Wednesday 11 December 2019 12:01 am

Only 10 per cent of UK chief executives have financial incentives to tackle climate change

Only a tenth of UK chief executives have financial incentives to promote environmentally friendly business practices, new research finds.

A survey from Belgium’s Vlerick Business School says that only six per cent have bonuses with specific performance indicators related to environment.

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Less than one per cent have long-term incentives focused on the issue. 

The survey also found that just over a fifth of chief executives in the UK had incentives that were not related to their business’ profit or to shareholder returns.

The study, which was carried out by Professor Xavier Baeten, focused on the Stoxx 600 and included 159 UK firms.

Baeten said: “There is a general consensus in business, certainly among larger firms, that there is a climate crisis and that different stakeholders have to play a role in becoming part of the solution.

“However, our research shows that for the overwhelming majority of UK firms, there is no incentive for the top CEOS to enact these environment focused initiatives and policies.”

Baeten used the results to call for companies to adopt unique sustainability strategies for their business. 

He said that this would be much more effective than having governments impose such obligations on businesses.

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The results also showed that UK chief executives earn on average significantly more than their counterparts across Europe.

The mean total renumeration for the surveyed executives in the UK was €3.2m (£2.7m), above the Stoxx 600 average of €2.7m.