Green finance: China faces acute lack of talent for sustainability-linked investment, says CFA Institute

60 per cent of ESG professionals have received no relevant training, and fewer than 10 per cent hold a relevant qualification, organisation says

Government, enterprises and universities should work together to cultivate ESG talent, institute says

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People walk past a building in Beijing’s Central Business District on June 21, 2023. Photo: Reuters

Published: 11:30am, 12 Feb 2024Updated: 6:21pm, 12 Feb 2024

China lacks both an adequate supply and a pipeline of finance professionals with expertise in environmental, social and governance (ESG) issues as demand for such people surges amid a boom in sustainable investing, according to the CFA Institute.

China is struggling to develop ESG analysts, strategists and executives to fill the rapidly expanding demand in the finance market, the organisation said in a report. The government, enterprises and universities should work together to build a structured and standardised system for cultivating ESG talent, it added.

“As ESG is embraced by more companies in China, the need for the knowledge, skills and capabilities to deliver on their ESG-related goals has created a massive gap in terms of the thirst for ESG and sustainability knowledge,” said David Zhang, China head at the CFA Institute.

Driven by the global “do-good” investment boom and China’s climate goal of reaching net-zero greenhouse gas emissions by 2060, the country is seeing a rapid surge in demand for the skills and talent to do sustainability-related work, especially in the financial market. But unclear career positioning, a lack of training opportunities and a shortage of career guidance are inhibiting the development of such talent, according to the CFA Institute.

The Wujing Power Station is seen in Shanghai on January 24, 2024. Photo: Bloomberg

Even professionals who are in ESG-related jobs today lack the requisite expertise to do their jobs, with 60 per cent of ESG professionals having received no relevant training, the organisation found.

Between May 2022 and April 2023, the number of active ESG-related job postings in China increased by 64.5 per cent compared with a year earlier, according to a report released by China’s largest job recruitment site Liepin last July. The number of applicants increased by more than 150 per cent in that span, as salaries 30 per cent higher than those for average financial jobs drew candidates’ interest.