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Lindsey Hall: Hi. I'm Lindsey Hall, Head of Thought Leadership at S&P Global Sustainable1.

Esther Whieldon: And I'm Esther Whieldon, a Senior Writer on the Sustainable1 Thought Leadership team.

Lindsey Hall: Welcome to ESG Insider, an S&P Global podcast, where Esther and I take you inside the environmental, social and governance issues that are shaping the rapidly evolving sustainability landscape.

Esther, it's that time of year again. In the U.S., we're heading into Labor Day weekend. And so today, we're bringing you an episode of the podcast, focused on the topic of jobs. Specifically, how is the job landscape changing for sustainability professionals?

Esther Whieldon: We've done an episode on this topic for the past 2 years, and these have been among our most downloaded episodes of all time. And because this is a space that continues to change rapidly, today, we're back talking with a recruiter focused on the sustainability space.

Lindsey Hall: That's right. I spoke with Ellen Weinreb who owns Weinreb Group. That's a global boutique search firm focused on sustainability and ESG recruiting. The firm places chief sustainability officers or CSOs and other sustainability-focused roles. Today, we'll hear from Ellen about how the hunt for talent is changing. She'll explain how there's an increasing focus on compliance, governance, and regulation, which is leading to a big rise in ESG controller roles.

She talks about what companies are seeking in sustainability leaders and what these candidates are seeking in potential employers. And she talks about what's next for sustainability recruiting. By the way, a quick note on a couple of the acronyms we'll hear today. Some are pretty basic, like P&L, that's profit and loss, or COO, that's Chief Operating Officer. 

Some terms, you'll have heard us talk about quite a bit on this podcast like CSRD, that's the EU's Corporate Sustainability Reporting Directive, a set of sustainability reporting rules for companies. And others were brand new to me like VUCA. That's a term for volatility, uncertainty, complexity, and ambiguity. And it's a concept organizations can use to think about strategy in a changing landscape. Okay. Here's Ellen. She starts off by describing her company's work.

Ellen Weinreb: So most of our searches are in the U.S., although we do placement around the world, Europe, Asia, South America. And we are placing a lot on consumer facing. We're doing more search lately where private equity -- we do search in private equity, but we're also helping private equity firms, portfolio companies hire their first head of sustainability. So it's all around the wheelhouse of corporate sustainability and that's been our focus for 20 years.

Lindsey Hall: Okay. So tell me a little bit more about how you've seen that search for sustainability candidates change over time.

Ellen Weinreb: Yes. It's changed quite a bit. There's just the recruiting industry and how that's shifted. So when we started out, LinkedIn didn't exist. And then LinkedIn came around and there's always a question; will the companies need recruiters? If they can just go on LinkedIn and find somebody, then what's the value of hiring a recruiter? And so, the same thing's coming up today around the AI. 

Is AI making recruiting easier so that corporations will fill positions using AI tools as opposed to using recruiters? So there's the shift in the recruiting industry, sustainability aside. And then there's how sustainability has shifted and how the role has shifted. And we've done a lot of research on chief sustainability officers and how the role has been shifting over the last 20 years.

Lindsey Hall: Let's talk a little bit more about what are the main roles that you're recruiting for in your boutique.

Ellen Weinreb: It's usually a vice president of ESG or a chief sustainability officer. Usually, there's ESG or sustainability in the title. The clients are usually. Large corporations like Mars or Dow Chemical, KKR are some of our clients, Estée Lauder. There's been a shift in terms of who the drivers are for sustainability and then that impacts how the sustainability function is, who it reports to, how close it is to the CEO, and also just understanding how the drivers are impacting the P&L of the sustainability function.

And so with those shifts, we're tracking the shifts in the drivers, but it's also impacting how the role is changing and how the headcount might shift. Right now, the latest shift is around regulatory and then also around the non-financial reporting and the rules that the regulators are playing in terms of getting the data that's auditable and verified and assured.

There are more roles popping up in the controller's office. An ESG controller is certainly something where there's a big rise in, the ESG controller. We're looking at how that relationship between the ESG controller ties into the sustainability officer.

