The number of companies in the EU with ESG KPIs in compensation packages has in fact jumped from 4 percent in 2008 to 34 percent in 2020, according to a recent report by Diligent. The energy (59 percent) and utilities (64 percent) sectors had the highest amount of companies incorporating ESG metrics in their compensation plans.
“At the end of the day, you get what you incentivise,” said DiGuiseppe. Companies should therefore ensure ESG KPIs in executive compensation plans clearly align with the overall ESG strategy of the business to be most effective, he said.
Financial Director, Commentary, “Mid-sized market at risk of missing out on funding due to lack of ESG strategy setting” by Aoife Morgan