Investment professionals with ESG skills requiring salary bonuses

Sustainable investing has been accelerated by the COVID-19 pandemic, affirming a trend already underway, forcing asset managers to hire more skilled professionals, increasing salaries and creating a shortage of specialist talent.

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Last updated: January 12, 2021

Posted: 05 January 2021