The Plagues of an ESG Career

Saving the company, the world, and its people is undervalued

This one is going to hurt, but I have turned comments on if anyone feels like sharing their story!

As you might imagine, I talk to many people about ESG. Often, the conversations turn to careers. I hear from people in this field with decades of experience to those new responsibilities have been thrust upon to those looking to break into the space. The latter group is always curious about how I did it (hint: it was from my time in Capital Markets at Microsoft).

These career discussions come at a unique time for this topic. Despite the ridiculous anti-ESG pushback in the US, ESG jobs are growing. Four of the top ten LinkedIn Jobs on the Rise for 2024 relate to ESG:

With these jobs growing, there should be enough opportunity to satisfy everyone looking for meaning in their work, right? Well, not quite.

In my conversations, I could tell that something was off. Experienced ESG professionals were disenfranchised and fleeing corporate jobs from companies with what appeared to be great ESG programs. Those looking to break into the space were finding misaligned roles with what they were looking for and that there weren’t enough jobs to go around. These observations led me to ask my LinkedIn network their thoughts about what is going on.

The question reminds me of a quote from the mentor character in The Matrix, Morpheus, who tells Neo:

“What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world. You don’t know what it is, but it’s there, like a splinter in your mind, driving you mad.” – Morpheus (from The Matrix)

Maybe “your entire life” is a little much, as is how the quote ends, but it isn’t far off. As intangibles, globalization, and interconnected risks have increased, the nature of disruption has changed. Yet, for those working in this space, other factors have changed the meaning of work and influenced the work itself. And so, my LinkedIn question got over 5,600 views, and people messaged me to share their experiences.

What follows is an aggregation of their feedback and insights, my observations from previous conversations, and a little wild speculation. Thank you to all who reached out!

It started with purpose, but then…

People have worked on ESG-related issues for a lot longer than I have. I’ve heard that this work has never been particularly lucrative but, over time, has offered them financial stability and rewards in other ways, like aligning with their purpose and affording them the chance to do meaningful work.

You can see this alignment in a recent post by Mike Hower of Hower Impact. Mike asked a simple question:
Why do you / do you want to work in corporate sustainability?

The answers contain words and phrases about people, change, impact, belief, and love. For many, this career path is a quest to find meaning in their work.

But things have changed dramatically over the past few years, creating new opportunities with the potential to meet this purpose in the explosion of corporate and government attention to ESG. Still, it quickly morphed into something else entirely.

Let’s look at the recent history of how we got here.

First, attention to ESG grew in the mid to late 2010s. There were a few reasons for this, including that financial services firms attempted to capitalize on new waves of shifting social sentiment, Larry Fink addressed the issue directly in his CEO letters, and the Business Roundtable moved towards stakeholders. Second, as new financial products were created to capture this attention, new regulations emerged around creating comparable datasets from corporates.

These forces kicked off the modern ESG-related roles in business, which are growing, per the LinkedIn Jobs on the Rise report. But something else happened. Those working in this space found their meaningful work quickly lost ground to a wave of painful disclosures and endless supplier surveys. As a result, the outcomes were lost.

Against this backdrop are continued pressures that demand purposeful action, renewing the world’s attention to long-standing challenges that were ignored and new global risks. Extreme weather events crept into the Global North at pace, revealing the changes the Global South has long witnessed. The world struggled to care for each other, our loved ones, and co-workers through a global pandemic. Of course, here in the US, social justice took center stage after the murder of George Floyd. As the world continues with new geo-political tensions and war, more people search for meaning in their work.

The jobs are there, but the meaning, purposeful outcomes, or even intentional outcomes that protect company value, are missing.

The current state of corporate ESG

In discussions and hearing from my LinkedIn contacts, there are many problems out there in the corporate world around ESG work, but what I’ve called The Great Disclosening is playing a much more significant role than I thought.

Again, there is certainly no shortage of job postings, but a quick search shows that many roles focus on the reporting aspect, not purpose or outcomes. This is matched with a wave of interest from purpose-filled candidates who see more in the jobs than may be there. I talked to one hiring manager recently who said they had over 800 qualified candidates for a role, not including the entirety of applicants.

