Demand for sustainability consultants is too high, experts say
Ahead of new climate reporting standards, many organisations are fighting to fill green skills gaps by securing external expertise. This is not a viable long-term solution, an expert has said.
Climate-related financial disclosure legislation is currently before Parliament. Ahead of its passage, the pool of experts available to patch over in-house skills shortages is shrinking given growing demands.
CFOs across climate reporting countries are being asked to integrate sustainability and finance – a task that has, to date, proven challenging.
While the supply of, so-called, “green talent” available to help with the integration is increasing, it is being outpaced by the demand for their offerings.
Richard Evans, chief executive of sustainable finance recruiter, Talent Nation, said the imbalance in supply and demand is driving up prices.
“We’ve been recording the data for the last five years and [demand] has been trending upwards all that time … and therefore so have salaries,” said Evans.
“There is a shortage currently, and it’s only going to get tighter from here.”
Under the proposed legislation, Australia’s largest companies will be required to commence reporting from 1 July 2025, with a phased rollout for smaller organisations.
According to UNSW accounting professor Paul Andon, finance functions will play a leadership role in organisational sustainability reporting.
However, it will still be a business-wide phenomenon and reporting efforts to date, particularly in Europe, have demonstrated the challenges of climate data standardisation.
“There is a very different conception of data [quality] between the different individuals … there’s a very different information system involved in gathering, say, carbon data, emissions data, etc. than there will be for financial reporting,” said Andon.
“We’re finding that there are difficulties, particularly in Europe, in getting teams together to agree on the quality of information, how it’s going to be gathered, processed, assessed, and internally assured to a standard that will satisfy the CFO and the board.”
Andon explained that external experts and consultants will be instrumental in bridging in-house green skills gaps and in creating a common language for the business-wide transmission of climate data.
“The last thing a CFO wants to hear from someone like me is, ‘You need to increase your cost base by bringing in a consultant.’”
“Unfortunately, the in-house expertise is often not there, even in the best organisations,” he said.
Internal shortages are one thing, however, Evans explained that external consultants, too, are experiencing shortages.
“They’re short-staffed at the moment. There’s a real shortage of consultants with experience in this space, and they’re being brought in-house by their clients,” he said.
Aletta Boshoff, advisory partner at BDO, said the climate reporting transformation will incentivise many financial organisations to diversify their talent pools, including by engaging individuals with science backgrounds.
“Sustainability covers everything in the business, cybersecurity, privacy lawyers … it’s not just the traditional accountants, it’s much broader.”
Boshoff said that external engagement, however, is not a long-term solution and that organisations must focus on building internal strengths.
Education and training will be instrumental in building the in-house capabilities for climate reporting given the costs of ongoing external engagements.
Evans said universities and executive education institutions are looking to increase their course offerings to allow the required degree of upskilling.
The challenge, he said, is ensuring those educational offerings remain up to date with the changing sustainability legislation.
“The space is moving so rapidly that it is quite challenging to build a course and make sure that it’s relevant by the time the first class of graduates come through,” said Evans.
“People aren’t panicking, but I think there is certainly a lot more activity around shoring up internal capabilities,” he added.
