Barclays, for example, has more than doubled its sustainable capital markets team since establishing it in 2019, and the bank hired Freier this year to bring its analysts up to speed on developments. Those include constant new regulations, debuts from governments and companies, and a smorgasbord of debt types.
There’s also greater activism from investors trying to avoid paying a premium or getting caught out by greenwashing—where the environmental benefits are exaggerated—leading some funds to start dumping suspect assets. That’s putting banks under pressure to make sure what they market isn’t misrepresented.
“We are not hiring financial analysts from other firms but rather subject matter experts from think-tanks, NGOs and other areas, people who built their career around sustainability to make sure we are bringing that knowledge into the department,” Freier said, adding banks risked losing business without integrating ESG.
Scientific Greenium
HSBC’s Herweijer, a former NASA Fellow with a PhD in climate modeling, and Credit Agricole SA’s Tanguy Claquin both fit the mold—former climate scientists turned investment bankers.
While Claquin, with a PhD in atmospheric physics, benefited from France’s banks taking an early lead in sustainable finance as the country became the largest sovereign green bond issuer, he sees others catching up.
“There is a transformation going on in the banking industry—all banks are taking it seriously,” said Claquin, Credit Agricole’s head of sustainable banking.
So far this year there have been $377 billion in ESG debt deals, already nearing 2020’s all-time high. The biggest were social bonds from the European Union and a green debut from Italy, while the corporate side was led by sales from Heineken can-maker Ardagh Metal Packaging Finance Plc and Spanish utility Iberdrola SA.
I’m Available
An ethical hiring push could help to attract younger bankers—a Morgan Stanley report found that 95% of millennials (roughly born between 1981 and 1996) were interested in sustainable investing in 2019. Yet expertise will count—a recent job ad for a vice president role at Citigroup required experience within sustainable debt capital markets and pulled in around 80 applicants before being closed.
“The growth we see is at the associate and VP level, where there is a deep pool of talent with ESG expertise wanting to see their careers develop in this direction,” said Philip Brown, Citigroup’s global head of sustainable capital markets. “You cannot have a leading DCM franchise today and not be engaged in ESG.”
Yet with even the concept of ESG meaning different things to different firms, working out what banks want is a challenge, according to recruiter Gower. Clients are looking for people who can add value for the buyside as there’s still a lag with what investors need, he said.
“Every single role that we fill now has an ESG angle to it,” Gower said. “One thing, for sure, is that banks don’t want to be late to the party.
This article was provided by Bloomberg News.