Farient Briefings: Growth in ESG-Linked Comp Seen in Upcoming Research

Are environmental, social, and governance initiatives alive or dead? This question will undoubtedly continue to fuel debates. Recent articles and research suggest that the backlash against any corporate program perceived as “woke”—from climate change to diversity, equity, and inclusion under the banner of ESG—has had implications on both sides of the divide.

The overlap between ESG and executive incentives—i.e., stakeholder incentives—is the focus of annual research conducted in four of the last seven years by Farient Advisors and the Global Governance and Executive Compensation (GECN) Group, of which Farient is a founding partner.

In preparation for the 2024 Global Trends in Stakeholder Incentives report to be released in the new year, Farient researchers have been analyzing the adoption of such plans among companies around the world. New indices were added this year to capture comparisons among large-, mid-, and small-cap companies.

The results are illuminating. Rather than see a deflation in the ESG balloon, such measures are becoming more rigorous and specific. Greater refinement of ESG strategies to create longer-term shareholder value remains the pursuit. The challenge before companies is to demonstrate the link between ESG objectives and value creation.

How entrenched is the anti-ESG movement in the various regions of the world? That question is explored in the upcoming research along with the specific measures being used and the differences according to geography, company size, and sectors.

Also included in the upcoming 2024 report:

• Prevalence of stakeholder measures globally and by sector
• Types of stakeholder measures
• Types of social vs. environmental measures
• Company examples
• Exclusive Insights from board directors and investors