Why are there so few Sustainability Leadership Vacancies?
Ever since the end of 2022, when Liz Truss imploded, the demand for staff in the sustainability market has dropped and while Liz Truss is not entirely at fault, this decrease has been most heavily evidenced at the senior end of the sustainability recruitment market.
As a business that specialises in ESG and Sustainability senior appointments I thought it would be useful to explore the causes for this drop in this article.
There are still high quality Sustainability and ESG leadership roles at purpose led companies where you can have a real impact; it is simply that the number is significantly lower than the preceding years and far below what you would expect to see in a healthy recruitment market.
Yes, there was a boom as businesses initially scrambled to hire CSOs and Sustainability Directors to roll out net zero strategies and announce their targets to the market, that was always going to subside. However, since 2023 it has been economic pressures and the consequential cost management that are a key reason why senior sustainability roles have dwindled. Inflation, diminishing growth and negative government announcements (thinking of the 3 months prior to the last Autumn Budget in the UK), followed by tax increases for companies in the UK, have naturally created a cautious economic outlook for most CEOs and CFOs.
As a result, with companies focusing on cost management and short term profitability, sustainability hiring has been seen as less business critical by many CFOs that are now focused on roles with clear ROI, regulatory compliance or cost-saving capabilities rather than broader transformation positions that offer longer term benefits.
Regulatory compliance is obviously a key part of hiring an ESG Director or Chief Sustainability Officer, however the continued uncertainty (as witnessed with the ongoing CSRD Omnibus) only dilutes the urgency businesses feel for investing in new sustainability leaders.
In the US and parts of Europe, a backlash against ESG and increasing political friction over climate policy has led firms to pause or scale back sustainability hiring. Some banks have even downgraded senior ESG roles, moved them away from executive committees, or opted not to replace departing officers.
Political swings in the US as Trump has been re-elected has had wide ranging impacts, not only felt deeply in the US but also increasingly on a global level, these have coincided with slowing returns in some green investment funds.
Instead of hiring a Head of Sustainability, CSO or Sustainability Director, potentially with dedicated teams, we have increasingly seen companies downgrade the role to middle management and look to hire a Sustainability Manager. Supporting this new hire with external consultancies to deliver a similar remit, albeit usually less ambitious, or in some cases the new Sustainability Manager is expected to deliver a range of duties, initially planned to be covered by multiple new hires.
Another reason is that we have seen more integrated roles, the upskilling of procurement and finance staff for example, meaning a possible lessening need for a C suite sustainability hire. In some sectors such as manufacturing and FMCG we have seen the Sustainability role often merged with others like Health & Safety.
As with all senior appointments, the market is more sensitive to candidates moving roles to generate more opportunities. However, in our current employment market, with a scarcity of quality vacancies, those candidates already in impactful roles are choosing not to risk a move.
The current dip in senior sustainability roles isn’t a sign of fading relevance, but it does reflect a shift from early stage, high profile hiring to a more pragmatic, business integrated phase.
Of late, in sectors like the built environment where regulatory pressure and government funding has been “more” consistent, we have experienced the larger share of leadership opportunities and I expect that to be the same for the rest of the market.
The next wave of opportunities is likely to return as regulatory frameworks stabilise and finance flows back into strategic decarbonisation, potentially driven by a worsening climate situation, but hopefully in a period of increased political and economic stability and stronger leadership from governments.