Opinion

Linking executive pay to net zero is working – sort of

It’s encouraging to see this linkage increasingly happening, but there is still work to do when it comes to making sure such efforts are effective.

Zoe Whitton and Rebecca Mikula-Wright

Dec 4, 2024 – 12.43pm

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It is often said that in life you get what you pay for. Australian companies and investors are increasingly applying that logic to the net zero transition by linking executive remuneration to company performance on climate issues.

We’ve seen an explosion of such linkages recently – in line with a broader trend across other developed economies. According to the Australian Council of Superannuation Investors, just 10 per cent of ASX 200 companies were linking executive pay to climate transition performance in 2020. Four years later that has jumped to 54 per cent.

Zoe Whitton is head of strategy and impact at climate change investment and advisory firm Pollination.

Rebecca Mikula-Wright is chief executive of the Investor Group on Climate Change.