Did you make it to GreenBiz19? If not, 2019 is just beginning and you can join your peers for Circularity19 in Minneapolis from June 18–20. Bringing together more than 500 leaders in the industry, Circularity19 attendees will work to define and accelerate the circular economy through plenary sessions, interactive breakouts, networking event and more. Organized around size program tracks — business and strategy, circular cities, design & materials, logistics and infrastructure, next-gen packaging, and standards and metrics — this event will not only inform it will also inspire. You can register now.
The Complexities of Connecting Executive Bonuses to Sustainable Efforts
https://hbr.org/2018/11/how-to-tie-executive-compensation-to-sustainability
When it comes to doing the right thing, wouldn’t it be great if everyone jumped all in just because? Unfortunately, we’ve seen that that is certainly not the way green efforts have worked in the past.
While a number of large corporations are making good efforts toward greener practices, the way these efforts should be rewarded when it comes to a traditional bonus or increased compensation is hard to define.
In an exploration of how to tie executive compensation to sustainability, Seymour Burchman noted that deciding which elements of sustainable practices for that organization have priority is key and those goals could be linked to a pay incentive.
Typically compensation committees would start by tying bonuses or other long-term incentives to goals that relate to compliance and risk management. This tactic might be acceptable for some investors, but it may take too much focus off of the company’s core mission.
So, where to begin?
Burchman suggests that bonuses should depend heavily on executives’ success in engaging the company in the big strategic picture that correlate with sustainability. If they can motivate their team members to go on the offense when it comes to sustainable efforts, that in turn can help pull sustainability from the edges of the business model into the center.
Even though it is clear that not every company can tackle major sustainable initiatives right now, the opportunities to pursue them is growing fast. In a survey by the UN and Accenture, 63% of executives said they believe sustainability will cause major changes in their business over the next five years.
Taking these changes into consideration requires a company’s board to engage in a different way of thinking about what will make their company increasingly sustainable while also expanding those efforts when it comes to suppliers and customers.
As these goals are established and then connected to executive incentives, it’s vital that directors make sure that to avoid any negative consequences that may come with an attempt to meet said goals. It’s also imperative that directors remain focused on creating a reasonable number of sustainability goals that deliver the most value. Value that can, in term, be used to energize executives and provide benefits for other stakeholders and the broader community.
Sustainability Consulting Round-Up: Best of Our Blog from January 2019
We try to post a new blog at least once a week, just to share our insights into the world of sustainability strategy and what it takes to be a sustainability consultant or professional today. Here are our most-read posts from January.
Exploring Innovative Solutions to Plastic Recycling
Use the "8 habits" of Creative Genius to Shape Your Sustainability Activities
What You Know and Who You Know Are Important for Aspiring Sustainability Consultants
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