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Top Companies Tie Compensation to Sustainability

[fa icon="calendar'] May 9, 2013 9:38:49 AM / by CSRHub Blogging

By Guest Blogger, Keith Patterson

Companies commonly base executive compensation on performance, but a growing number of businesses have started associating top leaders' pay rates and bonuses to achieving corporate environmental goals. In essence, initiatives such as reducing energy use can lead to higher compensation for those in the corner offices.

According to a 2013 joint report done by the Investor Responsibility Research Center and the Sustainable Investments Institute, 43 percent of Fortune 500 companies link executive pay to sustainability. These incentives are helping companies across the world accelerate green goals and reduce carbon footprints.

Caterpillar

In recent years Caterpillar, a worldwide manufacturer of construction and mining equipment, has dedicated itself to corporate sustainability. As motivation for senior executives to reach these goals, the company has started tying compensation to sustainability performance. In 2011, a reported 84 percent of Caterpillar's executive officers had compensation tied to the company's performance.

Caterpillar has lofty environmental goals, such as a 20 percent reduction in greenhouse gas emissions and a 25 percent increase of energy efficiency by 2020. But in some cases, it has already exceeded these goals. According to its annual report, the company has surpassed its energy efficiency goals by 22 percent by 2012. Part of this achievement is based on Caterpillar's dedication to renewable energy resources. In 2012, 18.2 percent of the company's energy was comes from green energy.

In addition, Caterpillar has made a commitment to follow LEED standards for all new construction worldwide. LEED is the international standard for sustainable construction, design and maintenance. These buildings will focus on energy efficiency as well as reduced waste.

Intel

In the world of technology, Intel is a leading computer and processor manufacturer. But in terms of the green movement, the company is leaps and bounds ahead of most companies in sustainability initiatives.

[csrhubwidget company="Intel-corporation" size="650x100" hash="c9c0f7"]

Intel has been linking sustainability and compensation for its CEO and top leaders since 2008. In addition, all employee bonuses are tied to its green goals. The company encourages its employees to find new ways to innovate sustainability at work and recognizes successful staff with its Intel Environmental Excellence Awards. Employees who received the award in 2010 collectively saved the company $136 million.

By 2010, the company reduced its emissions by 40 percent, saved more than $5 million through recycling programs and created more energy-efficient products for customers. To further limit its carbon footprint, Intel committed to purchasing 2.5 billion kWh worth of renewable energy credits, which will offset 85 percent of the company's energy use. According to the U.S. Environmental Protection Agency, that's enough clean energy to power 218,000 homes!

Shell

Though you may not think one of the world's leading energy and gasoline companies would be green, Shell  has some impressive sustainability standards. The company makes the environment a performance evaluation criterion for its 87,000 employees worldwide, including upper level executives.  Shell's employees are evaluated for individual and team efforts for accomplishing the company's green goals. Their performance in these initiatives is directly related to their annual bonus amount.

As part of its sustainability commitment, Shell works to provide energy-efficient alternatives to its customers around the world. As a major producer of oil and gas, Shell has a significant investment in alternative fuels and research for renewable options. In the past five years, the company spent $2.2 billion to develop alternative energy. Additionally, the company has increasingly used natural gas as a cleaner-burning fuel than coal to create energy.

Shell is significantly invested in wind energy, with wind farms located in Europe and North America. The company estimates that its emission-free generation of electricity eliminates more than 1 million tons of carbon dioxide from entering the atmosphere.

Photo courtesy of AMagill via Flickr CC.


Keith Patterson is a copy writer for EnergySavings.com and freelance blogger on energy innovation and design for the greater good. Follow him on Twitter: @kcpatterson711

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 7,000+ companies from 135 industries in 91 countries. By aggregating and normalizing the information from 200 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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COMMIT!Forum Right Around The Corner!

[fa icon="calendar'] Sep 20, 2012 10:02:11 AM / by CSRHub Blogging

CSRHub CEO and Co-founder Bahar Gidwani will be speaking at CR Magazine’s Corporate ResponsibilityCOMMIT!Forum, Good Business Makes the Difference, October 2-3, 2012 in New York, NY.  Joining Bahar’s conference panel, Assuring Sustainability, will be executives from Intel, UPS and the Global Reporting Initiative.

Bahar will be moderating one of the Ask-the-Expert discussions, Assuring Sustainability: When & How to Undergo Third Party Validation…and When Not To.  He will also be leading one of the CROA discussion groups on CSR training.

Assurance can improve trust, but at what cost? Is it right for your firm right now, or should you explore other options? Hear from seasoned practitioners and experts who've weighed the options for themselves and come to different conclusions. In engaging session our panelists will share their perspectives and provide you with a roadmap for making your own decisions.

Featuring:

  • Michael Jacobson, Director, Corporate Responsibility Office, Intel
  • Steve Leffin, Director, Global Sustainability, UPS
  • Marjella Alma, External Relations Manager, Global Reporting Initiative

Register to attend COMMIT!Forum today using ID Code: CSRHUB at  www.eiseverywhere.com/commit2012?discountcode=CSRHUB, to enjoy one of two special offers from CSRHub valued up to $225!


Bahar Gidwani is a Co-founder and CEO of CSRHub. Formerly, he was the CEO of New York-based Index Stock Imagery, Inc, from 1991 through its sale in 2006. He has built and run large technology-based businesses and has experience building a multi-million visitor Web site. Bahar holds a CFA, was a partner at Kidder, Peabody & Co., and worked at McKinsey & Co. Bahar has consulted to both large companies such as Citibank, GE, and Acxiom and a number of smaller software and Web-based companies. He has an MBA (Baker Scholar) from Harvard Business School and a BS in Astronomy and Physics (magna cum laude) from Amherst College. Bahar races sailboats, plays competitive bridge, and is based in New York City.

