Six years ago, Kedge was the first to go. At the start of the 2021 academic year, Edhec and Skema launched their master’s specialization in sustainable finance. At the same time, the Montpellier business school ripolined its “Finance” master’s degree, renaming it “Finance and Green Finance”.
No doubt: the race is well and truly launched between the schools, and there is no question of missing the turn to green finance. However, the delay is already taken. “Awareness of the climate emergency has clearly progressed in recent years, and France realized a little late that it had forgotten to train finance professionals”deplores Dhafer Saidane, head of the sustainable finance and fintech specialization within the Skema master’s degree. Under the effect of the arrival of new regulations, such as the European taxonomy, companies must measure the impact but alas, those who manage are not trained, according to this specialist.
For Antoine, a young graduate and widely aware of the subject, the Kedge master’s was an opportunity to invest, which he likes, while contributing to the fight against climate change. As soon as he finished his master’s, he found an internship at the Caisse des Dépôts et Consignations in the investment department of the Banque des Territoires. Objective: to deploy the government’s recovery plan on the climate resilience and biodiversity component. In other words: select and invest in projects that promote the renewal of life.
However, do not be mistaken about his profession. Despite the term that sounds like an NGO plea, we are talking about money and return on investment. “We do not distribute subsidies! clarifies Antoine. Ultimately, we want to collect revenue that balances our expenses, and even a little more to cover the bank’s operating costs. »
Money, concrete, impact
The day before the interview, the young man was on the ground, in Essonne, to visit an old embankment storage site which will be in five years, and thanks to the investment he has made, a forest. “We went to discuss with the project owners to see if the earthworks costs (reworking of the land, editor’s note) are in line with their preliminary analyses, he explains. It’s concrete! Making Excel or slides intended to be put away in a cupboard never interested me. »
Caroline is a graduate of Edhec. The master’s in sustainable finance did not yet exist when she was there. So she chose classic finance. “I was very mathematician and I liked finance. » So she started her career in mergers & acquisitions in a big bank but couldn’t find her way around. “I did not see the creation of values and especially the negative externalities of our projects. These were LBO operations to pay dividends to shareholders or acquire a target in order to expand the business of such and such a company. It didn’t speak to me…”
Caroline needs projects in line with her ecological and environmental convictions and “not to create new needs that are not necessary”. Today, she works for a consulting firm specializing in the financing of renewable energy and ecological transition projects. “I am aware that I am not saving the world with my job, but at least I am mitigating our impact on climate change. »
More committed promotions than the average
Therein lies the specificity of these students: the conviction of urgency. Caroline says to herself “quite engaged” but is actually a lot. She has read the latest IPCC report and diligently follows the content of Jean-Marc Jancovici, a professor at Mines ParisTech who has become a reference on energy transition. Also, she heats her home very little, does not buy new clothes and as few products as possible in packaging. As a good city dweller, no car but a bicycle or the use of public transport. She once felt an anxiety about climate change that she knew how to use to get involved in the cause.
On the side of Patrick, also a graduate of Edhec and currently working at the European Bank for Reconstruction and Development (EBRD) on the financing of hydrogen power plants, we do not find the same commitments but equally strong convictions. : “I will never work for the gas or oil industry. I don’t need to sell my soul to buy a huge apartment in London. »
At Skema, we readily recognize that students of the master’s in sustainable finance are more aware than the average. For Dhafer Saidane, it is “their extraordinary degree of maturity” who especially marked him, “with students ready to have more class hours than expected”.
Even though salary is still a very important variable, they are no longer obsessed with it
Students, often more aware than school administrators, were in demand for this type of training which combines financial rigor and a quest for meaning. In recent years, they have multiplied the pressure to obtain training related to their desire for commitment. “With this master’s, we thus recover students who would otherwise have turned away from finance”confirms Dhafer Saidane.
This finance professor says he receives requests from students enrolled in other programs over the years. “I ask them why and they all tell me: ‘We want meaning'”. Recruitment is also largely based on their level of commitment and sensitivity to the need for change. “And if they lack technical skills in finance, that’s okay. »
These motivated students would be ready to give up the sometimes fabulous salaries of finance in exchange for meaning. “Although it’s still a very important variable, they are no longer obsessed with compensationaccording to Dhafer Saidane. An observation in which Caroline finds herself, at Green Giraffe. In a big American M&A company, I would have earned a lot more, but in a very different setting. I would not have had colleagues with whom I share the same values, nor the same enthusiasm for the projects. »
However, this salary difference is said to be fading, due to the growing need for graduates in sustainable finance. “Overall, salaries in sustainable finance professions are getting higher and higher, and they will be even higher in the coming years”anticipates Isabelle Mouret de Lotz, director of development at the recruitment firm Birdeo, specializing in jobs with a positive impact. “This dual expertise in finance and sustainability is a real career lever. »
A reality observed by Antoine, a graduate of Kedge: “My classmates who also graduated in sustainable finance earn much more than those in consulting. I myself am not to be pitied”without saying more.
Booming demand for skills
If the students succeeded in influencing the programs of the schools, today they still have to do the same on the management of companies. Because this gradual arrival of new talents who are over-aware of climate change is shaking up the chiefdoms generally of good will but lacking in skills on the subject. “These young people are ahead of their leader”notes the head of Skema.
As with any transition, change within companies will be gradual. Especially since the size of the promotions remains very modest: 36 students at Edhec, 37 at Kedge and 40 at Skema. Of course, these specializations tend to multiply and training in the challenges of green finance is not limited to these very specific courses, insist the schools. “In the four specialties of the master’s in finance, we have at least one course in sustainable finance”says Edhec.
Non-exhaustive list of green finance professions
ESG or CSR consultant, ESG risk analyst, SRI fund management specialist, green bond expert, impact measurement specialist, extra-financial auditor, etc.
And fortunately given the growing needs of the market. “The demand is very strong from companies, management companies and consulting firms, confirms the head of the firm Birdeo. Industry professionals face an incredible talent shortage. »
And for good reason: few employees can claim ten years of experience in ESG funds or SRI practices. Candidates therefore have an interest in training on these subjects in order to be one step ahead of the others. For their part, companies must also train their employees in order to keep them within their structures.
A largely minority green finance
For its part, Skema expects a doubling every year of business requests for these trades. “And our training will not be enough! » regrets Dhafer Saidane. For his part, Patrick at the EBRD is convinced that the entire financial sector is destined to become “green”.
For the time being, we are still far from it. Sustainable finance would represent 10 to 12% of global finance, according to Dhafer Saidane, “but with a growth rate close to 20% per year”and this, if we include all aspects of sustainable finance, including Islamic finance which will appear in the Skema master’s next year.
The key is therefore to agree on a definition of “green finance”, a label widely used by financial players.
According to analysis released last week by Clarity AI, the global leading sustainability technology platform, only 7% of 31,000 private equity funds have more than 10% green revenue. A total of 3.6% of the income from these funds can be considered green – that is, helping to mitigate climate change.
The heart of the transition: infrastructure. Alas…
According to an OECD report taking February 2020 as a reference period, pension funds and insurers had 117 billion euros of investment in green infrastructure, while they could have devoted up to 10,300 to it. billion.