Disclosure focus
The practical emphasis is on the real scope of the arrangement: whether it applies across the organisation or only to selected roles, business units, or senior leaders, and whether it is used consistently or only in certain parts of the business. The report should help a reader understand how far the incentive approach reaches in practice, and whether sustainability performance is embedded in everyday management or limited to a few flagship functions or sites.
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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Due diligence actions
Sustainability / risk / complianceRecord the main checks, reviews and follow-up steps the organisation uses to identify, prevent, reduce and address adverse impacts linked to its activities and relationships.
Evidence Due diligence policy, process maps, risk assessments, issue logs, action trackers and sign-off records.
Watch for The process is described at a high level but does not reconcile to the actual risk-assessment and remediation workflow used in practice.
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Disclosure cross-references
Reporting / finance / sustainability reportingList where the related information appears elsewhere in the report so a reader can trace each linked topic to its full explanation.
Evidence Reporting index, disclosure map, section cross-reference table and final report pagination.
Watch for The cross-reference points to the wrong section or version, so the cited location does not match the final report structure.
Before you start
- Have you decided which pay plans, bonus pools, or other reward arrangements are actually in scope for this write-up?
- Have you settled the performance basis you will use for each plan — for example, which measures, period, and cut-off point feed the figures?
- Can every figure or statement be traced back to a named internal source, such as payroll records, HR files, or board papers?
- Have you fixed the definitions you will use for the sustainability measures and any linked performance targets so the same meaning is used throughout?
- Have you mapped where each piece of information sits in your report, so the cross-references point to the right section or note?
How to prepare it
Request the data
Request the incentive-scheme evidence and disclosure cross-references
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
How are sustainability-related performance measures built into pay or bonus arrangements, and where is that shown in the reporting pack?
Use your organisation’s own names first, then map them to the reporting disclosure. For example, ask for bonus scorecards, annual incentive plans, long-term plan metrics, scorecard weightings, committee papers, and report cross-references rather than using framework labels in the request.
Weak request
Please provide the ESRS 2:GOV-3 evidence for integration of sustainability-related performance in incentive schemes, including due diligence steps and cross-references.
Why it fails: It uses framework language that many internal owners will not recognise, so the request is harder to action. It also does not say which plans, people, systems, or documents to pull, or how the evidence should be returned.
Better request
Please send the bonus plan, scorecard, or other variable pay documents for [period] that show which internal measures are used, how they affect payout, who is covered, and where this is referenced in the draft report. Include the source file, approval paper, and any changes made during the period.
Formal email template
Subject: Request for incentive-scheme evidence for [reporting period] Dear [name/team], We are preparing the sustainability reporting pack and need your help with the material on how non-financial performance is built into pay and bonus arrangements. Please send the following for [reporting period] and [scope/population]: - the current incentive plan or policy documents that show the relevant scorecards or measures; - the metric names used internally and how they are weighted or linked to payout; - any committee or approval papers that confirm the arrangement; - the source file or system extract, if available; - the draft report cross-reference or section where this will be described. Please also confirm: - which employee groups or roles are in scope; - whether the arrangement changed during the period; - the owner of the final evidence pack. A possible LRA training template only — please adapt this to your organisation’s own terms and check the source material before sign-off. Many thanks, [preparer name] [team] [contact details]
Short Teams / Slack version
Hi [name/team] — could you share the incentive plan / bonus scorecard evidence for [period]? We need the internal docs showing the measures used, how they link to payout, who is in scope, and any committee approval papers, plus the draft report cross-reference. Please use your team’s own labels and send the source file or system extract if you have one. A possible LRA training template only — adapt to your organisation and check the source material before sign-off. Thanks, [name]
Industry examples
Manufacturing
Context. A group uses a plant-level safety and emissions scorecard in annual management bonuses.
Adapted request. Please share the annual bonus scorecard and approval paper for [period] covering plant managers and operations leaders. We need the internal measure names, the weighting or payout link, the scope of sites covered, and the draft report cross-reference. A possible LRA training template only — adapt to your organisation and check the source material before sign-off.
Example response. Attached: FY2025 operations bonus scorecard; safety and emissions measures; 15% combined weighting; sites covered: 8 plants; approved by Remuneration Committee on [date]; draft report cross-reference: section [x].
Financial services
Context. A bank includes conduct, customer and climate-related measures in senior management variable pay.
Adapted request. Please send the variable pay policy, scorecard, and committee paper for [period] covering senior management. We need the internal labels for the non-financial measures, how they affect award outcomes, the population in scope, and the report section where this is described. A possible LRA training template only — adapt to your organisation and check the source material before sign-off.
