ESG teams see salary bump after internalisation push

A supply/demand problem in the recruitment of ESG professionals is leading salaries for the highest-paid ESG heads to reach $400,000. 

An ESG and Responsible Investment Salary survey by Kaizen Recruitment found the highest salary for a head of ESG was $408,000 with the average being $276,000 inclusive of superannuation. 

However, the most common range was $250,000 to $325,000 with just 12 per cent of ESG heads receiving more than $325,000. The mean bonus received for the role was $72,000, rising as high as $202,000. 

A head of ESG’s responsibilities was described as reporting to the CIO or board regarding long-term strategy, areas of focus for the organisation and driving internal change. Depending on the organisation’s size, they would typically manage a team and evolve continuous improvement regarding investment stewardship and ESG policies and frameworks.

Kaizen noted there had been a trend for firms that traditionally had small in-house teams to hire more in-house staff rather than relying on outsourcing, as issues such as greenwashing and regulatory action became more prevalent.

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At the other end of the spectrum, an ESG analyst had a salary range of $95,000 to $130,000 inclusive of superannuation, with the highest salary sitting at $162,000. The highest bonus was $30,000, while the mean bonus was $15,000. 

Kaizen noted salaries for ESG analysts had increased since their last survey due to respondents now having more industry experience and the role being in higher demand. These roles would usually involve focusing on reporting and assisting senior team members, as well as implementing the firm’s ESG investment policies and helping with ESG-focused research.

In the middle, an ESG manager could earn as much as $245,000, but the salary range was $155,000 to $230,000 with a mean bonus of $39,417.

While staff said they felt comfortable in their permanent roles, 48 per cent of the survey’s respondents said they felt undervalued regarding salary. Some 70 per cent said they received a financial bonus during the year.

“Kaizen predicts that 2023 will continue to be a candidate short market with relevant and qualified skill sets for ESG continuing to be in high demand. Organisations are seeking unique and nuanced talent dependent on current team structures, in-house capability and yearly goals both for investment and otherwise.

“We will likely see significant expansion and growth in related roles as ESG issues are rising in importance and prominence within society.”

If a person was looking to pivot from their current role into one focused on ESG, Kaizen recommended working on a broader research team and carving out an ESG specialisation, which could provide knowledge on evaluating companies. Attractive skill sets included policy knowledge, ESG due diligence, proxy voting and data analysis, among others.

Other transferable areas included law, consultancy, engineering and environmental science and courses were available on investment management and research.

For employers, the recruiter advised they should focus on up to three of their most desirable skills or industry experience and offer learning and development to improve a candidate’s skills.

“Organisations seeking ESG talent are currently facing one of the biggest challenges: the diverse experience requirements across various industries, organisations, and positions. While employers are facing this challenge, candidates are also struggling to find a role that suits their skill set in a company that offers professional development and matches their individual needs.”