DID THE COP26 UN CLIMATE CHANGE CONFERENCE PROVIDE ADEQUATE SOLUTIONS?

Did the COP26 UN Climate Change Conference provide adequate solutions or simply raise more questions in relation to solving climate change?

IGA Talent Solutions caught up with our Consultant, Oliver Clark who specialises in recruiting for UK and international investment markets with mandates on Environmental, Social and Governance (ESG) to get his unique insight into the outcomes of COP26.

What are the current challenges from an ESG / climate change point of view?

There are several very complicated challenges facing the world now with regards to tackling climate change. Some elements you cannot change, such as overpopulation and reducing the emission of greenhouse gases around the world, however there are some challenges that the world can look at and work towards a solution.

Firstly, there is no universal and clear framework to really measure key ESG principles and if the actions taking place are truly influencing climate change. Around the world to date a lot of capital has been invested into research and development of technology to tackle climate change, such as becoming more reliable on renewable energy sources like Wind Turbines or Solar PV. However, there are no metrics in place showcasing how much of an impact renewable energy is having. Implementation of a clear framework would make sure the capital being deployed is spent in the right areas and is having a true impact on climate change. This might also lead to further capital being deployed in an attempt to tackle climate change as investors will have a clearer picture of how the capital they are investing is having an impact, besides seeing risk and return levels.

Secondly, there is a great divide between global leaders on target solutions to tackle climate change such as prevention of deforestation, methane pollution, greenhouse gas emissions and moving to electric vehicles. Leaders are currently divided when it comes to committing to certain targets and initiatives outlined at COP meetings. Such a large division between global leaders will mean that whilst some countries will make serious strides in tackling climate change, others will continue to have a negative effect on progress, decreasing the overall impact of global climate change initiatives.?

What do you think are the key issues, challenges and opportunities that have come out of COP 26?

Following on from COP26 there have been a number of commitments to try and tackle the climate crisis by global leaders including deployment of capital, implementation of a single sustainability standards framework, halting of deforestation and the methane pledge. One of the issues raised by several critics is that some world leaders have committed in the past to a number of policies to tackle climate changes by signing declarations, but little to no change has been evidenced since the last summit. As António Guterres, Secretary-General of the UN has said, “signing the declaration is the easy part, it’s essential that it is implemented now, for people and the planet". Moving forward from COP26 it will be interesting to see how different countries demonstrate the commitments they have made at the conference.

In relation to the requirement to establish a clear framework to measure key ESG principles, the IFRS Foundation has established an International Sustainability Standards Board (ISSB) which presents a great opportunity to oversee the development of a baseline sustainability disclosure framework. This will mean that the information provided by firms is comparable across industries and financial markets and will provide investors with a set of high-quality, transparent and comparable statistics to measure the sustainability of firms. Meeting certain ESG principles will be comparable to financial statements which indicate liability and return levels. A sustainability framework will also help to tackle corporate greenwashing of ESG risks and help investors to reach their sustainability objectives by making sure capital is deployed in the right way to truly tackle climate change.

How are these challenges impacting your clients?

The big change over recent years is that several our clients are needing to have some form of ESG offering or be more transparent on how their investments are influencing ESG principles. This in turn has led to the growth of ESG specific departments within consultancies, developers and investment managers looking at either the implementation of policies, developing papers on ESG principles or papers on how a given investment manager is performing against ESG metrics.

Several of the consultancies that we work with need to be more conscious of integrating ESG principles into the solutions they provide to investments such as Defined Benefit Pension Schemes. This could be through the selection of fund managers to looking at how schemes can effectively integrate into their investment strategies. Investment Managers need to be more transparent on how the investment portfolio is impacting certain ESG principles.?

What solutions do you offer to your clients?

Within IGA Talent Solutions we source and secure the best possible talent for our clients that enriches brands and positively impacts business performance. At heart, our business is people and we pride ourselves in the relationships we nurture with our clients, our candidates and within our own team. Clients often come to us for our service-centric approach, market knowledge and detail orientated style, ensuring we deeply understand their requirements from both a skill-set and cultural perspective.

We specialise in placing mid-senior level candidates across the UK and international investment markets across the following functions: Investments, including M&A Buy-side and Sell-side, Project/Structure Finance, Capital Raising, ESG (Strategy and Policy Making), Investment Strategy, Manager Research and Asset Management. Partnering with a mixture of consulting firms, asset managers, PE houses, Pension Funds, and Infrastructure boutiques, often on mandates with a Sustainability or ESG leaning.

What opportunities are there in the market?

With a greater focus on tackling climate change globally in recent years, new roles are becoming available that have a Sustainability/ESG leaning for candidates, which is an exciting opportunity for candidates to play an active role in pushing forward to a more sustainable world.

The biggest change, as mentioned above is to do with ESG research, policy making and reporting, where more businesses from a principal or consultancy compacity need to provide investors with transparent information on what the key topics of ESG are and how given investment strategies/investment managers are performing against key metrics. Therefore, more opportunities across research, strategy/policy making and reporting need to be filled to support with transparency of ESG matters to the outside world and implementation of key principles moving forward.

More opportunities for investment managers are opening up within the Clean Tech space, looking at developing markets. It is not just developed economies that are investing heavily in Clean Tech as there is also a serious push across developing parts of Asia and Africa. Renewable energy projects such as Solar PV or Onshore Wind are either currently being built or are already operational across these two continents. There are more opportunities for candidates with strong backgrounds across Capital Raising, Project/Structured Finance and M&A within developing markets to move away from Infrastructure or Conventional Power to more sustainable investing, such as water treatment or renewables.

Where do you see the industry heading in the next 2-5 years?

With there being such a big push towards a more sustainable world and the tackling of climate change, I believe there will continue to be growth in the market as more ESG centric roles become available relating to policy making, strategy, reporting or pure investment roles. We can already see a big shift in the investment world as candidates are looking for an ESG/Sustainability angle in their new roles and clients are adapting their role requirements to focus more on ESG and sustainability factors.

Our understanding of key ESG principles and metrics is always growing and changing due to more research and data becoming available. I believe this will lead to the creation of new types of roles within investment markets to tackle new aspects of ESG as they develop. There will also be greater evolution of different forms of Clean Tech moving forward, which will open new areas for investment or to measure ESG principles/metrics against.

How are market conditions impacting talent acquisition?

I believe there is an even push from candidates and clients looking for ESG/Sustainable aspects to a given role across different functions. This is mostly due to there being a greater push by everyone wanting to be a part of the transition to a more sustainable world, but also realising you can get good returns with lower risk than first expected. For example, investing into renewable tech can generate strong returns at lower risk.

I also believe there is an increase in the variety of roles available in the current market compared to a year ago as more reporting and policy making roles are being created. More individuals can now move into a role with a Sustainability/ESG leaning as more skill sets are becoming transferable.

Oliver specialises in placing mid-senior level candidates, across the UK and international investment markets. His clients are a mixture of consulting firms, asset managers, PE houses, pension funds, and infrastructure boutiques, often on mandates with an ESG leaning. Investors are increasingly applying non-financial factors as part of their analyses when identifying material risks and growth opportunities.

Before joining IGA, Oliver specialised in the sustainability sector for an international executive search firm, placing candidates in several countries.

If you would like to discuss your recruitment requirements with Oliver, please contact him at [email protected] He would love to hear from you!