Do they report to the sustainability officer? Do they report into finance and dot it to the controller? There's a lot going on currently in that direction. Early on in the day, the CEO would tap somebody who had been at the company for a long time and say, "Hey, can you help me figure out what sustainability means here?"

This is 20 years ago. Then more recently, there were a lot of investors asking questions during the investor calls. The CEO and the CFO received a lot of sustainability related questions so they were bringing the CSO into these calls. Responding to investors and going on ESG road shows became a big part of the job. Right now, if we fast forward to today, it's a lot more regulatory, which is very different than investor. There's still a lot of reporting and disclosing of information, but the regulatory shift is changing a lot of how the role is resourced.

Lindsey Hall: Okay. A shift to this higher regulatory focus like you described. Then I'm also interested to dig in a little more on this ESG controller idea. This is something I've been hearing about as well and so I would love to know more. For our listeners who are saying, "Wait, what is an ESG controller?" how would you, just in plain English, explain the role, first of all?

Ellen Weinreb: In the past, non-financial reporting didn't necessarily need to be audited and verified. That was nice, but now under regulatory pressures, particularly in Europe with CSRD and double materiality, there is a part of the process that includes having that data assured and setting up controls for everything that you're saying.

Can you verify it and show a chain of how you came up with this number? And overall, it's creating a lot of work. If you bring the data into the finance office and the controller's office, then there's a lot of controls basically that are put into place.

But when you have an auditor's mindset going into how do we verify this data, when the auditors are coming in to assure this data, how can we assure that this is all good and verified? And can we repeat this again and again and come up with the same number? So putting those controls in place takes an enormous amount of resources.

Lindsey Hall: Absolutely. And how should our listeners think about this ESG controller role related to the other roles that we talk about a lot in recruiting discussions in the sustainability space, which is, of course, the chief sustainability officer? How do those two work together?

Ellen Weinreb: Yes, that's what I find really interesting because different companies develop it in different ways. Everybody is doing this for the first time. This is relatively new. I mean there are some companies, let's say, Amazon. Very well resourced, have been doing this for, let's say, 3 years, but it's still relatively new. And in some cases, there's questions about who owns the data and where does this data live and how aligned is it with the financial data.

In some cases, if it's really an ESG controller, then that person is reporting into the finance office. But we also see a lot of non-controllers, non-CPAs who are owning the data and owning a lot of the processes that are outside of the finance office. They're working in the sustainability office because you're gathering the data and you're setting up software systems and then you're also reporting. So there's so many pieces that go into that just -- it's not just about the ESG controller. It's also about that bigger picture.

And also, I think at the end of the day, there's a really interesting discussion about why are we doing all of this and can we get to the substance of the strategy and moving the needle on sustainability. I think that's a fear right now, is this need for controls usurping the ultimate goal around sustainability.

Lindsey Hall: That makes a lot of sense. I also have to say I'm going to betray myself as the nerds that I am, but I find it fascinating this question of who sits where in the company when it relates to sustainability and like you said, how do those pieces work together. How does the corporate social responsibility arm work together with the chief sustainability officer and the ESG controller? What are the trends that you're seeing when it comes to where these sustainability functions sit?

Ellen Weinreb: We have run a survey of chief sustainability officers. We do research on CSOs where we will be entering our 14th year of research. Every other year, we survey CSOs and we ask the question -- one of the questions we ask is where do you report and how many steps away from the CEO. About 1/3 or 30% do report directly to the CEO and then most others report one step away from the CEO. Then the question is, where do they report?

A lot of them report into the COO, but over the past 20 years, we've seen the role shift. For example, it used to be when it reported to legal, that would be considered bad because legal was the naysayer and they would shoot everything down. Now there's another way to look at it where you're saying legal is the last stop and if legal approves that, then we can disclose this information. So you want to be very close to legal and reporting into legal is a good thing.

That's been interesting to see; how legal has gone from bad naysayer to positive, the last stop, and a good partner. Also, investor relations has shifted. But for the most part, the other answer is that it just reports all over the place; finance, general counsel, human resources. Sometimes, it reports into diversity and sometimes diversity reports into sustainability. There's also the use of ESG. We could talk a little bit about that, how the -- sometimes the sustainability leader would report into the ESG leader. It is a little all over the map.

