The dog has just caught the ESG freight train, but is now realizing that this poses a whole new set of challenges and possibilities.
Financial institutions and investors in the ESG investment space are scrambling to get talent on board as the rapidly growing base of environmental, social and governance assets is motivating companies to expand their workforce to meet investor demand. Driving the surge is not just traditional assets — equity and fixed income — but a whole range of asset categories from real estate to timber that suddenly have the ESG halo and appear appropriate for an ESG-focused investment approach.
Recent examples of the rapid growth in ESG talent include the private equity and alternative investment firm Blackstone Group Inc. continuing to build out its corporate ESG capabilities with the creation of five managing director positions across the U.S., Europe and Asia. Even more dramatically, in June 2021, PwC announced it would invest $12 billion over five years to create 100,000 new jobs aimed at helping its clients grapple with climate and diversity reporting. The new hires would eventually make up about a quarter of PwC's workforce.
Part and parcel with gathering troves of new assets for ESG investment is hiring and retaining top ESG investment talent to manage those assets. As if that wasn't enough, companies are also striving to increase the gender diversity and ethnic minority representation of their workforce. A large part of the push is coming from generationally more diverse millennials, who are now the largest demographic in the U.S. labor force, and Gen Z looking to work for companies that reflect their demands for diversity and equity. Those that ignore this express train will be swept away like deer caught in the headlights.