Kathleen Price's path to ESG executive wasn't even an idea when she entered banking nearly 30 years ago. Jobs in sustainable finance didn't exist after she graduated from college. At the time, she was unsure about which profession to pursue.
"My dad said I should go into banking to learn about a wide range of companies and figure out where I want to work," Price said.
Growing up, Price said she was always interested in a career that focused on the environment. But banking ended up being the perfect career choice. After spending the first 24 years of her working life in capital markets, commercial banking and loan syndications at Bank of America in Charlotte, Price moved a few blocks over to Tryon Street, to Ally Financial's office, in 2017. She had been tapped to be an executive director for the $186 billion-asset bank's compliance team.
As her career unfolded, the banking sector began expanding environmental, social and governance accountability standards, which would lead Price to a new professional track, meshing her financial skills with her passion for protecting the environment. Last year, Ally promoted Price to become its first environmental sustainability risk executive, capping what she described as a "long and winding road" from career uncertainty to professional calling.
"I am in my dream job," Price said. "I'm one part of Ally's three-legged ESG stool, which also includes social and governance, and requires delivering high-level strategies with detailed and tactical execution."
Generally, female bankers hold a higher proportion of ESG positions than in other core business groups. While skyrocketing demand for dedicated sustainability specialists has opened new doors for women in banking, some industry professionals question whether ESG offers meaningful career advancement opportunities or is another way to silo women into a "softer" practice area rather than a business line with revenue responsibilities.
Early ESG: A 'women's ghetto'
When ESG departments were being established, ESG was regarded as a "women's ghetto" where female banking leaders were pushed, according to Zoe Van Schyndel, a partner at the executive search firm Gaia Human Capital Consulting.
"In many cases, banks staffed ESG groups with the understanding that it's a great place to hire women and say, 'Yes, we have some diversity over there,' " Van Schyndel said.
Van Schyndel speaks from experience. She has worked in banking and financial services since the 1980s, including 10 years as a branch chief for the Securities and Exchange Commission, as well as stints at State Street Global Advisors and KLD Research & Analytics.
In 2007, Van Schyndel helped Gaia's founder, Dawn Dzurilla, start an executive search firm. Dzurilla, who also worked in the banking sector in the 1980s, said she has seen more women, with broader ranges of experience, join banks to work in ESG.
"Executives are being forced to respond to demands for more diversity," Dzurilla said. "The next step is to ensure these women have meaningful career opportunities pushing them into senior leadership positions."
Finding a home in ESG, Kristin Bloser found it hard to imagine a career in banking during the 1990s when she collected soil samples as a scientist with the U.S. Department of Agriculture.
"I come from a very targeted environmental profession," Bloser said. "When my career began, I didn't even know banking was a possible trajectory."
Bloser entered the private sector as an environmental consultant at the construction and engineering advisory firm Golder Associates. In 2008, Comerica Bank hired her to help implement ESG strategies across the Dallas bank. For the last 11 years, Bloser has served as senior sustainability officer in charge of a two-person office. Working for so long in such a small group might not offer a promising career trajectory, she said, but ESG and sustainability has provided "leadership opportunities connected to every division and department across the organization."
Bloser's previous role at Comerica focused more on risk, which she said was not as visible to the rest of the company. Now, Bloser said she would be unable to do her job "without interacting with the entire bank."
For Karen Wong, ESG motivated her to pursue the second act of her career.
"ESG is a great opportunity to make a difference," Wong said. "At the same time, I don't feel like I've moved away from my investor mindset or obligation to put the long-term interests of clients first."
After more than 20 years as managing director for equity and index portfolios at various divisions of BNY Mellon, Wong joined State Street Global Advisors last June as global head of ESG and sustainable investing. State Street created the position after clients increasingly sought help with decarbonizing their portfolios.
"The more I learned about ESG investing, the more I felt challenged and intrigued," she said.
Careers in sustainable finance have a "magnetic type of attraction for diverse talent," Wong said, adding that her own team at State Street has diverse gender, racial and ethnic representation of better than 50%. "Joining this team has further reinforced what I've seen in the market," she said. "Whether it's the composition of an ESG group or leadership position, enabling diversity has become a highlight of my job."
A career pathway or a pitfall?
"Five years ago, the head of ESG wasn't an executive-level job and didn't report to the CEO. Today, that role has become a prestigious job," said John Hodges, a partner specializing in climate change and sustainability at the consulting firm EY. "It seems like there's competition among executive cohorts to claim that position."
Van Schyndel concurred. "The supply of qualified candidates is small, and the demand is so high. It's an extremely competitive environment," she said. "I can't say that it's easy for us either. We spend a lot of time trying to find good people who are qualified candidates."
How much upward career mobility ESG offers for women depends on a bank's dedication to implementing sustainability initiatives throughout the organization, according to Ian Povey-Hall, global head of sustainable finance and impact investing at Acre, a financial services recruitment firm based in London.
"Organizational design and ESG's functionality is what creates opportunity for these roles," he said. Sustainability positions "with a dotted line to the CEO" offer the most visibility and best chance to advance, according to Povey-Hall.
"If the role impacts core operating functions and creates value, you will be recognized," he said. "But if the assignment focuses more on risk compliance, the position will not be front and center."
Implementing ESG strategies across France-based bank BNP Paribas has made the team more visible to bankers working in business groups that are peripherally related to sustainability. Ravina Advani, head of energy natural resources and renewables based in New York at BNP Paribas, said ESG programs' goal of reducing corporate greenhouse gas emissions has led to more demand for hiring bankers with backgrounds in clean energy.
"The technical skills I acquired working in project finance have become very instrumental in what I'm doing now," she said. "After bringing in people with varying sustainability experience, we quickly saw results and realized it's not just banking backgrounds that can succeed in ESG."
Ally's approach to ESG has provided Price and the sustainability team she leads with visibility across the bank's business groups. The "whole-of-company" sustainability strategy has also let Price draw upon a wide range of skills she's developed as a banker.
"All of the experience I've gained throughout my career — in capital markets, technology, risk compliance — those skills contribute to what is required when implementing a climate-risk mitigation strategy," she said.
"ESG leaders can't be figureheads," Price said. "It's too important of a role."
