The word ESG stands for “Environmental”, “Social” and “Governance”. The concept of ESG has assumed importance in recent times as “responsible investing” is gradually becoming the norm of the day. This means that the global investors are looking at “ESG frameworks” adopted by companies for investing. These include disclosure of data regarding environmental, social and governance aspects of business practices rather than looking at only profitability and valuation. This shift in approach in investing to look at “sustainability aspects” of a business enterprise is making companies seriously think to resort to best practices in these areas. This is recent development since the first mention of the word ESG in 2004 by the UN.

This development has, therefore, resulted in abundant enchantment in job opportunities for young people in the exciting areas related to ESG.

Major Job Profiles:

1.    Corporate Career: The large companies in all sectors are today employing ESG professionals who investigate the compliance as well as best practices in the areas related to the three components of ESG namely, environment, social and governance aspects of a company’s behavior. Section 134 (m) of The Companies Act 2013 mandates the companies to include report by BOD on energy conservation. Similarly, there are SEBI guidelines for top 150 listed companies for ESG reporting. ESG policy and framework have, therefore, becomes norm of the day by all companies; these primarily focus on the approach of a company towards environmental protection (including reduction in carbon emission), contribution to society and ethical governance standards. The ESG professionals look into all these aspects of a company. They are also responsible for accomplishing ESG goals of the company as well as ensure that proper reporting system is adhered to.

2.    ESG Analyst: This is the role on the other side. All equity research firms, large banks and investment companies have ESG analysts who assess adherence by the companies they are dealing with the mandates of ESG framework. As said earlier, this is a major parameter for investing and needs critical assessment. The ESG analysts are involved in the same. They are finally responsible for helping the investors to resort to “responsible investing”.

3.     ESG Consultants: The ESG professionals can start consulting outfits (entrepreneurial ventures) of their own to provide the needed services to the companies. There is an ever-increasing demand for the same.

Educational Qualification:

ESG contains three different but mutually associated concepts that finally impact “sustainability” of a business enterprise. Hence a student can do degrees that are associated with any of the three to enter the world of job opportunities in ESG. There are also specific certifications in all the three domains (environment, social sensitivity, and ethical governance) that a student can specialize in. Lots of practical insights are needed to become an expert in the areas of ESG and hence on-job-training provides the best opportunity. Students wanting to go up the ladder to occupy positions like “Chief Suitability Officer”, etc., need to do master’s degree and, if need be, doctoral degree.

Needed Competencies:

A high degree of problem-solving and critical thinking attitude is needed trait for these jobs. Students require to possess good analytical skills including number crunching. Many of the assignments involve interaction with different stakeholders and hence, proficiency in both oral as well as written communication, is essential.

Future Outlook:

Dr A K Sen Gupta is the Founder and Convener, Higher Education Forum (HEF). He is former Director of SIES College of Management Studies (SIESCOMS), Navi Mumbai and Bharatiya Vidya Bhavan’s S P Jain Institute of Management & Research (SPJIMR), Mumbai. He may be contacted at aksengupta51@gmail.com or 9821128103.