23.08.2023
In the past two years, a number of infrastructure funds made deliberate and focused efforts to build out their ESG teams to drive value creation by ensuring that they brought in strong leadership to spearhead their sustainability efforts and this trend has continued in 2023 for those funds that were behind the curve or those that were taking on new energy transition or climate strategies.
In H1 of 2023, we have seen the beginnings of a transition towards ESG integration into the investment portfolios and the investment firms’ general business dealings in the European landscape. This year has been marked by a significant focus on regulation, disclosure, and targets for ESG. This has been largely led by developments in the EU and the U.K. However, the United States, despite the anti-ESG sentiments, has made some regulatory and disclosure progress through the guidelines proposed by the Securities and Exchange Commission (SEC). This has led global infrastructure funds to hire either dedicated teams or specialists to drive the data collection, and analysis, integration, and reporting. Limited Partners have placed added pressure on General Partners to comply with these regulations.
The types of skills required for these teams vary in part due to the size and focus of each fund and in part due to the current market composition (which includes sustainability / ESG professionals who could have either a consulting, strategy, scientific, or financial / investment background). On this basis, it is clear that this is a fluid and evolving talent pool, therefore funds need to be clear on their strategy in order to build a fit-for-purpose team across all sustainability roles if they intend to reach their goals. Funds that have recently made hires in this area include but are not limited to Global Infrastructure Partners, KKR, EQT, Blackrock, etc.
From a portfolio company perspective, there is still a high demand for Sustainability Executives and Non-Executive Directors or Advisors and we expect this trend to continue well into H2 and 2024. At the fund level, generalist ESG hires have continued at a slower rate at the mid to senior levels. Our report reflects that the average percentage of females appointed at the senior levels was 57% and 80% at the junior levels (excluding any promotions). Other market trends include a focus on climate change, diversity and inclusion, and strong governance practices.
Tidimalo Padi
Consultant, IR & ESG
Tidimalo is a seasoned executive search professional with a demonstrated track record of delivering on several global sustainability & ESG, IR, and C-suite mandates on behalf of infrastructure funds, investment funds, and portfolio companies. She has produced mandates in Europe, UK, Africa, UAE and USA. She has delivered on roles such as Head of Investor Relations, Head of Sustainability, Chief Investment Officer, Investment Partner, Chief Executive Officer, Chief Financial Officer among others. Tidimalo has partnered with several companies on their succession planning and leadership development initiatives. Prior to joining One Search, Tidimalo worked across other industries. including venture capital, banking, telecommunications, and technology.
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H1 of 2023 has been an interesting 6 months in the wider economy, which has seen increased interest rates and question marks around the certainty of the economy. Relative to the macroeconomic climate, the Infrastructure Credit market has had a stable start to 2023 with continued hiring across all levels, with the junior end of the market producing the most moves as it does every year.