Disclosure focus
Practically, the organisation should describe the scope of the arrangement: for example, whether it applies across the whole business or only to certain executives, business units or sites. It should also explain the basis for any climate-related element in pay, so readers can understand how consistently the approach is applied and how material it is within the overall remuneration structure.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official IFRS 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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Board oversight
Governance / Company SecretariatCapture which governing group is responsible for overseeing the topic, and note any committees or sub-groups involved in that oversight.
Evidence Board or committee terms of reference, meeting packs, minutes, and governance charts showing responsibility.
Watch for The named oversight body does not match the board or committee actually assigned in governance records.
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Applied criteria
Sustainability Reporting / PolicyCapture the specific measures or conditions the organisation uses for this disclosure, including any thresholds, tests, or internal rules applied.
Evidence Policy documents, calculation notes, control procedures, and reporting instructions that define the criteria used.
Watch for The reported condition is not aligned to the internal policy or calculation rule used to determine the answer.
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Climate-linked pay share
Reward / HRCapture the share of executive pay that is tied to climate-related measures, using the same pay basis and the same executive population used in remuneration reporting.
Evidence Remuneration policy, bonus scorecards, pay award schedules, and HR or payroll outputs supporting the percentage.
Watch for The percentage is calculated on a different pay base or executive group than the remuneration data it should reconcile to.
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Pay incentive links
Reward / HRCapture how pay is connected to climate-related performance, including which pay elements are affected and how the link operates in practice.
Evidence Remuneration policy, incentive plan rules, committee papers, and award letters showing the linkage.
Watch for The linkage description does not match the actual incentive plan design or omits a pay element that is part of the arrangement.
Before you start
- Have you identified which board-level group, or committee beneath it, is actually overseeing the pay link to climate matters?
- Before you calculate anything, have you settled which climate-related measures or conditions sit inside the pay arrangement you are describing?
- Can you trace the percentage figure back to a source record, and is it based on the same pay period and climate metric set you will explain in the note?
- Have you agreed what counts as executive pay for this calculation, so the figure is built on one consistent internal definition?
- Is the remuneration linkage itself clear enough to describe in plain business terms, without mixing in unrelated incentive arrangements?
How to prepare it
Request the data
Request the pay-link evidence from Reward / Finance
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
What climate-related measures, if any, are built into executive pay, how are they described internally, and what share of executive pay is tied to them?
Use your organisation’s own reward and performance language first, then map it to the disclosure wording. Ask for the actual pay plan terms, scorecards, and approval records in the terms your business uses, and only translate them into the reporting label at the end. Check the official source before sign-off.
Weak request
Please provide the remuneration linkage disclosure data for climate, including governance oversight, measures and conditions used, and the percentage of executive pay linked to climate.
Why it fails: This uses framework language that may not match how the organisation actually manages pay. It also bundles several ideas without asking for the underlying plan documents, approval trail, or the internal terms needed to verify the figures.
Better request
Please send the executive pay evidence for [reporting period] covering [entity/boundary]. We need the plan documents, the climate-related scorecard or condition used, the approval record, and the share of executive pay affected. Please use your own plan names and internal wording, then add a short note showing how that maps to the reporting label.
Formal email template
Subject: Request for executive pay-link evidence for [reporting period] Hi [name/team], We are preparing the sustainability reporting pack and need the underlying evidence for the executive pay arrangements that reference climate-related performance. Please send, for [reporting period] and [entity/boundary]: - the plan or policy documents that set out the relevant pay terms; - the internal measures, scorecards, or conditions used; - the approval record showing who signed off the arrangement; and - the calculation or summary showing what share of executive pay is affected. Please use your normal internal terms in the response, and include a short note explaining how those terms map to the reporting label. If helpful, you can return the information in the table format below. Please also note any exclusions, changes during the period, or differences between plan design and actual payout. Thanks, [preparer name] [team] Please check the official source before sign-off.
Short Teams / Slack version
Hi [name] — could you share the pay-plan evidence for [reporting period] covering [entity/boundary]? We need the plan terms, climate-related measures/conditions, approval record, and the % of executive pay affected. Please use your internal plan names and add a short note on how they map to the reporting label. Thanks — [preparer name]
Industry examples
Manufacturing
Context. A group with a plant-level decarbonisation target feeding into senior leader bonuses.
Adapted request. Please share the bonus plan pack for [reporting period] covering [entity/boundary]. We need the target sheet, the emissions or energy KPI used, the approval note, and the share of executive bonus linked to that KPI. Please use the internal names used by Reward and Operations.
Example response. Returned items: annual bonus plan, plant emissions KPI scorecard, Remuneration Committee minute, and a summary showing 15% of executive bonus linked to the KPI.
Financial services
Context. A bank with climate milestones included as a modifier in variable pay for the executive team.
Adapted request. Please provide the variable pay papers for [reporting period] covering [entity/boundary]. We need the climate milestone wording, the modifier or gate used, the committee approval record, and the percentage of executive pay affected. Please keep the bank’s own terminology and add a mapping note.
Example response. Returned items: incentive plan rules, climate modifier schedule, committee paper, and a table showing a 10% modifier applied to annual incentive outcomes for the executive population.
