Environmental, social, and governance—ESG—is more than a buzzword. It’s a new perspective that drives business practice by prioritizing the health of the company, its team, and the community it impacts. Our ESG compensation consulting services will help your company progress in its ESG journey, through proper incentive practices.
Investors are focused on supporting companies that are considered good corporate citizens. They’re interested in how an organization’s products and services impact the environment, employees, and customers. They also want to be confident in a company’s leaders as skilled operators who follow best practices in alignment with an organization’s vision.
Studies show ESG-linked compensation is directly correlated to improved corporate performance. In fact, more than two-thirds of companies in the S&P 500 have ESG elements built into their compensation programs. Zayla helps your business develop a compensation strategy that incorporates ESG aligned with your goals—and shows investors you’re up to the challenge of being a positive force in the community.
Company strategies often benefit from improved ESG performance. We develop compensation plans that incorporate ESG to inspire your team to do better—for the organization, your customers, and the community.
Zayla’s team of skilled consultants stays up-to-date on the rapidly changing world of ESG. We benchmark your team’s ESG practices and evaluate them against peer best practices in your industry and beyond. We also conduct interviews with board members and key leadership to understand what ESG metrics matter most. With this information, we design ESG incentives that encourage growth, progress, and interest from well-matched investors.
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Through analysis, reporting, and careful listening to your short- and long-term vision, we create structures that support strategies for improvement in ESG. While ESG incentive practices continue to evolve, we ensure you are balanced in your focus on ESG and other strategic priorities.
The health, safety, and satisfaction of employees are major parts of the S—social—in ESG. And when employees are given goals toward something important, such as protecting the environment, they feel a greater sense of purpose. This leads to the perspective that they’re part of a larger whole, which drives engagement and innovation.
Poor ESG performance can lead to a variety of problems, including legal action and its associated costs, and sinking share prices. But beyond its financial impact on a company, focusing on ESG is simply the right thing to do. From customers to investors, today’s stakeholders are more interested than ever in policies that protect the environment, promote community, and demonstrate good leadership.
ESG incentives are metrics incorporated into a company’s short or long-term incentive plan to encourage progress on environmental, social, and governance matters. Companies are more frequently incorporating ESG metrics into their incentive plans; according to the ES Guage, 69% of the Fortune 500 have adopted ESG metrics, an increase from 52% in 2021. Smaller companies have adopted ESG metrics more slowly, but the practice continues to emerge across all industries.
(E) Environmental metrics such as carbon footprint reduction, greenhouse gas reduction, emissions containment, and renewable energy use are the second-most-common used incentive plan metrics, behind social metrics.
(S) Social metrics such as Diversity, Equity, and Inclusion (DEI) are the most common metrics currently used in corporate incentive plans, followed by workplace health and safety.
(G) Governance metrics are the third most prevalent ESG measure included in company incentive plans.
Zayla™ is happy to help your company align your pay and governance structures and processes with your long-term goals.
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