Cultivating ESG Talent in Higher Education

There’s plenty of ongoing debate around environmental, social, and governance (ESG) strategy, policy, reporting, investing, and ultimate impact. But a simple truth underscores all of the clamor: ESG is now an essential component of business and finance globally.?

And it isn’t going away.??

Dynamic markets create surges in demand for specialized talents. Right now, the market requires ESG skillsets and expertise. Business schools and universities must serve those needs.

How has higher education answered this call in the past?

In the middle of the Industrial Revolution, the world’s first business school, Ecole Spéciale de Commerce et d’Industrie, was founded in Paris. At the height of the Gilded Age, industrialist Joseph Wharton established the first American collegiate institution “specifically designed to prepare leaders for business” at the University of Pennsylvania. And at the dawn of the 20th Century, Harvard launched the first MBA program to educate “young people for a career in business, just as its medical school trained doctors and its law faculty trained lawyers.”

How can they answer the call for Environment, Social, and Governance Talent?

In our own age of digitalization and environmental change, it is only fitting that educational institutions once again evolve to prepare tomorrow’s leaders. Encouraging more ESG business implementation research, thesis development, rigorous training, and professional development avenues will build the skillsets required of the modern workforce — and of future captains of industry.

After almost a decade in academia (directing collegiate community affairs— had the opportunity to co-edit and author a book about it!) and now having led corporate responsibility and ESG divisions across four industries, I can affirm there’s an enormous opportunity for higher-education and industry to collaborate on developing a generation of energized students toward fulfilling careers in critically important ESG roles.

Here's a few practical approaches:

1. Utilizing existing tools

While international ESG policy, reporting requirements, and process integration continue to evolve, there are plenty of well-established resources for understanding baseline ESG principles, guidelines, and structuring methodologies and how they impact a variety of finance and industry functions.?

Business schools can ensure they are adequately incorporating practical ESG preparedness into educational programs by linking related curriculum to UN Sustainable Development Goals (SDGs), the CDP disclosure system, and ISO Global Reporting Initiative (GRI) guidelines, for example.?

2. Materiality assessment and stakeholder engagement training ?

Core to any ESG strategy or reporting program is the Materiality Assessment and Stakeholder engagement, which determines the environmental, social, and governance issues that are material to an organization and matter most to its stakeholders. Business students should be trained in the basics of conducting ESG materiality research and developing a clear vision for ESG. It can be done with a guided approach or imbedded with a business framework they are studying like six sigma's “5W1H”:?

• The Whos: Identifying and collecting input from key stakeholders (internal and external), which may include regulators, investors, finance teams, the C-suite, board members, customers, suppliers, and partners.
• The Whats: Developing a materiality map or matrix prioritizing the ESG issues that affect financial and operating performance within a selected type of organization. The Sustainability Accounting Standards Board (SASB) offers great materiality exploration resources for this pursuit.
• The Wheres: Demonstrating ESG acumen targeted to specific industries or finance specializations, including review of peer reporting, messaging, disclosures, and familiarity with a selection of relevant ESG ratings.
• The Whens: Incorporating past, present, and future ESG implementation projections into assessments with key performance indicators (KPIs) and timelines that address known or anticipated regulatory and/or internal policy compliance requirements.
• The Whys: Developing ESG policies, reporting criteria, and processes that map directly to business value and inform organizational strategy (an oft-missing component in many ESG materiality maps).
• The Hows: Understanding appropriate ESG reporting frameworks, and/or relevant industry-specific frameworks and standards, and basic aptitude with technologies that facilitate them.

Download Workiva’s free Interactive ESG: Materiality Assessment ebook for even more details on the process and targeting outcomes.

3. Well-rounded ESG experiential learning, active service, and internships

Opportunity for practical application and professional experience is the hallmark of superior business education programs. This applies especially to cultivating ESG talent — and it can manifest in surprisingly productive ways.?

Consider the multidisciplinary Energy Coalition at the University of Houston in Texas, which is the largest energy-focused student organization in the U.S. and actively partners with local oil and gas companies as well as renewable innovators. An overwhelming majority of University of Houston students are environmentally conscious and report that ESG priorities are integral to their employment decisions, but they are not turning away from difficult sustainability challenges or problematic sectors. Rather, they are engaging with industry, interning, and preparing to play a role in shaping the transition of energy in alignment with their values.?

