In Part I of a two-part series, Warwick Peel and Brendon Booth, co-founders of pb Human Capital, explain why green job opportunities are increasing in Australia and highlight the key players in the carbon trading market.

The renewable energy industry and carbon markets represent the future of sustainable careers in financial services. Carbon offset pressures are being felt across the Australian market sooner than expected and December’s United Nations Climate Change Conference in Copenhagen is looming closer.

With amended legislation for the Renewable Energy Target (RET) scheme passed by the Federal Parliament recently, 20 per cent of Australia’s electricity generation is set to come from renewable energy sources by 2020. The Australian Government has allocated $4.2bn in funding for renewable energy, and employment opportunities within the sector will continue to rise well beyond the 30,000 jobs quoted earlier in the year.

The implementation of the Carbon Pollution Reduction Scheme (CPRS) means carbon-credit offset requirements for companies in the domestic market will become an annual commitment, creating significant financial and commercial implications for corporate Australia.

The renewables industry is clearly here to stay, and the carbon markets create a new asset class for the financial services sector to trade.

Who are the key employers?

Banks

Plenty of banks already have carbon trading desks in European markets, with the likes of Barclays Capital, Deutsche Bank, Goldman Sachs, JP Morgan, Morgan Stanley, and Merrill Lynch among the more established.

Within the domestic market, nabCapital has developed a Carbon Solutions Group, spearheaded by a sustainability pioneer previously from PricewaterhouseCoopers. Macquarie’s Oliver Yates is well respected across the international carbon markets. Investec acquired Rothschild’s natural resources team a few years ago and it has since been at the forefront of the renewable energy market in Australia.

Funds

A responsible investment strategy is adhered to by some of the country’s most well regarded super funds, and both domestic and offshore fund managers. Dr Ian Woods plays a pivotal role in driving AMP Capital’s investment decisions with regards to its environmental, social and governance (EAG) criteria. The highly regarded Amanda McCluskey is the “green enforcer” within Colonial First State Global Asset Management.

Consultancies

The consulting arena is also ready to push the green button, and some top-tier strategy firms, such as Booz & Co, have received praise for their work for the Australian and New Zealand Governments on the CPRS and European Union Emission Trading System (ETS) proposed schemes.

Several independent firms have emerged in the sustainability and climate-change consulting arena. Terence Jeyaretnam of Net Balance conducted his first environmental energy audit of The Body Shop over a decade ago. Independent firm Ipsos Custodes is recognised as a first-mover in Renewable Energy Certificates (REC) and carbon-abatement trading.

Power generation companies

The carbon trading and green desks within the power generation companies are quite possibly the most active participants in this market. AGL was the first energy company to trade carbon domestically. It appears to be the market driver, having built a specialist carbon strategy team headed by a former Rothschild precious-metals investment banker, who developed an intimate eco-markets knowledge during the infancy of the renewable energy industry.

Trading platforms

A number of parties plan to launch carbon futures. ASX, operator of Australia’s stock exchange and the existing energy futures markets, is expected to have a natural advantage on the carbon futures market. EnVex, a firm backed by Macquarie Group, also plans to muscle in on this potentially huge market and plans to use Sydney-based Financial & Energy Exchange (FEX) as its trading platform. FEX is in the process of obtaining an Australian markets licence. Other firms, such as the Australian Climate Exchange, are also offering platforms to trade environmental products including Renewable Energy Certificates.

Part II of this article, published next week, looks at different job functions within the green sector.