NEW YORK - U.S.-based bankers and money managers whose job titles include "ESG" or "sustainability" earn on average around 20% higher base salaries than colleagues of the same seniority without those labels, according to analysis of salary data shared with Reuters.
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)