What these job seekers often find, is that the path others have forged is now full of disillusionment and disappointment.

The push for standards and compliance has refocused some corporate efforts entirely. While I have long observed this was getting in the way of intentional outcomes, I had no idea how pervasive the issue is, as this theme came up repeatedly from industry veterans. This new disclosure pressure is unproductive since management teams are leading with the disclosures, and little else. When companies are hit with regulations requesting comparable information to support financial products, the result will be comparable data, not action.

This leads to employee burnout quickly. Companies have structures to prevent data from being centrally analyzed and processes from being questioned and scrutinized. These roles are like being an accountant, seeing a massive error that could be corrected, and being told not to worry about it. In one case, when the inaction was uncovered and changes were suggested to improve outcomes, there was a backlash from leadership. As that same person looked around at other companies, they found that many were only doing about one-third of what they promised.

The business value of required reporting is at the crux of the issue, as compliance is of lower value than inaction in favor of reporting or creating opportunities. As a result, the job market is misaligned with applicant desire. The business value of disclosure data is too often overlooked and not matched with ESG-related expertise or those willing to engage. Industry veterans are not finding jobs to match their skills; there are only jobs for those who understand alphabet soup. When excited people get an interview with a company that looks good on paper, with their glossy CSR reports, they find nothing more than over-exaggerations. In one person’s words, “window dressing over substance.”

Some of the greenwashing may be an intentional balance around stakeholders. One person shared that companies are balancing what to do and what not to do, as they have all kinds of different stakeholders, including those in ‘big bad’ industries. Admittedly, this is ESG, yet taking no action serves no stakeholder. Following required reporting with little action might appear like the best path forward, but ultimately, it will lead to risk and missed opportunities. Even those ‘big bad’ industries, which might be your company’s stakeholders, will eventually have to change. That’s what transition risk is all about. The longer you wait, the more difficult the change will be.

It gets even worse as companies are inconsistent with their purpose. They may tout their ESG-related work but then pivot to Return To Office (RTO) too early, conduct massive layoffs while growing profits, and engage in greenwashing. What people are telling me is that these inconsistencies are not going unnoticed, leading to disillusionment.

Depth skills give way to breadth

Similar to the SOX regulations in the US from the early 2000s (a Governance rule), companies are doing the bare minimum and favoring breadth over depth, and it shows.

Job seekers are particularly frustrated with corporate recruiters, who appear to hold up a mirror to the company. Some companies are diffusing the topic without expertise, but breadth without depth is watering down the result. One recruiter balked at an applicant’s lack of TCFD experience, but then the recruit explained that they spelled the acronym out on their application. A few years ago, I heard a similar refrain about the acronyms from another contact. If the gatekeepers don’t know what they’re looking for, can the company leadership be much ahead?

This diffusion of ESG and evidence of its missing quality might point to an early end of Sustainability Analysts and their ESG ilk:

1. HR (and, by connection, the company) does not understand these roles and, therefore, cannot find value in them. Nor are they interested in the value.

2. This diffusion might be ‘good enough’ for reporting but not enough to engage in the meaningful work of change.

These truths result in other effects. When ESG roles make it to the VP and C-Suite level, the pay is not commensurate with their peers. Like many senior positions, these roles reach across the business, but often, senior ESG staff are put into siloes without the agency or reach across the organization to achieve change. I’d suspect that due to the ‘good enough’ understanding by the board and limited responsibilities for reporting, the pay simply doesn’t match. Yet, someone else had a different perspective, which is worth considering.

Sustainability Analysts and those working in DEI lead with purpose and care. Industries with ‘care workers,’ like healthcare and education, sometimes exploit those workers due to their purpose-driven nature. This pain was particularly present during the pandemic as the world asked essential workers to risk their lives to serve. ESG-related fields, often dealing in non-financial matters, aren’t necessarily being asked to risk their lives. Still, companies are taking advantage of this purpose to get some value, in this case, regulatory compliance, at a low salary.