Likewise, the Boston College Center for Corporate Citizenship offers networking and professional development opportunities and comprises thousands of corporate social responsibility (CSR) and sustainability professionals and researchers serving more than 500 companies from around the world. Arizona State University has the Global Institute of Sustainability and Innovation, focused on advancing sustainability education, research, and innovation in business practices. And The Wharton School, NYU Stern School of Business, and MIT Sloan (among others) have all launched well-regarded executive education programs devoted to ESG leadership training.?

Examples of ESG talent cultivation in practice

A valued contributor on Workiva’s ESG team with both business and sustainability expertise pursuing an advanced degree, Christine Zhang is a Master of Environmental Sustainability candidate at the University of Pennsylvania. She shared some of the positive ways Penn is accommodating her intellectual passion:

“My university provides a plethora of ESG-related courses to grow academically and professionally. If a particular interest is not met, then we can conduct research or explore that interest with a supporting professor through an independent study course. I have taken advantage of this by exploring carbon markets and GHG accounting. My university also equips and funds students to attend industry conferences, gain reporting certification, and engage with environmental issues in the community. Without these opportunities, I wouldn’t have grown into such an informed, conscious, and well-rounded sustainability professional.”

Drake University Dean of the College of Business and Public Administration Alejandro Hernandez offered these interesting thoughts about cultivating ESG talent in higher education:

“There is a deep need for professionals who do not just have domain expertise but also the skills and experience to interpret and respond to the heightened expectations that people and communities have for the private sector to take a leadership role in solving society’s most pressing issues.

The opportunity to generate purpose and prosperity is important here and now because trust in the private sector in 2022 is higher than trust in government, media, and nonprofits. As noted in the 2022 Edelman Trust Barometer, governments and the media are seen as divisive forces by many, while businesses and NGOs are looked at as unifying forces.

These perceptions and expectations make sense to me given that business leaders are pragmatic by nature; they are paid to create solutions that solve problems. Business schools are responding by embedding ESG learning, research, and outreach opportunities into their curriculums and programs. Catalyzing this work to prepare future leaders to innovate in a more complex, more global, and more challenging business environment is the recent introduction of a societal impact standard by the leading global accreditation body for business schools, the AACSB International.”

When Dean Hernandez supplied these comments, he just happened to be in Santiago, Chile, preparing to present on a similar theme at Drake’s partner institution Universidad de los Andes (UANDES). Interest in ESG education is global and resonates deeply. This energy was reflected in Workiva’s whole ESG summer intern cohort — a highly engaged group of young professionals representing a wide range of backgrounds and interests, all eager and motivated to dive in and master modern business responsibly.?

There’s a wealth of enthusiasm ready to be tapped. Well-rounded ESG talent development can and should extend into every facet of commerce, and business schools should also encourage desirable cross-disciplinary ESG specialization including:

• Data/Reporting
• Technology
• Asset Management
• Global Experiences
• Employee Programming/Training
• Sustainable Finance
• Responsible supply chain management

Lotti Hawkins, who heads Executive Search at Farrell Associates staffing mid-to-senior-level sustainable investing, ESG & impact roles for private markets in the US, UK, and Europe, just appeared on the ESG Talk video podcast. She specializes in supporting hires across the range of different asset classes including private equity, private debt, infrastructure and real estate, as well as the different types of investment strategy, including venture capital. Lotti noted that when it comes to experienced ESG business leaders right now, “there's obviously a small talent pool of these people around the world.” That means there’s a pressing need to get creative in encouraging more ESG talent development.

Bloomberg estimates ESG assets will surpass $50 trillion by 2025, accounting for a third of the projected total assets under management globally. It’s no wonder there’s been an “explosion” of interest in ESG-related management courses at top universities, according to The New York Times, which noted that the surge will reshape business school curriculums and “could ultimately have a significant impact on how businesses are run.”

You can listen to the full ESG talent conversation with Farrell Associates’ Lotti Hawkins on the ESG Talk video podcast in our latest episode, Building ESG Talent. And for projections on ESG’s focus in five years, check out the recent ESG Talk episode Driving Accountability for Financial and Social Impact featuring Sarah Chapman, Global Chief Sustainability Officer at Manulife.?

Subscribe to ESG Talk on YouTube, Apple Podcasts, Google Podcasts, or Spotify.?