The Government’s Ireland for Finance strategy has set out an ambition to grow employment in Ireland’s international financial services sector from 44,000 at the beginning of 2019 to 50,000 by 2025. And it is anticipated that much of that growth will come from the burgeoning area of sustainable finance.
“It’s a growing industry and that is generating demand for talent,” says Prof John Cotter, head of banking and finance at the UCD Michael Smurfit Graduate Business School. “We are now approaching the point where every person employed in the industry will have some link to sustainable finance. That will apply to everyone, regardless of whether they are the CEO or someone who has just walked in the door. The nature of that link will depend on their role but that will drive massive demand for skills in the space. There is a lot of training and education to be done. Repeated upskilling will also be required.”
In that context it is little surprise that an emerging skills gap has been identified by the industry. One of the key findings of the Financial Services in Ireland – Skills of the Future report produced by Financial Services Ireland, the Ibec body representing the industry, and the Irish Financial Services Skillnet earlier this year is that there is “a growing gap between the current availability of sustainable finance skills and what will be required to support growth in the field”.
“Developing sustainable finance skills and talent within organisations is important and materially impactful to clients, customers, people and society at large,” the report found. “Addressing the sustainable finance skills gap requires an integrated, multidisciplinary approach. This means upskilling existing finance professionals, including corporate financiers, tax advisers, and risk and audit teams on ESG criteria, as well as introducing new skill sets from a varied set of disciplines to ensure Ireland’s talent pool is developed to meet the ambitions of future financial services stakeholders.”
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The Sustainable Finance Deep Dive Skills Report (2019), commissioned by the Sustainable Finance Skillnet Ireland and Sustainable Nation Ireland, said this rapid shift in required skill sets will require integration of sustainability and ESG modules into all third-level finance degree and masters programmes and professional finance qualifications.
But there is no one skill set that fits all the sustainable finance needs of every firm in the financial services industry, according to Louise Dobbyn, a partner in Matheson’s Financial Institutions Group and member of the firm’s ESG advisory group.
“In order to integrate sustainability risk and embed ESG into a firm’s business firms must first assess whether management have the right qualifications and expertise to drive this change specific to their ESG business needs,” she says. “Firms must have the necessary resources and expertise for the effective integration of sustainability risks and to ensure staff have the technical capacity and knowledge necessary to analyse those risks, taking into account the nature, scale and complexity of their business. More resources will also be required into the future for in-scope companies when ESG reporting and disclosure requirements become enshrined in Irish law.”
And the industry is responding. “There has been a significant investment in professional service firms to develop highly-skilled practice groups to meet these industry needs,” Dobbyn adds. “At Matheson, having worked on a number of innovative ESG projects, we understand the pace at which dynamics are changing. We have developed a firm-wide, multidisciplinary ESG advisory group to provide an integrated approach to supporting our clients in responding to legislative and regulatory change; delivering on their own ESG goals; and meeting the challenges and opportunities in doing so.”
Donna Noonan, IFS Skillnet network manager and a member of the Expert Group on Future Skills Needs for the financial services sector, notes how the situation has evolved in recent years. “It used to be sufficient to have one person in the company who knew about ESG and sustainability,” she says. “It’s a much bigger body of work now, and you need people throughout the business with expertise in them. You have to look at what people need to know and what skills they need to do their jobs.”
In response IFS Skillnet worked with the Sustainable Finance Skillnet and the Compliance Skillnet to develop the world’s first sustainable finance compliance programme for the financial services sector. The new Professional Diploma in Sustainable Finance for Compliance Professionals will provide participants with the knowledge and practical skills required to deliver high standards of governance to their firms when it comes to sustainable finance.
“Financial Services Ireland board members came up with the idea for the programme,” says Noonan. “That’s the beauty of the Skillnet model. Financial Services Ireland is our promoter organisation, and we are in constant contact with the industry through it. No one knows how sustainable finance is going to evolve, but we are working with companies in the sector to forecast future skills needs and then develop training programmes to meet them.”
Cotter sees the skills shortage as a potential positive for Ireland. “The sustainable finance report found that the shortage is not as bad in Ireland as in other European countries.,” he says. “I see this as an opportunity for Ireland. There needs to be a massive ramp up in training and education in the coming years. I see that as an opportunity for the universities and other training providers like the professional accountancy bodies. Here at UCD we have the masters in sustainable finance with 30 to 40 people coming through that each year, and all our courses in the UCD school of business now have a sustainability element as part of the curriculum. Students are coming to us looking for that. Other universities and education providers are going to follow suit.”
The future growth of the industry will be dependent on the training and education providers ramping up their offerings, he adds. “The two main opportunities for Ireland’s international financial services sector in the next 10 years are fintech and sustainable finance, and both are centred on talent. Our ability to avail of those opportunities will decide whether the industry employs 35,000 or 55,000 people in 10 years’ time.”