- Financial firms are going outside traditional talent pools to hire in-demand climate scientists.
- Banks and fund managers need them to help deliver on big promises to combat global warming.
- Activists say Wall Street must empower the experts they hire so their work is put to good use.
A JPMorgan sustainability executive was hired away from a leading non-profit that campaigns for climate action. BlackRock’s head of climate and sustainability research came from a major conservation organization. A climate specialist with a PhD in atmospheric and environmental sciences has joined Vanguard’s investment stewardship team.
Climate scientists and environmental advocates have arrived on Wall Street.
Banks and fund managers are venturing outside traditional talent pools of math whizzes, market obsessives, and finance majors to find new colleagues who can help deliver on big promises to combat the climate crisis and scrutinize investments for environmental risks.
It’s a trend that has unfolded in recent years as firms face stricter regulations and shareholder pressure. But it’s hardly because bank bosses and private equity executives are suddenly driven by virtue.
Investment firms know that having better insights and relationships than the shop across the street is invaluable. And they are willing to pay big bucks to draw people away from academia, nonprofits, and government agencies for their environmental expertise.
“Portfolio company leadership teams often respond quite positively to a scientist being in the room alongside a deal team,” said Lauren Callaghan, a Spencer Stuart consultant who founded the executive search firm’s ESG and impact-investing practice.
The pay packages vary based on employees’ seniority and experience, but in New York City people with deep knowledge of climate risk working in finance can command base salaries between about $175,000 and $350,000, said Diana Retana, head of the search firm Lawson Chase’s sustainability investment recruiting.
People in private-market investing, like those working at private equity firms, can make seven-figure salaries, she said. Environmental scientists’ and specialists’ median pay in 2021 overall was $76,530 per year, according to the Bureau of Labor Statistics. Ellen Weinreb, a veteran sustainability recruiter and founder of the Weinreb Group, said private equity clients are increasingly seeking candidates who not only have dealmaking chops but environmental expertise.
JPMorgan, BlackRock, Morgan Stanley, and Wells Fargo have all promised to slash planet-warming pollution from their loan and investment portfolios. To do that, they need technical expertise in carbon accounting to measure and track progress. Firms are also building internal climate models to assess risks such as natural disasters, deforestation, and the transition from fossil fuels to more renewable energy to integrate them into investment decisions.
Time will tell whether financial firms’ endeavors actually make a difference to the climate crisis.
Some industry insiders and politicians have called ESG investing garbage and criticized asset management giants BlackRock, Vanguard, and State Street for promoting it. The same firms have also drawn ire from climate activists, as finance executives dismiss calls to divest from fossil fuel companies.
Some experts, like William Boos, an associate professor in the department of earth and planetary science at the University of California, Berkeley, are encouraged by these firms hiring climate specialists. He said it’s a good thing that environmental scientists have new career options to make a positive impact and earn more money than they typically would in academia.
“There’s a lot of money being made in the world by helping sell widgets to people that are not tremendously useful, or they’re not making the world a better place,” Boos said. It is heartening for him to see the financial services industry starting to understand that the natural environment is worth protecting and can make people less vulnerable to disasters like flooding, he said.
‘I felt like I had a duty to come back’
Sarah Kapnick is one leading expert who has had a front-row seat to the intersection of finance and the climate.
She was recently appointed as chief scientist of the National Oceanic and Atmospheric Administration, which describes itself as “America’s environmental intelligence agency” within the US Department of Commerce.
Kapnick left JPMorgan this summer, where she was a senior climate scientist and sustainability strategist in its wealth and asset management arm for about a year, to return to NOAA. She had previously spent a decade there.
Kapnick has a PhD in atmospheric and oceanic sciences and started her career as an investment banking analyst at Goldman Sachs about two decades ago, when climate finance was barely mainstream. Partners at the firm teased her about her interest in climate change at the time, Kapnick said: “‘You should do that as a hobby — be a banker!'”
“I felt like I had a duty to come back and bring my expertise back in-house — both my technical expertise and my experience in the private sector,” she told Insider, “to help ensure the data, products, and services created by NOAA and are in the pipeline are being used to underpin the future of commerce, the future of the economy.”
JPMorgan hired Ben Ratner in January as executive director of sustainability after he spent nearly a decade at the Environmental Defense Fund working with oil and gas companies to reduce methane emissions.
Ratner said he’s kept up those relationships at JPMorgan, which aims to reduce the carbon intensity — a measure of a company’s emissions for every dollar in sales — of its oil and gas portfolio by 35% this decade as part of a broader plan to align its financing with the goals of the Paris Climate Agreement. The bank is the world’s largest funder of fossil fuels, providing an estimated $382 billion in lending in underwriting to the sector since 2016, according to an analysis by The Rainforest Action Network, a climate advocacy group.
Ratner said he supports his industry relations colleagues who talk to investors every day about balancing the energy crisis sparked by the war in Ukraine with tackling climate change. Ratner also talks with nonprofit, government, and academic leaders about JPMorgan’s strategy and is leading an effort to shift the bank’s private grantmaking to more sustainability initiatives, such as helping communities be more climate resilient.
“I think it’s a welcome sign that the financial sector is recognizing the value of both environmental expertise and environmental ambition,” Ratner said. “I had a great experience at EDF and it wasn’t easy to leave. But I felt the opportunity at JPMorgan was one with a very significant impact.”
Attracting climate scientists from big banks
The pitch from Wall Street recruiters is fairly simple: The best-case scenario is that you use your expertise to influence where money is flowing, decide which projects deserve funding, and steer big firms toward making more informed environmental decisions.
The money doesn’t hurt, either.
When banks or private equity firms come calling, candidates are seeing their companies bring counter-offers to hold onto them “in ways that we haven’t ever before,” said Kate Shattuck, who co-leads the impact investing practice at search giant Korn Ferry.
That could mean a raise of between 10% to 30% to stay put, or speeding up a scheduled promotion for the employee, Shattuck said, reflecting both the demand of climate experts’ talent and broader wage inflation across industries.
Environmental activists are watching for the industry’s next moves.
One indication that climate experts are making a difference on Wall Street: If there is a dramatic uptick in policies that ban financing for new fossil fuel projects, said Jessye Waxman, a senior campaign representative for the Fossil-Free Finance campaign at the Sierra Club, a climate advocacy group.
The International Energy Agency last year said investors shouldn’t invest in new fossil fuel supplies in order to keep global warming below catastrophic levels. That’s a step Wall Street has so far been unwilling to take.
“If Wall Street is going to hire scientists, it needs to empower those scientists and ensure their expertise actually influences financing decisions,” Waxman said.