Energy Efficiency, GHG Emissions - December 8, 2020
Deutsche Bank to link management pay to hitting ESG targets
Deutsche Bank announced Dec. 7 that it intends to link management pay to environmental, social and governance-related (ESG) criteria, following the lead of a few other financial institutions.
Banks such as HSBC, BNP Paribas and UniCredit already have similar models in place that connect pay and ESG targets, Reuters reported. Starting in 2021, Deutsche Bank will begin to tie management compensation to reaching targets on sustainable finance investments, on the sustainability rating it receives and on reducing the bank’s own energy consumption.
“It is our ambition to be a leader on sustainability in the financial sector, and contribute to an environmentally sound, socially inclusive and well-governed world,” Christian Sewing, Deutsche Bank Chief Executive, told the publication.
The German bank plans to invest more than 200 billion euros ($242.66 billion) in sustainable financing by 2025 and to be carbon neutral itself by 2025.
This trend has been largely driven by an increase in investors looking to invest in companies that perform better on ESG metrics and by policymakers looking to banks to help promote the transition to a low-carbon economy, the publication said.
While Deutsche did not disclose how much of management pay will be tied to ESG targets, others like BNP Paribas have tied around 20% of variable pay to such criteria.
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