Which ESG specialists are private equity firms looking for? We see three plus one groups in the ESG candidate market. All of them have relatively little private equity experience.
ESG strategists who know sustainable business models as potential targets. They’ve invested in these markets and understand how “green” business models and their competitive dynamics work. They’re often found in deal teams or fund management companies.
Sustainability investor relations experts and communicators. They know what investors and stakeholders expect on ESG and CSR compliance, which data is easy or hard to obtain across a company or group, and which topics need a lot of attention and which relatively little. They organise how the data is gathered and interpreted, and advise the board and management on external communication.
Sustainability implementers. They know how to reduce the CO2 footprint of a factory or a value chain, how to build a circular economy and how a (portfolio) company can optimise its energy mix and consumption.
All three groups are highly specialised.
On the ESG strategists: they absolutely must be able to deliver too; that’s simply how mid-market private equity works. But such people are mainly found in large corporations, and it’s very hard to persuade them to move into PE. The interest is there, but it often founders on a lack of mid-market delivery experience.
ESG communicators often come from banks and the fund industry, and also from industrial groups. The art is to work out how much delivery capability they have in a smaller setting.
In the long run, we don’t see a shortage of ESG communicators and strategists for PE, because degree programmes and courses in ESG communication are springing up everywhere at universities and business schools. Plenty of talent is coming through.
The implementers are often far removed from the strategic and financial implications of the business model. Here we’ve met many purpose-driven people who are rather sceptical of private equity. Only by dispelling existing prejudices can PE win over some very interesting candidates from this group.
And the fourth group? The “plus one” are the consultants. Good general and specialist skills, plenty of know-how on EU regulation, a good strategic overview. But what about delivery? Start early! The sooner young, up-and-coming talent is introduced to ESG in a PE context, the better for the long-term ESG strategy. As with diversity: the early bird catches the worm.
