Impactos da remuneração executiva sobre o desempenho ESG e a gestão de resíduos: evidências em países emergentes e implicações para a regionalidade brasileira

Abstract

Background: In recent decades, in light of contemporary sustainability-related challenges, social, regulatory, and institutional pressures on companies to integrate ESG practices into their corporate strategies have intensified. These practices, which encompass environmental, social, and governance initiatives, also extend to corporate waste management, a particularly relevant issue given the environmental impacts associated with waste generation, disposal, and recycling. Although several organizational mechanisms that promote ESG practices have already been examined in the literature, the role of executive compensation as an incentive mechanism, particularly in the context of waste management, still lacks robust empirical evidence. Objective: To investigate the effects of executive compensation on ESG performance and waste management in publicly traded non-financial companies located in 11 emerging G20 economies during the 2016–2024 period, as well as to identify possible implications of the main empirical findings for Brazilian regionality. Method: To achieve the objectives of the study, three research stages were structured. The first consisted of a systematic literature review based on the ProKnow-C methodology. In the second stage, a multilevel model was employed to estimate the associations between executive compensation proxies and the dependent variables, ESG performance and total waste generation, as well as to identify the relative importance of the effects at each level by decomposing the variability across countries, across firms, and within firms over time. In the third stage, to verify the consistency of the main findings and identify additional empirical evidence, robustness analyses and additional tests in different contexts were conducted. Results: Overall, the results of the study indicate that executive compensation proxies are associated with better ESG performance. In contrast, consistent evidence was found indicating that these proxies do not robustly contribute to reducing waste generation or increasing the recycling and reuse of corporate waste, suggesting that other Corporate Governance (CG) mechanisms may be more effective in waste management. Adherence to the research area of the PPGAdm (Regionality and Management): This study is situated within the field of corporate finance, with a focus on executive compensation, and addresses regionality both in the context of emerging countries and in the possible implications of the empirical findings for Brazilian regionality. Impact and innovative character in intellectual production: In theoretical terms, the topic addressed expands the debate on CG mechanisms by examining the effects of different executive compensation proxies on ESG performance and corporate waste management. In particular, the total compensation of senior executives represents a variable that remains underexplored in the academic literature in the context of reducing total waste generation. Waste management is a current and relevant issue for sustainability; however, it is still relatively neglected by both companies and the academic literature. The study also differs by analyzing this context using a sample of companies located in emerging G20 countries. From a methodological perspective, the research contributes by employing econometric strategies that are less commonly adopted in studies on these topics, such as the multilevel model. It also brings to discussion possible limitations arising from the adoption of only one methodological perspective of analysis. Furthermore, its innovative character also lies in identifying possible implications of the empirical findings for Brazilian regionality, thereby contributing to discussions on regional development. Economic, social, and regional impact: This study provides new insights into the role and shared responsibility of firms regarding ESG performance and waste management. It may contribute to aligning corporate strategic objectives with corporate waste management practices and encourage companies to rethink alternatives that promote such management. It also provides support for the redesign of executive compensation contracts and highlights the importance of joint action among firms, the public sector, and the third sector in favor of sustainability. Furthermore, it contributes to the academic literature by discussing the effectiveness, limitations, and rationale of executive incentive policies, as well as providing additional information for investors who value waste management-related practices in portfolio composition. Finally, it contributes to discussions on the Sustainable Development Goals (SDGs), particularly SDG 12. Regional implications: Executive compensation may strengthen ESG practices; however, in isolation, it is not sufficient to promote corporate waste management, which also depends on other institutional factors, regulatory aspects, and organizational maturity. Thus, for organizations operating in the mesoregions of Triângulo Mineiro/Alto Paranaíba, Southern Goiás, and Eastern Mato Grosso do Sul, the improvement of internal corporate governance, the strategic alignment of ESG and waste management, joint action with regional public governance, the adoption of complementary policies—such as incentives for the circular economy, the strengthening of extended producer responsibility, and better environmental monitoring—as well as partnerships between the private sector and the third sector, may foster outcomes that contribute to sustainable regional development. Furthermore, integrating waste management into corporate strategy and executive compensation, in addition to representing a competitive advantage for companies and signaling commitment to sustainability to stakeholders, may generate social, environmental, and economic benefits for the communities in which they operate. Sustainable Development Goals addressed in the research: Although nearly half of the 17 SDGs are directly or indirectly associated with waste management, the main focus of this study is SDG 12 (Responsible Consumption and Production), particularly targets 12.5 and 12.6, namely: “By 2030, substantially reduce waste generation through prevention, reduction, recycling, and reuse” and “Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycles”, respectively (United Nations Brazil, n.d.). Additionally, SDG 11 (Sustainable Cities and Communities) and SDG 13 (Climate Action) are briefly incorporated into the discussions.