Carrot and stick: Why companies like Chipotle are linking executive pay to ESG targets

What do Chipotle, an air conditioning company and one of the world’s largest activist investors have in common? They’re all tackling the challenge of how to incentivize executives to advance corporate sustainability goals.

In this episode, we talk with Chipotle Head of Sustainability Caitlin Leibert about the company's plan to tie 10% of annual executive incentive bonuses to sustainability goals. Linking executive compensation to ESG goals is a way for companies to "put your money where your mouth is,” Caitlin says.

But European activist investor Cevian Capital believes that many companies could make their ESG-linked incentives more robust and transparent, says Harlan Zimmerman, a senior partner at the firm.

We also hear from Marcia Avedon, Trane Technologies’ Chief Human Resources, Marketing and Communications Officer, about how the air conditioner and heating company is looking to incentivize all its employees to act on its sustainability targets.

"We are weaving sustainability...into everything we do as a company," Marcia says.

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