In the absence of a standard profile for this relatively new role, where does the search for ESG professionals begin and what are the skills to look out for?
In a previous article, I discussed the benefits of appointing senior ESG professionals in smaller funds or building a dedicated ESG team in larger firms. If you’ve made the decision to invest in ESG expertise, your next step will be creating recruitment profiles.
ESG professionals are relatively new in the context of private markets recruitment, so there’s no such thing as a standard profile just yet. As such, it’s useful to seek guidance on the skills you should be searching for. I’ve put together a top-level guide below and I’m available to chat if you’d like more guidance on the seniority, qualifications and experience that would meet your firm’s needs. Please use the form at the end of this article to get in touch.
When it comes to core skills, it will come as no surprise that financial acumen is a must, particularly as your ESG team will be working closely with your deal and portfolio management teams on a regular basis. Your checklist should also include the ability to navigate complex regulation, analyse metrics and communicate effectively with investors.
So far, so familiar. However, there’s plenty of opportunity with an ESG hire to look outside of the standard private markets candidate pools. For example, while recruiting a Head of ESG for an infrastructure investor, my search focused on the construction and energy sectors. What appealed in this instance was the hands-on experience that candidates had in managing environmental impact surveys, carbon-reduction initiatives and employee safety regulations. The successful hire was someone who had experience in building a framework, setting and managing KPIs and, crucially, had the ability to work effectively with all stakeholders, particularly the management teams of the assets.
Templates for supply-chain and workforce monitoring have existed in these heavily regulated sectors for some time now and the principles easily transfer to ESG policies with the potential to improve sustainability in any business.
In addition to recruiting permanent team members, it’s also worth considering those who can partner with you in an advisory capacity, particularly entrepreneurs and business owners who have successfully embedded ESG criteria in their own firms, perhaps even achieving B Corp status. They can provide a holistic perspective on efficiencies across businesses and creative solutions within the supply chain.
Search parameters can also be widened when hiring junior ESG professionals. While consultancy backgrounds certainly offer the commercial insight and stakeholder management experience these roles demand, we also look to those working within sustainability teams in the corporate environment, particularly in firms that sit within your chosen sectors. Again, these individuals have the experience of creating frameworks and embedding measurement metrics.
When considering the educational backgrounds of junior hires, the data analysis skills needed to monitor performance in the portfolio would immediately suggest a bias toward STEM subjects. However, subjects such as Geography tend to include high-level statistical analysis and, particularly in recent years, focus heavily on environmental issues. Similarly, PPE studies and subjects such as international development involve numerical skills as well as insights into pertinent social and political issues.
Most importantly, ESG professionals at all levels must be great communicators. This is a relatively nascent area of the market and, as a result, there is still much to learn and understand. The best ESG professionals are those who are comfortable and confident building and presenting the case for ESG and can work collaboratively with all internal and external stakeholders.
The people who make it on to your shortlist must be dedicated to ensuring private markets investment has a positive impact on the environment, our society and the way businesses are governed. Passion is critical; skills can be developed.
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