Responsible Reward: Top 10 tips to get Reward professionals started now


No matter the economic or political climate, now is the right time to think about Responsible Reward.

The fact is, there’s always a more ‘pressing’ HR issue to put out elsewhere. And the truth is, if you don’t prioritise implementing Responsible Reward at some point, your existing remuneration practices may well become a fire that needs extinguishing before too long. We see countless examples of firms with executive remuneration issues featuring in the press … and the focus is relentless.

Here’s why you need to consider Responsible Reward now:

  • Time and time again, we are seeing social and environmental challenges that prove that the world is crying out for business to be done differently and more sustainably.
  • Businesses with a well-defined Environmental, Social and Governance (ESG) strategy are proven to be more resilient in testing times.
  • Linking your ESG strategy to your remuneration policy is a catalyst to help you fulfil your sustainability agenda – and demonstrates your real commitment to the long-term sucess of your business and to resolving global issues.

What is Responsible Reward?

Responsible Reward is the integration of ESG measures, also known as extra-financial (or non-financial) measures, alongside financial measures into incentive pay structures.

It is about linking your sustainability and your remuneration strategies. It looks at how you do business, what ESG KPIs you have determined, ensuring they’re appropriately reflected in your annual and long term incentives.

How to get started with your Responsible Reward project

To seek and obtain their support, you’ll need to explain your thinking to your Senior Management or Board. Here are my top ten tips on the questions I help my clients resolve when embarking on a Responsible Reward project:

  1. YOUR WHY: What will implementing Responsible Reward mean to your firm?

I’ve written and spoken extensively ( about why Responsible Reward is integral to responsible business and investments.

Now, you need to determine your own why.

You may have already made a public pledge to amend your remuneration policy to include ESG factors. And you’ll want to fulfil it, despite adversity, to illustrate how much it means to your business and your stakeholders.

Perhaps you’re already doing a lot of work on sustainability and haven’t yet linked it to remuneration. Yet you now see the benefits it would bring.

Or maybe you want to get ahead of the competition to appeal to investors and to attract and grow engaged talent and customers when better times return.

Implementing Responsible Reward practices will help you to succeed in all of these areas.

  1. YOUR BIG GOALS: What are your BIG GOALS?

Your big goals are your version of the UN Sustainable Development Goals

They must be so big that your firm cannot achieve them alone, and so ambitious that your stakeholders are enthused, inspired and driven to play a small part in a global solution to make them happen.

These goals address the question: “How do you conduct your business so that your firm makes a positive global impact beyond its profitable bottom line?”  You understand that positive global impact and profit are closely related.

  1. YOUR PROJECT SPONSORS: Who do you need on board?

For a project of this magnitude to be successful, it requires sponsorship at the utmost level. Have you engaged with representatives from:

  • The business?
  • HR / Reward?
  • The Sustainability department?

All three teams will have views and bring knowledge and complementary perspectives that will inform, drive and ensure the success of the project. Of course, none of the participants will be involved in remuneration decisions that impact their own personal remuneration.


What changes are you actually proposing to make to your remuneration policy?

  • New targets?
  • Different measures?
  • Higher weightings?

As you link your sustainability and remuneration strategies, have you checked that your ESG goals are well-defined and SMART?

 Specific: what specific angle of ESG needs to improve? I often see results in how a firm has achieved in a particular area. While reporting on performance is absolutely key, it’s just as important to set out and communicate targets in the first place.

 Measurable: Are you able to measure these ESG objectives? Relying on qualitative and subjective judgement will not hold to the scrutiny of stakeholders.

 Assignable: Have you assigned these objectives to particular individuals or a group of individuals? Determine who is responsible for delivering what while some ESG objectives will apply across the whole firm as they underpin its culture.

 Realistic: ESG objectives must be both stretching to ensure progress, yet achievable. If they’re just a relabelling of current objectives, you will lose credibility with stakeholders. If they are too far-fetched, it may lead to disengagement from some employees as they can’t relate their jobs to what they perceive as unrealistic aspirations.

 Time-bound: ESG objectives must have a delivery deadline. This is particularly important when linking to incentive pay structures. What are you aiming to achieve over one year, three years, or the performance period of your incentive plan?


Determine upfront whose remuneration will be affected by the proposed changes. To drive the change from the top, starting with the Executive Directors’ incentives, sends a clear signal: “We mean what we say”.

Of course, they, alone, cannot fulfil the firm’s ESG agenda. So, over time, you will identify who else is included in these remuneration structure changes (e.g. Executive Committee, management, all employees).


You probably already have a lot of in-house knowledge and data on both ESG and remuneration. The trick is to assemble a cross-functional internal team that will design and implement your Responsible Reward offering. Do you have people that fit in these four RACI categories?

Responsible: these are the doers with their supporting teams.

Accountable: who is the person who is ultimately accountable for the timely delivery of the Responsible Reward project and will sign-off on it?

Consulted: who needs to be consulted? These people may sit in a different department, but their opinion matters. You will want to have a discussion with them on specific aspects of the project.

Informed: These are the people who are kept up-to-date on the project progress.


It’s a delicate balance between being over-enthusiastic wanting to make big changes to remuneration structures quickly – and taking so long that the project loses momentum.

Designing and implementing Responsible Reward in your firm needs careful planning yet sharp focus. It is not necessarily a full-time job, but the project requires on-going attention.

If changes to your remuneration policy have to be voted at the AGM, then regular engagement with key shareholders and the Remuneration Committee will help define the timeline you’re working towards.

Of course, regular internal communication is paramount for all stakeholders to collaborate and deliver their piece of the project. As a guide, when you start looking into Responsible Reward, you will need to allow 6-12 months from design through to implementation.


As with any project, there are likely be associated expenses. These will very much depend on the resources and data already available to you. My experience is that although clients may hold general compensation data, they do not usually have readily available information on the Responsible Reward practices that exist in the wider market and amongst their competitors more specifically. You may also need to source and collate ESG information that affects your firm or your sector.

As part of my work, these are all areas I monitor closely as Responsible Reward practices are a fast-growing trend in remuneration.


Lastly, to validate your level of performance against your stated ESG objectives, you’ll likely want and need the services of a third-party specialist firm. They will provide expertise in their field, an impartial assessment and reassurance to your stakeholders that what you communicate accurately reflects the results you have achieved.

In my 2-minute video on The seven mistakes you should avoid when it comes to remuneration matters, I explore the various options that are available to you when it comes to securing external assistance on Reward projects. I invite you to watch it too.

My clients value the technical expertise, structure and objective perspective I provide in my role as an external remuneration adviser as it blends with their intricate knowledge of their firm.

If this is something you would like to explore too, then please contact me at:


Corinne Carr is an independent remuneration consultant specialising in Responsible Reward and founder of PeopleNet Ltd. For more information on Corinne and the Responsible Reward services she provides, visit

Read her Responsible Reward: how to fulfil your environmental, social and governance promises through performance and pay