Using a similarly appropriately conservative tone as its recent “Using Compensation to Promote Diversity, Equity, and Inclusion” (which we reported on here), Semler Brossy’s “Moving Cautiously on ESG Incentives in Compensation” advises companies considering inclusion of environmental, social, and/or governance pay metrics to do so in a carefully considered, methodical manner that includes a readiness assessment and a multi-year commitment to metrics aligned with strategic priorities and disclosure, which may ultimately consist of explaining publicly why established goals were not attained. The thoughtful piece cites a number of examples of metrics concerning carbon footprint reductions, human capital management, sustainability and recycling, human rights, DE&I, and others.
Access additional resources on our Executive Pay page » Non-Financial Metrics and Surveys/Studies.
This post first appeared in the weekly Society Alert!