NAB chairman says bonuses could be linked to climate
NAB chairman Phil Chronican is “open and attracted” to the idea of linking banker bonuses to climate-related targets, so long as reliable and robust measurements can be found.
Some of National Australia Bank’s international investors had been asking whether NAB might follow the lead of Barclays and NatWest in Britain, which have linked long-term banker pay to hitting climate goals, he said.
NAB chairman Phil Chronican. Paul Jeffers
Just six ASX 200 companies require executives to achieve environmental targets before their long-term bonuses are paid, including Bendigo and Adelaide Bank. But none of the major banks do, amid proxy adviser scrutiny of vague bonus metrics for non-financial performance.
“We are getting interested in it – and indeed, I am open to it, and I am attracted to the idea – but I don’t think our measurements are mature or stable enough to do it yet,” Mr Chronican told The Australian Financial Review.
The global Task Force on Climate-related Financial Disclosures recommends all public companies with material climate-related issues should describe whether, and how, climate-related performance metrics are incorporated into remuneration policies.
Bendigo and Adelaide Bank made a 10 per cent allocation in its LTI for initiatives relating to “people and planet”.
Some European banks are moving on the idea. Barclays’ 2022 executive bonuses and 2022 to 2024 long-term incentive plan include climate and sustainability goals, which have a 10 per cent weighting.
But S&P Global has described the Barclays targets – including “progress towards our green financing commitments” and a net zero bank by 2050 – as being vague.
NatWest Group, which also gives climate targets a 10 per cent weighting in executive director 2022
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