I couldn’t resist making this meme.

It comes to the skills and their value. At one point in my upcoming book, I argue that there is a need for domain expertise in companies. A company cannot deliver short-term projects and long-term value without domain expertise. Diffusion of these topics is needed, but you can’t extend the breadth without keeping the depth, but if reporting is the goal, these skills aren’t required. So, what are companies doing actually?

Well, you probably already can guess the answer.

The majority of boards don’t realize the value of ESG (only 45% do) and certainly don’t (at 11%) think having deep expertise on the board is worth it (Source: PwC). And so, high-level, breadth skills are cultivated around this topic instead of the deep expertise companies need to transform and deal with transition risk and drive change. While I agree that not every management team member needs to understand ESG issues in depth, domain expertise is required to internalize and implement projects at the material intersection of the company, as one person wrote.

In other words, a certain amount of high-level diffusion is happening around this topic throughout companies without the expertise to execute against it. Who needs a Sustainability Analyst when all they are doing is reporting, and enough business people at the company understand the topic ‘good enough?’

Companies are missing out on the greatest opportunity

Meanwhile, companies are failing to capitalize on their biggest asset - purpose-filled employees who understand the business.

This comes out in the size of ESG-related teams. While there are a lot of ESG jobs out there, another challenge is that advancement isn’t available because ESG-related teams just aren’t that big and may even be shrinking as reporting becomes the focus. This means those with existing business expertise, who are now filled with purpose and can learn, have little chance to get in. Again, they might not like what they find even if they get the opportunity.

Industry veterans are sidestepping this evolution, vacating corporate jobs, and striking out on their own to focus on the outcomes as they see fit with clients they can choose. There are a few benefits, one of which is what those intentionally greenwashing can’t engage in - the ability to speak out and drive change or even new perspectives in public-private partnerships through an ‘insider’s perspective.’

On the other hand, it can be lucrative for some to focus on reporting. One consulting firm shared that most of their ESG income comes from reporting engagements. Still, reporting alone isn’t going to lead to action magically and certainly doesn’t solve the biggest opportunity companies miss: Consider how a company could execute against its company’s most pressing challenges if these passionate employees were paired with the depth of expertise, budget, and company endorsement.

A little on what to do

So, despite all the negative issues plaguing those in the ESG-related professions, I want to leave you with some hope.

Suppose you find yourself pursuing a career in this space or feeling dejected. In that case, I encourage you to learn about another 2024 trend, quiet thriving, a term coined by psychotherapist Lesley Alderman in the Washington Post. Unlike quiet quitting, you don’t give up but change your mindset to feel more engaged. In reading it, it sounds similar to the stretch projects that put me on the career path I’m currently on.

Take all of Alderman’s advice, but pivot three of the steps slightly:

• Advocate for a cause: Find the intersection of your purpose with your work and follow it.

• Craft your job: Build on advocacy and materiality to make the business case that your idea or new role should be pursued. Amplify that there is a connection to the business with your idea to show value.

• Seek expert advice: Here, find the depth ESG expert on the topic, maybe someone who has struck out on their own. You might be able to help them align with your new idea and their purpose.

Look, I believe everyone has unique intersections with this topic and that everyone can find purpose and meaning in their work with little passion projects or by integrating ESG into their work, which shows business value.

The ESG field has taken a few steps back as regulations progress, so be wary. Even those in supporting roles, who might be looking to find purpose at the intersection of their work, may find it just doesn’t exist at their company. Still, if your management team isn’t supportive, no amount of ambition will move the needle unless you can prove business value. That might take time and small wins.

Just remember, the world is full of threats that ESG can help mitigate, and no CSR report will shield a company from those threats, no matter how thick it is.
👆This is your opportunity to capture!

If you have a receptive management team, try quiet thriving and finding those unique intersections. If not, it might be time to jump ship, which is an ESG issue for your company, involving a key stakeholder, its employees.

If you end up leading with business value and pursuading the management team to address ESG issues, you might find yourself a new spot in the number one LinkedIn Job on the Rise. Good luck!