Transcript

Meeyeon (00:00)
Hi, everyone, and welcome back to another episode of CFI FinPod podcast. We’re talking about What’s New at CFI today and today, we want to start talking about our new ESG mini module series.

Now, the three ESG courses, of course, come together as one and create. They’re one, they’re really one piece and not three separate units, but we want to be able to introduce each one to you. So today, we’re going to talk about the E piece. So environmental issues and materiality.

And, of course, I have none other than Noah Miller here with me. Welcome Noah.

Noah Miller (00:37)
Great to be here, Meeyeon. Thank you for having me.

Meeyeon (00:39)
And today, let’s talk about a little bit about what this course is all about, what the E piece focuses on, and yeah, let’s just dive right into it, E in a nutshell.

Noah Miller (00:50)
So E in the nutshell, right, we’re really talking about what are the environmental issues, climate change, natural resource scarcity, biodiversity loss, what are the issues that impact the planet that are also gonna be impacting how businesses run today and in the future? So really, what this course specifically drills into is what is a bottom-up approach to addressing the material risks and opportunities that each issue presents

and having a good handle on what is the implications for both finance entities and companies that are operating in that space. Being able to connect those dots is really what this module is all about.

Meeyeon (01:32)
And we do, now this is gonna depend on how our listeners are choosing, picking and choosing what to listen to. But with the ESG specialization that we already have, how does the mini module series differ? And would you recommend someone take one or the other first? Are they more complimentary or is there a lot of overlap?

Noah Miller (01:46)
Great.

Yeah, I think it depends on your role in the context. if you are someone that feels pretty comfortable talking on these issues, you have a specific, let’s say you’re trying to integrate environmental issues into your due diligence, that’s a very specific use case. But you really need to have a good handle on the boots-on-the-ground issues in order to build a practical, actionable, and intuitive due diligence process.

So that’s one very isolated example, but if you’re working in anything with an ESG title, sustainability title, you know, really any function that may be touching this work. It’s just a good fundamental understanding of what are these issues mean practically, not theoretically, but boots on the ground in a bottom-up view so that you can understand, practically speaking, what are the real risks and opportunities and what can you practically do about it. And you’ll see the keyword here is practical.

Meeyeon (02:52)
So, a question that I wanted to ask was, of ESG, when I look at various job postings from investment managers in finance, so for example, venture cap funds that might be focused on sustainability,

it’s renewable energy, renewable consumer products, or hedge funds that have an ESG focus. I find that there are specific hires, so job postings that call out the E in their job posting. So, for example, they’ll ask for an academic background in some sort of environmental kind of sustainability piece. And do you think that of ES&G, E kind of provides the most job opportunities lately?

Noah Miller (03:39)
Yeah, well, I’d definitely say E gets a bulk of the attention and primarily because the most expensive and studied risks and opportunities really are around the physical and transition risks of climate change. And climate change inherently touches every issue and every aspect of the planet. So things like,

insurance brokers that are needing to do climate risk management analysis on the markets they’re looking at or at the assets they’re looking to ensure. Similarly, you have certain markets like New York and California that are now having emission reduction requirements and disclosure mandates so it is specifically honing in on the E,

you know, around climate change, just knowing that that is both the most expensive collection of risks that we face, as well as the biggest commercial opportunity in transitioning to a net zero economy. So, Meeyeon, you called out, you know, a hedge fund that’s focused on sustainable products and services.

That is the view that a lot of these funds are taking, is that the decarbonization opportunities across each industry is the most lucrative opportunity that we’ve seen. So it’s pretty natural that all the finance entities looking to capitalize are going to need analysts and strategists that know these issues and know them within the context of a commercial enterprise.

Meeyeon (05:06)
And one of the things that actually just coming to mind is that I used to work at a pension fund. And when, this was more like this was like 10 years ago, but they were also starting certain funds that had ESG focus. But their concern was how do we actually evaluate our investments to against the E? Like, they just, at that point, didn’t necessarily know how to do it. They knew they wanted to do it. They had the budget to do it, but they didn’t know how to do it.

Does this course kind of address in any way how the E is actually creating jobs in finance?

Noah Miller (05:45)
So this course is pretty tactical in nature in terms of going through the range of environmental issues, looking at what industries have really big risk exposure, and then what are some specific concepts around risks and opportunities, both for operators and finance entities. So it’s very tactical, boots on the ground. It’s almost like a boot camp to get rapidly acquainted with these issues and be able to speak to them in the context of commercial,

you know, use case. It doesn’t expand too much upon like the current market conditions and why there’s such a green skills gap and the huge opportunity. But LinkedIn, you know, just on that notion, LinkedIn did come out with a big green skills assessment and it was something like there’s an eight to one ratio of demand versus supply. So that right there, you know, is pretty lucrative from where the job’s going to be. Well, that’s that, you know, speaks pretty loud.

Meeyeon (06:44)
Okay, well, this is the first of three installments of our mini-series. So this is a bit of a mini podcast. So we are going to wrap it up for E, but you will join us again very shortly. You’ll see us for the G piece. So, thanks for tuning in to this episode and we will see you all very soon.