At the US Open women’s tennis semi-final in September play was interrupted for nearly an hour by Just Stop Oil protesters; in October protesters injected some actual interest into yet another West End production of Les Miserables.
These were just the latest in a string of protests calling for an end to fossil fuel production which comes as scientists warn of an urgent need to slash burning fossil fuels to zero following the hottest July, August and September on record. At the same time, many people are wary of investing their money in anything that could damage biodiversity and contribute to climate change.
These are among the reasons why green finance, defined by the World Economic Forum as “any structured financial activity that’s been created to ensure a better environmental outcome” has become such a growth area.
“Sustainable financing relates to environment and social and governance (ESG) requirements, and green finance falls into the environmental side,” says John Cotter, professor of finance and chair in quantitative finance at UCD.
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“Green finance includes green loans; these could include preferential rates – which are substantially better – for electric vehicles or houses with a higher building-energy-rating certificate.”
An Ibec report released in 2022 said there was an urgent requirement to prepare the current and future workforces to support sustainable finance. The report stated that 69 per cent of respondents identified sustainable finance as the greatest opportunity for the finance sector. But it also pointed to a growing skills gap in the sector and the need for more education.
Where are the career opportunities in this sector?
“Green finance was formerly seen as a bit niche but now it has become part and parcel of everyday work in the financial services sector,” says Donna Noonan, IFS Skillnet manager with Ibec.
“So even if it is not your full-time job, your work may include some green finance or it may involve sustainable finance disclosures regulations or the corporate sustainability reporting directive. There are lots of skill gaps in this sector, so people interested in a career could look at becoming a sustainability reporting specialist or specialising in sustainable finance regulation implementation. Or they could become sustainable and responsible investing associates.”
Although the Ibec report put sustainable finance at the top of the list, Cotter says fintech may be more important.
“The sweet spot is a combination of sustainable finance and fintech – for example, a data science role where someone monitors and evaluates pollution amounts,” he says.
What primary degrees or postgraduates do people working in green finance have?
Graduates with business, engineering and legal degrees, both general and specialised, are moving into this area, says Cotter.
“In the business school here at UCD our undergraduate and postgraduate programmes, as well as our executive education, has become more green and sustainable in the past decade,” he adds.
“This change has been led by students: they demand more sustainable courses and themes throughout their programmes. It really matters to today’s students. We all know that this needs to be addressed and, with universities now including current and potential students among their stakeholders – instead of just alumni – the demand for sustainability to permeate the courses has grown.”
Noonan says that for employees, especially those in younger generations, sustainability is an important factor when they decide what companies to work for.
“They are asking companies about what they are doing in terms of ESG,” she says.
UCD offers a masters in sustainable finance, on which about 60 per cent of the cohort are international students, says Cotter.
“We are attracting people from energy and environmental science backgrounds,” he adds. “Our MSc in sustainable finance and MSc in financial data science share a common module on green – or sustainable – data science.”
On top of this, there is a postgraduate diploma in sustainable financial technology and innovation at Maynooth University.
What CPD options are available?
Many professionals who did not learn about sustainability in their undergraduate or postgraduate degrees have opportunities to increase their skills through continuous professional development (CPD).
“We have strong links with the Institute of Banking and the Compliance Institute, and we have developed and delivered a brand new, European-first programme in sustainable finance for compliance professionals, which runs part-time over a year,” says Noonan.
Cotter, meanwhile, says the Institute of Banking runs all types of CPD courses related to this area, while it is also covered in the institute’s own suite of executive education programmes.
Is green finance only for finance professionals?
“There is so much regulation in this area, and more coming down the tracks, that a move into this sector would be a good pivot for someone with a law and/or law and regulation background,” says Noonan.
“There are also roles for analysts who can work on data related to this area. It is not just people from pure banking backgrounds.”
Where are people working?
Graduates and professionals with knowledge of sustainable finance are not necessarily going to work in traditional banks, says Cotter.
“They are finding roles in NGOs and in governmental organisations. And they are finding that sustainable finance is not as neatly siloed away as it once was; instead, it is a concern throughout the organisation,” he adds.
“Or, they may go into the area of renewable energy. You might see a student doing a business or engineering degree and then going into the area of renewable energy finance. Even some fund managers are creating ESG funds.
“I am involved in the European Securities and Markets Authority and part of our brief is to look at activities in European financial markets. And we see that – from a base of almost zero – the big growth area is ESG activity.”