Top leadership nudged to score green goals | Economic Times

New Delhi: Nestle, the world’s largest packaged foods company, has started linking chief executive bonus packages and the remuneration of board members to climate targets beginning this year. It joins an increasing number of companies that are aligning key result areas (KRAs) and bonuses of leadership teams with sustainability goals. Many others that have already been linking the environment to leadership KRAs are increasing the percentage of payouts, creating new roles for chief sustainability officers or aligning goals to performance targets of all staff. “The contribution the leadership makes in driving our sustainability agenda is one element taken into consideration when considering performance,” said a Nestle India spokesperson. “We continue to accelerate our journey towards attaining our sustainability goals.”Companies are accelerating climate and sustainability goals amid mounting environmental concerns. Beverage and snacks foods maker PepsiCo said environment targets, reduction of sugars and saturated fats in foods and beverages, and plastic packaging goals are being directly linked to KRAs of the leadership. The company announced last month that it was advancing global net-zero emission targets by a decade.“We work across key strategic sustainability targets which senior leadership is responsible for driving through defined KRAs,” a PepsiCo India spokesperson said. Executives at search firms said an increasing number of corporates are linking payouts and performance parameters to sustainable goals since these are as critical as profitability, sales and diversity inclusion. “Sustainable goals are coming under the risk management business continuity plan. This has become even more important during the pandemic,” said Uday Chawla, managing partner at executive search firm Transearch India. “Companies have initiated discussions at board level too on creating new roles of chief sustainability officers, while some are in discussions to make these KRAs of all employees for payouts.”80890703Tobacco, hotels and consumer goods giant ITC has evolved its targets to now also include plastics management and carbon emissions, in addition to existing goals linked to energy, water and waste. “The company’s sustainability milestones form a vital part of the key result areas of the leadership team,” said Sanjiv Rangrass, ITC group head of sustainability, R&D and projects. “ITC’s internal evaluation system is deeply focussed on superior triple bottom line performance.” Tech Mahindra, which has been integrating sustainability goals with KRAs of its leaders, is among those accelerating the exercise.“The organisation’s focus on sustainability is only going to get stronger. Already all our CXOs are closely working around these goals. Now we want to involve all our employees too,” said Sandeep Chandna, chief sustainability officer at Tech Mahindra. “Offering a reward programme will not only deliver tangible and measurable business gains but will send out the message that your sustainability goals are just as important as any other KPI (key performance indicator).”REGIONAL-LEVEL PARAMETERSIn the case of multinationals, apart from global targets and mandates, some have also defined region-level parameters, which helps with positive feedback but also more engagement with policies of that country’s government. “Besides, being perceived as a ‘green’ company also brings in environmentally conscious consumers, especially millennials. Sustainability targets and stakeholder engagement will escalate in times to come,” said Deloitte India senior director Rajat Wahi.McCain India, wholly-owned subsidiary of the global frozen foods maker McCain Foods, now follows a quarterly review of progress against sustainability targets. “We review the progress against our commitments every quarter. We have been creating five-year commitments for sustainability targets, and have yearly initiatives planned which all our leaders are accountable for,” said Debadatta Baxi, regional director, HR and sustainability, for McCain India, South Korea, Southeast Asia and Taiwan. A spokesperson for India’s largest consumer goods maker Hindustan Unilever said sustainability was integral to its business. “Progress on sustainability has been one of the key criteria for long-term reward,” the person said. “Most of our programmes, social initiatives and brand-led initiatives directly contribute to the sustainable development goals (SDG).”CSR ACTIVITIESOthers like Apollo Tyres have started mapping the corporate social responsibility (CSR) footprint to sustainability goals, which cascade down to CXO-level goals and are linked to KRAs of leaders. “Sustainability remains a key consideration at the functional level, given its interface with a diverse set of stakeholders,” said Sunam Sarkar, Apollo Tyres president and chief business officer. Direct-selling company Amway’s India unit too has evolved targets for reduction in total waste, increased recycling, better use of alternate energy sources, reduced water and total energy consumption, aligning with performance goals of leadership.