Finance

Want to make £500k a year? Get a senior job in ESG: ‘There’s a double whammy of strong demand and short supply’

Competition is rife among asset managers in the booming environmental, social and governance sector amid soaring interest in sustainable investments.

But a battle is also being waged over top-flight ESG talent, with sought-after professionals able to command bumper pay packages.

“The biggest demand at the moment is filling roles at the top end,” said Sophia Deen, a consultant at recruitment firm Bruin Financial.

According to Deen, heads of ESG at asset managers can expect base salaries of at least £150,000, while some firms are offering candidates total compensation packages of up to £500,000 for global positions.

“Two years ago those conversations wouldn’t be happening,” said Deen.

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Asset managers have been building out their ESG teams for some time, having undergone a hiring spree in 2019/20 when a spate of junior appointments were made, according to Deen.

Those in junior or analyst roles would have been able to secure salaries of between £60,000 and £75,000, with some candidates willing to take a pay cut to get an ESG role.

“The reason pay has gone up is because of demand, but also because asset managers are looking for like-for-like hires,” said Deen.

“If someone is hiring for a head of ESG, they want someone in a similar role from another firm, rather than from a consultancy.”

A dearth of ESG professionals is giving candidates the chance to consider multiple offers and hold out for the best remuneration package.

“There is a double whammy of strong demand and short supply,” said Tim Wright, a senior client partner at Korn Ferry.

“There are limited individuals in the market with extensive ESG experience, given it has been quite a specialist area until now.

“As a result, base salaries for new hires can carry a premium.”

David Harms, a partner with executive recruiters Valentine Thomas & Partners, sees similarities between the ESG job boom today and risk management roles around 20 years ago.

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“Risk managers weren’t necessarily front and centre, but in many firms the chief risk officer now reports to the CEO and are an integral part of the investment process,” said Harms.

Harms added that integration of ESG professionals is happening quickly and that there isn’t enough supply to keep up.

“Compensation is going up as the demand for talent soars,” said Harms.

However, he said there is no “one size fits all” when it comes to benchmarking pay, given the broad range of ESG roles and profiles of those moving into these roles.

“One trend we have seen by looking at historic data is that compensation was significantly lower for individuals in ESG roles when benchmarked with other roles in an organisation, be they investment or distribution. This is changing, and fast.”

To contact the author of this story with feedback or news, email David Ricketts

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