🧃Executive Bonuses, Climate Losses

Welcome to The Strawman, the daily climate newsletter that thinks “net zero” might soon refer to climate mentions in boardrooms.

Today’s story is about corporate climate promises - and the growing gap between what companies say, and what they’ll actually pay for. A wave of big players is quietly scaling back environmental goals from executive compensation, just as the climate crisis intensifies. Let’s dig into the green retreat.

Climate targets once tied to executive bonuses are now being dropped or quietly diluted

Over the past few years, ESG-linked pay plans have become corporate catnip, particularly in Europe. Companies raced to show off how sustainability was being baked into everything, including C-suite salaries. But that narrative is shifting. UBS removed references to decarbonisation targets from its annual report. HSBC dialled back how much weight is given to environmental goals in executive long-term incentive plans. And Standard Chartered quietly edited out climate-linked metrics from short-term bonuses. These companies aren’t abandoning climate entirely - but they’re definitely muting the message.

The ESG Escape Hatch

Even when climate targets remain in executive pay plans, they’re often so nebulous that they’re barely measurable. Executives get rewarded for talking about sustainability or building a "green culture" - not for measurable emissions cuts or renewable energy use. Data shows that goals that can't be expressed numerically tend to yield higher payouts than hard metrics. Meanwhile, failure rarely leads to reduced pay. In practice, ESG goals in compensation schemes are more like soft suggestions than serious accountability tools.

Targets Dropped, Bonuses Not

This rollback isn’t happening in a vacuum. In the US, anti-ESG sentiment is gaining traction - fuelled by political narratives that portray climate action as a threat to profits or national identity. That’s created a transatlantic tension. European investors still push for robust climate governance, while US boards are increasingly wary of drawing right-wing ire. Companies caught in the middle are recalibrating. Rather than take a public stance, they’re doing what corporate comms teams do best: quietly editing, reframing, and hoping no one notices.

The takeaway:
As the climate crisis worsens, executive pay packages are losing their green edge. In the battle between corporate incentives and planetary urgency, the bonuses are still winning.