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Clifford Chance

Clifford Chance


Remuneration and ESG: What do you need to know?

29 April 2021

Tying executive remuneration and broader pay conditions to environmental, social and governance (ESG) measures continues to be a hot topic as the 2020-21 AGM and shareholder meeting season demonstrates.

Global events such as the COVID-19 pandemic, the climate emergency, economic uncertainty and social and racial justice are causing companies to accelerate changes to their ESG priorities, ensuring ever closer alignment between these issues and their long-term corporate strategies. Increasingly, companies' boards and remuneration/compensation committees are recognising that they have a role to play too in addressing these urgent challenges and are looking to manage the risks by linking them to conditions on executive pay. The level of interest in this area will only increase, as investors, consumers, staff and broader stakeholders put pressure on companies for a strong commitment to ESG, viewing pay as another way to hold companies and their executives to account.

Here's what you need to know about the current status of ESG and remuneration globally.

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