Report: Responsible reward: how to fulfil your environmental, social and governance promises through performance and pay

This report from PeopleNet, in collaboration with CASS Business School, looks at the link between corporate performance, sustainability and pay outcomes. It considers how to integrate environmental, social and governance (ESG) measures into remuneration structures.

Key findings

• There is strong evidence that sustainability and corporate financial performance are positively correlated; when firms identify their ESG priorities and align them to their business strategy, they reap the benefits of increased long-term financial returns.
• Although there are numerous signatories to initiatives such as the club 30% or the Women in Finance Charter, which require the link between Social (diversity) targets and the determination of pay outcomes, there is little to show in terms of such linkages.
• Responsible reward encapsulates the sustainability targets that are material to a business in delivering its core strategy and links them to annual and long-term incentive plans.

This report considers the PeopleNet E.A.R.T.H.™. methodology (Evaluate the current situation, Ascertain targets and options, Realise changes, Tell internal and external stakeholders, and Help monitor progress and results). It provides the five steps businesses follow when they design and implement responsible reward to fulfil their ESG promises through performance and pay.