This proxy season is just the latest affirmation of a sea change on climate and ESG. It occurs against the backdrop of the US reentry into the Paris Agreement and pledge to cut emissions in half by 2030,[18] and a broad global reckoning with the need for enhanced transparency on sustainability.[19] It also occurs in the midst of ever-more powerful signals from major institutional investors of their commitment to sustainability.[20] Finally, it occurs as the SEC considers potential rulemaking to improve climate and other ESG disclosures for investors.[21] These developments place ever greater responsibility on companies, and therefore boards, to integrate climate and ESG into their decision-making, risk management, compensation, and corporate transparency initiatives.
For example, in the wake of racial injustice protests, companies have made numerous pledges regarding their commitment to racial diversity. Going further, some companies have tied executive compensation to relevant ESG metrics. Companies like Starbucks, McDonalds and Nike, for example, have all recently said they will tie executive compensation to diversity metrics.[58]
The Amazon's Pledge Sarah 29
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