Illustration by Neyva Hernandez

Careers in Climate Finance

Climate Finance is real and has opportunities for career growth.

Environment-oriented careers have always been in short supply and underpaid and often require considerable field time and experience, even for entry-level jobs. Despite the importance and necessity of conservation works, youths who are highly trained in environmental conservation find it very difficult to secure jobs. However, the recent emergence of conservation and climate financial markets might make environmentalism a more viable career. While jobs are still in short supply, a career in conservation and climate finance is an opening for individuals, particularly those with a passion for market solutions to environmentalism and climate change.
Regulations under the 2015 Paris Agreement have changed how companies operate, creating an emerging financial market for climate related causes. Although climate finance is often defined in terms of a flow of funds from developed countries to less developed countries, such mechanisms can be utilized within developed nations as well. While mainstream climate finance is accessed through funding mechanisms under the United Nations Framework Convention on Climate Change such as the Green Climate Fund, many private and multinational financial sectors have also contributed to scaling climate finance. This phenomenon is leading to an increasingly niche market for students and experts interested in market-based solutions for tackling climate change. The market is not yet fully developed, but it is growing at an astonishingly fast rate.
The funding mechanisms under the UNFCCC, however, remain inefficient. For instance, the Green Climate Fund is short of the required 367 billion AED per annum by 2020, as pledged by developed countries for projects aimed at mitigating or adapting to climate change in less developed countries. This shortage has given the private sector an opportunity to scale up its role. However, while climate finance is increasingly gaining popularity, it still requires the necessary 1.47 trillion AED annually.
Given that action against climate change will get stronger upon the implementation of the Paris Agreement after 2020, it is reasonable to expect that these markets are going to become stronger. The recent boom in the private sector setting up climate change practice groups is also evidence for a growing market. Either way, these mechanisms provide unique career opportunities for students to combine their interests in consulting, finance or law with their passion for environmental issues. This development marks an important shift from the traditional activism-based solution to fighting climate change to newer market-based solutions. Accordingly, this change has opened up the field of environmentalism to professionals across all academic disciplines.
The question remains: where is the money for climate finance coming from?
Companies around the world have recognized the potential of climate finance. Apart from the opportunities to engage in financing mechanisms such as the GCF, big banks have also allowed for increased access to capital. Through the World Bank and International Finance Corporation, The World Bank Group has been a pioneer in developing the green bond market to fund projects with environmental benefits. According to the World Bank, green bond issuance is projected to surpass 477.5 billion AED this year, compared to 299.7 billion AED issued last year. Private Banks have captured this market too. Goldman Sachs, for example, has been a pioneer in the deployment of environmental impact bonds, which leverage private investments to finance high-impact environmental projects where repayment is analogous to specific performance outcomes.
There are also plenty of opportunities to work with non-governmental organizations, aid partners and governments on leveraging these funds and implementing green projects. A panel discussion I attended at Norton Rose Fulbright in Sydney in 2016 highlighted that while there is an increased access to funds for green projects, there are very limited reliable companies or organizations that can use such funds and invest in green projects in developing countries. For example, the African Development Bank channeled funds from green bonds to finance the Ithezi-Tezhi Power Project in Zambia, the Kivuwatt Project in Rwanda and the Buseruka Hydropower Project in Uganda. There are also immense funding opportunities for social entrepreneurs who can design large-scale green projects that fit investment criteria.
Given this increased cash flow, some of the biggest consulting and law firms in the world have established practice groups dedicated to climate change. The big 4 accountancy firms, for example, have already made their way into the climate change and sustainability services market. Similarly, PricewaterhouseCoopers, one of the big 4 auditing firms, has a dedicated Climate Change and Sustainability Services group. The purpose of this group is to advise clients on matters ranging from green growth to climate change and climate smart agriculture, and the group is particularly focused on how the public and private sectors can work together to deliver more sustainable development. Baker & McKenzie, a leading multinational law firm, has a dedicated Environmental & Climate Change Practice Group that is ranked among the best environmental teams in the world.
Likewise, after noticing the demand for professionals with a solid understanding of conservation finance, universities across the world are increasingly offering courses on conservation finance, environmental economics and climate change. NYU Stern, for example, offers a course called Business and Environment. The London School of Economics offers a specialized Masters Degree in Environmental Economics and Climate Change. The graduates of this degree have gone on to work in investment banking, consulting, education and with other private and government sectors. Although getting a degree in environmental economics is not essential to pursue a career in the field, it is a great opportunity for students who intend to specialize in a market-based approach to environmentalism.
Although a market for climate finance is not fully established yet, there are tremendous opportunities for career growth in this sector. Perhaps one can simultaneously make money and protect the environment after all.
Rashtra Raj Bhandari is a climate columnist. Email him at
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