The broad shift to a climate-resilient future continues, spurred on by perpetual regulatory pressures, corporate paradigm shifts, and a burgeoning ESG market.
While polarised investor sentiment and a recent dip in annual growth have sparked concerns for some, the maturing regulatory environment is poised to usher in a more transparent era for ESG.
Regulatory Complexity
ESMA’s (European Securities and Markets Authority) fund-naming guidelines are a prime example – a ruling designed to protect investors against exaggerated or unsubstantiated sustainability claims.
Moreover, firms across the EU are preparing to apply the CSRD (Corporate Sustainability Reporting Directive) for the first time in the 2024 financial year, for reports published in 2025. Are they ready?
Corporate responsibility has once again found itself in the spotlight, and we expect it to stay there for the foreseeable future.
This is the apex of a large iceberg. In the last ten years, ESG regulations have increased by a staggering 155%. Transparency and accountability aside, the overwhelming complexity of today’s compliance requirements is proving difficult to broach, leaving many firms swamped and bound in regulatory red tape.
Leaders must be equipped to build defensible, sustainable risk and compliance functions to fortify their operational resilience, competitiveness, and adaptability in the coming years.
A Defensible Talent Pipeline
Many of today’s firms are forced to compete inside highly unfavourable hiring conditions, a particularly affecting challenge for alternative fund managers (largely a result of fragmented regulation on the global stage).
Driving this compliance talent crunch are:
Increasing regulatory complexity – Between shorter compliance cycles and oncoming regulatory changes, the recruitment process is turning into a race against time.
A lack of understanding at the board level – Much like the implementation of AI, a lack of understanding at the board level can lead to short-sighted decision-making. Boards that fail to see the value of a strong compliance function risk hindering their ability to attract and retain talent. Best-in-class candidates are searching for firms with sturdy compliance cultures.
The rise of intra-regional trade – In many cases, a strong focus on regional expertise is making it difficult for firms to rely on the global talent pool.
Growing demand for specialised skills – Demand for niche skill sets (sustainability reporting, ESG analysis, environmental law) is outstripping supply, making it harder to find qualified candidates.
Despite myriad challenges, firms have an opportunity to transform regulatory complexity into a competitive advantage. Talent has emerged as a key battleground, causing firms to outsource to talent specialists like us to remain both competitive and compliant. The team at Broadgate are optimistic about the growth and resilience of the financial services space and the evolution of the recruitment process.
We’ll be following these regulatory updates closely, and in the meantime, we're eager to hear from firms navigating the hiring process in today's fast-changing regulatory environment. Moreover, in the spirit of World Environment Day, we're hoping to talk with fellow B Corps about their approach to the latest updates to the climate reporting regulations. If you’d like to discuss the hiring landscape in more detail or glean some market insights from our specialist compliance recruiters, contact us here:
