Bosses at Asos will no longer need to hit diversity targets to get their bonuses, in the latest sign of the environmental, social and governance (ESG) movement faltering.
The online fashion retailer said it was changing the criteria for its annual executive bonus scheme, making it primarily dependent on profits. Executives will also have to make progress on improving Asos’s share price and profit margins to land their payouts.
It comes amid a turn away from ESG among investors, with pressure on companies to re-prioritise profits.
Unilever, the Ben & Jerry’s maker known for its ethical focus, recently abandoned its drive to “force-fit” all of its brands with a social purpose following pressure from investors who dubbed earlier efforts “ludicrous”.
British oil majors Shell and BP, meanwhile, also renewed their focus on oil and gas in the wake of concerns that renewable energy was not boosting profits.
Asos said it had made the decision to remove ethical targets from annual bonuses because the turnaround was “what management will be focused on delivering for the year ahead”.
Previously, its scheme had included a requirement to hand female and ethnic minorities more leadership roles. Bosses did not receive their annual bonus last year because Asos did not manage to hit all its targets.
Under Asos’s wider diversity drive, it says it aims to have 50pc female and 15pc ethnic minority representation at every leadership level by 2030.
It is understood to be part of an attempt to prioritise the return to profit within the company, with chief executive José Antonio Ramos Calamonte recently saying the next year will be about “about taking the necessary action” to return Asos to growth.
The company said it has instead opted to include a diversity measure in its longer-term incentive scheme. This could potentially mean executives have fewer shares vesting if “appropriate progress” is not made on diversity over the next three years.
It said its focus on profitability meant it had decided to dock incentives, rather than allow executives to earn more if they hit diversity aims.
It comes amid a scramble at the retailer to stem losses as sales slide. In the latest financial year, the company’s losses before tax ballooned to almost £300m compared to £32m a year earlier. Sales slipped 10pc, with the decline more pronounced in the UK.
It has recently been looking at ways it can free up cash. The Telegraph revealed earlier this month that Asos was in talks to sell Topshop, the fashion brand which it acquired in 2021 and values at £265m, to the US retailer Authentic Brands.
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2023-11-25 16:00:00Z
CBMiaGh0dHBzOi8vd3d3LnRlbGVncmFwaC5jby51ay9idXNpbmVzcy8yMDIzLzExLzI1L2Fzb3MtZGl0Y2hlcy1kaXZlcnNpdHktdGFyZ2V0cy1ib251cy1zY2hlbWUtZXNnLWZhbHRlcnMv0gEA
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