Research by NGO think tank Planet Tracker has found that 95% of “leading plastic players” do not have a “sufficient link” between executive pay and sustainability factors. The ‘Plastics – Executive Compensation‘ report analyses the pay-performance plans of 39 plastic-related companies including ExxonMobil, Saudi Aramco, Costco and Mars. According to Planet Tracker’s data, 41% of plastic-related companies lack any link between sustainability practices and executive compensation which the NGO calls a “key requisite of a credible sustainability plan”. Additionally, its research found that the approaches of the 23 firms that do align compensation with ESG performance are “insufficient”, with them lacking a quantitative link or only tying a minimal proportion of compensation to sustainability performance. The study also found that 54% of companies do not have science-based targets, with Planet Tracker underscoring the need for independently verified target setting to enable investors to rule out greenwashing and compare companies. Thalia Bofiliou, Senior Investment Analyst at Planet Tracker, said: “It’s a positive sign that all plastic companies we analysed are committed to wider sustainability goals. However, without meaningfully tying executive pay with sustainability metrics, this is all wrapping and no substance. To reduce the significant risks the plastic industry faces, from CO2 emissions and microplastics to new regulations, investors can no longer afford to wave pay packages through that aren’t linked to sustainability-related elements.” Last month, analysis by Planet Tracker also found that executives across the plastics value chain could be underestimating the range and urgency of the ESG risks facing the sector.
📝New Report: 95% of leading #plastic players fail to have a sufficient link between executive pay and sustainability factors.
— Planet Tracker (@planet_tracker) September 20, 2023