Growing investor demand for investments and portfolios that integrate environmental, social, and governance factors is increasingly giving rise to unique work and employment opportunities around impact investing.
Asset managers are being forced to employ and poach persons with in-depth knowledge and expertise on financial services and responsible investing.
Having a pool of experienced ESG focused managers is turning out to be a requirement to attracting a new generation of institutional and retail investors who expect ESG factors to be integrated into investment strategies and portfolios.
Likewise, competition for skilled ESG investment consultants is intensifying as funds look to gain an edge in attracting big dollars geared towards impact investing. More firms and funds are investing in ESG consulting specialists, including individuals with proven investment credentials.
While demand for ESG product specialists is expected to continue rising, below are some factors to consider when hiring an ESG investment consultant.
Financial Acumen
Only applicants with years of experience in financial matters and investments should be considered for the role of ESG investment consultant. A background in sustainability issues and responsible investing would be a definite plus.
According to The Altruist managing partner Ekaterina Chernova, “consultants with some knowledge, but without an expertise in ESG, lack conviction in ESG integration when pressed on whether clients should integrate ESG into their investment policy statements.”
Likewise, prospects s should boast of financial acumen to work with deal teams as most of the work will involve pitching out impact investment ideas and direct the investment processes. The goal would be to end up with someone capable of convincing people on the other side of the table why ESG investing makes economic sense, in addition to solving underlying ESG issues.
Flexibility
A prospective ESG investment consultant should be highly flexible as the role involves working with various stakeholders. According to The Altruist League’s president Milos Maricic, the position requires an understanding of different viewpoints.
“It is important for an ESG consultant to be open-minded and curious while speaking to different teams and investors. You have to be very pragmatic and not apply investment principles that are disconnected from reality,” said Mr. Maricic
Broad Background and Understanding
While looking to hire ESG Investment consultants, it is important to look for generalists who can master a complex brief. ESG investing is still in its nascent stages of growth. Therefore, having a broad understanding of different issues and investment ideas would make one a perfect ESG consultant.
The idea is to have a broad background of the investment world and knowledge of ESG issues likely to give rise to investment opportunities with high market returns. Diverse connections would also be a bonus essential for seeking help and advice when necessary.
Communication Skills
ESG Investment consultants should never be shrinking violins. Instead, they should boast of the highest communication skills able to hold the attention of any demanding audience such as investors seeking ESG consulting services.
A lot goes into ESG consulting, from holding discussions with institutional investors to speaking to deal and investment teams or supporting an investment team looking at an impact investing opportunity.
Likewise, an ESG consultant should be open-minded and ready to have in-depth discussions with investors and teams about investment opportunities.
Listening skills are also critical as ESG investment consultants must find out what other people are thinking, understand what they want to achieve, and build long-lasting relationships.
Strategic View
The ultimate requirement is settling on ESG Investment consultants to build rapport and known to empower the entire deal team. ESG investment consultants operate as change agents, convincing management of the need to be more sensitive to ESG issues.
Likewise, the role requires someone who can work with management teams and help them think about sustainability. Similarly, they are required to convey their investment ideas to investors and convince them why an opportunity on the table is worth it.
“ESG investment consultants have to constantly think about strategy and what to achieve in future. Improving constantly is the theme to stay on top of the game while dealing with investors and management teams,” added Mr. Marucci.
Conclusion
The nascent stage that ESG investing is means investment funds and firms require dedicated ESG investment consultants to drive the ESG agenda forward. ESG investing works well and generates the desired returns and impact when teams are empowered by the right personnel, such as experienced ESG Investment consultants.