PwC: Scotland leads the charge in financial services green jobs opportunities

The report, in collaboration with the Financial Services Skills Commission (FSSC) and the Aldersgate Group, explores the pivotal role of the financial services sector in achieving a net zero future and how it’s fuelling a rising demand for green jobs in the industry.

It highlights the high concentration of green financial job opportunities in Scotland, with 5.6% of job openings classed as ‘green’. Whilst the highest proportion of green job openings exist north of the border, London boasts the largest absolute number of green financial job openings, at 7,000 in a year, versus Scotland’s 2,200.

With the demand for green finance jobs on the rise, significant regional disparities exist in the prevalence of these roles across the UK. Scotland and London have emerged as global leaders in green and sustainable finance, attracting talent and investment that has fueled substantial growth in their green economies.

The report finds the proportion of job vacancies in the sector that are identified as green increased from 0.25% in the 2019-2020 timeframe to 2.2% in 2022-2023, growing from a total of 4,900 jobs to 16,700. Given the scale of the green investment needed to meet net zero goals, in the UK and globally, this growth is expected to accelerate.

The growth in green job openings has been driven by two factors: the creation of new green jobs in the finance sector such as sustainable investment analysts, climate strategists and ESG analysts and the greening of existing jobs. For example, portfolio managers in asset management have expanded their roles beyond conventional tasks and their duties now encompass tasks like analysing ESG fund trends and producing and evaluating climate risk assessments for client portfolios.

Fraser Wilson, financial services leader at PwC Scotland, said: “Scotland’s position as a global leader in the transition to a green and sustainable economy is evidenced in our first-place ranking in the UK’s Green Growth Index and PwC’s Green Jobs Barometer – thanks to the country’s high proliferation of green jobs. This latest report demonstrates that the nation’s important role in ensuring a just energy transition goes beyond our strengths in the energy sector.

“Our financial services industry is thriving, with Scotland well-known as the UK’s largest financial hub outside of London, with Edinburgh in particular leading the way in terms of its collaborative approach to developing green talent in order to support a sustainable financial system. In that respect, it’s no surprise to see that Scotland has ample opportunities available for green talent in the sector, with the highest proportion of green finance roles in the country.

“And whilst it’s encouraging to be leading the way, we must be cognisant of the need for a fair and just transition at pace across the UK. Our report highlights discrepancies across the regions which must be addressed to ensure the sector as a whole is adequately prepared to meet net zero targets, and that each region is able to retain skilled and talented individuals looking for green opportunities.”

As the demand for green talent and skills continues to grow, the supply of green talent both from new entrants and the existing workforce is failing to rise with it and a green skills gap is emerging. The total number of green job vacancies stood at nearly 17,000, in 2023 and it’s estimated that graduates with sustainability skills would only be able to fill 900 of these vacancies.

The shortage of new green talent can be attributed to several factors: the absence of green knowledge and skill integration in traditional finance degree programs, a knowledge gap among students regarding green skills and available career paths in this field and graduates with green skills choosing to work in industries they perceive as better aligned with their values.

Jason Higgs, ESG leader at PwC Scotland, added: “It goes without saying that, to make the most of the green job opportunities available, we need the right skill and talent available – and so the skills gap that is emerging in line with the continuing growth of green and nature finance must be addressed.

“Green skills are no longer a niche specialisation, but rather are now core to jobs in financial services. In Scotland, educational institutions like the University of Edinburgh, Heriot-Watt and Napier are actively promoting a sustainable and ethical financial system, nurturing a skilled workforce for the future.

“However, moving forward, collaboration between government, education and the sector itself will be key to ensure students and graduates are equipped for moving into a changing workforce, and that our existing sector workforce can readily reskill to take on the opportunities available.”

Claire Tunley, chief executive, Financial Services Skills Commission, commented: “Technological change and the increased focus on green finance requires enhanced knowledge and capabilities in the workplace to enable green transition.

“This is why the Financial Services Skills Commission and its members, including PwC, are calling for firms to equip employees with the skills and knowledge they need. This is critical for the sector to retain talent, unlock productivity and achieve net zero.”

James Fotherby, senior policy officer, Aldersgate Group, said: “Addressing the green skills shortage in the finance sector is essential if the UK is to both meet its ambition of becoming the world’s first Net Zero aligned financial centre and maintain the sector’s competitiveness globally.

“A clear plan is vital to tackle this issue and ensure that the economic and job creation opportunities that the net zero transition presents for the sector are capitalised on.”