When it comes to work, what's your purpose?
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When it comes to work, what's your purpose?
Opportunities in layoffs and the sustainability and ESG talent gap
Oof! It has been a couple of weeks. If you read my newsletter regularly or follow me on LinkedIn, you know I work for Microsoft. Over the past few weeks, companies across industries, including Big Tech and Microsoft, have experienced massive layoffs after a period of unprecedented growth and hiring. While I’ve been fortunate not to have been directly impacted, I’ve lost a lot of talented colleagues over the past few weeks. If LinkedIn is any indication, I’m not alone.
The other thing you likely know about me by now is that I see ESG everywhere. So, today, I wanted to touch on the layoffs and the job opportunities at the intersection of purpose, sustainability, and ESG.
No one inspires purpose like Big Tech, but…
For the past few years, Big Tech companies have been the darlings of the markets for their approach to E, S, and G issues that drive their impact on the world. These companies are among the few who can make bold, ambitious commitments and deliver on them, inspiring others to follow. There are two reasons for this. First, Big Tech is obviously built on technology, which is all about change and progress. This mindset is needed to deal with the shift to address global challenges. Second, Big Tech companies have also enjoyed a boon as the Fourth Industrial Revolution took off, which helps fund efforts that do well by doing good.
NOTE: I know. Doing well by doing good is not ESG, but stay with me.
Since I’m so close to this industry, I’ll leave it to you, dear reader, to draw conclusions and opinions about Big Tech companies and their intersection with ESG. I will state that each has similar and vastly different material ESG issues to consider but also espouses unique cultures centered around purpose.
Here’s where it gets tricky. If done with authenticity and consistency, purpose can drive talent acquisition and retention, which is material and ESG. It is grounded in how a company approaches its stakeholders and the tables stakes of E, S, and G issues. In other words, is the company trying to save the world? Do they foster pay and racial equity? Is the board consistent and acting ethically? Activities like these can create purpose, drive culture, and deliver material benefits for those looking for it. So, when a company is built on purpose and layoffs occur, it can demoralize and break employee trust.
This past week, Dr. Dorothea Baur, a thought leader in ethics and technology, spoke about this. I included a snippet below, but she goes deeper in the interview’s second half, which is worth a watch.
To massage Dr. Baur’s point, if you lead with purpose and ethics, you must treat your stakeholders, those leaving and those remaining, the same way. In this way, layoffs are intersectional between the S and the G because they impact one of your most important stakeholder groups (employees), can affect the perception of other stakeholder groups (prospective employees and customers), and represent a massive Governance challenge that results in stakeholder (investor) questions about how you got here in the first place and what you are doing about it.
And so, we arrive back at Big Tech being the ESG darlings of the market. ESG is focused on long-term resilience, but that doesn’t mean consistent year-over-year growth is a guarantee or that your investment thesis will consistently outperform. No one will get ESG or their core business issues 100% right 100% of the time, nor is ESG the only factor in the decision-making process. Still, how boards and corporate leaders understand ESG and their market pressures speak volumes. What comes next can carry that purpose forward with thoughtful action or erode it instantly with rash decisions and inconsistent employee experiences.
This issue certainly isn’t unique to Big Tech. Even your mayonnaise can have a purpose, after all. During these challenging times, every company laying off workers has an opportunity to reinforce its ethics and purpose, allowing them to be consistent and maintain trust.
Can sustainability and ESG careers weather the storm?
So, what are employees filled with purpose left to do? As it turns out, sustainability and ESG jobs might be one answer. So, let’s look at sustainability first.
A new wave of climate disclosures is coming from the EU’s CSRD regulation, the potential SEC’s climate ruling (rumored to be coming in April), and the ISSB’s ongoing work. This compliance exercise requires skills to interpret operational data, communicate impact to stakeholders, and make nuanced decisions around highly complex science and uncertainty.
As a result, there is no shortage of compliance-related work for those looking at corporates or consultancies of all sizes. Still, these opportunities lead job seekers to ask complex questions at the intersection of their personal purpose. For example, what role does purpose play in your next career move? Do you ditch helping difficult-to-abate sectors?
If you have sustainability expertise or are interested in compliance, Why your company may soon be hiring an 'ESG controller' is worth a read. While Chief Sustainability Officers have been driving impact, this role is a little different, as explained here:
The role of ESG controller is different from sustainability officers because ESG controllers can bring the experience and diligence that the company has developed around financial information to non-financial disclosures.
And so, we’re starting to see the sustainability job market build on existing Chief Sustainability Officers with new compliance roles as well.
Pivoting to ESG, there seem to be opportunities in financial services to start. Where the financial services industry goes, others will follow. In fact, while banks are also cutting more traditional roles, ESG roles appear safe. Broadly, I also see this for both sustainability and ESG roles.
The findings suggest that it pays to build expertise in environmental, social and governance strategies, as some of the world’s largest banks resort to deep cuts in more traditional corners of their business.
Not only that, but financial services firms are willing to pay for ESG talent. Mark Campanale, the founder of the London-based Carbon Tracker Initiative, stated:
We’ve lost people to banks on what are without doubt for us insane salaries.
Before you get too excited, that doesn’t mean that anyone off the street who has a purpose can pick up that passion and take on sustainability or ESG work. However, you likely have diverse skills to build upon if you’re willing to learn. I usually learn via articles and podcasts, but I wanted to make the hard career pivot to ESG. So, I took two formalized classes to refine my skills: NYU Stern’s Corporate Sustainability and Sustainable Finance and ESG Investing. Wharton also has an ESG Initiative, and Villanova has a Sustainable Enterprise Executive Education & Development (SEED) program.
Again, don’t let the focus on financial services here fool you. Banks' work on ESG will cross over into corporate efforts over time. Companies will be sure to follow this trend, and now looks like the time to jump in.
Perhaps if we all get a little better at understanding and integrating ESG into our work and businesses, we can drive more resiliency when the market goes south, back away from more traditional cost-cutting exercises, and pivot to a future where we protect our stakeholders, trust, and value.
Resources
What companies still get wrong about layoffs (HBR, December 2022)
Why Many Companies Get Layoffs Wrong (companion to the above article with HBS Professor Sandra Sucher)
Don’t miss Ed’s Clean Energy & Sustainability Jobs List and check Climatebase.
Shannon Houde comes highly recommended as a sustainability career coach.
Erica Mattison, another coach, is running a sustainability career cohort this spring.
Katie Kross, Managing Director, EDGE at Duke University, published a list of people to follow for sustainability jobs and advice on LinkedIn.