In an era where career choices are increasingly driven by purpose rather than profit, Hong's journey from commercial banking to development finance offers a powerful narrative on the evolving values of today's workforce.
In Conversations with Hong Paterson and Noel Keogh: Click here to watch the Interview.
Hong initially pursued a career in banking, drawn by its financial rewards and the stability it offered. However, she has since reflected on the motivations of today's younger generations, including her own daughter. Unlike her time, financial security is not the primary driving force for young professionals today. They are increasingly motivated by the impact their work has on the planet, society, and disadvantaged communities. This shift in values influenced Hong's transition from the private sector to the development sector later in her career. She was concerned about the legacy she would leave behind and the state of the world for future generations.
Upon moving to the development sector, Hong recognised that her skills from the private sector could be utilised in new ways. She initially thought she might need to take a step back to move forward, especially in the nascent field of climate finance. However, this sector offers the private sector opportunities to leverage their knowledge and investments, particularly in financing.
In her role, Hong collaborated with professionals from various backgrounds, including humanitarian, finance, and scientific fields. Her experience on investment committees in the private sector focused on financial returns. In contrast, in mission-driven development finance organisations, the primary concern is the project's impact on the ground and its benefits to beneficiaries. Only after assessing these factors do financial considerations come into play.
The complex structuring of investment projects is still relatively new in the development sector. Hong's skillset in this area is invaluable, providing significant benefits to mission-driven organisations. The financial landscape has changed significantly since the Paris Agreement, with the annual funding required to combat climate change increasing from $100 billion to trillions of dollars. Climate finance organisations now face similar decisions to those in the private sector, needing to prioritise projects based on available financial resources.
Hong likens the approach to resource mobilization from donor governments and agencies to that of a sales pitch, as they need assurance that their investments are economically viable. Simply appealing to altruism may not be sufficient.
One of Hong's biggest challenges in this transition has been understanding the complexity of the public sector and the diverse interests and motivations of its stakeholders. While the private sector is complex, the public sector operates on a different scale, and navigating it is not straightforward.
There is a growing movement towards Environmental, Social, and Governance (ESG) considerations, with an emphasis on seeking profit alongside positive societal impact. Policy-making in the public sector often involves long-term thinking, a skill that is sometimes lacking in the private sector's short-term mindset. As private companies embark on their ESG journeys, they must adopt a more long-term perspective similar to that of the public sector.