There were a record number of job vacancies in the UK this year centred around environment, social and governance (ESG) – with more anticipated in 2022 according to global recruiter Robert Walters.
There have been more than 35,000 new jobs created this year alone around ESG – with the number of people moving into these roles increasing by +7% to now represent upwards of 400,000 professionals in the UK.
The heightened focus on ESG comes as the UK presses ahead with its world-leading commitment to reduce its greenhouse-gas emissions to net zero by 2050, in addition to mounting pressure on listed companies to be more transparent around pay and representation at board level.
Added to this the Financial Conduct Authority (FCA) recently announced their work with Government to improve transparency and data discrepancy, in a bid to put UK financial services and regulation at the forefront of ESG internationally. All of this is leading to ESG being treated with increasing importance by business leaders, where currently half of the country’s leading firms link executive pay to ESG measures.
The findings come from a new report from recruiter Robert Walters: Environment, Social, and Governance: Mindset Over Must.
Chris Poole, Managing Director of Robert Walters UK comments: “Right now, businesses are under more scrutiny than ever. Processes, suppliers, materials, and policies often have more of an impact on consumer actions than a finished product.
“As governments strive to achieve environmental targets, and the choice widens for customers on socially-conscious products and services – ESG will increasingly become more critical for survival, and not just for investment. With that the number of ESG roles across the UK has risen sharply this year and will continue to grow as organisations strive to be more ethical, fair and inclusive.
“These roles can sit in HR (+19%), IT (+18%), Marketing (+18%), Finance (+6%), Research (+6%), Legal (+3%) or standalone roles reporting directly to the Board - and will lead to new working practices impacting organisational sustainability and resilience, whilst also building long term value for Stakeholders.”
Ticking the box with sustainability
§ 54% increase in CSR job vacancies when compared to pre-pandemic levels
§ 28% of CSR vacancies is for senior roles – up from 7%
§ A quarter of CSR hires comes from consumer goods industry
§ 51% of professionals state that it is important that their employers CSR-values align with their own
Roles relating to corporate social responsibility (CSR) increased by +54% when compared to 2019 pre-pandemic, and by +121% when compared to 2020 - with May 2021 being the second-busiest month on record.
Recruitment has also been steadily shifting to senior hires, from 7% of total CSR vacancies in 2019 to 28% in 2021. Not surprisingly the industry where hiring for CSR experts is most prominent is consumer goods and services - which accounts for nearly 23% of all professional vacancies.
Chris adds: “Some thought that in a global crisis, ESG targets would be the first to go. However, many companies strengthened their commitment to ESG during the pandemic. The suggestion also that people would care more about jobs and rocketing government debt over, for example, more socially conscious behaviour, appears misplaced.”
Companies press ahead with D&I agendas
§ +32% increase in D&I roles compared to pre-pandemic levels
§ 40% of D&I roles are for senior positions within an organisation
§ 2/3 of fund managers reduce investment in companies that score poorly on D&I
§ 62% of professionals would turn down a job offer from a company with poor D&I initiatives
§ 1 in 5 D&I-related vacancies are advertised by the technology sector
D&I-related professional vacancies in the UK have increased by +32% when compared to 2019 pre-pandemic, and by +202% from 2020 - with peak activity taking place in Q4 2020 post the Black Lives Matter protests in the summer. The majority of roles (40%) are for senior positions based in London (52%).
The industry with the largest share of D&I-related vacancies is technology, media and telecoms (TMT) - representing 21% of all advertised roles, followed by the public sector/ not-for-profit (19%), and financial services (13%). Robert Walters analysts predict that hiring within this space will continue to increase, particularly when research shows that almost two-thirds of UK fund managers are reducing their investments in companies that score poorly on D&I metrics.
Governance high on boardroom agenda
§ +87% increase in Corporate Governance roles since 2020
§ 1/3 of job roles are for senior positions within an organisation
§ 40% of all Corporate Governance roles is within professional services
§ £430m+ is the cost of Corporate Governance per year in the UK
A record number of vacancies for corporate governance roles was recorded in spring/summer this year – with job roles up by +87% from 2020.
The UK government has hinted at plans to significantly increase the number of companies subject to stringent governance standards. This news has pushed many in the sector to get on the front foot where the biggest industry for corporate governance vacancies is professional services — responsible for over 40% of all hiring so far in 2021, followed by financial services (21%).
“Over the last decade, we have seen a significant shift in the way that businesses approach social responsibility – with ESG making its way rapidly up the priority list,” Chris went on to say.
“In 2019, the Global Reporting Initiative revealed that 93% of the world’s largest companies by revenue already report on their ESG performance. That these corporations believe it is important to publish their work in this area reflects how central ESG has become to the way some of the larger multi-national corporations have started conducting their businesses.”
Chris Poole outlines why ESG is important from an employment perspective:
1. Reputation: Businesses which are failing to meet the expected ESG performance standards should expect to see a knock-on impact on their reputation. As a workforce strategy, ESG has become a competitive advantage in attracting and retaining talent; numerous studies have shown that, when weighing up potential employers, millennials are hugely influenced by how a business responds to and tackles social issues.
2. Productivity: Companies with a strong ESG and labour relations proposition have better productivity. Addressing the widening gap between executive and workforce pay is also directly linked to productivity. Fairer incentive structures can help drive an inclusive culture and employee engagement, which in turn, can boost productivity.
3. Value: Almost all investors and stakeholders are now alive to ESG performance, and want to see not just short-term plans but also how the core business model incorporates and deals with these issues in the long term. Businesses that do not have an ESG and labour relations agenda will find themselves struggling to find investment from savvy backers, who recognise the need to manage these risks and promote compliance.
4. International standards: Businesses will no longer be able to rely on their geographical location when complying to base level labour laws. There are international frameworks that set out expected employment standards across the world by which non-governmental organisations, investors, other stakeholders and the media are now judging businesses. This includes: the UN Global Compact; the International Labour Organisation Conventions and Declarations; the International Bill of Human Rights and the OECD guidelines.
5. Legal compliance: The ability to investigate ESG breaches and issue fines has significantly increased. For example, gender pay gap reporting is now a legal requirement in the UK for companies with more than 250 employees and similar legislation applies in Ireland, Australia, and California. While the level of penalties varies considerably from country to country, the willingness to impose top-level fines has increased across the board.