The Advisors' Blog

Companies have been dipping their toes in the “ESG metrics” pool for at least a decade now. As I’ve noted this week, we’re now reaching a fork in the road. Some investors want all portfolio companies to incorporate ESG targets into executive pay plans, and many boards have determined that it’s appropriate to incentivize non-financial performance in some way. Other people are raising concerns that ESG metrics distort executive behavior and will never be adequately transparent.

This is a very company-specific determination and there are various ways to approach it – e.g., modifiers. Yet, there are some commonalities. If a company does include ESG metrics in pay plans, investors are looking for specific, measurable targets that track to strategic initiatives, and thorough disclosure of performance and payout decisions. Expectations are more sophisticated than they were even 5 years ago, when “ESG” was less defined and often discretionary.

In that vein, DEI metrics are now one of the most common topics to incorporate into pay plans, as Emily observed earlier this year. But as DEI goals continue to evolve, the metrics must keep pace. Is your company measuring the right data points to accomplish its strategic DEI goals?

If you’re looking to navigate this pressing topic, or if you’re tackling any aspect of equity audits, we have an excellent DEI workshop series set for this spring. Not only do we have a fantastic lineup of content and speakers, this event is FREE to attend! Here’s more detail:

– April 13 – “Collecting Diversity, Equity & Inclusion Data: What to Measure & Why”: DEI work that is not data-driven likely won’t be made an organizational priority, have clear direction, or have an adequate process for measuring progress. Learn what data points to measure to provide business-relevant insights on diversity, equity and inclusion. Register here to secure your spot for session 1.

– May 4 – “Understanding & Using Equity Audits & Civil Rights Audits”: Companies are facing growing calls from shareholders and other stakeholders to conduct equity & civil rights audits. As I blogged earlier this week, a high-profile “pay equity” proposal recently garnered majority approval, as did a proposal for a racial equity audit at another high-profile company, which Emily blogged about on TheCorporateCounsel.net. These outcomes may be a bellwether of things to come. Now is the time to understand and prepare for an audit, so that your board and your company are equipped to respond to this emerging trend. Register here to secure your spot for session 2.

– May 25 – “Using Diversity, Equity & Inclusion Data: Goal-Setting & Reporting”: You have the data, how do you use it? This session will explore practical ways to use DEI data to set goals and report on progress. You will leave this session with steps you can take right away to set more targeted goals and report out on what your leaders need to know to buy-into and champion the DEI strategy. Register here to secure your spot for session 3.

Each of the above sessions will run from 2:00 – 3:30pm Eastern. You can sign up for all 3, or whichever ones fit your schedule. After the live event, the sessions will also be available on-demand to members of PracticalESG.com (if you aren’t yet a member, email sales@ccrcorp.com). RSVP now to take part in this valuable series!

– Liz Dunshee