Debate Issue $2$: Should executive pay be linked to ESG goals? Environmental, social, and governance $($ESG$)$ is a frame$-$work that allows firms to evaluate their priorities in these three areas. ESG performance is monitored by stakehold$-$ers, including investors. Many financial services compa$-$ethical standards? How do you think businesspeople feel? $3.$ Find some examples of socially responsible busi$-$nesses mentioned in this chapter. Research these com$-$panies and explain why you believe their actions are socially responsible. Why do you think a given com$-$pany chose to act as it did? n nies give companies ESG scores to help investors identify companies with high social responsibility performance relative to their industry and investor priorities. With in$-$creasing evidence that strong ESG performance contrib$-$utes to good financial outcomes, more companies are linking executive pay with ESG goals. Critics say ESG metrics are inconsistent from company to company because there is no standardization, and some goals are challenging to measure. However, ESG is be$-$coming more standardized. The World Economic Forum, for instance, has shared common metrics in the name of consistent reporting of ESG measures, and the Euro$-$pean Union established ESG reporting requirements. The United States does not yet mandate ESG disclosures, but this could change in the future. Those who support tying executive compensation to ESG measures believe it gives executives an incentive to perform well on environmental, social, and governance metrics, thus improving a firms financial performance. $1.$ Executive pay should be linked with ESG goals to help companies meet their objectives. $2.$ There are too many challenges with measuring ESG metrics, so executive pay should not be linked with them.