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[fa icon="comment"] 3 Comments posted in Assuring Sustainability, Bahar Gidwani, Commit!Forum, CR Magazine, Global Reporting Initiative, GRI, Intel, Uncategorized, UPS

CSRHub’s Bahar Gidwani Speaking at COMMIT!Forum

[fa icon="calendar'] Aug 29, 2012 10:26:11 AM / by Bahar Gidwani

CSRHub CEO and Co-founder Bahar Gidwani will be speaking at CR Magazine’s Corporate ResponsibilityCOMMIT!Forum, Good Business Makes the Difference, October 2-3, 2012 in New York, NY.  As COMMIT!Forum’s website states, “It’s called the COMMIT!Forum because it calls on individuals and organizations to make commitments that change the world.” Joining Bahar’s conference panel, Assuring Sustainability, will be executives from Intel, UPS and the Global Reporting Initiative.

You can join world leaders in corporate responsibility and “walk into MissionPossible Case Studies, Game Changing Innovation Lightening Rounds and Ask-the-Expert Discussions ready to dive into the issues at hand.”
Bahar will be moderating one of the Ask-the-Expert discussions, Assuring Sustainability: When & How to Undergo Third Party Validation…and When Not To.

Assurance can improve trust, but at what cost? Is it right for your firm right now, or should you explore other options? Hear from seasoned practitioners and experts who've weighed the options for themselves and come to different conclusions. In engaging session our panelists will share their perspectives and provide you with a roadmap for making your own decisions.

Featuring:

  • Michael Jacobson, Director, Corporate Responsibility Office, Intel
  • Steve Leffin, Director, Global Sustainability, UPS
  • Marjella Alma, External Relations Manager, Global Reporting Initiative 

If you haven’t already, register to attend COMMIT!Forum today!


 

Bahar Gidwani is a Co-founder and CEO of CSRHub. Formerly, he was the CEO of New York-based Index Stock Imagery, Inc, from 1991 through its sale in 2006. He has built and run large technology-based businesses and has experience building a multi-million visitor Web site. Bahar holds a CFA, was a partner at Kidder, Peabody & Co., and worked at McKinsey & Co. Bahar has consulted to both large companies such as Citibank, GE, and Acxiom and a number of smaller software and web-based companies. He has an MBA (Baker Scholar) from Harvard Business School and a BS in Astronomy and Physics (magna cum laude) from Amherst College. Bahar races sailboats, plays competitive bridge, and is based in New York City.

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The Truth Will Out: Integration

[fa icon="calendar'] Jul 5, 2012 5:00:00 AM / by CSRHub Blogging

By Ashley Coale

 

So what exactly did Unilever CMO Keith Weed mean when he told the annual Marketing Society audience Group at board table. in London at the end of last year that CSR departments have become redundant? Well, besides meaning to be just a little bit provocative, he also meant that the time has come to look past add-on CSR units within a corporation and start thinking about integration.

 

Calling a CSR department redundant wasn’t Weed’s way of saying CSR or sustainability efforts no longer have value. In fact, it’s just the opposite. Much like the example that Unilever is striving to set, integrated sustainability means putting sustainable principles into every facet of business operations. CSR is not the sole purvey of corporate affairs, the corporate foundation, the marketing department or even facilities. It’s part of all these departments and more. With integration, sustainability drives strategy, planning and the core of what and who the business is.

Companies that put integrated sustainability into practice strive to build a culture of environmental and social responsibility. Fostering a culture that embraces these values down to every decision is an effective way to standardize and insure compliance. (See Bertel’s Framework for more on this idea). Leaders such as Intel and Cisco incorporate sustainability goals – among other core frameworks – into individual employee performance reviews and base bonuses on successful achievement of these goals.

 

Intel and Cisco, among other leaders, also work to integrate sustainability into governance strategy. Board-level planning and decisions to embed sustainability into strategy reinforces this type of corporate culture. It also pushes the company to take a longer-term approach and innovate for the future challenges of a resource-constrained world. (For more on Intel and Cicso, check out their ratings on CSRHub. Intel scores a 66 and Cisco scores a 69.)

With the whole team on board, and executive reinforcement, there is no longer an isolated CSR effort. Instead, sustainability becomes a part of each decision, product and service. Nike’s Considered Design is an example of sustainability at conception, design and production of a product. Rather than looking at how to reduce impact after the product is made and shipped, Nike has taken a leadership role in employing principles of sustainable design right from the start. Integrated sustainability means thinking about this challenge every step of the way and in every conference room, office, assembly line and factory.

 

Photo courtesy of US Embassy New Delhi 



 

Ashley Coale has a long-standing passion for business sustainability and the impact that strong, effective communications campaigns can have in catalyzing change. As the Social Media Editor, Ashley manages social media and communications outreach at CSRHub. She is responsible for crafting and implementing content and strategy. Her communications experience includes a wide range of causes including international development, human rights, and federal and municipal sustainability policy. She holds a bachelors degree from Wellesley College and a Masters degree from the London School of Economics. A native of Portland, Oregon, she now makes her home in Brooklyn.

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[fa icon="comment"] 0 Comments posted in Cisco, CSR, Intel, sustainability, Uncategorized, Unilever

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