Example response. Attached: FY2025 senior management variable pay pack; conduct, customer and climate measures; 20% combined weighting with a modifier; population covered: executive committee and direct reports; approved by the board remuneration committee; draft report cross-reference: note [y].
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 which due-diligence steps are included, how each one has been identified, and how the related report locations have been matched to those steps.
Context note
Explain that the figures show the organisation’s due-diligence process and point readers to where each part is discussed in the report.
Fluctuation statement
If the pattern changes from one reporting period to the next, note whether that reflects a change in the process itself or simply a different way of presenting the same information.
Content index entry
GOV-3 Integration of Sustainability-Related Performance in Incentive Schemes — [location / page] / [notes]Download Centre
Preparation tools & forms
Download preparation tools for GOV-3 with free verified email access for 24 hours. Source-report links remain public.
Check
For each claim, check the evidence
We have shown, in a table, how the due-diligence work links back to the relevant parts of the sustainability statement.
Risk An assurer may test whether the mapping is complete, whether each step is linked to the right disclosure, and whether the table is consistent with the final published statement.
Evidence to check Draft and final cross-reference table; source mapping workbook; sign-off notes showing review of each link; version history between draft and publication.
In the statement, we point readers to where the main due-diligence activities are covered for the topic areas we report on.
Risk An assurer may probe whether the locations identified are accurate, whether any material topic area is missing, and whether the explanation matches the underlying reporting structure.
Evidence to check Narrative sections and disclosure index; internal mapping of due-diligence stages to report sections; topic-by-topic evidence pack; review checklist confirming all relevant areas were included.
Our table sets out, for each reported area, where the related due-diligence steps are described elsewhere in the report.
Risk An assurer may check whether the table is truly a cross-reference tool rather than a general summary, and whether the references lead to the right supporting sections.
Evidence to check Published table; linked section references; document control log; reviewer comments confirming the references were tested against the report.
We have explained, in plain terms, where the report shows our approach to the key parts of the due-diligence process for the sustainability matters we cover.
Risk An assurer may look for gaps between the explanation and the actual report content, or for wording that overstates what is evidenced in the statement.
Evidence to check Prepared mapping note; supporting drafts of the relevant report sections; internal consistency check between the explanation and the underlying disclosures; approval records.
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 ownerThe request goes to the wrong team or person, so the data is chased from someone who does not actually hold the pay-plan or performance records.
- Framework language usedThe question is asked in ESRS-style wording instead of the organisation’s own terms, and the respondent cannot map it to the relevant bonus or reward process.
- Scope not pinned downNo one states which pay arrangements, employee groups, or business units are in scope, so different people collect different slices of the data.
- Wrong period basisThe team pulls figures from the wrong performance year or award cycle, so the numbers do not match the reporting period being prepared.
- Mixed counting basisHeadcount, award counts, and value measures are blended together without a clear basis, which makes the dataset internally inconsistent.
- Source labels lostThe original names from payroll, HR, or remuneration files are stripped out, so later reviewers cannot trace each figure back to its source record.
- Populations mergedDifferent groups that should stay separate, such as executives and other staff, are combined into one file and the split cannot be rebuilt cleanly.
- Evidence trail missingThe collector saves the numbers but not the supporting file names, dates, or version notes, so the audit trail is incomplete.
- No sign-off recordThe final dataset is circulated without a named reviewer or approval note, leaving no clear record of who checked it before use.
Judgement needed
- Choosing which pay plans sit in scopeSet out the organisation’s rule for which bonus, long-term award or other pay plan is treated as linked to sustainability performance, and explain any cut-off used for plans that sit close to the boundary.
- Handling newly bought or sold businessesState how you deal with awards and performance measures when a business is added or removed during the year, including whether you keep, restate or exclude those figures and why.
- Different country labels for the same pay metricIf local schemes use different names or definitions for similar performance measures, explain the mapping you use so readers can see how the group view was built from local practice.
- People near the inclusion thresholdExplain the rule for staff, managers or executives who are just inside or just outside the population covered by the pay scheme, including any grouping or exclusion approach used.
- Picking the measurement date or periodDisclose whether you assess performance using year-end results, a full-year average, or another timing basis, and keep the chosen approach consistent or explain any change.
- Using estimates where direct figures are not availableWhere actual results are not yet available, say which parts are based on estimates, how those estimates were produced, and how they are distinguished from measured outcomes.
