As global sustainability regulations tighten, financial institutions are under growing pressure to improve the accuracy, governance, and assurance behind their ESG disclosures. This shift has created a rapid rise in demand for Compliance and ESG professionals, and the trend is expected to accelerate further as we move into 2026.

Regulation is quickly moving from voluntary to mandatory. New global standards such as ISSB and IFRS S1/S2 are pushing companies to treat sustainability information with the same level of rigor as financial reporting. In Europe, CSRD and SFDR now require firms to provide detailed, auditable ESG data across their products and portfolios. Japan’s FSA is moving toward more formal governance expectations and scenario reporting, while the US SEC is implementing climate-related rules that demand stronger internal controls. Together, these changes mean that sustainability claims are now evaluated with the same seriousness as financial statements.

As a result, compliance and ESG functions are beginning to merge. Traditional compliance teams, once focused primarily on AML and KYC, are increasingly responsible for monitoring ESG data quality, preventing greenwashing, managing sustainability-related risks, verifying disclosures, and overseeing product-classification governance. Firms now need professionals who understand both regulatory frameworks and sustainability concepts—an uncommon combination in today’s talent market.

Investor expectations are also shifting. Institutional clients are demanding clear, evidence-based sustainability reporting rather than broad ESG narratives. They want transparent emissions data, credible transition plans, and reporting that aligns with global standards and taxonomies. This trend is moving ESG governance and reporting roles into the core of investment operations rather than leaving them on the periphery.

All of this has created a growing talent shortage heading into 2026. The most in-demand professionals are those who can bridge the gap between sustainability and regulation—individuals with reporting knowledge, carbon accounting expertise, scenario-analysis capabilities, and experience working in audit, legal, or risk functions. Because these hybrid profiles are still relatively rare, many firms are recruiting talent from Big Four sustainability teams and internal governance-related departments.

Importantly, strengthening ESG compliance is becoming a strategic move rather than a defensive one. Firms that build robust ESG governance today will find it easier to launch ESG-labelled products, meet client due-diligence expectations, avoid regulatory risks, and compete effectively in global capital markets. Strong ESG oversight is increasingly viewed as a growth enabler, not just a regulatory requirement.

Compliance and ESG specialists are therefore emerging as one of the most critical and competitive talent pools of 2026. As sustainability regulation continues to mature, the institutions that invest early in the right talent will be best positioned to lead in the years ahead.