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Sustainable Finance and the Talent Challenge – Ireland’s story

In 2020 the world lost nearly two million people to the COVID-19 pandemic. The health of more than 90 million people globally was affected, lifestyles dramatically changed, and humanity was forced to rethink its natural fragility and its relationship with the environment. And with the economies of most, if not all countries in the world, brought to a standstill, millions of jobs, people’s incomes, and savings were negatively affected, with governments scrambling to halt economic freefall.

Unfortunately, these challenges still persist today. However, as we address the ongoing health issues, we should also consider how best we can rebuild when the crisis fades, and normal economic activity once more becomes possible. And with many of the world’s economies rebooting, we must ensure this period is utilised to rethink the structure of the economy, and to plan for how the economy can be further aligned with a resilient, low-carbon future.

In this context, greater mainstreaming of the sustainable finance agenda will be key. Indeed, investments integrating ESG factors outperformed the rest of the market during the pandemic. 2020 saw a significant surge in capital allocation directed towards sustainable finance activities. ESG aligned Exchange Traded Funds (ETFs) grew from under $59bn at the end of 2019 to just over $174bn end 2020. Equities were not alone as in 2020 green bonds issuance hit a record $269 billion. And in Ireland, Euronext Dublin ESG bond listings for 2020 surpassed €28 billion in cumulative issuance, the highest annual figure to date.

The Talent Challenge

Reflecting this trend, comes the need to identify talent requirements and upskill financial services professionals with sustainable finance skills; in effect support the development of new products and services utilised to mobilise the trillions required to finance Ireland and Europe’s transition to a low-carbon economy. Accordingly, within firms the demand for sustainable finance skills and talent is growing rapidly.

However, in meeting this challenge, recent research by Sustainable Finance Ireland highlights that organisations are finding it difficult to hire sustainable finance staff. Left unaddressed, this could cost them significant economic losses both through relative prices (increased salaries due to relative scarcity of talent) and lost opportunities. The most in-demand skills, pressing learning needs and desired outcomes from training show that the upskilling in sustainable finance requires a systematic approach by firms. These findings align with the need to advance skills to assist in product-development and bring sustainable finance into the core strategy of organisations.

Ireland’s response

An action of the Irish government’s Ireland for Finance Action Plan 2019, in 2019 Sustainable Finance Ireland, UN convened FC4S and Deloitte Ireland undertook an analysis of Ireland’s financial services sector sustainable finance readiness. The findings highlighted that sustainable finance is not a short-term trend, but a permanent shift from ‘niche’ to ‘mainstream’ representing an entirely new focus in finance. It recommended, that in addition to changes to third level programmes, sustainable finance must be part of professional education and continuous professional development for finance professionals, underpinning new product and services development.

A Greener Horizon

On the back of this important analysis and with the support of the Irish government industry skills development agency – Skillnet Ireland, the Sustainable Finance Skillnet was launched late 2019.

Overseen by a Steering Committee representing all segments of Ireland’s financial services ecosystem, across 2020 the Sustainable Finance Skillnet put 1,400+ professionals through a wide range of sustainable finance learning opportunities.

Activities included the development of a global first-of-its-kind EU Taxonomy course which enables investment professionals to gain a firm understanding of the EU taxonomy and its practical implementation to facilitate sustainable investment. The Sustainable Finance Skillnet also partnered with CFA Ireland to launch the CFA UK Certificate in ESG Investing in Ireland, delivering the benchmark knowledge and skills required by investment professionals to integrate ESG factors into the investment process. In 2020, 260 finance professionals from 40 firms also undertook UN Principles for Responsible Investment Academy online courses.

Under government’s Ireland for Finance Action Plan 2021, the Sustainable Finance Skillnet has been tasked to further develop sustainable finance skills programmes for professionals in the Irish financial services sector. Activities in 2021, include the development of a course to address the EU’s Sustainable Finance Disclosure Regulation (SFDR), which launched in March.

On the back of a public-private sector €1MN investment, across 2020 and 2021 over 3,000 Irish located finance professionals will have been supported by the Sustainable Finance Skillnet to upskill.

In late 2020, voicing her admiration for the work of the Sustainable Finance Skillnet, European Commissioner Mairead McGuinness stated that: “Ireland’s initiative for improving skills and expertise for greening the financial system is setting an example for others to follow”.

The development of a deep sustainable finance talent pool underpins Ireland’s emergence as a leading international sustainable finance centre of excellence.

Paddy Molony
Sustainable Finance Ireland

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