By Isla Binnie
NEW YORK (Reuters) – US-based bankers and money managers whose job titles include “ESG” or “sustainability” earn on average about 20% higher base salaries than peers of the same seniority without those labels, according to analysis of shared salary data with Reuters.
More than $30 trillion in capital has been committed to environmental, social and corporate governance investments as the world strives to curb greenhouse gas emissions and companies are under pressure from issues such as workplace diversity and social justice .
This has led to a struggle to find bankers and asset managers for these positions, leading to higher base salaries than for equivalent professionals in non-ESG-related positions, according to the analysis conducted for Reuters by New York-based data. startup Revelio Labs.
“ESG and non-ESG staff salaries began to diverge in 2020, in line with the spike in ESG hiring due to the increasing focus on ESG and sustainable investing in the financial sector,” says Loujaina Abdelwahed , an economist at the company .
The strong demand for professional talent stems from a political backlash against ESG in parts of the Western world, especially in the United States, where it has led to several laws to remove environmental and social considerations from business in some states.
Revelio Labs scraped online professional profiles for people with finance positions in commercial and investment banking and wealth management and split them into people 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: about 2 million H1B documents, in which companies declare salaries they pay to non-U.S. citizens, about 25 million job postings that include salaries, and about 1 million – reported salaries.
Since 2019, the base salary growth rate for ESG positions has been about 38 percentage points higher than for non-ESG personnel, Abdelwahed said.
ESG-labelled features overtook non-ESG in June 2020 on a six-month rolling average and rose to peak around $109,846 in August 2021, 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 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)