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Sustainability Bonuses: A New Trend That May Become the Norm

A New Trend that May Become the Norm

We have seen a recent uptick in companies, especially Fortune 500, integrating metrics that are more about the company sustainability and/or social responsibility.  While these metrics are not the majority of the weight for determining payouts, they may be a gatekeeper that prohibits payouts. Companies are using metrics like reduced carbon footprint, energy consumption, use of renewable resources, commute time, environmental impact, etc. 

Hugh Welsh of The Guardian recently wrote about having sustainability goals and not achieving them.  The article can be read here.

We believe this recent trend among Fortune 500 may become more the norm over the coming year. Why? The increased use in these corporate sustainability metrics has various shades of green.

  1. There is tangible consumer goodwill from the PR of publicly announcing corporate green and sustainable actions that are so important, the company is willing to put it’s money where it’s mouth is. 
  2. The Company can actually reduce costs through many of these initiatives, like moving to electronic documents, or asking consumers to “do their part”. Example, hotels asking customers to reuse towels and save water consumption.
  3. Many companies are using the metric as a potential hurdle that if the Company doesn’t meet sustainability goals, incentive awards may be reduced (thus lowering costs).


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