(11 November 2021 – United Kingdom) Only one in four major banks globally have distinctly linked chief executive officer (CEO) remuneration to an environmental, social and governance (ESG) target.
The Capital Monitor research generated by GlobalData through analysis of publicly available data reveals most environmental bonus targets do not account for financed emissions, that is those emissions generated by the companies the banks lend to and raise capital for. Instead many lenders have adopted narrower operational targets relating to the emissions produced by their offices and business travel. This is despite increasing stakeholder pressure to link executive remuneration to ESG factors as is the case in other industries and more explicitly committing to public environmental improvement initiatives.
“It is of deep concern that only one in four of the 100 largest banks have publicly announced environment-related incentives for their CEOs” commented Capital Monitor Editor-in-Chief Daniel Flatt.
“Equally troubling is the general lack of transparency provided on how key executives are paid, with a few exceptions, as laid out in this report,” he adds. “We hope that remuneration committees look to leaders in this area, such as ING and NatWest, and choose to take a similar path very soon” Mr Flatt added.