As You Sow research has revealed that many large carbon-emitting companies in the U.S. fail to provide meaningful metrics or sufficient compensation when linking CEO pay to climate reduction goals.

In a September 29 report, the shareholder advocate said that some 89% of the 47 largest carbon-emitting companies in the U.S. received D or F grades for failing to include a quantitative, or any type of climate-related incentive.

The study found that where a company claimed it had implemented climate-related compensation, “most [cases] were negligible, non-quantitative, and lacked specific climate-related pay incentives.”

None of the assessed companies covered in the report received an A grade, which As You Sow said would require linking CEO compensation to the Paris-aligned emissions reduction target, across all relevant emissions sources in the long-term incentive package.

According to the report, U.S. natural gas company Xcel Energy earned the highest score, graded B, for linking CEO pay to quantitative emissions reduction performance.

As You Sow concluded that “investors need to pay particular attention to the amount of pay associated with climate metrics and if these metrics are included in long-term incentive plans, which often represent the majority of the pay package.”

“To incentivize emissions reductions, climate metrics should constitute a motivating, and well-defined portion of CEO pay,” the organization suggested.