Skilling up an army of ESG talents

Sustainability has been rapidly mainstreaming in recent years. This week, the scene was feverish - with Ecosperity anchoring as the platform for the who's who in the business, finance, policy and innovation world to congregate and take the big, hairy, audacious sustainability goals to the fore.

One which I think is going to game-change industries will be this: the Monetary Authority of Singapore's massive push to upskill an entire workforce on sustainable finance skills. Word has it that 90% of finance jobs in Singapore will be, if not already disrupted by environment and social regulations kicking in. #ESG rolls of the tongue better than sustainability has ever done. Even in China, who also meanwhile announced mandatory ESG disclosure for listed companies, with the Shanghai Stock Exchange paving the way to clearer guidelines just this week.

My personal take on Asia's developments in the space of skilling up ESG talents:

• The climate perception gap: There is a need to make a clear connection between climate change --> action and the movement of people taking ESG / sustainability as an important career development. Stats have shown that more than 60% of people in Asia agree that climate change is a global emergency, yet most of my peers in corporate functions have not bought into sustainability. Probably because the problem of climate still seem too big/too far away, while there is still debate going on as to whether ESG is fluff or not. The role of mainstream media is critical in this case, but a consistent effort is needed to strengthen the ESG narrative making an actual difference in climate action, instead of tearing it down.
• Non-strategic focus: Roles in ESG within Asian companies are still cornered into one or two departments, mainly Communications and Risk & Legal Compliance. While this is expected, it needs to progress quickly to the core departments gatekeeping relevant policies and financial data. These are likely to be finance, legal, HR, operations and corporate strategy. Internal Audits now have the unenviable role of taking on ESG reporting review before third party audits are commissioned. Imagine the daunting task of dotting the 'i's and crossing the 't's without a full sustainability roadmap.
• The innovation piece is missing, and integrated thinking is needed - For the longest time, innovation has been also disconnected from sustainability management. This is not surprising - given the compliance nature of ESG today. However, the forward-thinking organisations have made the connection quickly, and are running with it right from the corporate strategic planning. This aligns with decarbonisation plans, circularity plans, social innovation partners. This is where integrated thinking needs to be fostered - corporate culture shaping the acceptance of ESG as part of many many roles in the organisation, and finding solutions that could fit the complex climate puzzle for the company.
• The Sales piece needs more than a crash course on Coursera: Linked to the earlier point on innovation, is the business development potential of ESG. The potential for sales teams everywhere to market new sustainability features and solutions growing rapidly. From advisory, to software and fintech, to certifications - Asia's consulting market itself is growing at 17% annually, I believe this will double easily very soon. From the requests we've received to train up sales teams, one thing is clear - Sales needs to understand how the company's new solutions is really helping solve a headache of their customer. For example, selling an ESG reporting platform with new added GHG emissions calculators isn't just about reporting. It is about enabling a series of events downstream in an industry's value chain. Understanding GHG Protocol would therefore be key, because this unlocks a whole other potential on ESG-tightened procurement standards.
• HR has untapped potential to be driving this - from an organisational development, learning, talent development, and for companies in the frontlines of climate action - executive compensation. If every Learning head were to see the current skills gap across the business units because of the lack of understanding of the gravity of Net Zero targets or even ESG reporting compliance, they would very likely prioritise the need to start mapping out the skills required. The alternative is to have expensive strategy consultants come in to plug the gaps with limited traction after.
• Getting the board on board cannot be understated. On this point, a leaf should be taken out of SGX RegCo's book when they stipulated in 2021 that all Directors of listed boards need to receive mandatory sustainability training. To me, it was not a stick approach, but an order! But witnessing the impact three years on, Directors are not only better tuned with climate risk issues, they are eager to invest in longer-term solutions. Directors now understand that it's in their fiduciary duty to do so.
• Legal implications: Climate litigation is unlikely to substantially take root in Asian markets. But what we're likely to see a tsunami of legal activity taking shape - from legal clauses being added into investment contracts, the legal impact of treaties on pollution (plastic, e-waste) to Article 6 agreements on the carbon markets. I am anticipating a surge in ESG-trained legal professionals to be in demand, and supporting a flourishing market of new environmental and social corporate finance cases.

Sitting where I am - at the intersection of media and corporate sustainability in Singapore and Beijing - I feel very excited about the opportunity to really change this space. 10 years ago as regional Director of a sustainability consultancy, the one industry which I had zero entry point to was the financial industry. No Asian financial institution had a sustainability report, let alone a Net Zero ambition.

Yet today, the financial industry is at the forefront of all of this. Some may say it is driven by the central bank's activity. In my humble opinion, yes and no. MAS saw the sheer size of problem, understood the climate risk implications within its own shores, made sense of Singapore's ability to move capital and influence non-financial industries, set its own boundaries, and drew up a clear blueprint to stage out its long-term vision. But the financial institutions themselves have asset owners, and customers who have fresh demands, and climate risk (thanks to TCFD) is fast becoming a common language for finance.

Singapore won't solve climate change, but it will be an inspiration for economies and policy makers looking for benchmarks and best practices.

There is alot to do to skill up a nation of people, and I am proud that Singapore has never been afraid of its 'tiny dot' proportion, but instead harnessed its own strength to move mountains.