Singapore ranks 2nd in APAC for ESG metrics

Eight in 10 companies incorporate ESG within executive incentive plans.

About 82% of Singapore companies incorporate Environmental, Social, and Governance (ESG) metrics within executive incentive plans, the second highest in the Asia-Pacific (APAC) region, a WTW study showed.

The country topped the global average of 74%, which was up 2% from the previous year. Of the top 400 companies analysed in APAC, 193 disclosed their incentive plan metrics.

This rise contrasts with the global average of 81% and steady adoption rates in regions such as North America (77%) and Europe (94%). 

Amongst the APAC markets analysed—including Australia, China, Hong Kong, India, Japan, and Malaysia—the industrial sector showed the highest use of ESG metrics in long-term incentive (LTI) plans.  

Short-term incentive (STI) plans remain the dominant mechanism for incorporating ESG metrics. 

Nearly 64% of APAC companies included ESG measures in STI plans in 2024, marking a 4% year-on-year (YoY) increase, whilst only 30% applied them in LTI plans.

This contrasts sharply with European companies, where long-term carbon emission targets are more commonly embedded in LTI plans.  

Social metrics, including diversity and inclusion, are the most widely used ESG measures in APAC, with 62% of companies adopting them in 2024, up 8% YoY. 
Environmental metrics are less prevalent, with only 42% of APAC companies integrating them, compared to 85% in Europe. 

Amongst environmental measures, 30% of APAC companies incorporated greenhouse gas (GHG) or carbon emission targets, including Scope 3 emissions.  

“The disclosure and prevalence of ESG metrics used by companies in APAC continue to vary and are influenced by the level of disclosure requirements and institutional investors’ expectations in each market,” Shai Ganu, Managing Director and Global Practice Leader, Executive Compensation and Board Advisory at WTW, stated.

“Whilst markets such as Australia, Japan, and Singapore continue to have high prevalence of ESG measures in executive incentives, we haven’t seen significant change over the past year,” added Ganu. 

Looking forward, geopolitical shifts could entail a slowdown in the adoption of climate and DEI measures, specifically in North America.

“Nevertheless, Asian companies will do well as they continue to drive the right behaviours by ensuring alignment between ESG strategy and executive incentives,” Ganu said.