Just as awareness and support is accelerating for environmental, social, governance (ESG) investing, with retirement systems worldwide such as the Canadian pension system attracting attention for their strategies, an issue has arisen – a shortage of financial professionals with sustainable finance skills.

Pension funds and investment managers are among the financial services organizations affected by the talent shortage, says a recent report from Toronto Finance International (TFI) and Deloitte. But banks and insurance companies are affected as well.

How soon will they feel the effects? They already are. When it comes to investment portfolios, ESG factors offer opportunity but also risk — and the need to improve decision-making around asset allocation to ensure client success is “accelerating the need for action” in training and supporting sustainable finance professionals.

The report notes in particular a need expressed by its financial services industry respondents for financial workers with skills in ESG risk management, qualitative and quantitative analysis, and ESG auditing. But the need for skills in all areas of ESG is increasing.

“ESG thinking is rapidly changing the job of financial professionals across the board,” said Kevin Hagen, Vice President of Environment, Social, & Governance (ESG) Strategy at Iron Mountain, quoted in a Harvard blog post from iits sustainable finance program. New business metrics will involve accounting for such disparate areas as environmental impact and worker pay, and new challenges in decisionmaking will require financial experts who can weigh various ESG factors.

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