IMD World Competitiveness Booklet 2022
Figure 2: Question: “Is the remuneration of executives linked to the environmental performance of your company?”
NOTE: The IMD Executive Opinion Survey was run between February 17 th , 2022-May 11 th , 2022. Only 3% of total responses were collected before the start of the Ukrainian-Russian war (February 24 zh , 2022). Based on a sample of 4’097 C-level and mid-level managers from the 63 countries included in the study.
for most executives to improve business processes and practices that will limit a company’s environmental impact. When we perform a regional breakdown, we find that companies based in Eastern Asia and Western Asia and Africa are more likely to align compensation of their executives to environmental perfor- mance compared to firms located in other regions. Over 30% of executives working for companies in Eastern Asia and slightly fewer than a third of those operating in Western Asia and Africa answered posi- tively to the relevant question. What are the different regional character- istics with respect to the hard data and survey responses studied? This is what we will examine next.
of governmental initiatives in the past years, companies seem to lag still when it comes to aligning their mission with the fight against global warming. One way that such an alignment could be achieved is to increase the element of executive accountability. More specifically, a way to account for whether mission statements of companies go beyond mere statements and translate into operational actions is to introduce a link between execu- tives’ remuneration and performance on certain metrics related to sustainability. In the IMD Executive Opinion Survey more than 4’000 executives from 63 countries responded to the question of whether or not such link exists in their compa- nies. Figure 2 captures how over 60% of respondents say that there is no link between corporate leaders’ compen- sation and the environmental perfor- mance of their company. Only 24% of them answered positively to this question. This translates into a lack of incentives
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