Impact of ESG on compensation
ESG considerations have increased in importance for corporate stakeholders and customers alike. Integrating ESG goals into overall corporate strategy is critical for long-term sustainability, reputation and risk management. By aligning executive compensation with ESG performance, companies cement their commitment to responsible and sustainable business practices. In terms of which ESG measures are incentivised in companies, DEI is seen as a very important metric in financial services, while reduction of carbon footprint is a priority in the Energy sector and, in agribusiness, product quality and sustainability ranks highest.
Compensation practices play an integral role in shaping an organisational culture, performance, and most importantly, employee engagement and retention. They are influenced by a multitude of factors such as cultural norms, economic conditions, regulatory frameworks and industry dynamics that in certain environments can be difficult to navigate given the things that drive them. Kestria’s global network spans all key industries, enabling us to maintain insight into the trends that matter to help our clients hire at the right level and provide compensation standards that meet the needs of new recruits.