Linking executive pay to net-zero goals key to climate action: Deloitte survey

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Chair of the future - The role of the Chair in climate transition, shared exclusively with Mint, explored the insights of company leadership on climate change, its integration with business strategies, and the potential role of the boards of directors. The participating companies comprised some of the largest public and private Indian corporations, as well as multinationals from sectors including banking, financial services, and insurance, oil and gas, fast-moving consumer goods, and industrial products.

The report, citing the recommendations of the chairpersons surveyed, said that incentivizing environmental, social, and governance (ESG) objectives within corporate boardrooms is pivotal to effectively addressing climate change. It also underscored the importance of commitment by the leadership, particularly from the CEO and the executive team.

"CEO compensation should have one component related to ESG performance," it said. Considering that companies are now defining their net-zero strategies, a key aspect of the corporate journey to achieve these goals involves meeting various milestones along the way, said Viral Thakker, partner, and sustainability and climate leader, Deloitte South Asia, He also underscored the importance of a calibrated approach rather than relying on ad hoc measures.

“One has to work towards it, and implement projects to get there. In order to make sure these projects are prioritized, it requires active involvement of the management." "Based on whatever is the net-zero pathway that might be committed, it's important for the management to follow that through.

And hence, the achievement of those milestones can be a part of the evaluation process. We believe it is possible to align profitability with