Lindsey Hall: Okay. I'd love to know what you hear in the conversations about just this terminology, ESG versus sustainability.

Ellen Weinreb: Yes. I would say, 2 years ago, 2022 was peak ESG as a term. 20 years ago, it definitely was not a term and it came to rise fairly rapidly. Now we are seeing chief ESG officers, in addition to chief sustainability officers. Some companies, when you refer to sustainability, it means environmental sustainability and other companies' sustainability refers to ESG and it's synonymous. 

We have found the rise of that term, ESG, and we're also seeing that it isn't going away. I said that there was a rise and a peak that it was a big buzz. These days, it's not as much of a buzz, but the term isn't going away. I'll also add that ESG is the common word in the finance sector. You definitely see more ESG titles in the finance sector than non-finance corporate sector.

Lindsey Hall: Tell me more about what are the main qualifications that the companies you work with, what are they seeking in candidates for these sustainability-focused roles?

Ellen Weinreb: Yes. We were talking about the leader of sustainability. There's a lot around influencing change, we call them the corporate chameleons. Are they able to work with senior leadership and influencing change? How is it that they're able to speak the language and understand the needs and understand the value of sustainability to all the key stakeholders, largely internally? 

A lot of what we see for the sustainability leaders is that they have the ability to set strategy and then there's also operationalizing strategy and also working with senior leadership to own the various work streams that are developed through the strategy and then also working externally so that they're able to interpret what is going on externally to make sense to the company internally.

Those are the real four factors. It's setting strategy, operational strategy, working with senior leadership to influence change, and then working externally. There's also externally, does that company want to be a leader and where do they want to be a leader. It's some external stakeholder relationship management as well.

Lindsey Hall: Okay. It sounds like they're looking for candidates who are pretty nimble and flexible in their ability to communicate across a lot of different stakeholder groups, if I'm hearing you.

Ellen Weinreb: Yes. Yes. I like what you're saying about nimble and flexibility because there's also a lot of volatility in the world and I've certainly seen that, like the VUCA, the more volatility, uncertainty now than there was 20 years ago. These CSOs and sustainability leaders are very adaptable to change.

Lindsey Hall: Okay. That's a little bit about what you're hearing from the companies. On the flip side, what are some of the main questions you're getting from the candidates that you work with? What are they looking for in employers?

Ellen Weinreb: The sustainability professionals do not go into this field to become rich. They come into this because they want to make a difference in the world. That's the main question we get from candidates is to really understand where is there an opportunity to create change. What I'm hearing from a lot of sustainability leaders and this ties into that whole controller and regulator is that they're feeling so many resources are going into control and data that it's taking the wind out of their sails.

Lindsey Hall: I can certainly understand how that would be the case. Like you said, it requires so much resources to verify and assure data to create all the appropriate governance. All these things are really important and at the same time, there are limited resources, there's limited time. So I can see how that would perhaps get in the way of some of the momentum, some of making the change that people getting into these roles are trying to make.

Ellen Weinreb: Yes, we're identifying in our research that will come out in February. Right now, we're doing preliminary research. The total number of CSOs is increasing and we're noting that over time. We're also recognizing that the CSO tenure is shorter and I don't have the exact number on that.

But in general, we're very curious about what CSOs do when they leave and why do they leave and what do they do when they leave. Do they take another CSO role? Which in some cases, they do. A lot we're seeing are developing portfolio careers, where they're teaching or they're getting into investing or technology, joining a startup. 

There's a lot of directions that they can go from there and so we're also curious about why they're leaving. I'm not saying that they're leaving in droves, but it's interesting to see if they're leaving, are they taking another sustainability role? Are they going in a fractional direction? There's a lot that's shifting in terms of what CSOs do when they leave, I'd say, today versus maybe 5 years ago.

Lindsey Hall: We've talked a little bit about what's changed over the last year and even over the last couple of decades. If we cast forward, what emerging trends are you seeing in the sustainability recruiting space?