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
Explain which decision-makers were involved, what climate-related measures or conditions were used, and how the percentage linked to executive pay was calculated.
Context note
Set out what the figures show about how far climate considerations are built into senior pay and what that says about the organisation’s approach to incentives.
Fluctuation statement
If the percentage or the measures changed from the prior period, describe the main reason, such as a revised pay design, a different set of conditions, or a change in governance oversight.
Content index entry
s2-29-g Remuneration linkage — [location / page] / [notes]Download Centre
Preparation tools & forms
Download preparation tools for s2-29-g with free verified email access for 24 hours. Source-report links remain public.
Check
For each claim, check the evidence
We have named the board-level group, committee, or other decision-makers that oversee the pay link, and we can show how that role was described in the report.
Risk An assurer will check that the named oversight body is real, correctly identified, and actually connected to the climate-pay link described in the disclosure.
Evidence to check Board or committee terms of reference, governance charts, remuneration policy papers, meeting minutes, and the final report wording showing the oversight body and its role.
We have explained the way climate matters were built into executive pay, including the specific targets, triggers, or other conditions we used.
Risk An assurer will probe whether the stated pay conditions are complete, internally consistent, and supported by the underlying remuneration design.
Evidence to check Remuneration policy documents, scorecards, incentive plan rules, target-setting papers, approval papers, and calculations showing how climate conditions were applied.
We calculated the share of current-period executive pay tied to climate factors using the same population and period throughout the disclosure.
Risk An assurer will test whether the percentage is based on the right pay population, the right reporting period, and a consistent method of calculation.
Evidence to check Payroll and remuneration schedules, calculation workings, population definitions, period cut-offs, and reconciliation to the reported percentage.
We kept a clear audit trail for the remuneration linkages, so the reported figure can be traced back to source records and approvals.
Risk An assurer will look for traceability from the published statement back to source data, including whether the evidence supports each linkage claimed.
Evidence to check Source files, version history, approval emails, committee papers, policy extracts, and a documented mapping from each reported linkage to its source.
Before publication, we checked the disclosure for internal consistency, arithmetic accuracy, and alignment with the approved remuneration materials.
Risk An assurer will examine whether the final text matches the underlying records and whether any review step could have missed an error or mismatch.
Evidence to check Disclosure review checklist, sign-off records, cross-checks against policy and payroll data, arithmetic review workings, and evidence of final management approval.
Evidence pack to prepare
Common reporting gaps
- A percentage is stated without the underlying counts (numerator and denominator).
- The denominator — what the figure is a share of — is not explained.
- Partial scope is reported as if it were complete coverage.
- One-off activities are counted as if they were ongoing programmes.
- Boundary or period changes that move the figure are not flagged.
- Exclusions from the reported scope are not listed or explained.
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, so the people who actually set board pay, bonus rules, or scorecards never confirm the figures.
- Framework language instead of business termsThe data call is written in reporting jargon, and the pay team cannot map it cleanly to the organisation’s own bonus, LTIP, or scorecard labels.
- Scope not fixedNo one states which pay group, business unit, or reporting perimeter is in scope, so different teams pull different populations.
- Wrong period basisThe team mixes the current year with a different award cycle or decision date, so the numbers do not match the same timing basis.
- Counting basis mixed upOne source uses headcount, another uses award value or eligible pay, and the collection step combines them as if they were the same measure.
- Source labels lostOriginal file names, column headings, or system tags are stripped out, making it hard to trace each figure back to the exact payroll or reward record.
- Separate groups mergedExecutive pay, non-executive pay, or different incentive plans are rolled together even though they should be kept apart for collection.
- Evidence details missingThe pack contains numbers but not the supporting date, version, owner, or file reference, so the source cannot be checked later.
- No sign-off trailThe draft moves on without a named reviewer confirming the extracted data, leaving no record of who checked it and when.
Judgement needed
- Newly bought or sold businesses during the yearSet a clear cut-off for whether pay arrangements from acquired or disposed operations sit inside the reporting boundary, and explain any change in the year so readers can see why the figure moved.
- Different country pay plans with different climate metricsWhere local bonus plans use different climate measures or labels, map them to one internal view in a consistent way and disclose the basis for that mapping so like-for-like comparison is possible.
- People just inside or just outside the executive groupState which senior leaders are counted in the pay-linked percentage when roles sit on the edge of the executive population, and explain the rule used to include or exclude them.
- Choosing the timing point for the pay figureUse one clear date or period-end basis for the calculation, and if the pay mix changed around the reporting date, explain the timing choice and its effect on the result.
- Using estimates where full payroll data is not yet finalIf some pay elements are still provisional, use the best available internal basis, label the amount as estimated, and explain what was estimated and how it was later checked or updated.
- Rounding the percentage and underlying amountsApply one rounding approach consistently across the disclosure and supporting workings, and note it if rounding changes the reported percentage or the split between linked and unlinked pay.
- Protecting small-team pay dataWhen the executive group is so small that individual pay details could be identified, combine the information to a level that protects privacy and explain the aggregation used.
