Vestas Wind Systems
ESRS disclosure: ESRS ESRS 2 \ DR GOV-3
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- Does the undertaking have incentive schemes and remuneration policies linked to sustainability matters for members of its administrative, management, and supervisory bodies? If so, provide detailed information regarding these schemes and policies, as required by Disclosure Requirement GOV-3.
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Question Id: GOV-3_01
The remuneration of the Executive Management team is linked to the results of Vestas’ financial and sustainability performance, through incentives. The annual process for selecting KPIs and setting targets for the incentives is based on Vestas’ strategic direction, and the KPIs are approved by the Board in the second quarter of the annual meeting cycle. The process includes input from each business area and leads to consolidated strategic prioritisation from the Executive Management and the Board when deciding KPIs and targets. For the Executive Management team, 10 percent of the short-term incentive scheme is linked to climate-related KPIs in the form of the KPI 'GHG emissions avoided.' During the year, no short-term incentives were paid to the Executive Management team linked to climate-related targets as the said targets were not met. The long-term incentives are not linked to sustainable targets, nor is the base remuneration. For the Board, 0 percent of the remuneration is linked to climate-related considerations.
Report Date: 4Q2024Relevance: 85%
- Provide a detailed description of the key characteristics of the incentive schemes and remuneration policies linked to sustainability matters for members of the undertaking's administrative, management, and supervisory bodies, as required under Disclosure Requirement GOV-3.
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Question Id: GOV-3_02
The remuneration of the Executive Management team is linked to the results of Vestas’ financial and sustainability performance, through incentives. The annual process for selecting KPIs and setting targets for the incentives is based on Vestas’ strategic direction, and the KPIs are approved by the Board in the second quarter of the annual meeting cycle. The process includes input from each business area and leads to consolidated strategic prioritisation from the Executive Management and the Board when deciding KPIs and targets. For the Executive Management team, 10 percent of the short-term incentive scheme is linked to climate-related KPIs in the form of the KPI 'GHG emissions avoided.' During the year, no short-term incentives were paid to the Executive Management team linked to climate-related targets as the said targets were not met. The long-term incentives are not linked to sustainable targets, nor is the base remuneration. For the Board, 0 percent of the remuneration is linked to climate-related considerations.
Report Date: 4Q2024Relevance: 85%
- Provide detailed information regarding the integration of sustainability-related performance in incentive schemes and remuneration policies for members of your administrative, management, and supervisory bodies. Specifically, indicate whether performance assessments are conducted against specific sustainability-related targets and/or impacts, and identify those targets and impacts, if applicable.
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Question Id: GOV-3_03
For the Executive Management team, 10 percent of the short-term incentive scheme is linked to climate-related KPIs in the form of the KPI 'GHG emissions avoided.' During the year, no short-term incentives were paid to the Executive Management team linked to climate-related targets as the said targets were not met. The long-term incentives are not linked to sustainable targets, nor is the base remuneration. For the Board, 0 percent of the remuneration is linked to climate-related considerations.
Report Date: 4Q2024Relevance: 85%
- Provide detailed information regarding the integration of sustainability-related performance metrics within the incentive schemes and remuneration policies applicable to members of your administrative, management, and supervisory bodies. Specifically, disclose whether and how these metrics are utilized as performance benchmarks or incorporated into remuneration policies.
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Question Id: GOV-3_04
For the Executive Management team, 10 percent of the short-term incentive scheme is linked to climate-related KPIs in the form of the KPI 'GHG emissions avoided.' During the year, no short-term incentives were paid to the Executive Management team linked to climate-related targets as the said targets were not met. The long-term incentives are not linked to sustainable targets, nor is the base remuneration. For the Board, 0 percent of the remuneration is linked to climate-related considerations.
Report Date: 4Q2024Relevance: 85%
- At what level within the undertaking are the terms of incentive schemes, related to sustainability matters for members of the administrative, management, and supervisory bodies, approved and updated?
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Question Id: GOV-3_06
The KPIs for the incentive schemes are approved by the Board in the second quarter of the annual meeting cycle.
Report Date: 4Q2024Relevance: 85%
- Provide a comprehensive disclosure regarding the resilience of your organization's strategy and business model in relation to its capacity to address material impacts and risks, as well as to capitalize on material opportunities. Include both qualitative and, where applicable, quantitative analyses of this resilience. Detail the methodologies used in conducting these analyses and specify the time horizons applied, as outlined in ESRS 1, Chapter 6 on Time Horizons. When presenting quantitative data, you may use single amounts or ranges.
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Question Id: SBM-3_10
The 2024 resilience analysis of our strategy demonstrates capability to address material IROs with our current strategic and operational initiatives and to take advantage of material opportunities. The changes to IROs compared to the previous reporting period had not been extensive, thus Vestas has been working with managing and pursuing many of the IROs in a strategic perspective for several years. Nevertheless, it is the first time we assess some of these areas both in terms of financial impact and dependency, and more insight remains to be gained.
The analysis was conducted based on input from our climate and biodiversity resilience analysis, evaluation of mitigation actions, financial impact assessments, and dependency analysis on natural and social resources. All areas were assessed in line with a short-term time horizon that is current year to less than three years, which correlates with our corporate strategy and enterprise risk management approach.
In 2025, the plan is to strengthen this analysis further vis-à-vis material IROs by improving the methodology, including mid- and long-term time horizons in line with the CSRD requirements. Therefore, Vestas has chosen not to disclose a more in-depth analysis overview for 2024 as defined by ESRS 1, SBM-3.
Report Date: 4Q2024Relevance: 70%