E&S Metrics in Executive Remuneration: A Focus on North America and Europe
September 2, 2024
Corporate boards are increasingly linking variable executive pay to non-financial metrics assessing Environmental & Social (E&S) performance. One reason for this is the heightened investor stewardship focus on effective company strategy and the management of E&S risks and opportunities. Companies are developing various methods of integrating E&S performance measures within their compensation frameworks to influence executive behavior. This includes using weighted metrics, sub-metrics, and modifiers, as well as the incorporation of E&S metric in executive director performance evaluations. This report offers a retrospective overview through 2023 of the efforts companies have made to integrate E&S metrics into executive compensation structures, focusing on companies in North America (U.S. and Canada) and Europe (Continental Europe and U.K.).