Monday 27 February 2023

‘CEOs rewarded for easy carbon targets’

The chiefs at some of the biggest businesses in Europe were given large bonuses last year for their firms meeting carbon reduction targets – but these were very easy to achieve.

That’s according to a report by PwC and the London Business School (LBS), which questioned the ease with which these bosses were receiving their bonuses.

Although it found that three-quarters of the top 50 largest companies in Europe had bonuses in place for certain carbon targets being met, it said these were high payment for relatively little achievement.

Half of the average pay out of these bonuses was the full 100% bonus, with the overall average sitting at 86%.

Explaining the criticism of the targets, Tom Gosling from LBS said: “Current levels of pay out don’t seem consistent with the slow progress we’re making on climate change.”

He added that allowing full bonuses to be paid for easy targets “results in more pay, not more climate action.”

The report states that the trend of seeing green targets included for bonuses is fairly recent, with the majority of these companies starting to implement them within the last four of five years.

The challenge with including green credentials with bonuses is “to do it well, so that pay targets make a meaningful contribution to helping companies meet their climate goals,” Phillipa O’Connor from PwC added.