Скачать или смотреть Nexus Seminar N.79 by Prof. Dr. Peter Schäfer

In 2021, nearly every second firm used environmental, social, or governance goals (ESG goals) in their incentive schemes for top executives, a two-digit increase over only ten years. Firms tie part of CEO pay to indicators such as carbon emissions, ESG ratings, or employee safety and satisfaction. However, we have only begun to understand ESG goals in CEO compensation contracts. I will give an overview of the young but vivid literature about such compensation components. First, how do firms design ESG incentives? For instance, some researchers argue that the weight of ESG goals is too low to motivate CEOs to change their decision-making. Second, why do firms adopt ESG goals? Maybe investors and corporate boards want to encourage CEOs to reduce the environmental burden or improve the social performance of their firms. However, some researchers view ESG incentives as a new form of greenwashing or CEO rent extraction. And finally, do ESG goals achieve their purpose? Do they help advance ESG goals, or do they create unintended consequences? Prof. Dr. Peter Schäfer provides an overview of what we know but also highlight open questions that are yet to be answered.