Inside the Growing Role of the ESG analyst

The ESG analyst has become one of the most paradoxical figures in modern finance. In boardrooms from Hong Kong to New York, these professionals wield enormous influence over where billions flow, yet they find themselves caught in a political crossfire that didn’t exist five years ago. Deutsche Bank’s asset management arm paid a €25m fine for greenwashing in Germany. Texas pulled $8.5bn from BlackRock, accusing it of hostility to fossil fuels. Shell faces accusations of using sustainability-linked loans whilst expanding oil operations. Welcome to the contradictory world where several high-profile cases in the UK and EU highlight the increasing regulatory and public backlash against greenwashing, even as demand for ESG expertise has never been higher.

The numbers tell a schizophrenic story. Global greenwashing cases fell 12% in 2024, the first decline in six years, yet the severity of those cases jumped 30%. Meanwhile, sustainable bond issuance in Asia-Pacific hit record levels, up 40% year-on-year. ESG careers are booming in Singapore and Hong Kong whilst simultaneously under legal assault in Florida and Oklahoma. It is against this turbulent backdrop that the ESG analyst navigates an increasingly treacherous landscape, translating corporate sustainability claims into investment decisions whilst dodging accusations from all sides.

What Actually Happens All Day

Strip away the controversy and an ESG analyst does something deceptively straightforward: they figure out whether companies are lying. Not about profits or revenues, traditional analysts handle that. ESG analysts determine whether a manufacturer’s water usage will become a liability when drought hits, whether labour practices might trigger supply chain disruptions, whether board composition correlates with scandal risk. They read the subtext in sustainability reports, hunt for gaps between corporate promises and actual performance, and quantify risks that don’t appear on balance sheets.

The work splits into distinct phases. Data collection comes first, a grinding process of extracting information from annual reports, regulatory filings, industry databases, and increasingly, satellite imagery and supply chain tracking systems. An analyst might spend days verifying a company’s claimed emissions reductions, cross-referencing disclosed figures against third-party assessments and physical evidence. Companies use varying metrics, making apples-to-apples comparisons maddeningly difficult.

Analysis follows data gathering. Here analysts assess materiality, determining which ESG factors actually matter financially. A retailer’s Scope 3 emissions might be immaterial whilst its labour practices pose existential reputational risk. Analysts model scenarios: what happens if carbon prices triple, if water becomes scarce, if regulators mandate disclosure. They evaluate governance structures, examining whether independent directors have teeth or are merely window dressing.

Then comes communication, arguably the hardest part. Findings must reach portfolio managers who care about alpha, executives who resist criticism, and clients with varying sophistication. Reports need precision without jargon, nuance without equivocation. An ESG analyst might present to investors one day, draft sustainability disclosures the next, and brief board members on emerging regulations the day after.

Continuous learning completes the cycle. European regulations evolve rapidly. The Corporate Sustainability Reporting Directive took full effect in January 2025, obliging roughly 50,000 companies to publish double-materiality ESG reports. Asia-Pacific markets are developing their own taxonomies. China’s three main exchanges separately published guidelines on 1 May 2024 for listed companies to disclose sustainability-related information. Analysts must track these changes, understanding implications for both the companies they evaluate and the funds they advise.

Breaking In

Most ESG analysts arrive through unconventional paths. The field lacks a clear pipeline, unlike investment banking where the route from target universities to bulge bracket firms is well-worn. Some come from environmental science, bringing technical knowledge but needing to acquire financial fluency. Others start in traditional equity research, then pivot when they realize climate risk affects valuations.

Educational backgrounds vary wildly. Finance degrees help, environmental science provides useful context, economics offers analytical frameworks. Increasingly, professionals pursue specialized credentials. The CFA Institute offers a Certificate in ESG Investing. EFFAS provides a Certified ESG Analyst designation. SASB has a Fundamentals of Sustainability Accounting credential. These certifications signal competence in specific frameworks but guarantee nothing about actual analytical ability.

Technical skills matter more than credentials. Practitioners need financial analysis fundamentals, understanding how ESG factors translate into material risk. They must grasp reporting standards including GRI, TCFD, and UN Sustainable Development Goals. Data analysis capabilities prove essential. But the hardest skill to teach is judgment: knowing when a company’s sustainability report is legitimate versus sophisticated greenwashing.

Geography affects opportunities significantly. Hong Kong and Singapore have emerged as ESG hubs for Asia-Pacific, driven by regulatory momentum and capital flows. Singapore launched the world’s first multi-sector transition taxonomy in December 2023. Europe remains the regulatory leader, with comprehensive frameworks driving demand for analytical talent. The United States presents a fragmented picture, with some states mandating ESG considerations whilst others explicitly prohibit them.

The Money Question

Compensation varies dramatically by market, experience, and employer type. In major financial centres, entry-level positions start around £35,000 to £53,000 in London, roughly $84,000 in New York. These figures lag traditional finance roles at comparable seniority levels, though the gap narrows with experience. Mid-career professionals command £60,000 to £200,000 depending on sector and specialization.

