The European Commission’s advisory group has concluded that the inclusion of ESG-linked executive pay and polluting activities in the taxonomy would help the EU’s flagship sustainable finance project generate real-world impact.
The Platform on Sustainable Finance - a group of 57 market participants, sustainability experts and public agencies convened last year to steer the evolution of the taxonomy - has released a draft of its latest recommendations this week.
In the recommendations, the Platform notes the growing trend for companies to link executive pay to ESG goals such as carbon emissions reductions or diversity at senior levels.
“Having executive remuneration linked to ESG should be part of the EU taxonomy as it is a reflection of what is happening in the real economy,” it recommends, but acknowledges concerns about “how such requirements may interfere with the culture and autonomy of a company”.
The Platform also addresses the pr…