Kering mulls alignment of CEO pay with biodiversity goals
Gucci owner proposes ‘adjusting’ long-term remuneration following SBTN validation last year
Luxury fashion giant Kering is looking to factor its recently-validated biodiversity targets into the pay of its CEO and chair, François-Henri Pinault.
The Paris-based owner of brands like Gucci and Alexander McQueen is one of the only companies in the world with science-based targets for nature, signed off by non-profit network SBTN.
It has committed to reduce its freshwater consumption from the Italian drainage basin where most of its tanneries are located by 21% by 2030, compared with its average baseline between 2018 and 2022.
The company has also pledged to ensure all its cattle is sourced from deforestation-free areas by 2027, and to stop sourcing from areas SBTN identifies as ‘hotspots’ for land conversion.
The same goals are in place for its wood, rubber and cotton sourcing, but with a later deadline of 2030.
Following the validation of these targets in October, Kering has now revealed it is looking to “adjust the biodiversity performance target for long-term variable remuneration” for its CEO and chair.
Its 2024 pay package included a 5% share allocation to Pinault if the company hit its annual regenerative agriculture targets, which it did.
These may now be replaced with goals linked to achieving its SBTN targets, according to its latest sustainability report.
Under the proposal, the variable share award would be dependent on the company establishing “collaborative restoration and water, land and biodiversity regeneration programmes in three priority drainage basins for Kering’s activities”.
Half the shares will be awarded if two programmes are set up, and all if three are established by 2027.
Anything less would result in none of the 5% share allocation being awarded.
Incorporating climate or ESG into pay has become more common in recent years, with one study suggesting up to three quarters of the S&P 500 had ESG-linked executive pay policies in 2023.
The most common themes include decarbonisation, diversity and governance goals, but biodiversity-linked pay is currently rare.