Sustainability skills on UK financial services boards in demand
Demand for sustainability skills on boards is likely to accelerate, EY has predicted, driven by a rising focus on corporate governance and complex regulation.
It is latest Financial Services Boardroom Monitor, EY reported the gender pay gap among non-executive directors with sustainability expertise stood at 52% in 2024 – the latest year for which data is available – markedly higher than the 29% gender pay gap average across all skillsets.
Shaun Carazzo, EY UK financial services partner & sustainability leader, said: “Board level ESG expertise is highly valuable and in short supply. The sharp increase in the number of non-executive directors with sustainability expertise joining UK financial services boards over recent years is testament to how important these skillsets have become in corporate governance, and the demand for such talent will likely accelerate as regulatory complexity rises.”
It also found the number of UK non-executive directors with sustainability expertise increased by 72% between 2020 and 2024, but the average pay fell by 12%.
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EY also reported the gender pay gap among UK financial services boards has narrowed, and is the only major financial services market across Europe and North America to do so, but overall salary figures still lags global peers.
For example, the gender pay gap on UK financial services boards narrowed by 11 percentage points from 40% to 29% between 2020 and 2024 (the latest available five-year period, EY said. In contrast, over the same period, on US and German financial services boards, the pay gap widened by two percentage points (from 2% to 4% in the US, and from 19% to 21% in Germany), and in Italy it widened by three percentage points (from 26% to 29%).
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Meanwhile, in Switzerland and France, the gender pay gap grew most markedly, widening by 14 and 18 percentage points respectively (from 41% to 55% in Switzerland and from 4% to 22% in France).
The UK, therefore, still has one of the highest board level gender pay gaps in the transatlantic financial services market at 29% – this is equivalent to $102,000 per year on average, much larger than that of the US (4%, or $13,000), Germany (21%, or $57,000) and France (22%, or $31,000).
Carazzo added: “The gender pay gap has been called out as a concern – despite narrowing since 2020 and sitting lower than in other European markets – it is a pressing issue. The gender gap for non-executive directions with sustainability expertise currently stands at 52%, which is significantly higher than the 29% gap across UK financial services boards overall. A review of remuneration policies is needed to ensure firms are rewarding fairly and can continue to attract and retain the right internal specialist skills and knowledge.”
Martina Keane, EY UK & Ireland Financial Services Leader, also commented:“It is encouraging to see UK financial services firms move faster than their transatlantic peers to narrow the board-level gender pay gap, particularly when many comparable markets are moving in the opposite direction. But this progress should not obscure the scale of the challenge that remains.
“The progress made in asset management and the near parity achieved in insurance show what is possible. Concerted, proactive efforts are needed to sustain and build on the progress that’s been made, but the pace must pick up. Faster progress to gender pay equality in financial services will better ensure the best global talent is attracted, retained and leveraged to promote industry and economic growth.”
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