Energy & Environment
Today's young finance professionals and the shift to a sustainable economy
Roberta Benedetti del Rio / Jun 2014
Today's young social entrepreneurs
Ending poverty, counteracting the drama of climate change, these are just some of the challenges that our generation is bound to face. Promoting sustainable investments, young finance professionals could play a key role in accelerating a solution.
For decades, investment banks have attracted some of the most talented individuals from the world’s top universities. When I was working at a bulge bracket firm, I regularly thought that if we could just pause the rat-race and focus all employees on solving a pressing and complex issue instead, such as hunger for example, we would no doubt collectively achieve the result.
Gradually I discovered I was not the only one thinking along those lines. Increasingly, young finance professionals want to align their occupation with their personal values, to be able to understand their impact and, ultimately, to have a job they can be proud of.
This is not surprising. Millennials are the first generation to enter the workforce truly, globally connected. Through economic and cultural globalization, the world’s problems are, more than ever, our problems. All of us have at least one friend shocked by their country’s political oppression, or who posts pictures of themselves taking part in relief efforts following a natural disaster close to home. Our deep interconnectivity means that our individual actions and choices today can potentially have exponential impacts.
The result is that a job in a prestigious banking institution with one of the highest graduate salaries (although often seen as a trade-off against one’s health and personal life) is, alone, not a compelling enough proposition for the new generation of bankers and finance graduates. A direct positive impact on the environment and/or society is an equally important factor for our sense of success.
The growing fields of impact investing and sustainable finance offer the best prospects in this sense, as the number of high quality applications that institutions like Big Society Capital, Generation Investment Management and Bridges Ventures receive for their open positions clearly shows. Using finance tools to drive innovation and business solutions to an array of social and environmental challenges, they have the potential of bringing sustainable investing to the mainstream arena.
Traditional financial institutions and their professionals would greatly benefit from gaining exposure to the new concepts being developed in sustainable finance. However, this is easier said than done.
Millennials in junior to mid-level positions in banks feel very comfortable in their area of expertise, but are not empowered enough to bring substantial positive change to their jobs. Their managers are often too invested in the traditional model and tend to be driven by the existing financially-focused incentives. Moreover, young bankers don’t have a lot of time to spend outside of the office, so they struggle to keep up with the ever-evolving set of solutions in this new finance field.
When young bankers look for a position that would allow them to be more aligned with their values, more often than not, only few ideas come to mind. Those that do may include roles within charities or start-ups, but fuel questions around what the job exactly entails, other than a big salary drop and higher risk. The underlying fear that resonates with many is that of missing the challenge, the fast pace and the adrenaline of a highly demanding job, and the professional satisfaction that ensues. In addition, most friends and contacts are also colleagues, so there is a psychological barrier in leaving everything behind. The whole leap of faith to a career with more direct social impact often feels too large a risk to take.
This is the gap we see at Finance Matters, an organization Madeleine Evans, Sebastian Seehusen and myself co-founded to help our peers in finance use their skills and capital to address the social and environmental issues they care about. We are working to bridge the traditional finance world and impact-focused finance through educational events, interactive workshops and debates, networking spaces and news feeds. We allow young professionals to feel part of a community of peers facing the same dilemmas, have the chance to hear about new models of sustainable finance directly from leaders in the field, and provide a low risk environment where open and transparent communication is the norm. These are unique opportunities in a journey of education and confidence building.
Three years after starting this adventure to help ourselves as much as to help others, we are amazed by the attention received and the relevance of our proposition. Whether a Finance Matters member wants to change her career path or find the courage to suggest positive innovation in her current role, we work to facilitate a transition towards a more sustainable financial system by supporting the young professionals that are its lifeblood and inspiration.
We see need for education at all levels. As finance evolves, mastering certain formulas is not enough anymore; a greater understanding of long term megatrends such as aging population, climate change, natural resources scarcity and a myriad of other social issues, is necessary. We, as finance professionals, need to assume the responsibility and courage to show we care.
While old structures and incentive systems are updated, Millennials are still leading the trend. We are enthusiastic and eager to put our skills to work for a better world for ourselves and future generations. We are not confused about our purpose; we are impatient to be the generation that leads the paradigm shift to a sustainable economy, fit for the long term.