Chipotle Mexican Grill announced a new initiative linking executive compensation with the company’s sustainability goals, with the introduction of a new metric tying ten percent of officers’ annual incentive bonus to the company’s progress toward achieving its ESG targets.
According to the company, executive leadership team will be evaluated on the Chipotle’s progress toward its overarching sustainability goals in the categories of Food & Animals, People, and the Environment.
Under the Food & Animals category, the company’s goals include increasing pounds of organic, local, and/or regeneratively grown/raised food used in its restaurants year over year. Chipotle ended 2020 at 31 million pounds of local produce and has a goal of reaching 37 million pounds of local produce by the end of 2021.
Chipotle’s People goals include maintaining racial and gender pay equity, and the company is also implementing a program to accelerate the development of its diverse field organization and support center employees for promotion to above restaurant and next level roles.
The company’s environmental targets include a new goal to publish Scope 3 emissions this year, pushed up from its prior 2025 goal. This target is aimed at contributing to transparency efforts, which include the launch, announced in October 2020, of Real Footprint, a sustainability tracking platform, aiming to provide guests with information about the impact of their orders.
Chipotle’s new initiative is part of a growing trend among companies across a variety of industries to tie compensation to ESG progress. Recently, Apple revealed that it will introduce an ESG modifier to its executive bonus payouts, Deutsche Bank announced that it plans to link top level executive and management compensation to ESG and sustainable finance criteria, and Marathon Oil restructured its incentive programs to prioritize issues including environmental performance and safety.
Laurie Schalow, Chief Corporate Affairs & Food Safety Officer, said:
“We are passionate about inspiring real change in people, food, and the environment every day. The compensation plan ensures our leaders continue to set the right example for our more than 88,000 employees while fulfilling our mission to drive change and Cultivate a Better World.”