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Introduction
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Growth of the ESG & Green sector
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Data roles within ESG & Green sectors
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Qualities needed for data professionals
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Analysis of Job Market
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Summary
How are the latest trends increasing demand for Data Scientists?
February 9th, 2023
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The ESG & Sustainability Job Market Report
The ESG & Sustainability Job Market Report
The UK Government Green Jobs Taskforce Final Report states that “Every job has the potential to become ‘green’ as the world moves to combat climate change”. This may be the case, however a recent report by LinkedIn shows that green jobs and those with the potential to become green or considered green are not growing at a fast enough pace. On top of this the gender gap as well as the education gap are not closing, with more males than females and more people with degrees considered to have green jobs than those without. The demand is still very high for talent within the roles that do exist, it’s just that to meet green targets, jobs need to be embracing ways to become more sustainable in their approach. In this report we take a look at careers for data specialists within the green economy, salary benchmarks and where the most green data related jobs are located within the UK, Europe and US.
02. Growth of the ESG & Green Job Market
Globally green talent has grown almost 40% in the last seven years, however demand far outstrips supply and as the chart below indicates some countries are more advanced than others when it comes to specialist software and IT skills within sustainability.
The share of green talent in the workforce increased from 9.6% in 2015 to 13.3% so far in 2022 and this growth rate of 38.5% looks set to continue. One thing to note is that the pandemic has increased the rate of green hiring and green talent is being hired at a faster rate that non green talent. It is an extremely resilient and growing sector and therefore one to consider if you are in a data or technology focused profession. In fact, the vast majority of green entrepreneurial activity is happening outside of roles traditionally considered as green, the fastest growing sectors for green entrepreneurial activity is within Software, Architecture Design and Finance (ESG market in America as an example).
One area that is really tapping into the skill sets of the Data Scientist is the Environmental Social and Governance (ESG) sector. The role of data within this area is an important one as it is helping to lift sustainability efforts of businesses out of the realms of greenwashing and purely the domain of the marketing department and into measurable hard facts. Data and AI is a solution to this greenwash challenge and the ability of the data professional to process vast amounts of ESG data which is often unstructured.
Use cases for data within this sector typically cover: data for CEO’s who need to track data versus their stated ESG goals before board members; data for investors; regulators and the media; supply chain information; investment funds data to track responsible investing and in the same vein risk management.
03. Data Roles within the ESG Market
The ESG market within the financial sector is growing at a phenomenal rate, in 2020 sustainable funds grew by 25%. In response to this trend, many asset managers have already started building climate science expertise by boosting their data, research and analytics capabilities on ESG topics and explicitly integrating it into their investment process. In 2021 PwC announced a $12billion plan to create 100,000 new jobs in ESG by 2026 and Deloitte, EY, KPMG, Boston Group and McKinsey are also ramping up their ESG hiring. There is a current shortage (LinkedIn data suggest a 2% gap in the talent required for upcoming green roles). This is partly due to the acceleration of the topic over the last 2 years and ESG roles have quickly expanded from data collection and dissemination to a real need for business strategy where ESG considerations are front and center. In the US ESG tends to mainly cover the financial sector however in Europe in particular sustainability has been merged within the definition. Because the market is maturing, the professionals needed to fill the increasingly sophisticated roles are becoming rarer to find.
The role has matured from a mid-ranking co-ordination of data role to needing someone who can lead a team, who is able to deal with multiple types of stakeholders and who understands the worlds of business, finance, regulation and strategy. There are entry level positions however those professionals are starting to take on higher level responsibilities and progressing to include activities beyond creating data spread sheets to building systems, to understanding what investors want, how to position reporting correctly to the driving of capital allocation within a business to driving sustainable outcomes and they need to be commanding enough to get the attention of the board.
The main challenge businesses will face is retaining staff once they have recruited them. People with even small amounts of ESG experience are being tempted by 40% pay increases from rival businesses. Counter offers and competing offers are prevalent because of the huge growth in interest around ESG.
The recruitment process is further challenged by the lack of standardisation within the job market. With any new sector, standard qualifications are not available and it takes longer to evaluate talent.
04. The Qualities needed for data professionals
| The main qualities businesses are looking for span Business Experience, Adaptive and Critical Thinking, Multi-disciplinary and Systems Perspective and Passion.
