ESG (Environmental, social, and governance) Finance or Sustainable Financing has become a prominent regulator and change-making demarcator in the financial policy decisions of companies and banks across Asia since 2020. They are repeatedly making efforts to promote the development of green finance for a sustainable future. In comparison to 2019, cash flows into ESG investments saw a sharp increase in 2020 amid the Covid-19 pandemic in Asia and across the globe. The sustainable finance bonds reached an all-time annual record of $544.3 billion in 2020 and assets under management for ESG funds in Asia rose to more than $60 billion in end-December 2020, doubling that of 2019. The boom in ESG finance has also led to the creation of many job opportunities and turned it into Asia’s hottest job market.
According to the Asian Development Bank, investments in green infrastructure will generate more than 30 million jobs in Southeast Asia by 2030.
China has emerged as a pioneer in green finance. Industrial and Commercial Bank of China Ltd has formed a green finance committee to synchronise and systematise an ESG push in its corporate lending, global markets, and research divisions. Cohesive efforts are being taken by countries like China and Indonesia to implement environmental, social, and governance measures. One of the tasks is to resolve challenges arising from pay disparity and air pollution. The Covid-19 pandemic has also led to the realisation of the importance of inequalities and health issues.
The growing investment in ESG Credit across Asia has fuelled the need for qualified staff even though there is a dearth of expert professionals in this field. Arthur Leung, a financial services consultant at Hongkong-based leadership advisory firm Egon Zehnder said that clients do understand the scarcity of talent. Talent with a proven track record and relevant ESG experience in both private and public sectors is rare. He also added that they are highly motivated to pay for these ESG roles. Hiring political A-listers with green finance experience is also an extension of this policy.
Labelled as the biggest ESG bond arranger in Asia, HSBC intends to bolster its sustainable finance teams across key markets like Singapore, Hong Kong, mainland China, Malaysia, Australia, India, and Indonesia.
Professionals with P.hDs in physics and chemistry were recruited at Sumitomo Mitsui Trust Holdings Inc. The demand for ESG talent is so high in Japan that a person in an ESG role can earn as much as 20 million yen in base salaries compared to less than 10 million yen in a non-ESG role. The demand for ESG experience is also skyrocketing in rating companies, consulting firms, and manufacturers.
Westpac Banking Corp., Australia’s leading bank appointed a lawyer to look after the legalities related to human rights and modern slavery risks. Climate risk training will be provided to the bankers of National Australia Bank Ltd through its collaboration with Melbourne business school. ANZ has decided to increase its sustainable finance teams to 22 by announcing recruitments for three new roles. Members in the sustainable finance teams were just 7 in 2019. HSBC Holdings Plc Australia and New Zealand Banking Group Ltd are also hiring for sustainable finance jobs.
Many towering female leaders have also said that the expansions in the ESG jobs have also created innumerable demands and opportunities for women. Singapore authorities have built a green finance research and talent development center in late 2020. Oversea-Chinese Banking Corp. has made at least 50 internal and external hirings to increase sustainability-related jobs.
The Asian financial institutions have made several ESG recruitments but the demands remain intense due to the abject need for sustainability experts.