How to tie ESG goals to executive compensation

The world is leaning toward sustainable businesses and organisations are responding by reviewing their operations to be considered responsible. There is room for all businesses to truly embrace the concept of ‘doing well by doing good’ and incorporating Environmental, Social, and Governance (ESG) principles if they truly want to thrive, with a view to recognising various stakeholders and not only shareholders.

Under the social component of ESG, which delves into the impact an organisation has on people issues relating to employee training, compensation, diversity and inclusion, health and safety standards are of important consideration. For companies that need to drive sustainability in their businesses, executive compensation can be used as a tool to achieve this.