Business Experience: A well rounded understanding of business gained from experience is helpful because companies are trying to get ahead as quickly as possible. This may not be one of those sectors where straight out of bootcamp, school or college is a route until it becomes more established. In the UK, Universities are starting to run courses aimed at analytics within sustainability. Adaptive and Critical Thinkers: Agility of thought, process and behaviour is a skill that will be useful in this industry. Not everyone has all the answers and people who are comfortable with this as well as getting their head around ideas that may, on face value, be at odds with each other will do well. Critical thinking and rigor within a person is helpful because it generally cannot be taught and in an industry which evolves as quickly as this one you need to be able to keep up. A Multidisciplinary and systems perspective: Expertise in one area, even if it is sustainability for example, is great but being able to see what could be done across many different disciplines is what is key and then being able to join the dots. Being able to see what is driving value and understanding what the links are is equally as important as knowledge around sustainability. Passion: Most of the industry agrees that passion for the subject is what’s important. People who combine their technical skills with a deep conviction that the world can be a better place are in demand. As an industry it is in its infancy and the spotlight is shining on specific job titles such as ESG Analysts. As with all new industries these job titles are likely to change in the future so that ESG fades into the operational side of the business and ESG analysts become analysts. |
05. Analysis of the job market
Conducting an analysis of job roles including Data and Analytics and variations of these terms with the skill set sustainability (ESG is not a term available) amongst the LinkedIn community shows that the number of professionals listing this job title and skill set has risen by 15% in the last 12 months.
Hot spot locations globally include London and New York as the top locations for this talent. Followed by growth areas of Greater Sao Paulo and San Francisco Bay which have all grown between 10-12%. The most job postings were found in London, New York and Washington DC. Not surprisingly hiring demand is indicated as very high. The UK has mostly gained talent from the Netherlands and Paris and moves between Edinburgh and London were evenly split. New York mainly gained talent from Washington DC followed by San Francisco.
Gender splits with this skill set is markedly more balanced than data analyst roles not listing this skill set. In London 46% of the professionals listed identified as female and 54% as male, in New York 49% female to 51% male and in Washington the female to male ratio tipped in favour of females with 52% to 48% males.
Consultancies such as Deloitte were showing the highest growth number of professionals, having increased their workforce by 59% in this area over the last 12 months. Bloomberg have also been on a hiring drive, increasing their talent in this area by 91%. Kimley Horn, planning and design engineering consultants, have increased their sustainability data professionals by 93% in the last 12 months.
Analysts are by far the most prolific job titles, followed by data analysts but a growing number of data scientists are also being employed in this area and Senior Data Engineers grew by 84% in the last 12 months.
To back up the information above around financial services, the data shows that this sector grew its data teams (with sustainability as a skill) by 29% and computer software as an industry by 31%.
Looking at employer value propositions for this kind of talent, not surprisingly “good work life balance” and “a company with a purposeful mission” rank as the top two (63% and 51% respectively). “Colleagues and culture that inspire employees to do their best” ranked 3rd and “challenging work” came next. All of these ranked above “excellent compensation and benefits” which ranked 5th. “Inclusivity” ranked 6th. This snapshot of motivators for employees differs slightly when the skillset sustainability is taken out. “A company with a purposeful mission” ranks 10th when the skillset sustainability is removed. With “excellent compensation and benefits” ranking 2nd. “Inclusive workplace” ranked 14th so individuals working in data within the sustainability sector have very different views on what an employer must demonstrate in order to attract them.
In terms of where talent is flowing to and from. Managing consultancies are hiring mainly from higher education followed by IT and Services. Financial services are generally gaining talent from the IT and Services sector.
With regards to skills sets amongst this cohort, Python ranks highest at 29% followed by SQL and R. The fastest growing skill set is Power BI, Data Analytics and Agile Methodologies. My SQL also ranked with around 40% growth in the last 12 months.
In the UK, salaries for ESG analysts sit at an average of £53k, however on further investigation into ESG Analyst roles they can range right up into the high £100k’s so as always experience will help command higher salaries. In the United States Glassdoor cites the average ESG Data Analyst salary as $73,824 with a typical range of $65k-$91,390
If you are looking to hire data professionals to assist with business data around sustainability or ESG then focusing on the areas that attract these types of people will be of benefit. Take a look at your Employer Value Proposition and ensure that the areas discussed above around mission and values, life balance and inspiring team cultures are highlighted across the materials and channels you use to communicate with candidates. Champion those colleagues who are making a difference or who personally stand for innovation, wellbeing, green issues etc on your website for example, talk about your company’s mission or vision in these areas and what you are looking to achieve through the hire or growth of the data team.
For information on how KDR can help you to attract the right candidates to your data, technology or Analytics teams contact us at enquiries@kdrrecruitment.com or call +44(0) 1565 651 422.
