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RI Careers Interview: “There is a huge need for professionals with solid scientific credentials who will be able to discern ESG-related data”

Dr Kim Schumacher, Lecturer in Sustainable Finance and ESG, Tokyo Institute of Technology talks to Responsible Investor about how he got into ESG and his career to date.

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Tell us a bit about your current role and the company you work at?

I am a lecturer and senior research associate in Sustainable Finance and ESG Investment at the Tokyo Institute of Technology in Japan. My job includes elements of research, graduate-level teaching and doctoral and Masters student supervision. Our School of Environment and Society bridges interdisciplinary knowledge gaps at the frontier of environmental sciences and social studies, notably how to utilise environmental and climate-related data to solve global social issues.

In addition, I am also managing the Japan Sustainable Finance Research Network, which aims at stimulating research and educational collaboration between Japanese research and academic institutions and businesses in the areas of sustainable finance and ESG.

What does a typical working week look like for you? What do you do on a daily basis?

I am usually designing or conducting research, meeting with various industrial or regulatory stakeholders, or teaching the course on Sustainable Finance, the very first dedicated Masters course on sustainable finance in all of Japan. In addition, departmental administrative tasks and student-related supervisory work are also part of my functions.

Have you always worked in RI/ESG? Tell us about your career path.

  • How long have you worked in RI/ESG?

7 years: first 4 years at green low-carbon project-level development and environmental impact assessment, then 3 years in sustainable finance and ESG research and engagement.

  • What was your background?

 I transitioned from environmental law and policy into environmental science, notably environmental impact assessment, energy research and large-scale renewable energy development.

  • Were there any particular steps you took to move into RI/ESG?

Not particularly, as I was already active in low-carbon energy project development field, focusing on the assessment of environmental impacts, sustainable finance and ESG aspects became one of the relevant factors, especially with green bonds becoming a popular form of low-carbon project finance.

  • What qualifications do you have?

Bachelor's in International Law, Master’s in Environmental Law (focus on Carbon Taxation and Carbon Pricing), PhD in Environmental Science (focus on Energy project-related environmental impact assessment and renewable energy network integration).

  • Was there anything that attracted you to RI/ESG?

My interest in environmental matters, the natural environment and human-environment interactions gradually led to a transition towards RI/ESG.

  • What do you like most, like least about RI/ESG?

RI/ESG holds the key to a sustainable society as it entails the human drive for profits with the existential premise of creating sustainable economies.  

However, greenwashing is rampant, not only regarding RI/ESG-related products but also regarding expertise, with many people now labeling themselves as ESG or Sustainability experts without the necessary technical or scientific knowledge, thus undermining the credibility and reliability of the entire sector. Read full article on 'Competence Greenwashing'. 

  • What single thing or person has had the most positive impact on your career, and why?

Despite the very conflicted history surrounding his persona and past/current controversies concerning his private actions, Michael Jackson's "Earth Song" from 1997 was hugely instrumental in shaping my environmental awareness and getting me interested in learning more about sustainability-related issues. I was very impacted by seeing the video as an 11-year old on MTV with images of deforestation, wildlife destruction, and famine on television. It is when I started also paying attention to the international environmental policy since the music video came out in the same year as the Kyoto Protocol was signed.

What differences do you see, if any, between Sustainable finance/investments and conventional?

In theory, sustainable finance investments take account of various sustainability-related factors during the structuring and funding phases. That means that several asset classes and sectors with high negative ESG externalities should be excluded and those with positive ones should be selected. It means that long-term non-financial and extra-financial factors play an equally important role than short-term financial considerations. 

Finally, the sustainable finance/investments are characterised by particularly strong transparency and disclosure standards, translating into stringent measurement, reporting and verification practices during the entire investment cycle.

What is your understanding of a sustainable workplace? 

A sustainable workplace should foster diversity, inclusion and fair and independent measurement and acknowledgment of work-related performance. As the world becomes more complex, and humanity is facing common challenges, the workplace needs to draw from everyone's strengths. The financial sector and corporate sectors are still lacking female and minority group representatives in leadership positions, thus rendering integration of ESG issues more difficult. A sustainable workplace should integrate ESG factors more pro-actively. 

If you knew what you know now what would you have done differently when you started your career. What advice do you wish you’d been given when you started out?

I would have loved to have more educational options during my undergraduate and graduate-level studies as these formative years provide the foundations of how to approach sustainability issues. The lack of interdisciplinary courses that combine natural and social sciences meant that I encountered many concepts that could’ve accelerated my RI/ESG careers only at a later stage in my career.

What advice would you give to someone starting out today?

  • What qualifications?

Definitely a combined natural science / social science curriculum, ideally an interdisciplinary programme that included environmental science and finance/economics components.

  • What experience?

Climate-related fieldwork with internships at financial institutions or corporates is definitely useful in providing new perspectives on how to approach and integrate RI/ESG at a practical level  

  • What ‘soft-skills’ are beneficial?

Cultural awareness and socio-environmental empathy.

Looking ahead, where do you see the opportunities or growth areas for career paths in RI/ESG?

The lack of trained RI/ESG professionals, with most so-called experts currently being recruited from or transitioning from the finance, management or business sectors, means that there is a huge need for professionals with solid scientific credentials who will be able to discern ESG-related data. With more rigid disclosure and regulatory frameworks, and stronger inclusion of science-based ESG targets and data, a solid grasp on environmental and climate-related issues will definitely be of advantage. As non-financial aspects and elements such as biodiversity accounting, natural capital and ecosystem services will become more relevant, granular knowledge in those areas combined with financial expertise will be in high demand.

CV at a glance:

  • Tokyo Institute of Technology, Lecturer: 2019-present
  • School of Geography and the Environment, University of Oxford, Honorary Research Associate: 2019-present
  • Luxembourg Ministry of Environment, Climate Change, and Sustainable Development, ESG and Sustainable Finance Consultant: 2019-present
  • Smith School of Enterprise and the Environment, University of Oxford, Research Associate: 2017-2019
  • Graduate School of Arts and Sciences, University of Tokyo, Doctoral Research Associate: 2013-2017

To access other interviews and Sustainable Finance Careers Report follow the link: esg-data.com/careers