Lack of talent in sustainable finance despite rising wages

Six years ago, Kedge first went. At the beginning of the 2021 academic year, Edhec and Skema began a master’s degree in sustainable finance. At the same time, the Montpellier Business School received a Master’s degree in Finance and was renamed Finance and Green Finance.

Undoubtedly, the race has started successfully and truly between schools, and there is no doubt that we will miss the transition to green finance. However, the delay has already occurred. “In recent years, awareness of climate emergencies has clearly increased, and we have realized a little later that France has forgotten to train financial professionals.”Lament Dhafer Saidane, Head of Sustainable Finance and FinTech expertise within the Skema Master’s degree. According to this expert, under the influence of the advent of new regulations such as the European classification, companies need to measure the impact, but unfortunately the managers are not trained.

For Antoine, a young graduate and widely aware of this subject, the Master’s Degree in Kedge was his favorite investment opportunity while contributing to the fight against climate change. As soon as I got his master’s degree, I found an internship at the Caisse des Dépôts in the investment department of the Caisse des Dépôts. Objective: To develop a government recovery plan on climate resilience and biodiversity factors. In other words, select and invest in projects that promote life renewal.

Antoine, an employee of the Caisse des Dépaux.

Antoine, an employee of the Caisse des Dépaux.DR

But don’t get me wrong about his profession. Despite what sounds like an NGO’s plea, we’re talking about money and the rate of return on investment. “We do not distribute subsidies! Clarify Antoine. Ultimately, we want to balance costs and generate even a little more revenue to cover the operating costs of the bank. »»

Money, concrete, impact

The day before the interview, the young man was on the ground in Essonne and visited the forest five years later thanks to the storage of the old embankment and his investment. “We talked with the project owners to see if the cost of the earthworks (land rework, editor’s notes) was consistent with their preliminary analysis. He explains. It’s concrete! I was never interested in creating Excel or slides intended for storage in the cupboard. »»

Caroline is a graduate of Edeck. Her master’s degree in sustainable finance did not yet exist when she was there. So she chose classic finances. “I was a very mathematician and loved finance. »» So she started her career with a merger and acquisition at a big bank, but couldn’t find her way. “I didn’t see the creation of values, especially the negative externalities of our project. These pay dividends to shareholders or get the goal to expand the business of such a company. It was an LBO business for. It didn’t talk to me … “

Caroline, Green Kirin Employees

Caroline, Green Kirin EmployeesDR

Caroline needs a project that is in line with her ecological and environmental beliefs. “Do not create new needs that are not needed”.. She currently works for a consulting firm specializing in financing renewable energy and ecosystem migration projects. “I realize that my work is not saving the world, but at least it reduces the impact on climate change. »»

Promotions that are more committed than average

There is a peculiarity of these students: conviction of urgency.Caroline tells herself “I’m pretty engaged” But in reality there are many. She has read the latest IPCC report and is enthusiastic about following the content of Jean-Marc Jancovici, a professor at Mines Paris Tech, who helped with the energy transition. She also barely warms her home, buys new clothes, and packs as few products as possible. As a good city dweller, you have no choice but to use a bicycle or public transport.

Patrick, who also graduated from Edeck and is currently working on financing a hydrogen power plant at the European Bank for Reconstruction and Development (EBRD), does not have the same commitment, but has an equally strong belief. “I never work in the gas or oil industry. I don’t have to sell my soul to buy a huge apartment in London.» »

Skema easily recognizes that Master of Sustainable Finance students are more conscious than average. In the case of Dhafer Saidane “Their extraordinary maturity” Especially the person who marked him, “Students are ready to spend more class time than expected.”..

Salary is still a very important variable, but they are no longer obsessed with it

Students, often more conscious than school managers, sought this type of training that combined financial rigor with a quest for meaning. In recent years, they have doubled the pressure to receive training related to their desire for commitment. “By earning this master’s degree, you can recover students who should have been away from the economy.”Check Dhafer Saidane.

The finance professor says he has received requests from students who have been enrolled in other programs for many years. “I ask them why, and they all tell me:” We want meaning. “.. Recruitment is also primarily based on their level of commitment and their sensitivity to the need for change. “And if they lack the technical skills of finance, it’s okay. »»

These motivated students will sometimes be ready to give up a great financial salary in exchange for meaning. “It’s still a very important variable, but they’re no longer obsessed with compensation., According to Dhafer Saidane. Observation that Caroline finds herself in the green giraffe. The big American M & A companies would have made more money, but the situation is very different. Colleagues who share the same values ​​would not have the same enthusiasm for the project. »»

However, this salary gap is said to be closing as the need for sustainable financial graduates increases. “Overall, salaries in the sustainable financial industry are getting higher and higher and will be even higher in the next few years.”Expects Isabelle Mouret de Lotz, Development Director of the recruiting firm Birdeo, to specialize in positive impact jobs. “This dual expertise in finance and sustainability is a true career lever. »»

Reality observed by Kedge graduate Antoine: “My classmates who graduated from sustainable finance earn far more than their consulting classmates. I’m not pathetic myself.”I have nothing more to say.

Rapid increase in demand for skills

Even if students succeed in influencing school programs, they still have to do the same to run a business today. This gradual arrival of new talents who are over-aware of climate change generally undermines well-meaning sovereignty, but due to lack of subject skills. “These young people are ahead of their leaders.”Note the Skema head.

As with any transition, changes within the enterprise are gradual. In particular, the scale of the promotion remains so modest that there are 36 students at Edhec, 37 at Kedge and 40 at Skema. Of course, these disciplines tend to expand, and schools claim that training on green finance issues is not limited to these very specific courses. “There is at least one course of sustainable finance in the four disciplines of the Master of Finance.”Edhec.

A non-exhaustive list of green finance professionals

ESG or CSR consultants, ESG risk analysts, SRI fund management specialists, green bond experts, impact measurement specialists, non-financial auditors, etc.

And fortunately, given the growing needs of the market. “The demand from companies, management companies and consulting companies is very strong. Check the head of the company Birdeo. Industry experts are facing an incredible shortage of talent. »»

And there is a good reason. Few employees can claim 10 years of experience in ESG fund or SRI practices. Therefore, candidates are interested in training in these subjects in order to stay one step ahead of the other subjects. Companies also need to train their employees in order to keep them within the organization.

Mainly minority green finance

Skema expects business demands for these transactions to double each year. “And our training isn’t enough! »» I regret Dhafer Saidane. Patrick of the EBRD is convinced that the entire financial sector is destined to be “green.”

For the time being, we are still far from it. According to Dhafer Saidane, sustainable finance accounts for 10-12% of the world’s finance. “But the growth rate is close to 20% per year.”And this includes all aspects of sustainable finance, including Islamic finance, which will appear in Skema’s Master’s degree next year.

Therefore, it is important to agree with the definition of “green finance,” a label widely used by financial professionals.

Of the 31,000 private equity funds, only 7% generate more than 10% green revenue, according to an analysis released last week by Clarity AI, the world’s leading sustainability technology platform. A total of 3.6% of the revenue from these funds can be considered green. In short, it helps mitigate climate change.

Center for migration: Infrastructure. Ah…

According to an OECD report with a base period of February 2020, pension funds and insurers have invested € 117 billion in green infrastructure, but could have invested up to € 103 billion. I have.