Podcasts - 27.06.2023 - 09:00 

Innovations in Sustainable Finance #6 with Tom Gosling | ESG Incentives and the Zone of Discretion

Most large European corporations compensate executives for reaching ESG targets. Is that a good thing, and how should this be done? Julian Kölbel discusses these questions with Tom Gosling, perhaps the world's most experienced expert regarding ESG compensation.
Innovations in Sustainable Finance #6: ESG Incentives and the Zone of Discretion with Tom Gosling

Some insights you learn in this episode:

  1. Even if ESG targets contribute to long-term shareholder value, it can make sense to incentivize middle managers on ESG because they are usually incentivized on annual targets.
  2. ESG incentives can work when they are aligned with overall strategy, focus on one central ESG issue, and are monitored by a knowledgeable anchor investor.
  3. There is no way to fix the economic incentives given by the market and regulation with managerial incentives.


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