Green is the New Gold: Ready for the ESG talent treasure hunt?

In a dynamic and ever-evolving landscape of contemporary business, the significance of Environmental, Social, and Governance (ESG) considerations has reached unprecedented heights. Beyond being viewed as a moral imperative, research indicates that sustainable business practices also strongly correlate with financial performance. Additionally, policymakers are increasingly incorporating ESG goals and policies into their legislative frameworks, e.g., corporate sustainability reporting in the EU came into effect in 2023 . Hence, it becomes imperative for companies to scrutinize not only the stated ambitions but also the capabilities of the workforce tasked with bringing these aspirations to fruition. However, companies find it very difficult .

ESG talent gap challenging:

Our comprehensive analysis of job posting data reveals a staggering growth in the number of postings related to ESG, surging more than 10 times since 2019. While this points to heightened industry awareness and commitment to ESG, an intriguing observation emerges - with more openings, it takes, on average, longer to fill these roles. Until last year, the percentage of postings filled has been decreasing, signaling a challenging trend in the labor market (note that the percentage for 2023 is naturally down as it is still the filling period for November and December postings). This trend indicates that the industry is experiencing a growing talent gap, making it increasingly challenging and time-consuming to secure professionals with the necessary skills and expertise to drive ESG initiatives.

When we look at different sectors, while ESG issues first gained particular attention from would-be investors and stakeholders in significant projects and capital raises, ESG considerations have garnered equal importance among consumers, influencing their purchasing decisions for ethical reasons . Consequently, consumer-facing businesses are placing an increasing emphasis on ESG. To guide companies through the intricate terrain of the ESG workforce, this thought leadership piece, enriched with insights from Aura, delves into the dynamics of the ESG talent pool within the CPG sector. It aims to dispel myths surrounding the current presence of the ESG workforce, shedding light on the sources and backgrounds of their talents among leading players in the industry.

Decomposing the ESG Workforce

What is the current landscape?

While there has been a noticeable surge in the size of ESG teams within leading CPG companies, recent data reveals that the proportion of ESG-related positions remains below 1%. This statistic stands in stark contrast to other supporting functions, such as Human Resources and Finance. As the industry navigates the path to ESG compliance, it raises concerns about the adequacy and readiness of the workforce to meet the impending challenges.

Where are they based?

Notably, the majority of ESG professionals are based in the United States, the United Kingdom, Pakistan, and India. This distribution reflects the global nature of ESG concerns and highlights the need for a diverse and inclusive workforce to address multifaceted challenges.

What is their background?

The analysis reveals that individuals with backgrounds in Management and Engineering dominate the ESG workforce. This trend underscores the interdisciplinary nature of ESG responsibilities, requiring a blend of strategic thinking and technical expertise to navigate the complex landscape of sustainability.

Most ESG professionals in the CPG industry come from other multinational corporations (MNCs). This indicates a trend of cross-industry knowledge transfer, fostering a collaborative approach to addressing ESG challenges. The second largest source of talent is academia and other research institutes, which highlights the technical nature of ESG-related issues and the need for topic expertise to fulfill the responsibilities.

Are we seeing any trends in growth?

While the ESG workforce has experienced robust growth over the past decade, especially in 2021, there is a discernible deceleration in this trend since 2022. This nuanced analysis highlights the importance of adapting workforce strategies to ensure continued momentum in the face of evolving ESG challenges.

The rapid expansion of ESG teams in 2021 reflects heightened industry awareness of the importance of sustainability and ethical governance. Companies recognized the need to prioritize ESG considerations, increasing their investment in specialized roles to address these complex issues. However, the deceleration in growth from 2022 suggests a potential plateau in the integration of ESG roles within organizational structures and tightened financial budgets.

Provoking Considerations for the ESG Journey

As the clock ticks down to the 2030 ESG targets, the urgency of evaluating and enhancing the ESG workforce is not exclusive to the CPG industry; it is a mandate for all. This analysis raises three pivotal questions that demand contemplation from business leaders:

1. Finding ESG talent is a time-intensive endeavor. Is your existing workforce adequately equipped to drive your ESG goals forward, or is there a need for strategic reskilling and upskilling initiatives to meet the impending challenges?
2. Talent does not have to be local. Considering the global nature of ESG concerns, have you strategically factored in the geographic distribution of this talent in shaping your recruitment strategy?
3. ESG is not just about talking. When evaluating candidates for senior roles, are you taking into account the technical nuances of the ESG landscape?

At Aura, we support this type of analysis by making workforce data readily available, enabling comparison of relevant metrics between cohorts of companies and candidates to develop a deeper understanding of workforce trends and drive meaningful change.

Loved reading this? Subscribe to Aura's Newsletter and get the latest on workforce around the globe! Check https://getaura.ai

Yuqing Coco Fu, Growth and Insights Manager, Aura

Note: All information mentioned in this report comes from publicly available data; if you believe the information on your company is incorrect, please reach out to us at [email protected] .