The ESG Phenomenon: APAC Firms Increasingly Embed ESG Into Executive Pay
The latest developments in the ESG space.
Public companies in Asia-Pacific are catching up with their global counterparts in incorporating ESG measures in their executive pay programmes, a new study said.
The findings come from WTW, a Nasdaq-listed global advisory, broking and solutions company.
Based on the companies that disclose information on the use of incentive metrics, European companies lead the field with 91 per cent using at least one ESG metric in their incentive plans, exceeding the global average of 75 per cent. This was followed by US companies at 69 per cent, with APAC at 63 per cent.
While most European and North American companies disclose information about metrics used in incentive plans, only 62 per cent of APAC companies did so.
Overall, the prevalence of ESG metrics in short-term incentive plans is significantly higher than long-term incentive plans across all regions. More than 50 per cent of companies in APAC incorporate ESG metrics in their short-term plans, behind Europe (85 per cent) and US (67 per cent) companies. For long-term incentive plans, the number of APAC companies (28 per cent) that incorporate ESG metrics remains behind Europe (46 per cent).
The most prevalent measures that APAC companies use in incentives plans are social metrics (47 per cent), which include sub-categories such as people and HR, diversity and inclusion, as well as health and safety.