British companies set for ESG hiring spree in 2022

More than 35,000 roles have been created this year, with vacancies for senior positions on the rise

London. The rising demand for environment, social and governance workers comes at a time when Britain is facing a labour shortage. EPA

A record number of British job vacancies centred around environment, social and governance (ESG) were created in 2021, with a further surge expected next year as companies strive to be build a workforce with a more sustainable focus.

More than 35,000 new ESG jobs were created this year, according to recruiter Robert Walters UK, boosting the number of professionals in these roles to more than 400,000 – an increase of 7 per cent over the past year.

The rising focus on ESG comes in the year the UK hosted the Cop26 environment summit and pledged to reduce its greenhouse-gas emissions to net zero by 2050.

There has also been growing pressure on listed companies to be more transparent around pay and representation at board level.

Chris Poole, managing director of Robert Walters UK, said British businesses are under more scrutiny, with processes, suppliers, materials and policies often having more of an impact on consumer actions than a finished product.

“As governments strive to achieve environmental targets and the choice widens for customers on socially conscious products and services, ESG will increasingly become more critical for survival, and not just for investment,” he said.

“With that, the number of ESG roles across the UK has risen sharply this year and will continue to grow as organisations strive to be more ethical, fair and inclusive.”

The rising demand for ESG workers comes as Britain faces a labour shortage, with the unemployment rate dropping to 4.3 per cent in the three months to end of September and job vacancies hitting 1.17 million in the three months to October, according to the Office for National Statistics.

Early figures show a record figure of about 1.3 million vacancies in October alone as companies struggle to hire staff.

The increase in ESG vacancies is sector wide, with increases of 19 per cent in human resources, 18 per cent in marketing, 6 per cent in research and 3 per cent in legal jobs.

In corporate social responsibility (CSR) alone, the number of vacancies is up 54 per cent, compared with 2019 pre-pandemic levels, and up 121 per cent from 2020.

Twenty-eight per cent of CSR vacancies are now for senior roles, a significant rise on the 7 per cent recorded in 2019, with the consumer goods and services sector accounting for most of the surge.

“Some thought that in a global crisis, ESG targets would be the first to go. However, many companies strengthened their commitment to ESG during the pandemic,” Mr Poole said.

“The suggestion also that people would care more about jobs and rocketing government debt over, for example, more socially conscious behaviour, appears misplaced.”

Meanwhile, diversity & inclusion (D&I) roles rose 32 per cent this year from pre-pandemic levels, with one in five vacancies advertised by the technology sector and 40 per cent of all the positions now for senior jobs within an organisation.

The shift comes as 62 per cent of professionals said they would turn down a job offer from a company with poor D&I initiatives.

There has also been a significant shift in corporate governance, with an 87 per cent increase in vacancies this year since 2020.

A third of those job roles are for senior positions, as the cost of corporate governance rises to £430 million ($570m) a year in the UK.

The UK government has hinted at plans to significantly increase the number of companies subject to stringent governance standards.

Meanwhile, the Financial Conduct Authority recently unveiled a tie-up with the government to improve transparency and data discrepancy, in a bid to put UK financial services and regulation at the forefront of ESG internationally.

“Over the last decade, we have seen a significant shift in the way that businesses approach social responsibility – with ESG making its way rapidly up the priority list," Mr Poole said.

ESG is key from an employment perspective as companies with a poor record could have their reputation tarnished while employees will be less inclined to work for a company that has a bad history on aspects such as gender pay gap.

“Almost all investors and stakeholders are now alive to ESG performance and want to see not just short-term plans but also how the core business model incorporates and deals with these issues in the long term,” Mr Poole said.

"Businesses that do not have an ESG and labour relations agenda will find themselves struggling to find investment from savvy backers who recognise the need to manage these risks and promote compliance."