Recent media coverage of the SEC’s proposal on climate risk and emission disclosure has focused on the impact for companies and their investors. But what about their talent pool — the rising cohort of students and job seekers? How could they be best prepared in this emerging job market?
To answer these questions, let’s first talk about the core problem the SEC proposed rule is trying to solve.
This rule is expected to change the current situation of voluntary disclosure of ESG information by U.S.-listed companies and, at the same time, standardize the information disclosed. The core issues involved in the proposal: corporate climate risk and carbon emission information — core ESG topics that capital is concerned about. Therefore, this proposal is expected to encourage investors to conduct more effective ESG risk analyses of companies, which can also be more effective.
It’s becoming clearer that jobs will increase in the market to meet the requirements of the SEC’s proposed rule.
Now, it’s becoming clearer that available jobs will increase in the market in order to meet the requirements of the proposed rule. Below are the main job categories that could see the most near- and mid-term position increases:
- In-house corporate climate disclosure roles. This category of positions typically requires some practical experience in the industry, either through an internship or previous full-time job experience.
- ESG and sustainability consulting roles. These jobs usually span from junior level to experienced senior-level roles, including specialized environmental and ESG consulting firms (WSP and ERM) as well as the Big Four accounting firms or management consulting firms’ ESG advisory and consulting teams.
- ESG investment roles. Most investment institutions are hiring for ESG investing or climate financing positions to build their climate-risk assessment capability to better structure their investment portfolios better.
- ESG rating agency roles. As mandatory climate disclosure is approaching, it’s possible we will see a big jump from the ESG rating agency side, too, due to more and better data being disclosed in the future. This category includes firms such as MSCI, ISS ESG, Sustainalytics and other regional-level ESG rating companies, such as MioTech in Hong Kong and mainland China.
- Roles at climate-risk data startups. Additionally, there is a new category of jobs emerging quickly in the ESG industry and gaining momentum: climate risk data providers, such as Silicon Valley-based Jupiter Intelligence and Durham-based The Climate Service (acquired by S&P Global in January).
Very exciting! But how can students and job seekers be best prepared for this emerging industry?
To answer this question, we can categorize these jobs by their different functions below.
- Climate risk assessment involves physical and transition climate risk. It could be very technical and require PhD-level research skills to conduct an effective climate risk assessment. This would be a good fit for environmental and climate background students and job seekers.
- Carbon-emission accounting can be quite technical as well, especially with regard to Scope 3 emissions analysis or even life-cycle assessment, or LCA. Similarly, employers looking for these candidates would prefer an environment or sustainability accounting academic background.
- Climate information disclosure typically requires more practical experience versus research or academic study, so it could be a good fit for all background students and job seekers as long as you have the passion for this field.
- Other strategy roles, a broad category of positions, do not necessarily require deep technical skills and may touch on broad climate-related topics. These may be a good option for students and job seekers with a passion for climate and experience in working in strategic positions.
- Climate-related Software-as-a-service (SaaS) firms are already hiring climate-data scientists and similar positions to develop SaaS platforms. This category obviously requires technical skills in data science or software development but does not necessarily expect experience in the climate field.
For students and job seekers interested in technical roles and who want to better understand the details of the technical side of the proposed rule, it would be instructive to explore the existing climate reporting methodologies and standards, including greenhouse gas (GHG) Protocol, the Task Force on Climate-Related Financial Disclosures (TCFD) framework, Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) standards, as well as pay attention to the new sustainability accounting standards being developed by the International Sustainability Standards Board (ISSB). As elaborated in the SEC proposal, it’s possible SEC would leverage some of the existing or to-be-released internationally accepted standards as its technical guidance
Although some uncertainties and ambiguities exist, the proposed SEC rule is undoubtedly already an important milestone for the ESG and climate disclosure. For investors, it will help to better analyze their investing portfolios’ climate risk. For companies, it will create a good mechanism to assess material climate risk and ensure all companies report the climate information in a consistent process that uses reliable frameworks.
For students and job seekers, it offers even greater opportunity and, hopefully, this market breakdown helps sheds some light on possible career paths.
March 29, 2022 at 01:15PM