'Bidding war' for ESG talent breaks out among Hong Kong companies needing help on sustainability goals, headhunters say • With commentary from Acre's Paddy Balfour

16 May 2023 by Paddy Balfour
blog author

​​​​Commentary from Paddy Balfour for South China Morning Post, published on 03.05.23, original source: 'Bidding war' for ESG talent breaks out among Hong Kong companies needing help on sustainability goals, headhunters say, Author: Martin Choi.

A “bidding war” is breaking out among companies in Hong Kong over senior and mid-level managers who have environmental, social and governance (ESG) expertise, as firms strive to reach their climate goals and meet tightening sustainability standards, according to headhunters.

Last month, Hong Kong’s bourse proposed tougher requirements for listed companies about disclosures of climate and sustainability-related risks and opportunities.

Hong Kong Exchanges and Clearing (HKEX) also proposed introducing new climate-related disclosures aligned with those of the International Sustainability Standards Board (ISSB), a body set up in late 2021 to consolidate various ESG reporting standards. The ISSB has said it will finalise its standards by June 30.

“The biggest issue is everyone wants readily available talent that has the experience [and] already knows the job,” said Sue Wei, managing director at Hays Hong Kong. “So the best person for the role is obviously someone that’s already sitting at your competitor doing the same job, and hence the bidding war. Or going to a big-four [consultancy and] stealing one of their consultants that’s working with your competitor, or with you.”

Managerial roles in ESG and sustainability are the hottest roles, including chief sustainability officer, sustainability director and sustainability manager, said Wei. Roles related to the regulatory requirements of ESG are also in high demand, she added.

“Compliance and regulatory reporting [related to ESG] is one of the hottest areas, because … our bread and butter in Hong Kong, our core business and competitive edge, is our financial hub,” said Wei.

“There’s a push [from the government] for every single bank and company to report on their sustainability plan and their green strategy. And that can’t be done without these experts.”

All of the around 2,600 companies listed in Hong Kong are already required to publish annual sustainability reports on their ESG performance, alongside mandatory periodic financial reports.

Qualified candidates are getting salary increments of 25 per cent to 30 per cent when changing jobs, according to Richard Barber, human resources and ESG practice head for Page Executive Recruitment in Hong Kong.

“This is mainly due to the lack of ESG talent entering and currently within Hong Kong, and companies ramping up their hiring efforts from competitors,” said Barber.

Senior sustainability leaders with over 15 years of experience, with a track record of establishing a company’s ESG strategy from scratch, as well as mid-level managers with six to 10 years of experience across different areas of sustainability, are the most in demand, Barber added.

While there is increasing demand for senior hires in the ESG and sustainability industry, “the real battle for talent is being waged for mid-career professionals,” said Paddy Balfour, executive director in APAC for sustainability recruitment firm Acre.

“This is in part driven by the rapid promotion of professionals with any level of meaningful experience into leadership roles that previously would simply not have been available,” he said.

“While there is an increasing number of graduates gaining experience, the supply of graduates has not yet fed through the system, thereby limiting the supply of mid-career professionals with the requisite experience in sustainability.”

Financial Secretary Paul Chan Mo-po announced plans for a three-year pilot scheme to build green and sustainable finance capacity in his budget plan in February.

The government earmarked HK$200 million (US$25 million) for the trial, which would provide subsidies for training to obtain the relevant professional qualifications in sustainable finance, as part of a collaborative effort to build capacity for the industry.

Hong Kong’s aspiration to become Asia’s green financing hub is also proving to be a strong driving force behind the growing demand for the right ESG talent within the financial sector, said Martin Xiang, principal at Heidrick & Struggles Hong Kong.

“While restrictions on the Hong Kong border have eased, we have received increased interest from senior sustainability leaders looking for potential local opportunities,” said Xiang.

Hays Hong Kong’s Wei does not expect a slowdown in demand, nor enough talent to fill all the gaps, in the next few years.

“When you have more demand over supply, that’s the push for bidding wars and talent competition,” said Wei.

Rather than trying to outbid competitors, companies should focus on a more holistic employee proposition, Acre’s Balfour added.

“Companies need to offer competitive compensation levels to attract and maintain their talented staff members,” said Balfour.