As responding to climate change has become a global issue, there is a growing movement among major companies to reflect ESG initiatives in the evaluation of executive bonuses.

Of these, Sumitomo Mitsui Financial Group revised the compensation system for officers from this fiscal year, and incorporated the “ESG” initiative, which emphasizes responding to environmental and social issues, into the evaluation items for bonuses.



Specifically, in addition to the amount linked to business performance, an external evaluation organization evaluates the performance of investment and financing that promotes decarbonization of business partners and the status of greenhouse gas reduction in the work in charge, and responds to the results. The amount of bonus will fluctuate.



With regard to ESG, an increasing number of companies are promoting it as it will lead to an increase in corporate value in the future, and investment in such companies is also becoming active.

Fumihiko Ito, Managing Director of Sumitomo Mitsui Financial Group, said, "While the medium- to long-term trend toward carbon neutrality has not changed, management must take this issue seriously and steadily accumulate results every single year. , I would like to further accelerate the efforts by quantitatively working on "ESG" in the evaluation of officers. "



Europe and the United States are leading the way in reflecting ESG initiatives in the evaluation of executive compensation, but in Japan as well, they have begun to spread mainly to major companies, such as those introduced by Mitsubishi Chemical Holdings and the Daiwa Securities Group.

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