▷ Top manager remuneration: social and ecological KPIs are becoming more important / 27% of German …


28.10.2021 – 13:18

Diligent

Munich (ots)

According to Diligent, a provider of software solutions for modern corporate governance, 27 percent of German listed companies integrated sustainable KPIs as part of their environmental, social and corporate governance (ESG) metrics into executive compensation in the past year. The statistics are part of a Europe-wide study with 1,914 companies, including 29 from the DAX 40. The study commissioned by Diligent showed that ten years ago there were no German companies that linked ESG criteria to company compensation. Today, more than a quarter (27 percent) do this.

Compared to other European countries, however, Germany is still lagging behind in this area. In 15 major European markets (Belgium, Denmark, Finland, France, Germany, Great Britain, Ireland, Italy, the Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain) was the proportion of companies using ESG metrics in their compensation plans Executives added last year averaged 34 percent. In 2008, their share was 4 percent. The increase in recent years may be a consequence of the EU Commission’s upcoming proposal for a “Corporate Sustainability Reporting Directive (CSRD)”, which provides for a new standard for European sustainability reporting and will come into force in 2022.

Little trust in their own ESG programs

According to a survey by corporate governance nonprofit OCEG, more than half of the 530 corporate executives surveyed in Europe and the US said they have little or no confidence in the reliability and maturity of their ESG programs . This could be one reason for the lower prevalence of ESG-related compensation in Germany.

Diligent, whose governance platform is used by 57.5 percent of DAX 40 and 37 percent of Euronext companies, recommends companies to take ESG programs seriously to manage risk and ensure compliance.

Peter Herr, Director of Sales at Diligent in Germany: “Linking ESG to financial rewards can be a useful incentive for companies to develop success criteria. However, it is worrying that so many executives have no confidence in their ESG programs. which could be one of the main reasons this is not a priority for German listed companies. ”

ESG strategy a must today

“An ESG strategy is an ongoing task with regard to a company’s own risk assessment and ensuring its growth. Having an ESG strategy is no longer voluntary or anticipatory, but essential,” says Peter Herr.

This year at least 15 companies across Europe carried out consultative votes on their climate protection plans, and more are to be expected. With many companies’ annual general meetings usually held in the fourth and first quarters, board members and shareholders will likely have to vote on “Say on Climate” proposals shortly.

However, a recent review of the resolutions proposed by company management revealed that between June 2020 and July 2021, more than three quarters (76 percent) of DAX companies voted ten percent of shareholders against the proposals in at least one vote.

Executives need to know ESG-related facts

Peter Herr: “In order to be able to vote on ecological or social proposals, executives must be familiar with the facts, understand the governance landscape from a legislative and compliance perspective, and have an effective communication channel to express their opinions. Diligent can serve on the board of directors Help you make the best decisions for your long-term business goals. ”

About Diligent

Diligent is a leading provider of Saas solutions in the area of ​​Governance, Risk & Compliance (GRC) with more than one million users in over 25,000 companies worldwide. Diligent’s GRC platform provides boards, directors and other executives with a holistic, integrated view of audit, risk, information security, business ethics and compliance across the organization. Diligent brings technology, insight, and security to leaders so they can create a more effective, equitable, and successful organization. Diligent customers are 65 percent of the Fortune 100, 83 percent of the ASX 200, and 90 percent of the FTSE 100 companies.

Press contact:

Press office Diligent Germany
c/o Industrie-Contact AG
Erik Biewendt
Tel. +49 40 899 666 14
[email protected]

Original content by: Diligent, transmitted by news aktuell


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