Malaysian companies are expected to link sustainability goals with executive remuneration by phases.
The move came under scrutiny in the US following some walkbacks by large US companies, the latest being Apple.
Kenanga Research said at least four in every five companies in the FTSE Bursa Malaysia KLCI have laid out their linkage between remuneration and sustainability.
“Even so, we expect the adoption locally of tying sustainability to pay will be continually widened to beyond the board and senior management. The pace of adoption style would, nevertheless, be varied as some firms take a phased-in approach,” it said,
The firm said some companies have been phasing in the adoption of the environmental, social and governance (ESG) aspects, particularly climate related measures and this is true in the case of Tenaga Nasional Bhd.
The utility giant aims to implement a phased-approach linking remuneration to key ESG key performance indicators (KPI) and climate-related disclosures in line with the IFRS S2 reporting recommendations, having already subjected C-suite level staff to climate KPIs so far.
“Drawing another example from the plantation sector, SD Guthrie Bhd disclosed that it had implemented the group ESG scorecard in 2022, but only for upstream operations.
