A study from WTW, a global insurance and consultancy firm, shows that 74% of 193 top companies across Asia Pacific (APAC) included ESG metrics in executive incentive programmes last year. This is an increase of 2% from the previous year. Australia, Singapore and Japan all scored highly, with inclusion rates of 92%, 82% and 74% respectively. China scored less well, with just above a quarter of companies surveyed including ESG metrics in pay structures, albeit from a small sample of 14. “The disclosure and prevalence of ESG metrics used by companies in APAC continue to vary and are influenced by the level of disclosure requirements and institutional investors’ expectations in each market,” said Shai Ganu, Global Practice Leader, Executive Compensation and Board Advisory, WTW. “While markets such as Australia, Japan, and Singapore continue to have high prevalence of ESG measures in executive incentives, we haven’t seen significant change over the past year.” The global average for companies incorporating ESG metrics is 81%, with North America standing at 77% and Europe standing at 94%. “Going forward, geopolitical shifts may prompt slowdown in adoption of climate and DEI measures, particularly in North America,” said Ganu. He added that Asian companies will continue to improve “as they continue to drive the right behaviours by ensuring alignment between ESG strategy and executive incentives.”
