November 7, 2022
ESG Metrics Continue To Be Industry & Business-Specific
Here are findings from Semler Brossy’s latest “Industry Report” on ESG metrics in S&P 500 incentive plans:
– Energy, Utilities, Materials & Real Estate companies have the highest prevalence of ESG metrics in incentives. They are the top four industries that incorporate environmental metrics and among the top five industries that have adopted HCM metrics
– Diversity & Inclusion metrics rank as a top 3 metric by prevalence in 10 out of 11 industries
– Carbon Footprint is the only environmental metric represented in all 11 industries (increase from 9 industries last year)
– While the Consumer Discretionary industry has had the largest year-over-year increase in ESG metrics – which Semler Brossy expects has been driven by investor & stakeholder pressures – it continues to have the lowest overall prevalence.
The report shows that ESG metrics by industry are often aligned with key strategic drivers of business-specific successes and risks – e.g., safety for heavy manufacturing, talent development for real estate, and emissions/chemical containment for energy.
The report’s findings are largely consistent with last year, and Semler Brossy continues to urge caution in adopting plan metrics purely due to pressure from investors or peer practices.
– Liz Dunshee