(09 December 2020 – Europe) Deutsche bank have decided to link executive management’s pay with Environmental, Social and Governance (ESG) criteria. All management compensations for 2021 will be conditional on sustainable finance investment targets being met.
Peer banks such as HSBC, BNP Paribas and UniCredit, have also implemented similar models that links pay to ESG performance. As more investors seek financial institutions that perform better on ESG metrics, it has become essential for banks to place more emphasis in this area of banking.
Policymakers have also required banks to stimulate the transition towards a low-carbon economy and co-operate with the Paris climate agreement.
“It is our ambition to be a leader on sustainability in the financial sector, and contribute to an environmentally sound, socially inclusive and well-governed world” commented Deutsche Bank CEO, Christian Sewing.