Road to net zero - incentivising leadership

Companies, investors and wider stakeholders are increasingly aware that climate strategy will be intrinsically linked to future business resilience and can positively impact many areas, from talent attraction to employee engagement. In the coming months the UK will host COP26, and with an increasing focus on the corporate sector to mitigate the impacts of climate change, the actions of business executives are seen as critical in this area.

As part of a wider trend towards the use of Environmental, Social and Governance (ESG) metrics in executive incentive plans, companies are increasingly incorporating the delivery of climate goals under annual and long-term reward frameworks. Where boards can demonstrate clear alignment to strategy and future business performance, the inclusion of climate metrics can send an important signal to executives, employees, investors and wider stakeholders and incentivise the collaborative change required to meet the UK’s net zero ambition.

Our publication explores the trends and considerations for remuneration committees in this area.

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