- Different definitions of climate-linked pay across parts of the groupIf one country or business unit treats cash bonuses, deferred awards, or non-cash incentives differently, set out the internal definition used for the group total and explain any exclusions.
Examples
How it reads on the page
Synthetic, written by LRA — not from a company report, not text from any standard.
Our board and its committees review how climate matters are built into pay, and the remuneration committee uses a scorecard that combines delivery against emissions targets, progress on transition projects, and risk-management milestones. In this example, 3 of 5 executive directors have a pay element tied to climate outcomes, so the share linked to climate is 60%.
- The board receives updates on the link between climate performance and executive reward each year.
- The pay framework uses a mix of financial and non-financial measures, with climate conditions applied to annual bonus and long-term awards.
This example shows how a reporter might describe board-level oversight, the conditions used in pay decisions, and the share of executive pay connected to climate outcomes without using standard wording.
Our directors and committee members oversee a pay policy that includes climate-related hurdles for senior leaders, and the remuneration committee checks whether those hurdles are met before awards vest. In this example, 2 of 4 executives have climate-linked pay terms, so the proportion is 50%.
- The measures used include energy-intensity reduction, lower process emissions, and completion of supplier engagement actions.
- The board is kept informed of how those pay links are working in practice and whether they are influencing management behaviour.
This example shows a different sector using a different mix of climate conditions and a different level of executive coverage, while still covering governance oversight, the measures used, and the pay linkage share.
Quality ladder
- Basic
Our executive pay includes climate-linked elements at 10%.
- Better
Our board and its committees oversee climate-linked pay, using emissions and transition milestones, and 25% of executive pay is tied to those measures.
- Best
Our board and its committees oversee climate-linked pay across the year, using emissions, transition and delivery milestones; 25% of executive pay is linked to them, and the share rose from 20% because we added a stronger long-term target.
Check your understanding
Scenarios to work through
The remuneration committee has agreed that part of the annual bonus for the chief executive and finance director will depend on climate-related delivery. The draft note says the board reviewed the approach, but it does not yet explain what the link is based on.
A group uses a scorecard for executive incentives, combining emissions progress, safety outcomes and cash flow targets. The climate element affects only one part of the annual award, and the team is unsure whether to mention the exact share.
The board approved a long-term incentive plan that can be reduced if climate milestones are missed, but the draft only says the plan is ‘aligned with sustainability priorities’. No one has yet documented the specific conditions or the committee that reviewed them.
A preparer has the percentage of executive pay linked to climate, but the figure was taken from an old remuneration paper and the current board pack shows a different structure after a mid-year redesign. The draft disclosure still uses the earlier number.
Real reports
How 3 companies report it
Examples of full and partial reporting practice. These are evidence-led reviews, not exact disclosure templates to copy.
Hang Lung Properties Limited
Partial
Aditya Birla Fashion and Retail Limited
Partial
DBS Group Holdings
Partial| Field | Hang Lung Properties Limited | Aditya Birla Fashion and Retail Limited | DBS Group Holdings |
|---|---|---|---|
| Board oversight | Partial | Not found | Not found |
| Applied criteria | Not found | Partial | Partial |
| Climate-linked pay share | Partial | Not found | Not found |
| Pay incentive links | Not found | Not found | Not found |
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Advice, not assurance
Framework references
Relevant IFRS / ISSB requirements and related disclosures
IFRS / ISSB
s2-29-g
within IFRS S2: Climate-related Disclosures
Guides that settle this question
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FAQ
Questions this page answers
The page says to prepare four datapoints: board oversight, applied criteria, climate-linked pay share, and pay incentive links. It also has a step-by-step preparation section you can use to turn those inputs into a draft.
Use the plain-language explainer and the step-by-step preparation section to decide what the disclosure is covering and how you will present it. The page is designed to help you set up the disclosure in a practical way rather than as a formal standard text.
The page is aimed at sustainability and ESG managers, HR or data owners, and assurance reviewers, so ownership usually sits with the people who hold the underlying pay and governance information. The preparation section and workbook are there to help you assign and track those inputs.
The page includes five assurance claims to verify and an evidence pack with five items to support review. Use those together to check the claim, the risk, and the evidence before you finalise the draft.
The page lists common reporting gaps and mistakes so you can spot issues before drafting. It is meant to help you avoid missing data, weak evidence, or unclear presentation.
The Download Centre includes a Prep & Assurance workbook in .xlsx format. Use it to organise the preparation steps, track the datapoints, and assemble the evidence needed for assurance.
The Download Centre also includes a printable Library Card in .pdf format. It is a practical companion for keeping the disclosure topic, key datapoints, and assurance checks in one place.
Yes, the page includes synthetic illustrative example disclosures, including a quantitative table, to show how the disclosure can be drafted. Treat it as a model for structure and presentation, not as real company data.
The page includes draft-output support such as visualisation ideas, narrative starters, and a content-index line. That makes it easier to turn your collected data into a first draft.
The page says the closest ESRS correspondence is ESRS E1 (Climate Change). You can treat that as a useful cross-framework reference and reuse data where it fits your reporting, but the page does not say the requirements are identical.
More questions this page can help with