LONDON, March 3 (Reuters) - Swedish activist investor Cevian
Capital urged on Wednesday that companies should include
Environmental, Social, and Governance (ESG) targets in their
management compensation plans.
Against a backdrop of growing public and political concerns
about climate change and economic inequality, companies are
under increasing pressure to show they are taking greater
responsibility for how they generate their profits.
"Only a tiny share of companies meaningfully incorporate ESG
targets into their incentive plans," said Christer Gardell,
managing partner at Cevian Capital.
"To get away from ESG box checking and ensure that ESG
considerations are truly embedded in corporate strategies, we
need to incentivise management teams to embrace them."
Cevian Capital, which counts ABB, Ericsson
and Thyssenkrup among its top holdings,
asked companies to develop proposals to incorporate ESG targets
into incentive plans in time for their annual general meetings
(Reporting by Thyagaraju Adinarayan; Editing by Dhara