ESG Viewpoint – Should ‘doing good’ pay out? Linking executive pay to ESG metrics
Insights

ESG Viewpoint – Should ‘doing good’ pay out? Linking executive pay to ESG metrics

ESG metrics in pay matter. We explain why, outline our expectations for companies in this area and detail our engagement efforts and the progress made.
Historically, executive pay has incentivised leadership to increase traditional measures of issuer performance such as revenue or operational efficiency. Now, as the world shifts its concept of corporate materiality and impact to include environmental and social matters, issuers are increasingly integrating sustainability goals alongside more traditional executive compensation key performance indicators (KPIs). These range from emissions reductions to workplace diversity targets – and, if achieved, can benefit stakeholders beyond just shareholders such as staff, society, and the environment.
In 2021, more than half of S&P 500 issuers – and nearly half of FTSE 100 issuers – included at least one ESG metric in executive incentive plans.
  • In 2021, Shell increased the weighting of its energy transition condition in the long-term incentive plan (LTIP) to 20%.
  • Since 2021, McDonald’s has factored diversity goals into executive bonuses.
  • Since 2020, Siemens has weighted 20% of stock awards for its managing board on an internal sustainability index based on three KPIs, including CO2 emissions.

Interested in learning more?

Read more about ESG metrics and executive pay, our expectations for companies and the progress we’ve been making through our engagement efforts. Download the full viewpoint to discover more.

 

30 Setembro 2022
Andrew Droste
Andrew Droste
Vice President, Responsible Investment
Kirsty Nicholson
Kirsty Nicholson
Impact Reporting Analyst, Responsible Investment
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics
Listen on Stitcher badge
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics

PDF

ESG Viewpoint – Should ‘doing good’ pay out? Linking executive pay to ESG metrics

Risk Disclaimer

Views and opinions have been arrived at by Columbia Threadneedle Investments and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

 

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

 

Engagement efforts outlined in this Viewpoint reflect the assets of a group of legal entities whose parent company is Columbia Threadneedle Investments UK International Limited and that formerly traded as BMO Global Asset Management EMEA. These entities are now part of Columbia Threadneedle Investments which is the asset management business of Ameriprise Financial, Inc. Engagement and voting services are also executed on behalf of reo® clients.

Related Insights

21 Novembro 2022

Steven Bell

Director, Multi Strategy Investments

Recession Watch: Europe and USA

We’ve been talking about recession for most of this year. So what’s going on?
Watch time - 7 min
17 Novembro 2022

Net Zero: From commitment to implementation

Here we set out how Columbia Threadneedle Investments is working to implement its own commitment to transition relevant portfolios in a systematic and meaningful way to deliver for our clients.
17 Novembro 2022

Food security challenges put spotlight on sustainable transition

The events affecting the food system from 2020-22 have been remarkable, and may become more widespread. Tackling this brings investment opportunities
Read time - 8 min

Também poderá gostar de

Sobre nós

Milhões de pessoas em todo o mundo confiam na Columbia Threadneedle Investments para gerir o seu dinheiro. Acompanhamos investimentos para investidores individuais, consultores financeiros, gestores de património, bem como companhias de seguros, fundos de pensões e outras instituições.

Contactos

Para mais informações sobre a Columbia Threadneedle Investments ou os nossos produtos, entre em contacto connosco ou com o seu consultor.

Responsabilidade social corporativa

Nuestro objetivo consiste en obtener resultados positivos que satisfagan las necesidades de nuestras partes interesadas, y nos comprometemos a actuar siempre de forma responsable y transparente, velando por los intereses de las personas que nos confían la gestión de sus inversiones.

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.

To view and control which insights you receive from us by email, please visit your preference centre.