Opinion – Rodrigo Tavares: We need to talk about the training of ESG specialists

ESG specialists are the most demanded and highest paid professionals in the financial market in Europe.

Recent Bloomberg and Financial News reports, based on interviews with human resources firms, indicate that the ESG director of a financial institution may be able to earn annual compensation of £350,000-1 million (from R$2 0.6 million to R$ 7.4 million), twice as much as last year and above equivalent hierarchical positions in other areas within the same organization.

This semester, of about 80 students in the Sustainable Finance course at the NEW School of Business and Economics that just ended, about a third received job or internship offers in the field – about 6-12 months before they finished. their masters. The proposals came from financial institutions in North America and several European countries.

This column has already described the problem of the shortage of ESG specialists in the market, including the Brazilian one. Most business schools have gradually adjusted their training offer to include subjects in sustainability, economics and finance, but the imbalance between demand and supply will remain for a few more years.

And another question arises that is perhaps even more pressing. What ESG specialists are we training? What is actually an ESG specialist? Uncritically we could say that it is a person who is equipped to produce and use ESG policies, practices and data with the aim of improving an organization’s financial performance, decreasing its exposure to risk or generating more positive social or environmental impacts.

But all these dimensions are fluid and open to multiple interpretations. The ESG market, given its embryonic character, still lacks specifications, standards and universalization. ESG leads to more profits? It depends. What is the best methodology for reporting ESG data? It depends. Is ESG related to positive impact generation? It depends. Is ESG data critical to assessing risk? It depends.

This diversity of senses is fertile ground for professional greenwashing. Not knowing what to look for and how to evaluate, many employers feel unable to recruit and identify talent. Biographies with steroids, weekend specials, or the wrong hiring of profiles begin to emerge. Few human resources directors have the necessary canine nose or the pachydermic hearing to identify quality.

To magnify the difficulties, ESG is a necessarily multidisciplinary field. Having a background in finance may be pertinent, but ESG specialists must also have some proficiency in climate change, human rights, sociology or law.

It is an estuary where jurists, engineers, social scientists and administrators flow and where professional and training walls give way to the need to adopt a holistic view of a company’s performance and the context in which it operates.

Therefore, a good ESG professional is not just someone who has mastered acronyms, concepts, practices or calculations about sustainability, but, above all, someone who shows an appetite for adaptability. Students, including undergraduate and master’s students, should not be educated to statically appropriate a certain type of knowledge, but to be active agents in its disassembly, assembly and recycling.

An ESG specialist is, above all, one who demonstrates analytical skills; innovative and creative thinking; adaptability and flexibility; initiative, curiosity and entrepreneurship; resilience; and the ability to influence and work as a team. If all this represents a menu of skills that is valued in many professional areas, in the ESG universe it has an even more acute dimension.

The marked appreciation of ESG professionals in the European market derives above all from the insufficiency of supply. But it also results from the complexity associated with their role and the multiple skills they need to master. In all due proportions, it is almost a return to the Renaissance homo universalis or to the polymaths of ancient Greek times.

Next week this new class in the Sustainable Finance course will take the final exam. Rather than asking students to calculate a company’s discounted cash flows by integrating ESG data, masters in finance will be asked open-ended questions, the ones that are frightening because they are so little conditioning and that allow two opposing answers to be correct.

This amplitude and ambivalence initially generates an upset stomach for students skilled in mathematics. But whoever manages to display autonomy, adaptability and critical thinking will get good grades. These are the ones who will become the best ESG professionals.