Despite a wave of job cuts sweeping through the global finance industry, the demand for ESG specialists remains strong, with hiring growth continuing throughout 2022, as a study by Barclays Plc reported.
After analyzing over 200 million job postings using natural language processing (NLP), Barclays Plc’s analysts have discovered that asset managers, asset owners and banks actively seek ESG skills and talent, surpassing every other sector and defying the broader hiring downturn.
These findings indicate that building expertise in environmental, social, and governance strategies is a wise investment, particularly as some of the world’s largest banks are making significant cuts in more traditional business areas. For example, Goldman Sachs Group Inc. recently carried out one of its largest rounds of reductions, cutting approximately 3,200 positions. Morgan Stanley let go of 1,600 employees in December, while other banks, such as Bank of America Corp., have also resorted to smaller-scale layoffs.
The majority of the job cuts that have been announced are aimed at bringing banks’ headcount back to pre-pandemic levels and align with the industry’s efforts to adapt to a decline in deal-making.
According to the research conducted by Barclays analysts Alexa Walls, Jason M. Goldberg, and data scientist Adam Lauretig, a company’s track record in hiring for Environmental, Social, and Governance (ESG) positions is not only a reflection of its dedication to sustainability but also a predictor of its future stock performance. The analysts noted that BlackRock Inc. is highly interested in recruiting ESG personnel, while Goldman Sachs has a moderate level of interest.
“Firms with higher than normal ESG hiring interest were more likely to experience subsequent rating improvements and enjoyed better stock performance two to three years following the posting date,” they said.
Despite headwinds faced by companies in the US that have embraced ESG, such as issuing several investing bans by Republican states, the Barclays study found that the finance industry’s dedication to ESG has not been deterred.
“Even as news headlines have questioned whether ESG is losing traction, it seems buy-side and sell-side alike remain convinced of its strategic relevance and future demand,” the Barclays analysts wrote.