How much ESG experience makes you an expert?
– There is a wide disparity in ESG expertise among those doing ESG work.
– Many getting into the ESG field are moved over from a number of other departments.
At what point can you safely consider yourself an ESG expert? We all have to start somewhere, right? It reminds me of the early 2000s when “corporate governance” suddenly became a thing. Before that, there were probably only a dozen people that I would consider real experts in that field. Anyway, I saw this note by Kim Schumacher – Kim writes a lot about this topic:
Regarding #greenwashing and #competencegreenwashing risks around the recruitment of ESG professionals, this piece reaffirmed a lot of my previous concerns. The authors state that “firms look internally for talent to run these efforts or lead ESG. They will often move a top performer out of traditional investing into a leadership role within #impactvesting” or look “for candidates with communications, PR or marketing backgrounds.”
They praise that “This is a good retention strategy that rewards strong talent with a leadership role in a growing sector.” Unfortunately, their views exemplify how the #finance and #corporate sectors often respond to #sustainablefinance and #esginvesting market/regulatory pressures by
– Adding #ESG” or #Sustainability” to the job titles of existing executives/directors/managers/analysts.
– Appointing “Heads of ESG/Sustainability” or “Chief Sustainability Officers” without solid material ESG track records
– Recruiting “ESG experts” that only completed short online introductory ESG certificate courses that are not equal to subject matter expertise in areas like #climatechange, #ecosystemservices, or #biodiversity
These practices explain the lack of board-level ESG expertise; or AMs failing to implement the #SFDR despite having many “ESG experts.”