- Rounding and small-number presentationExplain the rounding rule used for pay and performance figures, and make sure the rounded figures still reconcile to the underlying totals you present.
- Protecting personal data in small teamsIf a pay group is so small that individual results could be identified, describe the aggregation or masking approach used so the disclosure protects privacy while still showing the substance of the scheme.
Examples
How it reads on the page
Synthetic, written by LRA — not from a company report, not text from any standard.
We describe the main checks we carried out to identify and manage the most significant sustainability-related issues in our operations and supply chain, and we point readers to where the fuller detail sits in our report.
- Our board and committee papers summarise the review steps, the issues considered, and the actions agreed during the year.
- The related narrative is set out in the governance section, the risk discussion, and the due-diligence appendix, where we also explain how the work links across those parts of the report.
This example shows a company explaining the practical steps it used to review and address material sustainability matters, then directing readers to the sections where those details are described elsewhere in the report.
We set out how we checked the main sustainability risks and impacts across our project pipeline, and we indicate the report sections that contain the supporting detail.
- The review covered site selection, contractor oversight, and follow-up actions, with the board receiving updates on the outcomes.
- Readers can find the fuller explanation in the governance narrative, the risk and controls section, and the appendix that brings the related disclosures together.
This example shows a different type of reporter describing its review process in plain language and cross-referencing the places in the report where the supporting information is located.
Quality ladder
- Basic
I link 40% of annual bonus pay to sustainability measures and point readers to the related note in this report.
- Better
I link 40% of annual bonus pay to sustainability measures, split 25% for emissions progress and 15% for safety, and point readers to the related note in this report.
- Best
I link 40% of annual bonus pay to sustainability measures for the year ended 31 December 2025, with 25% tied to emissions progress and 15% to safety, and I point readers to the related note in this report; the split stayed the same because our priorities did not change.
Check your understanding
Scenarios to work through
The remuneration committee is drafting the annual bonus scorecard. It plans to include a climate metric, but the draft paper does not explain how the metric was chosen, who reviewed it, or whether any wider checks were done before it was linked to pay.
A group company uses one short-term bonus plan for executives, while a separate long-term plan is handled by the parent board. The draft report only describes the executive plan and leaves out the parent-level arrangement because it is “group-wide”.
The sustainability team proposes a safety target for the annual cash bonus. Finance asks whether the report can simply state that the target exists, because the detailed design is already in the remuneration policy appendix.
The draft says the company “considered environmental and social matters in pay decisions”, but it does not say whether those matters were actually built into the bonus formula, used only in discretion, or reviewed as part of the design process.
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Advice, not assurance
Framework references
Relevant ESRS requirements and related disclosures
ESRS
GOV-3
within ESRS 2: General Disclosures
Guides that settle this question
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FAQ
Questions this page answers
Start with the plain-language explainer, then follow the step-by-step 'how to prepare' section to turn the page into a working draft. Use the draft-output section for narrative starters, visualisation ideas and a content-index line.
The page says to prepare due diligence actions and disclosure cross-references. Collect those items first so you can build the disclosure around what the company actually did and where the supporting references sit.
Use the step-by-step preparation guidance to decide what belongs in the disclosure, then align the scope to the due diligence actions and cross-references listed on the page. Keep the approach consistent with the evidence pack and the illustrative example structure.
The page is designed for sustainability/ESG managers, HR or data owners, and assurance reviewers, so ownership should sit with the person coordinating those inputs and evidence. The workbook can help assign tasks and track what each owner needs to provide.
The page includes an evidence pack with five items, so use that as the core set of support for the disclosure. Build it around the due diligence actions, the cross-references, and the assurance claims you need to verify.
The page gives four assurance claims to verify, each with a claim, risk and evidence prompt. Use them to test whether the draft is supportable and whether the evidence pack is complete enough for review.
The page lists common reporting gaps and mistakes, so use that section as a pre-submission check. It is especially useful for spotting missing due diligence detail, weak cross-references, or a draft that is not backed by evidence.
The Download Centre provides a Prep & Assurance workbook in .xlsx format and a printable Library Card in .pdf format. Use the workbook to organise preparation and assurance tasks, and the Library Card as a quick reference while drafting.
Yes, but only as an illustrative guide. The examples are synthetic, so use them to see the style, structure and level of detail, then replace everything with your own company data and evidence.
Use the draft-output section, which includes narrative starters, visualisation ideas and a content-index line. That section is meant to help you move from collected data and evidence into a readable disclosure draft.
More questions this page can help with