Several factors influence earning potential beyond base experience. Financial hubs like Hong Kong, Singapore, New York, and London offer premium compensation compared to secondary markets. Educational credentials and professional certifications can boost salaries, particularly specialized knowledge in ESG data analysis and regulatory compliance. Bulge bracket banks and global asset managers generally pay more than boutique firms, though smaller shops sometimes offer greater autonomy and impact.

The role offers unusual career flexibility. As ESG skills remain in high demand across industries, practitioners enjoy opportunities for advancement or lateral moves. An analyst might transition from buy-side research to corporate sustainability, from ratings agencies to policy advisory, from asset management to impact investing. This mobility appeals to professionals seeking growth whilst contributing to sustainability goals.

The Battlefield

The rise of the ESG analyst reflects fundamental shifts in how markets value corporate behaviour, but also exposes deep ideological fault lines. Climate change threatens assets worth trillions. Supply chain labour abuses trigger consumer boycotts. Board scandals destroy shareholder value overnight. As of 2024, around 6,000 companies globally have made net-zero commitments. Major corporations including Microsoft, Unilever, Apple and Nestlé have announced ambitious climate goals. These commitments require rigorous measurement, verification and reporting, work falling squarely within ESG analysts’ remit.

Yet political backlash intensifies. In 2025, 106 anti-ESG bills were introduced in state legislatures across the United States, though only 11 passed. Texas, Florida, and Oklahoma lead efforts to restrict ESG considerations in public investments. In 2024, the Texas State Board of Education voted to terminate an $8.5 billion investment managed by BlackRock on behalf of the Texas Permanent School Fund, citing a state law that prohibits investing in firms seen as hostile to the fossil fuel industry.

Meanwhile, Europe doubles down on mandatory disclosure. The CSRD creates comprehensive reporting requirements. The UK’s Financial Conduct Authority introduced Sustainability Disclosure Requirements demanding that ESG claims be “clear, fair, and not misleading.” Asia-Pacific markets navigate their own paths, with Japan, Hong Kong, and Singapore incorporating International Sustainability Standards Board standards into reporting obligations.

Greenwashing scandals complicate matters further. In 2024, Shell faced a host of environmental controversies, including a New York City lawsuit over climate change, condemnation from U.S. lawmakers for alleged greenwashing practices, a carbon credit scandal, and a water contamination lawsuit resolved with a $230 million settlement. KLM was prohibited from repeating claims that flying could be “sustainable” after Dutch courts found the airline painted an overly rosy picture of offsetting impacts.

The profession faces methodological challenges beyond politics. ESG data quality remains inconsistent. Companies use different metrics and reporting standards, making comparisons difficult. Disputes persist regarding how to weight various factors when scoring corporate performance. While greenwashing cases decreased overall in 2024, 30% of companies linked to greenwashing in 2023 were repeat offenders in 2024, suggesting systematic issues rather than isolated incidents.

What Comes Next

Perhaps the most telling development is what companies have stopped saying. HSBC’s decision to exit the Net-Zero Banking Alliance, citing concerns over greenwashing exposure amid geopolitical uncertainty, marks a significant shift. This phenomenon, called greenhushing, sees companies downplaying sustainability efforts or avoiding ESG terminology altogether. A June 2025 report found 80% of large U.S. and multinational companies were revising their ESG strategies in response to shifting political and regulatory pressures.

For ESG analysts, greenhushing creates new challenges. When companies stop publicly discussing sustainability initiatives, tracking actual performance becomes harder. Analysts must dig deeper, relying more on regulatory filings, third-party verification, and supply chain data. The work becomes more investigative, less collaborative.

The broader question is whether the ESG analyst role will evolve or fragment. In Europe and parts of Asia, regulatory momentum suggests continued growth and professionalization. Mandatory disclosure requirements create permanent demand for analytical expertise. In the United States, the picture is murkier. Some analysts focus exclusively on financial materiality, stripping away any values-based considerations. Others double down on impact measurement, working primarily with investors who explicitly prioritize sustainability alongside returns.

What seems clear is that the skills remain valuable even as the context shifts. Understanding climate risk matters regardless of political winds. Evaluating labour practices, supply chain resilience, and governance quality informs investment decisions whether framed as ESG analysis or traditional risk assessment. The terminology may change. The political environment will certainly fluctuate. But the underlying work of translating corporate behaviour into investment insight persists.

For those considering the field, the appeal extends beyond compensation or career progression. Few roles offer such potential to influence capital allocation whilst contributing to a more sustainable economy. Yet those drawn to ESG analysis should enter with eyes open. The work is intellectually demanding, politically fraught, and ethically complex. It requires comfort with ambiguity, tolerance for criticism from multiple directions, and conviction that rigorous analysis can cut through partisan noise. The ESG analyst operates at the intersection of finance, environmental science, and political economy. It is not a career for those seeking simple answers or universal approval. But for those with analytical skills, ethical commitment, and intellectual stamina, few professions offer comparable opportunities to shape how business confronts the defining challenges of our era.