• July 22, 2023

The ‘Green Role’ conundrum: India Inc struggles with ESG talent gap

The ‘Green Role’ conundrum: India Inc struggles with ESG talent gap

The high demand for climate science and ESG expertise is outstripping supply as businesses respond to sustainability regulations.

When StepChange, a startup offering tech-based enterprise solutions in sustainability, went to a reputed campus recently to hire for climate science roles, they received over 100 applications but ended up selecting just one candidate. “Given the speed at which this space is evolving, we spend significant effort training people even when they come from the relevant background,” said Ankit Jain, co-founder and CEO of the startup whose clients include ICICI Bank and ITC.

If finding the right talent in climate science is tough for firms, the quest is no less challenging in the related but broader field of environmental, social and corporate governance (ESG) standards, which is seeing a spike in demand, according to a detailed news report on the Economic Times website. “Climate change is the biggest issue our planet is facing. But there aren’t enough people with expertise in the sector,” said Nitesh Mehrotra, partner, sustainability and ESG, EY. Data from job portals indicate that both opportunities and interest in the sustainability sector, or “green jobs” are seeing a sharp spike. Globally, the sharing of job postings on LinkedIn requiring at least one green skill grew nearly twice as quickly as the share of green talent compared to a year ago, while in India, about 13% of paid job postings required green skills. According to job search portal foundit (previously Monster), there has been a 20% year-on-year increase in green job opportunities in May 2023, with the role of ESG analyst seeing the biggest share of vacancies at 19%.

“The green sector has been experiencing significant growth in recent years, outpacing the availability of skilled workers. This rapid expansion has created a demand-supply gap in certain areas,” said Sekhar Garisa, CEO, foundit.

Globally, too, there is a shortage of green skills jobs – an OECD (Organisation for Economic Cooperation and Development) report in March found that “a green skills shortage across the OECD is holding back growth in sustainable development jobs and could jeopardise the race to reach net zero by 2050”.

There are a number of reasons for this uptick. For one, with Indian companies increasingly becoming part of the global supply chain, these firms have to comply with the slew of global regulations around sustainability that have come into force over the last few years. “Clients want us to engage with stakeholders, help set goals, develop a roadmap, create a strategy to achieve and report their performance according to various standards. The top 200 or so companies would also be looking at disclosing their ESG performance to international rating agencies,” said Shivanand Shetty, partner & head, ESG advisory at KPMG in India.

ESG reporting has also got a greater impetus under the climate change initiative with people wanting to capture the emission footprint of companies and incentivise companies to reduce it, said Anish Sugathan, co-chair of Arun Duggal ESG Centre for Research and Innovation at IIM Ahmedabad. “In India, there is a push from large investors like European pension funds and progressive institutional funds from the US (to reduce emissions).”

Domestically, market regulator Securities and Exchange Board of India introduced business responsibility and sustainability reporting (BRSR) as part of ESG disclosures that companies have to mandatorily make annually from 2022- 23. Then, there are the sustainability goals India has announced it will meet, both at the government and corporate level, such as net-zero greenhouse gas emissions by 2070 or Reliance Industries setting 2035 as the year by which it will “turn net carbon zero”.

That ESG is such a wide field encompassing environmental, social and regulatory or governance issues makes hiring all the more complex. “It’s not easy to be an ESG expert – in the environment or “E” part alone, there’s climate, pollution, waste management, to name just a few themes. The person also has to be someone who has experienced practical challenges. Today, it’s very hard to find ESG experts who go beyond compliance,” said Jain. One workaround some companies are resorting to is assigning this to the CSR (corporate social responsibility) department but this does not necessarily serve the purpose. “Quite a few boardrooms still think ESG is CSR,” said Mehrotra.

ESG roles, too, are moving from mere reporting and disclosure to actual transformation and creating impact, said Shetty. “Companies are under pressure not just to set goals and targets but to achieve them. ESG experts have to lead initiatives and work closely with the company leadership – you need someone with both expertise and experience.”

Underpinning all this is a general lack of awareness about ESG standards and compliance, with people tending to get lost in the jargon. “There is a huge gap in understanding and the one thing we keep hearing from C-suites and board members is that they need training, from the chairman down to the watchman,” said EY’s Mehrotra.

To plug the gap, both in talent and awareness, companies are training executives in-house as well as reaching out to firms with experience in the sector to come up with learning modules.

“There is increasing corporate interest in understanding how they can connect with us and develop a better understanding of the subject,” said Suruchi Bhadwal, associate director, The Energy and Resources Institute (Teri), which has a school of advanced studies.

Corporates who recently reached out for training and lecture programmes include Deloitte and Reliance Industries, said Bhadwal.

Institutes like IIM, Ahmedabad have also launched courses in ESG and sustainability. The first wave of training requirements started coming from the early 2020s when we started getting enquiries from corporates to conduct ESG awareness classes for the top executives. The second wave is a little more technical, with people wanting to understand the dimensions of ESG, and is targeted at the middle-management and analyst roles, said IIM-A’s Sugathan.

LinkedIn India said more professionals are looking to upskill, seeing the demand. “In India, we have seen a significant growth in the number of professionals actively seeking and equipping themselves with green skills,” said Ruchee Anand, senior director, talent and learning solutions, LinkedIn India.

However, Bhadwal added that because of the huge opportunity in the sector, organisations that do not have sufficient technical expertise are also jumping in the fray. “When organisations with only a partial understanding enter the field, it can be damaging because some of their recommendations might be adopted in policies and implementations,” she cautioned. The only solution, she said, is to build capacity and provide the right exposure.

The demand for the right talent, added Jain, is only likely to continue. “Every business over the next 10 years is going to need people who understand environmental impact just like every organisation today has someone who understands technology. For the next 30 years, demand will outstrip supply.”

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