Disclosure focus
The practical focus is on breadth and relevance, not just isolated examples. An organisation should think about whether the reporting and discussion cover the whole business where relevant, rather than only a few flagship sites, and whether the matters addressed reflect the organisation’s significant sustainability topics. The aim is to show how governance bodies are connected to sustainability oversight in day-to-day decision-making, not just at a high level.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official European Commission source.
Prepare
What to collect before drafting
Tick each field as the evidence lands. Owners are the teams that usually hold the source files.
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Incentive plan flag
Reward / HRState whether any pay or bonus arrangement includes a sustainability-linked element for the reporting period.
Evidence Remuneration policy, bonus plan documents, board or committee papers approving the scheme, HR or reward records.
Watch for Boolean flag is set from a draft policy rather than the approved reward plan, so the source system does not reconcile to HR or remuneration records.
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Scheme design summary
Reward / HRDescribe the main features of the sustainability-linked pay arrangement, including how it works and who it applies to.
Evidence Reward policy, plan rules, committee minutes, HR guidance, and any internal summary of the arrangement.
Watch for The description mixes the approved plan with a local variant, so the scheme features do not reconcile to the governing remuneration documents.
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Performance measures used
Reward / HRList the measures or indicators used to judge performance under the sustainability-linked pay arrangement.
Evidence Plan rules, scorecards, KPI schedules, committee papers, and performance framework documents.
Watch for The measures are taken from a draft scorecard and do not reconcile to the final incentive framework, creating a definition mismatch in the metrics used.
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Sustainability pay share
Reward / HRCapture the share of variable pay that is tied to sustainability-related performance, using the same basis as the remuneration calculation.
Evidence Reward calculations, bonus model, committee-approved payout schedules, and payroll or reward system outputs.
Watch for The percentage is calculated on a different pay base than the bonus system, so the variable-pay share does not reconcile to the remuneration calculation and period basis.
Before you start
- Have we actually used a pay-linked plan for any leaders, or is the answer no?
- If there is a pay-linked plan, which parts of it do we need to describe: the main features, the measures it tracks, and the share of variable pay tied to sustainability?
- Are the measures and targets we plan to mention the ones the board used in the period we are reporting on, rather than older or draft versions?
- Can every figure or percentage we include be traced back to a source we can show, such as payroll, board papers, or the incentive plan document?
- Have we agreed what counts as a sustainability-linked pay element in our own organisation, so we use the same definition throughout?
How to prepare it
Request the data
Request board and committee briefing evidence
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
What information was shared with the board and its committees about sustainability topics, and what pay-linked measures were in place during the reporting period?
Use your organisation’s own names for the board, committees, pay plans and performance measures first, then map them to the reporting disclosure. Keep the ask in business language rather than framework wording, and check the source material before sign-off.
Weak request
Please provide the ESRS 2 GOV-2 information on the evidence needed for ESRS 2:GOV-2, including incentive scheme details and the percentage of variable remuneration linked to sustainability.
Why it fails: This uses framework wording that many internal owners will not recognise, so it is harder to route, harder to answer, and more likely to produce a compliance-style reply instead of the underlying papers and plan data. It also bundles several asks without naming the actual board materials or internal plan records the owner should pull.
Better request
Please send the board and committee papers for [period] that show which sustainability topics were covered, plus any pay plan or scorecard that used sustainability-linked measures and the share of variable pay tied to those measures. Use your own names for the forums and plans, and include the document reference for each item.
Formal email template
Subject: Request for board and committee evidence for sustainability reporting Hi [name/team], We are preparing the sustainability reporting pack and need a short evidence extract covering what was shared with the board and committee(s) during [reporting period]. Please send, for [entity/boundary]: - the main sustainability topics discussed with the board and committee(s) - the briefing papers, slides, minutes extracts or other records showing those topics - any pay plan or incentive plan that included sustainability-linked measures - the measures, targets or scorecard items used - the share of variable pay linked to those measures, if applicable - the period covered and the source document reference for each item Please use your own internal names for the forums, plans and measures. A simple table is fine. If helpful, I can share a template. Please also check the source material before sign-off. Thanks, [preparer name]
Short Teams / Slack version
Hi [name/team] — could you share the board/committee papers for [period] showing the sustainability topics discussed, plus any pay plan details with sustainability-linked measures and the share of variable pay tied to them? Please use your internal names and include the source reference for each item. A table is fine. Thanks.
Industry examples
Manufacturing
Context. The board receives quarterly operational and risk updates, and the bonus plan includes safety and energy efficiency measures.
Adapted request. Please share the board pack extracts and minutes for [period] showing the sustainability topics discussed, plus the annual bonus plan summary where safety and energy efficiency measures were included. For each measure, include the target, the scorecard weight, and the share of variable pay linked to it.
Example response. Board pack Q2 2025; topics covered: plant safety, energy use, water; annual bonus plan: safety incident rate 10%, energy intensity 5%; variable pay linked to sustainability measures: 15%.
