APAC Organisations Increasing ESG Efforts

A new report shows an uptick of ESG measures in APAC incentive plans. 

By Zee Johnson

After a slow start, companies in the APAC region are getting on board with incorporating environmental, social, and governance (ESG) measures into executive compensation programmes.  

A new Wilson Towers Watson report found that of 300 APAC companies,188 (63%) currently include ESG metrics in their incentive plans. And of the metrics, social emerged as the most prevalent measure used in these plans (47%), trailed by governance (31%), and environmental measures (28%).  

The report also found that while people and HR measures were the most prevalent metrics for short-term incentive plans in APAC, for long-terms plans, environmental and sustainability measures were the most prominent. 

Though the region is still below the global average of 75% when it comes to aligning ESG priorities with executive incentive programmes, (Europe, 91%, United Kingdom, 89%, Canada, 80%, and the United States, 69%) Shai Ganu, managing director and global practice leader of executive compensation and board advisory for Wilson Towers Watson notes that the region is steadily upping the ante. 

“While APAC had a delayed start, we are seeing companies in the region pick up the pace in their ESG commitments, particularly in areas such as climate, human capital and DEI (diversity, equity, and inclusion), as well as broader corporate governance measures,” Ganu said in a press release. 

In the same release Xujing Zhu, Asia and Australasia leader of executive compensation and board advisory at Wilson Towers Watson, says the rapid surge in ESG integration in recent years has been driven by tightening disclosure requirements from regulators. “Pressure is clearly mounting for companies to establish an ESG agenda to remain competitive, relevant, and aligned with the priorities of their stakeholders,” Zhu added.  

The three APAC markets leading the region in the disclosure of metrics used and the integration of ESG measures into executive incentives are Australia (100%), Singapore (65%), and Japan (62%). 


Tags: APAC March/April 2023, APAC News, esg

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