Five Paths to a Sustainable Finance Career

It wasn’t long ago that a career combining sustainability and business was unheard of. They were seen as polar opposites. Climate advocates generally viewed banks and corporations as myopic, willing to do anything in the name of profit. Think of the movie Wall Street from 1987 with the famous “greed is good” speech forming a generational view of capitalism. Fast forward roughly 20 years later to the documentary “An Inconvenient Truth,” which brought climate change to the attention of audiences.

At the turn of the century, it was hard to imagine a career path combining the best of both worlds. Today, consumers are increasingly demanding green-oriented goods and services, and more people want to see their investments support environmental, social and governance (ESG) change. The result is companies can’t hire enough staff with skill sets — and mindsets — in both traditional finance and sustainability.

The number of chief sustainability officers (CSOs) has exploded by more than 228%, according to a survey published in 2021. As these stats only follow those with the exact title of CSOs, which is not used by all industries, growth probably is more.

With that high demand, it’s not surprising that multiple entry points have arisen for recent graduates and professionals who want to drive a more sustainable future. Here are some of the career paths in this rapidly expanding space:

1. Corporate Sustainability

As you would expect, this is the department devoted to ESG efforts for most organizations. Usually headed by a CSO, it is here that companies form, manage and communicate their responsibility strategy. It also is the home for the evaluation of its material ESG risks and opportunities, usually articulated in an annual sustainability report. This division often oversees a firm’s environmental footprint, works with human resources on human capital initiatives and organizes community engagement.

If a company has a foundation located in-house, it likely will be placed here. With such a wide scope, there are many different positions that intersect with almost every business unit.

2. Consulting And Communications

Consultants already exist for nearly every aspect of the business world and come in many varieties, so you could have predicted the emergence of ESG advisory firms to help corporations trying to wrap their collective heads around sustainability. Many simply don’t have the time, resources or expertise and know they can’t wait to build that up organically.

An advisory group can assist them in building many of the business practices that a corporate sustainability department offers and help with managing rapidly changing regulations, oversight and external communications. ESG services typically found in the management consulting, accounting, legal and public relations industries will be particularly busy for years to come.

3. Data Providers

Here’s another crossroads that might not be intuitive. Sustainable practice now involves big data. The lion’s share comes from third-party data providers like MSCI and Sustainalytics, which furnish ESG research, ratings and data on issuers and companies around the world.

An emerging area is the use of AI and machine learning, including natural language processing (NLP). NLP can scrape the internet for content in any language about any company. Historically, ESG scores were primarily based on aggregating corporate disclosures, but the more sophisticated programs today hunt for text and tone to assess trending sentiment about a business. If something goes viral in social media — especially something controversial — these algorithms pick up on it in real time. This offers those with strengths in computer science, statistics and data analytics a more quantitative route to join the sustainability cause.

4. Standards Setters

These are the non-profits and regulatory organizations around the globe that are helping to standardize sustainability disclosure and reporting, which would allow stakeholders to compare relevant and financially material ESG issues facing sectors, industries and issuers. This can be rewarding work as these groups are laying the framework for future policy and transparency with increasing government coordination. Some good examples are the Value Reporting Foundation and the Global Reporting Initiative.

5. Responsible Investing Specialists

The growth of responsible investing has been extraordinary as many prominent firms are racing to catch up with pioneers to satisfy the desires of individual and institutional investors. The opportunities vary, from working as an ESG analyst performing sustainability-oriented research to an engagement specialist on a stewardship team who meets directly with corporations around the world.

Investors are using ESG measurements to augment their due diligence, manage risk and identify mispriced investment opportunities. It is here that Gordon Gekkos and the stereotype of Wall Street give way to those who are redefining long-term sustainable wealth creation.

Growing demand in sustainable finance expertise

This is not an exhaustive list, and it shows there is no single template to prepare for work in the broad field of sustainability.

Many universities have developed ESG-oriented curriculum, business schools have created degree tracks, and industry associations, such as the IBF and CFA Institute, have certifications that put you on the doorstep of what could be a very rewarding career — with social and environmental impact in mind.

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