Being aware of longer-term trends is critical for companies as they prepare for the future and formulate corresponding strategies, this year’s seventh annual research report by the Global Governance and Executive Compensation (GECN) Group is entitled 2024 Global Trends in ESG Incentives: Entering the Next Phase of Maturity.
As ESG advances as a corporate and even regulatory topic, how is this affecting pay practices? What specific choices on targets and metrics are companies making? Our research details trends across regions and industries. We trust it provides timely insights and data useful for corporate decision-makers as they design their ESG and compensation strategies.
Global in scope, this year’s research covers Australia, Canada, continental Europe (France, Germany and Switzerland), Singapore, South Africa, the U.K., and the U.S. The GECN Group analyzed data on ESG incentives from the most recent public disclosures of all 500+ companies on the major indices in each of these countries.
Our 2024 report confirms a pattern from earlier years. There is a continuing upward trend in companies employing ESG measures in their compensation systems with differences by region, sector and company size. To enhance the analysis, we reviewed the data using a framework of the four primary categories that represent ESG incentive design. They are adopt, select, incorporate and govern, and represent areas companies need to consider when aligning compensation with ESG priorities.