Climate Governance Initiative

Effective climate governance - remuneration and incentivisation

10 April 2024

Toolkits Chapter Content
Incorporating environmental, social and governance (ESG) and climate-related factors into employee incentive schemes has become an increasingly important tool for driving climate action. This guide draws from conversations with remuneration/people and culture committee chairs, industry experts and national and international research to provide you with principles, guidance and actionable steps to support the inclusion of climate-related metrics within executive incentive schemes. The Institute of Directors, through Chapter Zero New Zealand, has created this resource in collaboration with Chapter Zero NZ foundation Partners Hobson Leavy Executive Search and KPMG New Zealand, and supported by EY and the Human Resources Institute of New Zealand. Topics covered include the role of incentives in influencing behaviour, trends and processes in management incentive schemes, and guiding principles and guidelines for aligning climate goals with remuneration. There is also a step-by-step guide to embedding climate in management remuneration.