The share of S&P 500 companies integrating climate-related metrics into their executives' compensation plans more than doubled over the past two years, according to a new report from The Conference Board based on disclosure data from ESGAUGE.

Executive compensation was tied to climate-related metrics by about 25% of S&P 500 firms in 2021 but rose to 54% in 2023. The percentage also doubled in the Russell 3000 index, going from 16% to 32%.

Moreover, as the rate of adoption of climate and other ESG performance metrics increases, companies have also started using them in long-term incentive (LTI) plans: The share of S&P 500 companies that use ESG metrics in both annual and long-term incentive plans grew from 7% in 2021 to 12% in 2023. READ MORE