Retail
Context. The executive committee reviews supplier standards and customer issues, and the short-term incentive plan includes waste and responsible sourcing measures.
Adapted request. Please provide the executive committee papers for [period] showing the sustainability topics discussed, plus the short-term incentive plan summary where waste reduction and responsible sourcing were included. Include the internal measure names, the target basis, and the share of variable pay linked to those measures.
Example response. Executive committee memo March 2025; topics covered: packaging waste, supplier audits, customer complaints; short-term incentive plan: waste reduction 8%, responsible sourcing 7%; variable pay linked to sustainability measures: 12%.
Draft your disclosure
Notes that turn data into a disclosure
LRA training templates — adapt them to your organisation, and check the official source before sign-off.
Method note
State how you determined whether a sustainability-linked incentive exists, what you counted as its main features, and which targets or measures were included in the analysis.
Context note
Explain what the figures say about how far sustainability considerations are built into variable pay and how central they are within the wider remuneration approach.
Fluctuation statement
If the share linked to sustainability has changed, describe whether that reflects a redesign of the pay scheme, a change in the measures used, or a shift in the weighting applied to those measures.
Content index entry
GOV-2 Information Provided to and Sustainability Matters Addressed by the Administrative, Management and Supervisory Bodies — [location / page] / [notes]Download Centre
Preparation tools & forms
Download preparation tools for GOV-2 with free verified email access for 24 hours. Source-report links remain public.
Check
For each claim, check the evidence
We said whether any pay or bonus arrangements for the board and committee members were tied to sustainability matters.
Risk An assurer will check that the statement is complete, that the answer is not implied rather than explicit, and that the reporting period and covered people are clear.
Evidence to check Approved remuneration policy, board or committee papers, HR or company secretariat records, and the final disclosure sign-off showing the yes/no position stated in the report.
We explained how those pay arrangements connect to sustainability topics and set out the main features of the scheme.
Risk An assurer will probe whether the description matches the actual design of the arrangement, whether the features are described consistently across documents, and whether any material element has been left out.
Evidence to check Scheme rules, remuneration committee papers, policy documents, and any internal summary used to draft the disclosure, with cross-checks to the published wording.
We identified which sustainability measures or goals were used to judge performance under the pay arrangement.
Risk An assurer will test whether the measures named are the ones actually used, whether they were in force for the period reported, and whether the disclosure avoids mixing up targets with broader ambitions.
Evidence to check Target-setting papers, scorecards, performance assessment templates, committee minutes, and the final report version showing the measures disclosed.
We stated what share of variable pay depended on sustainability-linked measures.
Risk An assurer will check the calculation basis, whether the percentage is for the correct population and period, and whether the figure is internally consistent with the underlying remuneration data.
Evidence to check Remuneration calculations, payroll or finance workings, committee approvals, and a reconciliation from the underlying pay data to the percentage reported.
Evidence pack to prepare
Common reporting gaps
- The information is presented without a date or as-at point.
- The scope or boundary of the statement is left undefined.
- Key terms are used inconsistently across the report.
- Material changes since the previous period are not disclosed.
- Assertions are made without supporting detail or a source record.
- Boilerplate is used that does not actually answer what is asked.
Where drafts go wrong
Mistakes to avoid and where judgement is needed
The left column is what preparers get wrong while collecting; the right column is where you will have to make and explain a judgement.
Mistakes to avoid
- Wrong ownerChasing the board secretary for pay-plan details, when the live source sits with reward, HR or the remuneration committee pack, leads to incomplete or delayed data.
- Framework language firstAsking teams for the governance-body wording instead of their own business terms means people cannot match the request to the records they actually hold.
- Scope not pinned downPulling figures without stating which entity, plan, committee cycle or staff group is in scope creates a mix of in-scope and out-of-scope records.
- Wrong period basisUsing a calendar-year extract for a reporting period that follows a different cut-off produces numbers that do not line up with the period being reported.
- Mixed counting basisCombining headcount, eligible participants and award recipients in one tally makes the denominator unclear and the resulting percentage unusable.
- Source labels stripped outCopying values into a clean spreadsheet without keeping the original field names, file names or system tags breaks the link back to the source record.
- Populations mergedPutting executive pay data and wider employee incentive data into one pool hides which group each figure belongs to and can distort the result.
- Evidence trail missingSaving the final numbers without the underlying extract, date stamp and reviewer sign-off leaves no audit trail for later challenge.
Judgement needed
- What counts as a sustainability-linked pay planDecide whether the arrangement is a true incentive plan or just a wider pay policy, and explain the basis used to include or exclude it from the board pack.
- Which performance measures to nameIf different countries, business lines or committees use different measures, set out the version used for the report and note any local variants that were left out.
- How to handle a year of change in the group perimeterWhen acquisitions, disposals or restructurings change the reporting group, state the cut-off date and whether the figures reflect the old or new structure, with any restated comparatives.
