Companies are increasingly establishing executive positions to cultivate ESG strategies but recent data suggests they won't stop there. Many of these firms will also be taking steps to tie or link executive pay with attaining ESG goals, according to a new survey from Willis Towers Watson.
Overall, one-third of companies that responded to the survey plan to increase the prominence of ESG in incentive plans. Most companies—four in five or 78%—are planning to change the way that executive incentive plans incorporate ESG over the next three years; four in 10 companies plan to introduce ESG into long-term incentive plans over the next three years; and 37% of respondents plan to introduce ESG into annual incentive plans over the next three years.
Investors are supporting this move. A recent report from Edelman found that 69% of investors want executive compensation to be linked to ESG targets. When ESG is linked to compensation, it increases investor trust in a company, according to those surveyed by Edelman.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Unlimited access to GlobeSt and other free ALM publications
- Access to 15 years of GlobeSt archives
- Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
- 1 free article* every 30 days across the ALM subscription network
- Exclusive discounts on ALM events and publications
*May exclude premium content
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.