Research confirms that companies that do not embed sustainability targets into executive remuneration strategies struggle to motivate executives to adopt sustainable practices, leading to misalignment with societal expectations and stakeholder interests.
While trends indicate a growing awareness of sustainability, a more widespread and deep-rooted commitment is essential for sustainability to become a cornerstone of business operations. Despite the progress made, challenges remain regarding the complexity and effectiveness of non-financial key performance indicators (KPIs). Data shows that remuneration is one area where not taking such KPIs into account can be detrimental to the company and its stakeholders.
Therefore, one way our Positive Impact Equity Investment team promotes sustainability is by advocating for executive remuneration to be tied to non-financial KPIs. They actively vote at the annual general meetings of all companies within their portfolios, and in particular on their remuneration policies, opposing those without substantial links to sustainability.
This reflects a commitment within UBP as a whole to fostering sustainable corporate behaviour among our investees and aligning their business practices with long-term value creation.
Crystal Wong
Impact Analyst
View her Linkedin profile
