A focus on cost cutting and higher investment returns has resulted in a slowing down of hiring for environmental, social and governance (ESG) positions, The Wall Street Journal reported.

Companies had 3,071 ESG departures compared with 2,897 arrivals in December 2023, according to employment data provider Live Data Technologies, which reviewed more than 360,000 current and former ESG professionals at U.S. companies, the Journal reported. That development marks the reversal of a multiyear trend.

Meta Platforms, Amazon and Google had the largest ESG job outflows among U.S. companies in 2023, according to the employment data, but many of those departures—along with those from tech, financial-services and consulting companies—represent cutbacks in those sectors, including layoffs. Some companies are facing ​​investor pushback and political pressure targeted at ESG efforts, with shareholders cashing out billions in favor of higher returns elsewhere.

In addition, some companies already have ESG teams and don’t need to build them out, said Joe Dubbin, managing director at executive search firm Cripps Leadership Advisors, in an interview with the Journal. Regulations and investor sentiment will help determine the future level of continuing demand for these positions, he said.

Corporate boards have been placing less pressure on executives to focus on managing ESG risk compared with that of supply chain, cybersecurity, generative artificial intelligence and geopolitical uncertainty, said Alexander Bant, chief of CFO research at consulting firm Gartner, in an interview with the Journal.

The drop in new ESG hires hasn’t necessarily weakened companies’ investments in those areas. Fully 92 percent of chief executives stand by their ESG programs, while the remaining 8 percent have ramped them down, according to a Teneo survey from December.  

The nature of ESG positions is also changing, according to the Journal. ESG job titles sometimes include words such as sustainability, impact, responsibility, climate and diversity. There are fewer sustainability reporting positions focused on companies’ reporting of ratings and rankings and more positions within or working directly with the finance team, said Ellen Weinreb, managing director at Weinreb Group, a sustainability and ESG recruitment firm, in an interview with the Journal.

Ongoing resistance to the ESG label might influence how companies decide which roles they want to avoid, said Mike Wallace, chief decarbonization officer at Persefoni, a carbon accounting and management software provider, in an interview with Journal. Some positions have moved from a director-level position into a job in the C-Suite and shifted from marketing to finance, he said. 

“You’re going to have to figure out ... the language you’re going to use to stay in compliance, but also continue to do business with your biggest customers asking you for sustainability, carbon data or ESG data,” he said, referring to chief financial officers and other executives.