Professionals are fleeing ESG roles. It might have something to do with the pay.
A compensation survey from recruitment company Pearse Partners found that ESG professionals working in finance are pretty under-compensated compared to their colleagues in old-school finance.
The best paid ESG professionals are impact investors, who invest in companies with both financial and ESG-related goals (such as IRR and GHG targets). After 9-12 years in the ESG space Pearse says they make £150k ($189k) in salary per year, which is vaguely similar to what Pearse Partners says VPs are paid in corporate finance and advisory jobs at investment banks in London (unless they have the good fortune to be somewhere like Deutsche Bank). However, when bonuses are factored in, bankers are paid around 10% more than even the highest paid people in ESG.
Pearse’s categories are confusing. It says senior asset managers, consultants, NGO workers, and even private equity staff specializing in ESG are paid even less. Investment managers are close to impact investors (Pearse says they’re on £260k), but it’s not entirely clear how they’re differentiated from them (or asset managers) working for asset management firms.
The overall message of the survey is, though, that pay is lower if you want to save the world. This is especially the case if you work in private equity. The range of salary and bonus compensation at large private equity funds (over €1bn) in Europe for a mid-career professional (specifically, a principal) is between €331k ($363k) and €526k ($576k) according to Heidrick & Struggles. Pearse puts comparable ESG pay at around £156k ($196k).
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