ESG jobs in finance: bracing for the Trump effect, or not
Not so long ago, environmental, social and governance (ESG) jobs were all the rage in banking and finance. In the years after the pandemic, they carried a 20% pay premium and there was talk of a skills gap: in 2020, CFA Institute found that 18% of portfolio manager jobs wanted ESG skills, but that only 1.5% of portfolio managers had them. Buffing a CV with ESG seemed like a no-brainer.
Not any more.
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Donald Trump is no friend of the environmental, social and governance (ESG) principles, which he's described "radical left garbage." In a campaign video posted on Truth Social in 2023, Trump promised that if he was reelected, he would, "support a law to keep politics away from Americans’ retirement accounts forever.”
It's a statement that hasn't gone unnoticed in the banking industry. Writing on social media last week, Ehsan Khoman, head of commodities, ESG and emerging markets research at MUFG, said Trump's reelection may to America's withdrawal from the Paris agreement to reduce carbon emissions by 43% by 2030. Natural resources bankers who'd rebranded themselves as ESG specialists, may want to revert to their old ways.
Trump's resurgence has "definitely created some negative sentiment" around the future direction of ESG jobs, admits Gabriel Nam, a certified ESG analyst and director of Sustainability and Strategy at recruitment firm Mercury Urval in Singapore. The head of ESG Capital Markets at one bank in London quietly agrees. "We're anticipating that Trump will dial back climate commitments," he says. "- There could be more deregulation, which will lessen the need for ESG expertise."
Trump risks hitting the ESG sector when it's already down. Investor interest in ESG has fallen for three years' running, and in a sorry indictment of the direction of travel, HSBC last month ejected its head of sustainability from its executive committee. Goldman Sachs' recent partner list was also notably short on anyone with an ESG or a sustainability title.
Tom Strelczak, founder of London-based ESG-focused recruitment firm TWS Search Partners, says ESG hiring by institutional asset managers operating in public markets has "plateaued in the past 18 months" This is mostly for cost reasons, says Strelczak: ESG became another cost centre, and firms have been struggling to afford it. As a result, Strelczak says some ESG professionals on the buy-side have had a "very difficult" time. There are still opportunities available - but often at "quite a different compensation level."
Strelczak is optimistic, too, though. "The last 12-18 months has been difficult for ESG employees and job opportunities, but it forms part of phase in the Gartner Hype cycle where we are coming out of the trough after a long period of disillusionment," he suggests.
Others in the industry also venture that Trump II may not be as disastrous for ESG as it seems. Trump is unpredictable, notes the head of ESG Capital Markets. "The definition of ESG jobs and deals might evolve," he says. " - Trump's relationship with Elon Musk might lead to an acceleration in EV sales. His important tariffs and social stress might lead to more emphasis on ESG as a means of mitigating those issues."
Nam in Singapore says Trump's impact on the ESG industry and its jobs will have regional nuances. Whereas it's unlikely to be good for ESG jobs in the US, it's unlikely to be as significant in the key markets of China and Europe, Nam ventures.
Nam - like others we spoke to - also notes that for all his sound and fury about ESG, the first Trump presidency was actually very positive for ESG jobs. "Demand for ESG professionals increased between 2017 and 2021," says Nam. Under Trump II, Nam says the same could happen again - there's still global investor pressure for sustainable investments.
Strelczak agrees. ESG is moving up the value chain, he says. - ESG professionals on the buy-side are being "rehoused in profit centres" where they're not just a cost centre but "add significant value with research, integration and stewardship efforts."
That sounds positive, but it also suggests that ESG jobs are becoming more like hard work: ESG professionals need to pay their way; doing so may not be quite so easy in 2025.
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