For all the talk about the boom in sustainability jobs, a quiet problem is emerging inside boardrooms and back offices: a widening skills gap.
As regulations like Australia’s AASB S2, the European Union’s CSRD, and the ISSB standards turn environmental, social and governance (ESG) into a compliance and assurance issue, demand for sustainability expertise has never been higher.
Yet the talent pool isn’t keeping up – and, paradoxically, many of the people expected to deliver on these new requirements don’t even work in ESG.
Companies are discovering that they don’t just need sustainability specialists – they need finance professionals who understand carbon accounting, engineers who can model transition risk, procurement managers who can trace modern slavery exposure, and auditors who can test non-financial data. That reality is exposing the next big bottleneck in the sustainability transition: a shortage of people who can bridge the gap between purpose and performance.
A new kind of talent shortage
The ESG skills gap isn’t about the number of people working in sustainability – it’s about where the skills sit. For the past decade, sustainability expertise has been concentrated in standalone ESG teams, producing glossy reports and strategy papers. But as disclosure becomes regulated and assured, those teams can no longer do the heavy lifting alone.
Climate risk is now part of enterprise risk. Emissions data is now part of financial statements. Human-rights impacts are now part of procurement contracts.
This shift is forcing organisations to look beyond the sustainability department. According to the World Economic Forum, sustainability and green skills are among the fastest-growing capabilities globally, yet only one in eight workers possess them.
In Australia, the CFOtech has highlighted growing concern among ASX companies that finance teams do not yet have the technical capability required for ISSB-aligned disclosures. It’s not that people don’t care – it’s that most simply haven’t been trained.
The consequences of the skills divide
The risks of this gap are already becoming visible. As mandatory reporting deadlines approach, many businesses are scrambling to collect data scattered across divisions – from energy bills to supply-chain audits – only to discover that few employees know how to measure, verify, or interpret it.
Globally, EY’s Corporate Reporting Survey found that only 29 per cent of finance leaders believe their teams currently have the skills to manage sustainability-related reporting.
In Australia, companies preparing for AASB S2 disclosure have frequently had to hire specialist consultants to translate climate metrics into financial language and build internal controls from scratch.
The result is a two-speed corporate world: A small cadre of sustainability experts trying to meet fast-moving regulations – and a much larger workforce that’s yet to catch up.
Unless this imbalance is addressed, even well-intentioned organisations risk compliance failures, greenwashing claims, or investor scepticism.
Australia’s challenge – and opportunity
Australia sits at a unique crossroads. With the rollout of AASB S2, the country will be among the first in the Asia-Pacific to require “financial-grade” sustainability data - assured, comparable, and investor-ready.
But Australia also faces one of the steepest capability gaps. The Australian Institute of Company Directors (AICD) reports that only 51 per cent of directors feel confident overseeing climate-related financial risks, down from 63 per cent from three years back.
Meanwhile, very few accounting or finance degrees currently teach ISSB-aligned climate disclosure, scenario analysis, Scope 3 accounting, or ESG assurance.
This gap isn’t just technical – it’s cultural. Many organisations still view ESG as a niche expertise rather than a shared competency. Until that mindset changes, sustainability will remain disconnected from core business execution.
Where the skills are missing
The skills deficit shows up in four main areas:
1. Financial fluency in sustainability teams
Many ESG professionals excel at policy and stakeholder engagement but lack training in internal controls, audit, financial materiality, or capital allocation.
2. Sustainability literacy in finance teams
Accountants and CFOs understand assurance but often lack familiarity with emissions data, biodiversity metrics, or human rights indicators.
3. Operational integration
Engineers, procurement officers, and logistics managers increasingly hold ESG responsibilities but rarely receive training to identify modern slavery or Scope 3 risks.
4. Leadership and governance
Boards may endorse net-zero targets but often struggle to translate them into performance metrics, incentives, and accountability structures.
Bridging these divides requires targeted training, interdisciplinary teams, and leadership buy-in.
Signals of change
Some organisations are beginning to respond. BHP has expanded sustainability capability-building across finance and operational leadership, embedding climate risk into decision-making structures. Rio Tinto has launched internal ESG capability programs aimed at operations and senior management, recognising the need for broader literacy across its global workforce. National Australia Bank (NAB) introduced internal green finance and climate-risk training for risk and treasury teams, supporting the integration of climate data into credit modelling. Woolworths Group requires its top suppliers to complete sustainability and modern-slavery training and is expanding similar capability-building internally.
Globally, similar signals are emerging. HSBC has rolled out a global Sustainability Skills Academy for 90,000 employees, with modules for finance, procurement, and operations. Unilever created cross-functional ESG academies to accelerate capability across finance, marketing, and supply chain.
These examples point to a future where ESG skills aren’t owned by one department – they’re shared across the organisation.
Closing the gap
Closing the ESG skills gap will require both structural and cultural change.
Education must evolve. Universities and professional bodies – including Chartered Accountants Australia & New Zealand (CAANZ), the Governance Institute, and Governance Institute of Australia – are launching ESG micro credentials, but coverage remains uneven. Embedding sustainability literacy into mainstream accounting, law, and business degrees is now essential.
Organisations must invest in upskilling. Internal “ESG academies,” mandatory training modules, and cross-functional secondments can accelerate knowledge transfer. Some firms now treat ESG training like compliance training – a non-negotiable requirement.
Boards and executives must lead. When leaders demonstrate fluency, it signals that ESG is part of core business. Linking part of executive remuneration to ESG capability-building (not just ESG outcomes) is an emerging trend among global firms.
A skills revolution in the making
The sustainability transition won’t fail for lack of ambition – it risks failing for lack of capability. Regulations can compel disclosure, but they can’t conjure skills overnight. Unless companies build internal literacy, the promise of transparent, assured sustainability reporting will remain out of reach.
The good news: capability-building is one of the most scalable levers companies have. Just as digital transformation redefined IT from a support function to a strategic pillar, the ESG skills revolution can redefine sustainability from a niche domain into an organisation-wide competency.
And Australia – again – may become a global test case. With AASB S2 ushering in some of the world’s toughest climate reporting requirements, the country has a chance to show not just how to comply, but how to build the workforce of the future.
The future of ESG won’t be decided by the size of sustainability teams, but by how quickly organisations can embed sustainability literacy into every corner of the business.
Kaushik Sridhar is founder and CEO of Orka Advisory, a sustainability consultancy
