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Who is an ESG specialist and why does a business need one?

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By Yury Erofeev

· 5 min read


The company’s reputation is determined not only by the reliability of the business partner but also by its attitude towards the environment and its employees. ESG specialists, a new type of top management, are responsible for the development of corporate ethics business.

What does the abbreviation ESG mean?

ESG is an acronym that contains three key concepts of modern business ethics:

  • Environment — careful attitude towards the environment

  • Social — focus on the social sphere

  • Governance — transparent management

ESG primarily means concern for nature. The movement towards environmental well-being and humanistic values is commonly called “sustainable development”. The terms “ESG” and “sustainability” are considered synonymous.

Why businesses invest in ESG

If a company has found its niche and shows decent sales, it becomes an attractive asset for investors looking to invest. For a long time, good financial statements were the only marker of investment attractiveness: if sales are growing today, they are likely to grow tomorrow.

Now the state, expert, and public organizations are guarding ESG principles. Uncontrolled deforestation, dumping of pollutants, or discrimination against employees can derail even the most optimistic business strategy. Sustainability specialists help management make effective decisions based on ESG principles to maintain the profitability of assets.

How in demand is the profession?

Demand for ESG specialists began to grow in the late 2010s when a tax on the export of goods to Europe was introduced. The size of the tax depended on the level of greenhouse gas emissions during production, and the basis of carbon resources exports was precisely characterized by a high carbon footprint. Fertilizer producers, metallurgists, and oil refiners began to urgently update their environmental programs. Companies that wanted to operate in the international market tried to enlist the support of foreign rating agencies. To do this, it was necessary to adhere to ESG principles that are important for Western economies.

General Responsibilities

An ESG specialist is a multidisciplinary manager. On the one hand, he manages environmental and social projects within the company. On the other hand, he is responsible for dialogue with the government, business partners, clients, and society on behalf of the organization.

Understanding classical business processes is the basis of the profession. The task of an ESG specialist or director of sustainable development is to compare the goals, objectives, and budgets of projects in their “disciplines” with the goals, objectives, and budgets of the corporation itself.

The logic is simple: every initiative of a specialist should help the company not to lose and increase capital under the influence of ESG trends. The metric of success usually comes down to direct or indirect financial benefits.

Additional Responsibilities

The specialist decides to finance the restoration of damaged forests using a share of the business’s revenue and creates a new expense item. Large business partners who monitor the reputation of their suppliers make a positive decision in favor of the organization after such a project — and the proceeds from new contracts cover all the costs of reforestation many times over.

Developing, finding sources of direct or indirect benefits, and implementing a project in the interests of the company are the job descriptions of most sustainability managers. Often this includes employment to ensure the social well-being of employees — organizing recreation, food, and medical care. ESG specialists in large companies also oversee charities.

An ESG specialist works with analytics. Monitoring financial and non-financial indicators, decomposition of almost every figure, and risk analysis — all this complicates the work, but multiplies the value of a specialist as a top manager.

One of the main pitfalls in work is evaluating work results. The contribution of an ESG specialist to business development is often not obvious to colleagues who do not understand the field of sustainable development. Therefore, it usually takes a lot of effort for ESG specialists to justify the need for investment in projects. A specialist must be able to bring his project into line with metrics that are understandable to top management.

What a specialist should be able to do

An ESG specialist must have several professional and social requirements. If we talk about professional skills, these are strategic planning, financial management, business analytics, and HR. If the company is engaged in production, then more technical skills are required from the employee. For example, in the raw materials sector, an environmental engineer can become a director of sustainable development after mastering the specified professional skills.

If we talk about “universal” requirements, then here we are talking about the presence of leadership qualities — the ability to motivate and lead people. Organizational skills and a sincere interest in developing the concept of sustainable development are also important. A person will not be able to effectively carry out his duties and develop projects if he is not concerned about the topic of reducing environmental harm. ESG is a calling.

Where to get a profession

ESG is a new industry, but large universities are already training specialists in undergraduate and graduate programs. 

The demand for ESG specialists will grow. The professional environment in the field of sustainable development is just being formed, which means that those who want to realize themselves in this area have every chance of making a good career.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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About the author

Yury Erofeev is a Business Analyst at SQUAKE, utilizing a solid foundation in Physics, Mathematics, and Sustainable Development to drive meaningful industry changes through data-driven decision-making.

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