With ESG gaining focus, professionals can command a premium

As a relatively newer specialisation, ESG allows and accepts adjacent skillsets to be considered for more than one active opening in the sector. (Illustration by Suneesh Kalarickal)

Most people want to have a purpose at work and being environmentally conscious in the workplace is the future. Experts say organisations will have to quickly rethink how to make the workplace Gen-Z-friendly in terms of how their policies and practices affect nature and society.

“Environment and sustainability issues are some of their key concerns. So domains like ESG (environmental, social and governance) and CSR (corporate social responsibility) will probably move from a compliance mindset to an employer branding perspective to create a differentiator,” said V Krishnan, CHRO at consumer durables maker Havells India.

However, industry experts say talent availability for ESG roles in India is abysmal.

Though they say organisations are making an effort to address this by hiring talent from overseas and upgrading the skills and competencies of in-house talent through L&D (learning and development) initiatives, this is mostly restricted to junior and mid-level staff.

“There is a scarcity of talent at the senior executive level. On the other hand, educational institutions are now rolling out programmes focused on ESG,” said Sumit Kumar, CBO at TeamLease Degree Apprenticeship, the training arm of the staffing company.

Demand amplified only within the last 12-18 months

With growing concerns about climate change and the necessary mandates, job demand in the ESG sector has grown over 468 percent in India in the last three years, according to a 2022 report by Indeed, the US-based website that tracks employment trends.

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The most significant increase in demand was witnessed between April 2021 and April 2022. The number of job posts grew 154 percent over the previous year when the expansion of these roles was 97 percent, it added.

The ESG space in India as a specialised sector for specialist talent demand is under five years old in its current form and definition, said Kamal Karanth, co-founder of specialist staffing company Xpheno. He said the focus on the ESG sector and its talent demand has amplified only within the last 12-18 months.

“However, the talent and skillset relevant to the ESG function has existed and matured under other enterprise functions much earlier. Senior specialist talent in functions like health and safety, environment, compliance and sustainability are talents with a lot of relevance and importance to the ESG function,” he added.

ESG skills and talent pool

The adjacency of qualifications, skillsets and experiences of this talent pool is notably high and applicable to the ESG function, Xpheno’s data showed. Applying the adjacency factor, there are over 36,000 active professionals who can be deemed part of the ESG function as a collective.

Active talent as a collective comes from over 20 related roles and functions across adjacent functions and clusters. Specialists from this pool are those who are experienced in ESG functions across multiple industry sectors and verticals.

As a relatively newer specialisation, ESG allows and accepts adjacent skillsets to be considered for more than one active opening in the sector.

As per Xpheno, there are over 600 active job openings across the different functions and roles in the ESG function.

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As a function that demands a fair amount of professional expertise and operational maturity, over 40 percent of the active openings are for mid-senior and above roles. Given the nature of field work involved, there is also a focus on hiring mid-level professionals, being the operating majority in the workforce.

As an emerging specialist function with a growing talent demand, there is also a focus on building entry-level talent.

“ESG requires specialisation/ experience in multiple topics and companies need very senior talent to be adept across the majority of the topics while also having the leadership gravitas to influence and manage stakeholders to drive change,” said Khushboo Kumra, a consultant at executive search firm Russell Reynolds Associates.

The future is bright

Earlier, the focus was on social and governance separately. However, ESG integrated environment, social and governance in one framework. Firms like UTI Asset Management Company have started implementing and measuring ESG principles in the recent past.

Some of them have started reporting ESG goals and outcomes as per international standards.

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“However it will take some time to implement completely as per the desired standards. There is a need for specialised resources in organisations to develop, execute, monitor and report the ESG guidelines. Therefore, there is a surge in demand for ESG professionals,” said Indranil Choudhury, president and head of HR at UTI AMC.

“Moreover if you are an investment organisation, you need an ESG research team to advise the fund managers,” he added.

Choudhury can think of three critical roles relevant for an investment organisation: One, ESG analyst providing ESG-related qualitative and quantitative support to the funds management team in terms of macro and micro research on sectors/industries and companies. Two, specialists to execute the ESG framework for an organisation. And three, external ESG consultants to guide the organisation in creating an ESG framework and doing the handholding through the implementation roadmap.

At the entry level, Kumar of TeamLease Degree Apprenticeship said the pay scale is around Rs 3-4 lakh per annum and goes up to Rs 2-4 crore at the C-suite level.

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“This compensation trend is a function of demand and supply. Given the current scarcity situation, professionals can command a 30-40 percent premium in ESG roles,” he added.