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More than $30 trillion in capital has been committed to
environmental, social and corporate governance-related
investments as the world looks to curb greenhouse gas emissions
and companies face pressure on issues such as workplace
diversity and social justice.
This has sparked a scramble to find bankers and asset managers
for these roles, leading to higher base salaries than for
equivalent professionals in non-ESG related functions, the
analysis conducted for Reuters by New York-based data startup
Revelio Labs shows.
"Salaries of ESG and non-ESG personnel started to diverge in
2020, in line with the spike in hiring in ESG roles due to the
increasing focus on ESG and sustainable investing in the finance
sector," said Loujaina Abdelwahed, an economist at the company.
The strong demand for professional talent comes amid a political
backlash against ESG in parts of the Western world, especially
in the United States, where it has culminated in various laws to
remove environmental and social considerations from business in
some states.
Revelio Labs scraped online professional profiles for people
with finance roles in commercial and investment banking and
asset management and split them into those with ESG or
sustainability in their job titles and those without.
They then applied their salary model which is trained on
publicly available data from three sources: roughly 2 million
H1B documents, in which companies declare salaries they pay to
non-U.S. citizens, around 25 million job postings that included
salaries, and about 1 million self-reported salaries.
Since 2019, the rate of base salary growth for ESG roles has
been about 38 percentage points higher than non-ESG personnel,
Abdelwahed said.
ESG-tagged roles overtook non-ESG on a six-month moving average
basis in June 2020 and in August 2021 surged to peak around
$109,846, fully $20,000 higher than non-ESG.
The analysis does not take into account the discretionary
bonuses often awarded to bankers and asset managers for their
performance, as this data is not available from the public
sources consulted by Revelio Labs.
The gap shrank in the second half of 2021 but grew again into
this year: in April 2023 average ESG salaries were $110,348
versus $90,283.
(Reporting by Isla Binnie; Editing by Simon Jessop and
Christopher Cushing)
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