Corporations Are Going Green by Linking Executive Pay to Energy and Emissions Targets
Back in 2005, when GE chief executive Jeff Immelt launched Ecomagination, an initiative to pedal plant-friendly technologies to the market, he famously quipped “green is green.” But despite Mr. Immelt’s pitch, the conventional wisdom has stubbornly remained that what’s good for the planet is going to hurt in the pocketbook.
Things might finally be shifting. From the data crunched for this year’s Newsweek Green Rankings, we found an interesting trend within executive compensation packages that challenges this assumption. For instance, for the first time since we have been tracking executive pay-links to green, the majority of the 500 largest listed companies — both in the U.S. and globally — linked at least part of their executive bonus payout to green factors like energy use and greenhouse gas emissions. In the U.S., 53 percent of companies tie executive bonuses to green performance targets; globally, the number is 69 percent. A decade ago, less than 10 percent of companies linked pay to environmental factors.