Textiles Firms Fail to Link Exec Pay to ESG

New research from financial think tank Planet Tracker has revealed that more than half of the top apparel brands lack a link between executive pay and ESG metrics. The Textiles Compensation report analysed 30 top textile brands and found that 17 companies, including Anta Sports, Gap, Levi Strauss, Nordstrom, Under Armour, and Victoria’s Secret, have no link between pay and sustainability practices. Only 7% of companies have a link that incorporates clear annual objectives and reporting, which Planet Tracker states is necessary for effective pay programmes. The textiles industry accounts for around 10% of global emissions, making it crucial for companies to incentivise better sustainability performance. However, Planet Tracker’s research found that even brands that do align compensation with ESG performance don’t necessarily set clear, quantitative annual targets linked to sustainability improvement. Richard Wielechowski, Head of the Textiles Programme at Planet Tracker, said: “Every textile player we analysed is publicly committed to embedding sustainability, yet these pledges are mere window dressing if the leaders of these companies are not held accountable.” Planet Tracker is calling on investors to extend pay performance policies beyond purely financial metrics and include sustainability-linked elements. The report urges companies to set a meaningful (10%+) percentage of compensation at risk based on sustainability performance, align targets and results with initiatives such as SBTi, set clear and quantitative sustainability targets, make targets annual, and disclose achievements clearly. Only Adidas and Puma have clear annual sustainability-linked objectives and reporting for executive pay programmes, the report found. 

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2024 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top