Companies in Action
Molson Coors Brewing ties compensation to sustainability metrics from the CEO down to unit managers. In a quest to scale impact and drive performance improvements, leading companies are tying executive and employee compensation to sustainability metrics and targets. At Molson Coors, incentive compensation for C-suite members, including the Chief Procurement Officer and Chief Operating Officer, is based on achievements linked to the company’s latest sustainability strategy: Our Beer Print 2025. Key metrics also extend to other members of the management team, including the business unit managers, environmental health & safety manager, risk manager and public affairs manager, among others. Specific performance metrics cover energy used, carbon emissions, sustainable sourcing of key commodities, water consumption and efficiency and performance against external sustainability evaluators, including CDP and Dow Jones Sustainability Index.
Recognizing that the entire staff of a company plays a role in achieving sustainability goals, Kingfisher announced in 2019 that employee bonuses will reflect performance against responsible business targets. While more companies are linking executive pay or bonus pay to performance on ESG goals, few companies have integrated this incentive structure throughout their entire staff. Kingfisher says the new incentive structure will help it achieve the following ESG goals: reflecting the communities in which it serves, protecting forests and tackling climate change and helping customers afford greener homes.
Barclays links both executive and employee pay to sustainable business performance. The company defines sustainable business performance as “making a positive contribution to stakeholders, in both the short and longer term, playing a valuable role in society.” The degree to which employee pay is linked to sustainable business performance correlates with seniority. More heavily linking pay at the executive level presses those with the most power in the company to achieve sustainability goals and ensures that junior employees are not significantly impacted by fluctuations in business performance. In 2018, 20% of CEO and CFO bonus pay was linked to strategic measures, which includes the company's performance against environmental and social goals. Barclays set an additional example of leadership when it comes to executive pay in the spring of 2020, announcing that CEO and CFO incentive payments would be delayed for a year due to the financial impacts of the coronavirus.
Bank of America integrates sustainability training across the company. To effectively engage employees and change their behaviors, companies should use a multitude of training methods and customize them to specific job functions. Bank of America’s “My Environment” program, which reaches 25,000 active employees across more than 30 countries, includes expert-led webinars and courses, as well as competitions on issues such as waste reduction and increasing recycling. In addition, the company provides ESG training for employees across the enterprise and it uses its Environmental and Social Risk Policy (ESRP) framework to help employees identify, measure, monitor and control environmental and social risks across the business. The company reported that 250,000 employees in control functions and front line units across the company had enterprise risk framework training in 2018.
