In Asia Pacific, seven in ten surveyed senior executives and board members are planning to change how they use environment, social and governance (ESG) with their executive pay plans over the next three years, according to a report by Willis Towers Watson.
Additionally, close to a third plan to raise the prominence of environmental (29%), social/employee (29%) and governance (31%) measures in their incentive plans in 2021.
Employers in Asia Pacific are taking various measures to review their workforces through an ESG lens. Nearly half (47%) said they have or will soon deploy listening strategies to better engage with their employees.
More than a third have created a new executive role to drive ESG strategy and half have identified new positions in their organisations to help achieve success. While, half of the respondents are also either planning or considering identifying new skills and knowledge to help the organisations achieve their ESG strategy in the future.
Assessing internal culture has been a top priority. Nearly half of respondents are either planning to review their culture to ensure ESG is embedded throughout their organisations or are considering doing so in the near future. Additionally, approximately one-third of respondents are planning to add oversight of broad-based total rewards and employee wellbeing to the compensation committee’s remit within the next three years.
“Boards have been asking for more information on ESG strategies and priorities, particularly in the areas of environmental conservation and employee wellness, to understand their alignment to sustainable value creation and materiality. Their goal is to improve the sustainable performance of the organisation by identifying the right measures for their incentive plans with appropriate performance targets,” said Trey Davis, executive compensation leader at Willis Towers Watson.
The 2020 ESG survey of board members and senior executives was conducted in September and October in 2020 with participation from non-executive and executive directors, and non-board member management executives at 168 organisations, of which 38% were from Asia Pacific and the rest from North America, Europe, Africa and the Middle East.