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In Search of ESG Talent … and Commitment

By Alba Aguilar - Consejo Consultivo Finanzas Verdes CCFV
Director General

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By Alba Aguilar | Director General - Tue, 11/08/2022 - 12:00

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The race toward sustainable development has begun and has no end. We see great progress among all market participants and are aware of the increasing public commitments of countries, governments, financial institutions, companies, and civil society; all with a common objective that demands establishing strategies and roadmaps to face two great challenges of this century: the impact of climate change and the urgent struggle to reduce social gaps. 

As in any race, runners (sustainability specialists) must be well prepared and can only stop to pass the baton to a new runner. This is where the need to find ESG talent arises; we are talking about a new profile within the financial, corporate, and public sectors that can identify and manage the environmental, social and governance risks that threaten the stability of the financial system and the competitiveness of our economy.

This is a great challenge for all economic actors since they must have trained teams in the very short term. Today, we recognize that corporate responsibility is evolving, with special attention to sustainable development goals, some of which are related to poverty, hunger, inclusion, climate change, energy, water, biodiversity, and ecosystems. It's not just about philanthropy or charity, or unmeasurable good wishes; it is now important to have a more holistic view, which establishes goals and evaluation processes for key performance indicators, both financial and non-financial. Not only is it important to maximize returns for shareholders, but also to meet the demand of stakeholders. These actions require, in most cases, maintaining a close dialogue with regulators, clients, and investors, as well as much more support for the entire value chain in its transition to sustainability.

Sustainability specialists must have a great combination of financial, business, legal, risk, and technical skills, just to mention a few; they will also consider if the business model is still viable, if the teams are prepared for change, if they are able to innovate and meet the demands of shareholders, investors, customers, and employees. The main task will be to establish a strategy with clear objectives that allows moving the business toward a more sustainable and resilient model. At the same time, they will have to identify, evaluate, and manage the risks and opportunities faced by the corporation in a scenario full of uncertainty. It will be necessary to maintain the growth and competitiveness of the business considering the best practices on sustainable finance, mainly with the adoption of new frameworks, global standards, principles, tools, and methodologies that are necessary to initiate the change, set goals, measure performance, and deliver better results.

Today, more than ever, the battle for ESG talent is imminent, even in an uncertain and slowing environment. It is necessary to professionalize knowledge about sustainability, provide new training with a wide scope through education and capacity-building focused on developing and strengthening the skills of both business and finance professionals and sustainability experts. We see many programs specialized on sustainable finance, but I believe that sustainability should be a transversal subject for any career. Today, CFOs and financial executives face unprecedented challenges that require more skills and knowledge. Their role is key to analyze new data, understanding that climate risks are also financial risks, that ESG information must improve in quality and standardization, that metrics and key performance indicators in sustainability are as relevant as financial indicators to evaluate and value assets, portfolios, and the entire company.

The new leaders of the 21st century will occupy the positions that will trigger and drive the change toward sustainable development. This transition requires a significant transformation of corporate governance and demands a redesign in its structure, as well as in the director’s duties. Now, the key areas of sustainable finance will have more responsibilities, especially for those executives in financial and corporate institutions who have established their sustainability strategy as part of the business strategy and who are moving forward convinced that this is the way to create value in the long term.

In the race toward sustainability, new profiles are also emerging within the corporate structure. One of these is the CSO (chief sustainability officer) who will be one of the top sustainable directors, since this position will oversee the implementation of the sustainability plan, coordinate efforts, set objectives, measure ESG risks, and ensure transparency and adherence to global standards. Another profile is the sustainability counselor, who will play a substantial role within the Board of Directors, since it is difficult to find a specialist in the field with the level and experience required. But above all, both positions will have to launch a plan, evaluate sustainability performance, and deliver results to senior management. This might seem like an unconventional task that undoubtedly will result in the search for talent, and perhaps I would add, in the search for an  ESG commitment.

Photo by:   Alba Aguilar

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