Reports

E&S Metrics in Executive Remuneration: A Focus on North America and Europe (2020-2025)

Below are key takeaways from ISS’ recently released report titled E&S Metrics in Executive Remuneration: A Focus on North America and Europe (2020–2025). The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Knowledge Center and its Library tab and to corporate subscribers by logging into Compass then selecting Governance and the Governance Library or Governance Exchange tab. If you are not a subscriber, you can download a copy of the full report here.

Many corporate boards are increasingly linking variable executive pay to Environmental & Social (E&S) metrics. These companies are developing various methods of integrating E&S performance measures within their compensation frameworks to influence executive behavior, including the use of weighted metrics, sub-metrics, and modifiers. This report offers a retrospective overview of changes observed through September 2025 regarding the integration of E&S metrics into executive compensation structures, focusing on companies in North America (the U.S. and Canada) and Europe (Continental Europe and the U.K.).

  • Since 2020, there has been a significant increase in Europe and North America in the number of companies incorporating E&S metrics into their executive compensation programs, a trend projected to continue through 2026. However, the proportion of North American companies incorporating these metrics into executive compensation decreased slightly in 2025 (through September).
  • The use of E&S metrics in executive variable compensation is more widespread in Europe than in North America. As of September 2025, 80 percent of European executive variable pay included E&S metrics compared to 38 percent in North America.
  • The use of E&S metrics in executive variable compensation is also more widespread in Canada than in the USA.
  • A key finding of this updated analysis is that while the proportion of companies incorporating E&S metrics in Canada continued to rise, the corresponding proportion in the United States decreased in 2025, representing the first decline since 2020.

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