Hinterland Green

Thursday, March 11, 2010

New tool for sustainable policy: big bonus

From NRC Handelsblad:

A new trend amongst Dutch multinationals: some executive remunerations are now based on meeting sustainability targets. But the criteria are not always clear. Paint and chemical producer AkzoNobel was the first to introduce a new system of performance related pay last April, when it announced its executive bonuses would be based on sustainability criteria. The 600 top managers at the company now have to take into consideration whether they have done enough to reduce greenhouse gas emissions and whether they have developed more innovative, environmentally friendly products than the competition. If they fail to do so, their remuneration is reduced.

Akzo was the first company to openly connect sustainable performance to its bonuses and several Dutch multinationals have already followed suit. Chemical manufacturer DSM, postal company TNT and energy giant Shell all announced they are adopting similar policies.

Is there a green revolution going on concerning rewards for executives? Have managers in the Netherlands all realised that more environmentally and customer friendly policies pay off? And are they trying to push their companies in this direction by not only taking profits into account, but also their contributions to people and planet? Or is this just a convenient way to keep handing out bonuses to managers when economic times are rough? Those who produce less may not meet their profit targets, but they also emit less carbon dioxide.

The article continues:  http://www.nrc.nl/international/Features/article2500556.ece/New_tool_for_sustainable_policy_big_bonus
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