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ESG and sustainability in the finance industry
What observations has Odin Partners made in market in relation to ESG?
In order for banks to benefit from areas such as sustainable finance, and to garner public support, having an ESG policy and stance is becoming increasingly important. It is also a way of attracting talent and changing the reputation of the financial services industry. There is sense that banks have a responsibility to focus on ESG and lead from the front, we have observed this from our clients and the sector, globally. As a result, ESG is becoming increasingly embedded within the strategy of banks and in order to grow and transform, we expect this to continue to be important.
To what extent do candidates express an interest in roles with an ESG focus?
Anecdotaly – among younger candidates, there is an emphasis on picking your employer based on factors outside of compensation. In such cases, candidates review the brand in its totality including CSR values. ESG is key to banks making themselves employers of choice. This is especially important for clients when looking to recruit from a (relatively) small pool of promising junior candidates looking to build a career in finance.
What examples of leadership has Odin Partners observed in the finance sector in relation to ESG?
There are multiple initiatives being rolled out and most institutions are now implementing and advancing their stance on sustainability. Even though the industry has a long way to go in terms of ESG, there are some exciting changes happening and some banks are leading the way by establishing clear policies and creating new opportunities for staff. This includes getting involved in community sustainability projects, campaigning against social injustices and investing in renewable energy.
How can candidates be better prepared for interview questions that may touch on ESG?
Candidates shouldn’t be afraid to ask more about ESG in the recruitment process. Doing some due diligene and research beforehand may help them to feel more informed and get a better feel for the bank. Being an expert in ESG is by no means a requirement, but even showing a general interest can help to establish a broader dialogue of substance. As recruiters, we ensure candidates are extremely well briefed for the roles they are preparing to apply for.
How does Odin Partners expect the banking recruitment landscape to be influenced by ESG over the next 5 years?
This will be an increasingly important topic and in order to stay competitive in the market, banks will likely need to highlight their ESG activity in order to attract talent. A need for experts within ESG will likely see more roles open up in the financial sector and some of the biggest banks are now growing their ESG advisory capabilities. As a result, business models and organizational structures may shift as banks start thinking about their longer-term recruitment needs. Considering sustainability, there are a wide range of investment opportunities in the community. Many global fund buyers believe that all funds will incorporate ESG within the next 5 years.
Thank you for reading this blog by Odin Partners. You may also be interested in Diversity and Inclusion in banking.