Hiring Head ESG

Most of my readers know about my friend who lives on the 104^th floor in the tallest building in Mumbai. For those who don’t know, this friend of mine is the richest person in the world. His wealth is more than the wealth of Ambani’s (I mean Mukesh), Adanis, Tatas (including Shapoorji’s), Birla’s and Mahindra’s, Agarwal’s and Mittal’s all put together. He pays income tax as much as the annual budget of the Municipal Corporation of Greater Mumbai. But despite the financial power he holds, he is a very simple, friendly, well-meaning and a warm gentleman.

Last Sunday, he called me and my Professor Friend for a breakfast. We reached the 104^th floor of the tower in seconds using one the special lifts that he has reserved for his esteemed guests.

We were ushered to the breakfast table where my friend was engrossed reading a note. The title of the note was “Need to Hire ESG Head”. There was a stamp “URGENT”. We could easily guess why we were called for the Sunday breakfast.

“Hello friends”, he said when he noticed us come.” What is this ESG about?”

Sometimes when you are asked questions of this sort, that are difficult to answer in 2 minutes, the best strategy is to look outside the window. Professor did exactly the same. I being a toddler consultant and so enthusiastic, said “ESG stands for Environmental, Social and Governance” emphasizing the word “and” that is often either not said or understood.

Oh, is that all? My friend said with a sigh of relief. He continued.

My Group CFO wants me to hire an ESG Head. When I asked him why and asked for a job description (JD), he said he did not know about it himself. He had thought that having this kind person was fashionable and good for the optics. Not having ESG Head meant that we were not sensitive regarding unsustainability in our business operations. Which business operation today is sustainable anyways! I mused.

My Friend’s business was in investing from his massive wealth and so was indeed impactful. Group CFO said that ESG Head will be useful to “certify” whatever was currently done as it was all good, ethical and responsible without changing a bit. Strangely, Without any sustainability consideration, the business was going good. The Group CFO had said that we need good documentation however  and perhaps the ESG Head can do this kind of job. My Friend gave us this background and explained why this Note was written.

Professor was as usual sarcastic. He pooh poohed the idea of a new Head ESG. He suggested an alternative of appointing the existing Head PR (Public Relations) or Head CSR instead of sourcing someone new from outside.

Don’t go to market my Friend for this position, Professor was very emphatic.  He said that most ESG applicants will come with a basic qualifications on zoology, home science, arts etc. topped by few sustainability courses on Coursera and the like. Of course they will speak the global language of sustainability in the interviews and brag that they are the ESG experts of 20^th century kind.

I was wondering what Professor meant by the global language of sustainability. I decided to watch some of the YouTube videos uploaded on the recently held COP 27 and listen to some of the speeches and panel discussions. I was sure that these folks must be speaking the global language of sustainability. I won’t be surprised that there will be coaching classes in future to read, speak and write sustainability language like English, French, Spanish and German.

Probably Professor was right. Today, Head ESG position can be perhaps best filled by the Head PR. Many times, ESG Head is required manage “relationships” especially when dealing “upstream” (with Limited Partners) and “downstream” (with investee companies) and of course with the consultants who do the ESDDs, ESIAs and ESMS (readers, don’t bother much about these four letter words if you don’t know them or heard them first time). Even Head CSR can contribute to the ESG function especially in faking (sorry extrapolating) the social impacts and say that they are aligned to the SDGs. I could immediately spot such ESG Heads, especially at the Funds.

The Group CFO however wanted someone from outside.  He said that he has hired one of the big fours to draft the Job Description (JD) of ESG head. He had already contracted a head-hunter agency as well who often cause distortions or play musical chairs by moving same people elsewhere.

I was weary about the so called big fours. Why always say four? By now there must be big 20 consultants like G20/B20, I thought. Someone should be updating this number.

The Group CFO was summoned who was waiting in the lobby.

So Mr please give us your plan to hire Head ESG, my Friend asked him after introducing us.

He passed us copy of the JD. It was simply amazing. In one sense it asked for everything possible but on the hand it was so vague that anyone could fit in! The Big four consultant was really clever.

My Friend became a bit impatient and decided to come straight to the point. “Shoot” he said.

Well, our consultants feel that ESG Head should be a woman, said the Group CFO.

We nodded yes as now a days we knew that gender aspect is very important in the recruitment, especially at the United Nations. The knowledge and experience regarding the subject does not always matter and could be secondary.

Professor however had a different point of view. He said that women generally outperform men in terms of both delivery and loyalty and these considerations go much beyond gender. I thought he was right. We therefore agreed that the preference should be for a woman candidate.

The Group CFO continued

No matter the basic qualifications, the ESG head should have done some sustainability courses, however brief and trivial, from Ivy League universities. Now a days if you pay you generally get the certificate you want. The CV should also show participation in international conferences  and memberships of few impressively sounding organizations.

Point taken, said my Friend. I remembered that there were several of this kind in the ESG industry

Any additional criteria Professor? My Friend asked

Professor lighted his cigar and spoke

The ESG Head must have negotiation skills e.g. to convince that project is category B and not category A or do a convincing story telling to show that a Non-compliance can be a Partial compliance.

I thought this was a very important qualification criteria. This suggestion should have come from the big four consultant since this is what they frequently do.

Professor looked at me and asked for my inputs

I didn’t know what to say.

I sheepishly said “The person should have a competency to create or show an impact – out of nothing”

Wow, my Friend exclaimed. He looked extremely pleased.

“Mr Group CFO, please put this as the foremost selection criterion”

Now it was my turn to look outside the window.

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Image sourced from https://scripbox.com/blog/what-you-need-to-know-about-the-new-e-s-g-equity-funds/