Ellen Weinreb: That's a really interesting question, Lindsey, because I've seen Andrew Winston and John Elkington, have written about this recently in terms of where it's going. If CSOs are leaving their chief sustainability officer role, then the question is where are they going?

Might there be a movement to create systemic change? Might there be some approach that is a little different in terms of not just relying specifically on a company or a brand but more collective systems approach? I think that's happening a little bit in regenerative agriculture and circularity. I'm wondering if there might be jobs that also shift that are going more towards systemic change than specific corporate.

Lindsey Hall: Okay. Interesting. Can you tell me just a bit more how might that happen? What might that look like?

Ellen Weinreb: Well, I think it might be initiatives. Maybe they're foundation-related initiatives or companies would come in and form a collective unit. For example, The Sustainability Consortium when it started, I think that was 15 years ago, there was this bold idea of bringing data in to support in measuring and goal setting.

Now with AI -- and even there was a big data, remember that was a big word 5 or 10 years ago, and now it's around generative AI. Now there's an opportunity to do more with the data. There could be collective action that would just take a different flavor given where technology and innovation is today.

Lindsey Hall: We spent a lot of today's episode talking about senior leadership roles, but I also wanted to know what advice Ellen has for listeners who are earlier in their careers or just starting out in the sustainability space. Here's Ellen one more time.

Ellen Weinreb: For one thing, our searches and our clients largely focus on corporate sustainability, but I also want to recognize that there's philanthropy, nonprofit, and there's an enormous amount of work going on at the city, municipal, local, uneven -- in the developing world, the sustainable development goals. There's just a lot of opportunities.

I think if you focus on corporate sustainability, that is relatively narrow. If you define sustainability broadly, there are a lot of opportunities out there. If you're really focused on corporate sustainability at a name brand, then those opportunities are few and far between. One is just to be broad in terms of your perspective and then also recognizing that technical skills are more value today.

When we were talking about these CSOs from 20 years ago, it was some guy who was doing strategy and the CEO said, "Hey, can you help us figure this out?" And these days, our candidates have 10, 20 years' experience and they have technical experience.

We have candidates who go through in an interview process, the client will say, "We want you to do a greenhouse gas accounting. We want you to look at the data," and they need that for the senior person as well as the junior person so developing those skills are certainly really valuable, particularly around climate and energy, specifically energy transition.

Lindsey Hall: We heard today how the hunt for ESG and sustainability talent is evolving. Ellen said companies are seeking leaders who can be "corporate chameleons" who can influence change within a company and externally who can be nimble and flexible in their ability to communicate across a lot of different stakeholder groups in a volatile world. On the flip side, she said sustainability candidates are seeking companies where they have an opportunity to create real change in the world, to make a real difference.

Esther Whieldon: Ellen also said that the space could be ripe for systemic change.

Lindsey Hall: Yes, and she mentioned two thought leaders and authors in the sustainability space who have written on this topic, Andrew Winston and John Elkington. Esther, we should probably try to get them on this podcast.

Esther Whieldon: Yes, absolutely.

Lindsey Hall: As an example of what this change might look like, Ellen mentioned The Sustainability Consortium. This is a nonprofit founded in 2009 that aims to transform the global consumer goods industry to deliver more sustainable consumer products and it brings together diverse stakeholders to turn the complexities of supply chain sustainability into simple and transparent data points. The consortium and its members and partners include manufacturers, retailers, suppliers, service providers, NGOs, civil society organizations, governmental agencies and academics.

Esther Whieldon: So basically everybody.

Lindsey Hall: Yes, exactly.

Esther Whieldon: And Ellen also noted that the future of sustainability could involve more of this kind of initiative that brings together stakeholders from different kinds of organizations. We'll be keeping a close watch on trends and sustainability talent as we head into a busy season of fall events. Next week, we'll be back with our preview of what to expect from Climate Week NYC So please stay tuned.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider. If you like what you heard today, please subscribe, share and leave us a review wherever you get your podcast.

Esther Whieldon: And a special thanks to our agency partner, The 199. See you next time.

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