- Whether a small or newly joined population is in scopeFor people just inside or just outside the relevant pay population, explain the inclusion rule used and whether part-year service, probation or temporary cover was counted.
- Choosing between actual results and estimatesIf some figures come from calculations, proxies or management estimates rather than direct records, say which parts are estimated and describe the method used to fill the gaps.
- Picking the timing basis for the figuresWhere the board saw information at a different point from the year-end reporting cut-off, disclose the date or period used and keep the timing basis consistent across the narrative and numbers.
- Rounding and percentage presentationIf percentages or amounts are rounded, make the rounding rule clear and ensure the published share linked to sustainability does not conflict with the underlying totals.
- Protecting personal data in small teamsWhere the relevant group is small enough that individual pay details could be inferred, aggregate the figures to a level that avoids identification and explain the privacy-driven grouping used.
Examples
How it reads on the page
Synthetic, written by LRA — not from a company report, not text from any standard.
We use a variable pay plan for senior leaders, and part of that award depends on sustainability performance. The plan is built around three measures: workplace safety, energy efficiency, and employee retention; in the current year, 30% of variable pay is tied to those measures, based on a total bonus pool of 100 units and 30 units linked to sustainability outcomes.
This example shows a simple pay structure where a portion of annual variable pay is connected to non-financial performance. The figures are internally consistent and purely illustrative.
Our group operates an incentive arrangement for executive management, and sustainability outcomes form one part of the award calculation. We use two measures — financed emissions reduction and staff inclusion outcomes — and 25% of variable remuneration is linked to them, based on 20 units out of a 80-unit variable pay opportunity.
This example illustrates a different sector with a different mix of measures, while still showing whether an incentive arrangement exists, how it is designed, which measures are used, and the share of variable pay connected to sustainability.
Quality ladder
- Basic
We linked 20% of executive pay to sustainability.
- Better
We linked 20% of executive pay to sustainability, using three measures: emissions, safety and staff retention.
- Best
For the year ended 31 December 2025, we linked 20% of executive pay to sustainability across the group, using emissions, safety and staff retention measures, and the share stayed flat because the board kept the same pay design after reviewing performance and priorities.
Check your understanding
Scenarios to work through
A group has a bonus plan for executive directors, but the sustainability part is only discussed informally in meetings and is not written into the plan documents. The reporting team is deciding whether to treat this as a linked incentive arrangement for the year-end report.
The board receives a quarterly pack that mentions emissions, workforce safety and ethics incidents, but the pack also includes many other topics. The preparer is unsure whether to describe all of these as matters the board dealt with, or only the ones that led to actual discussion and follow-up.
A company uses a scorecard for annual bonuses. Half of the variable pay depends on financial performance, and the other half depends on a mix of safety, emissions and employee engagement measures. The reporting team has to explain the share linked to sustainability without overstating it.
The sustainability team has a draft note saying the board discussed climate, labour and anti-corruption matters, but it does not say what performance measures were used, whether any incentives were in place, or how much pay was affected. The preparer must decide whether the note is complete enough for disclosure.
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Peer comparison uses examples on this card, not prevalence in the report corpus.
Advice, not assurance
Framework references
Relevant ESRS requirements and related disclosures
ESRS
GOV-2
within ESRS 2: General Disclosures
Guides that settle this question
Related & explore
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FAQ
Questions this page answers
Start with the plain-language explainer, then work through the step-by-step preparation section and the four datapoints to prepare. The page also gives narrative starters, a content-index line and a synthetic example you can adapt into a first draft.
The page lists those four datapoints as the core inputs to prepare. Use them to build the disclosure and check that your figures and descriptions line up before drafting.
Use the page’s preparation steps to define what you are including, then keep the scope and method consistent with the data you report. The page is designed to help you turn that into a clear draft, but it does not give a separate formal methodology.
The page is aimed at sustainability/ESG managers, HR or data owners, and assurance reviewers, so ownership should sit with the people who can source the pay and scheme data and check it for accuracy. The workbook is there to help you organise that process.
The page says there is an evidence pack with five items for assurance readiness. Use it to support the four assurance claims to verify and keep the underlying records together before review.
The page says there are four claims to verify, each with a claim, risk and evidence angle. Use those prompts to test whether the disclosure is supported and whether the evidence pack is complete.
The page includes a list of common reporting gaps and mistakes. Use it as a pre-submission check so the datapoints, narrative and evidence all match and nothing important is left out.
The Download Centre includes a Prep & Assurance workbook in .xlsx format. It is meant to help you organise the preparation steps, evidence and assurance checks before turning the data into a draft.
Use the synthetic example as a model for structure, wording and how the quantitative table is presented. It is illustrative only, so you should adapt it to your own data and keep the numbers internally consistent.
The draft-output section gives visualisation ideas, narrative starters and a content-index line. Use those to convert the prepared datapoints into a concise disclosure that is easy to review and trace back to evidence.
More questions this page can help with