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Yes, ESG Is Making Its Way into Executive Compensation
Environmental, social, and governance (ESG) investing is starting to make its way into executive compensation.
“Compensation is the ultimate governance mechanism that we have to make sure (that) companies are doing things right,” said Peter Reali, New York-based managing director and head of engagement for Nuveen, in a Pensions & Investments article.
“ESG issues are making their way into compensation conversations because shareholder proponents want it integrated into executive compensation design, to create accountability for executing on ESG commitments” said Reali.
The move toward including ESG in executive compensation is already making its way into European companies. It’s just the beginning of a move toward more ESG metrics.
Move to link exec pay to ESG integration growing
Move to link exec pay to ESG integration growing
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Michelle Dunstan said it’s just as important to have a good grasp of which metrics work best.
Now in the second year of the COVID-19 pandemic, investors are raising expectations about companies responses to highlighted ESG issues such as diversity and, increasingly, connecting that to executive compensation. Compensation is the ultimate governance mechanism that we have to make sure (that) companies are doing things right, said Peter Reali, New York-based managing director and head of engagement, responsible investing for Nuveen, with $1.2 trillion in assets under management.