Corporate climate goals are facing a critical test in the US with the arrival of Donald Trump and Elon ‘DOGE’ Musk in the political cockpit. And a pattern emerges across major firms, they are scaling back environmental targets in the boardroom, with sustainability slipping down the pay priority list.
UBS and HSBC lead this backslide, while others like BP reveal a more complex or opaque stance. The companies cite regulatory uncertainty, operational complexity, and investor focus on profitability as reasons for the change.
The trend coincides with broader economic pressures, increased scrutiny of ESG (Environmental, Social, Governance) metrics, and political resistance in the U.S. to sustainability-linked business practices.
Below, you’ll find a detailed breakdown of three major firms, what they changed, and how those decisions are being interpreted.
And if you think this is a new trend, think again, the below video on BP’s scale back on climate goals for instance dates from… 2023. However, by 2025 the trend is clear.
UBS: Climate Goals Removed From Pay Plans
UBS offers the clearest case of retreat. On March 18 Swiss Info posted the article “UBS delays climate targets and removes climate goals from executive compensation” in which it explains that UBS delayed its net-zero emissions target from 2025 to 2035, citing the Credit Suisse acquisition. Its latest sustainability report indeed removed a section on “environmental, social and governance objectives in the compensation process,” previously included, and stated there is “no direct link between senior management compensation and specific climate goals.”
However, executives still have an “environmental and sustainability” objective in non-financial assessments, though not tied to specific climate targets.
UBS Climate Goals and Executive Pay
| Aspect | Details |
|---|---|
| Removed Section | Environmental, social and governance objectives in the compensation process |
| Link to Senior Management Compensation | No direct link to specific climate goals |
| Existing Objective for Executives | Environmental and sustainability, includes supporting clients’ activities |
HSBC: Smaller Climate Bonus, Weaker Targets
The Guardian, in an article dated February 19, 2025, titled “HSBC delays net-zero goals and waters down environmental targets in CEO’s incentive plan“, reported that HSBC was delaying its net-zero emissions target for operations from 2030 to 2050, citing slow progress in supply chain emissions reduction.
Additionally, the bank watered down environmental targets in CEO Georges Elhedery’s long-term incentive plan (LTI), reducing the environmental portion from 25% to 20% for 2025-27, with a potential value of £9m (600% of base salary).
The LTI now focuses on the bank’s own emissions (Scope 1 and 2) rather than financed emissions (Scope 3), a less ambitious approach. Environmental campaigners from ActionAid UK and Fossil Free London have publicly criticized the changes, arguing they show weakened ambition at a critical moment.
HSBC Climate Goals and Executive Pay
| Aspect | Details |
|---|---|
| Delayed Target | Net zero operations pushed from 2030 to 2050 |
| CEO LTI Change | Environmental portion reduced from 25% to 20% for 2025–2027 |
| Focus of LTI | Bank’s own emissions (Scope 1 and 2), not financed emissions (Scope 3) |
| Criticism | Environmental campaigners expressed disappointment over weakened accountability measures |
BP: Backtracking on Emissions, But Pay Implications Unclear
It was again The Guardian which on October 13, 2024, posted an article titled “Very Concerning: BP dilutes net-zero targets but no specific mention of executive compensation“.
Initially, in 2020, BP aimed to be a net-zero energy company by 2050 and cut oil and gas production by 40% by 2030, but by 2023 (see also the video in the introduction), this was reduced to 25%, and recent plans abandon production curbs, focusing on fossil fuel investments.
BP Climate Goals and Executive Pay
| Aspect | Details |
|---|---|
| Original Goal | Net zero by 2050, 40% production cut by 2030 |
| Revised Goal | Production cut reduced to 25% in 2023, now abandoning curbs |
| Executive Compensation | No specific mention, but retreat from climate goals may affect pay metrics |
Broader Trends: ESG Retreat Under Fire
The rollback in climate-linked compensation appears to track broader corporate unease around ESG metrics. In the U.S., the backlash against “woke capitalism” and legal threats to DEI initiatives are making boards more cautious.
Firms claim that regulatory complexity and limited decarbonization progress justify recalibrated targets. Activists argue these are excuses to protect profits and reduce accountability.
Critics Say:
- These shifts undermine corporate responsibility in the face of climate urgency.
- Weakening financial incentives reduces internal pressure on CEOs to act.
Companies Say:
- Economic headwinds and global instability force prioritization of core business goals.
- Scope 3 emissions (from supply chains and financed activities) are difficult to measure and influence.
A Trend With Real Implications
There is a clear trend among major corporations – particularly UBS and HSBC – to scale back their climate ambitions within executive compensation schemes. BP has diluted its climate strategy more broadly.
This is not a complete abandonment, but a recalibration. The growing distance between climate goals and CEO bonuses raises questions about how seriously companies take their public commitments – especially under shareholder pressure and global scrutiny.
The question arises though that if the world’s largest firms won’t financially reward climate progress at the top, can sustainability remain a strategic priority for that very company?
