In today's corporate world, sustainability has become an important issue for many organizations. Whether environmental (E), social (S) or governance (G) aspects, regulatory pressure on the financial world is also increasing.
Whether an SME or a listed company, the need to address sustainability issues and comply with transparent reporting standards is undeniable. Charlotte Jacobs, Senior Manager at Swiss HR consultancy Robert Walters, sheds light on the impact of this trend.
ESG pressure is increasing in all sectors
While the financial sector struggles with the need for sustainable practices and strict reporting standards, the ESG pressure goes far beyond the financial world. Larger financial institutions will have to comply with European reporting standards (CSRD) by submitting ESG reports as early as 2024. But other sectors are also on the way to ESG. «The uncertainty surrounding ESG affects all sectors. Even large companies are struggling with the question of who should lead ESG initiatives. However it is clear, that ESG is critical not just in finance but for all organizations and needs to be woven into the fabric of organizations», says Jacobs.
ESG is a strategic priority
As Jacobs emphasizes, ESG is seen by some as a way to distinguish themselves on the market. It is therefore important to distinguish between genuine sustainability efforts and mere greenwashing. «Companies are faced with a choice: are their ESG efforts driven by genuine conviction and strategic direction or are they just reacting to regulations? Changing a company's ESG approach doesn't just mean ticking a box, it means making a profound cultural change», says Jacobs.
Anchoring ESG in all departments
According to Jacobs, organizations face the hurdle of smoothly integrating ESG principles into all aspects of their operations. «In smaller companies, ESG-related tasks usually end up on the desks of the finance, legal or risk and compliance teams. This requires close teamwork to interpret the regulations and integrate them into existing structures. On the other hand, larger companies are setting up specialized interdisciplinary ESG teams», Jacobs explains. For her it is clear, that the demand for ESG experts is growing as companies recognize the importance of specialized skills to navigate this complicated terrain.
ESG specialists are in demand
However, given the fierce competition and limited pool of experienced professionals, finding top ESG talent is not easy. Jacobs recommends that companies focus on hiring individuals who are truly passionate about sustainability and want to develop their skills in this rapidly evolving area: «Building a team of enthusiastic individuals who are committed to sustainability can drive collective progress and effect real change.»
Turning ESG into profit
The evolving area of ESG regulations presents both hurdles and opportunities for companies. Jacobs emphasizes the need to view ESG compliance not just as a box to be ticked, but as a strategic advantage. She adds: «By linking sustainability goals to financial targets and a genuine commitment to stakeholders, companies can set themselves apart. The goal is to create a sustainable future in which companies adhere to ethical principles, fulfill their obligations and gain the trust of society.»
