Companies will embed sustainability from the boardroom to the copy room and will manage their entire value chain for sustainability.
Corporate boards will provide formal oversight for corporate sustainability strategy and long-term performance. Sustainability considerations will be integrated into board discussions on strategy, risk and revenue.
The CEO and company management -- C-Suite executives to business unit and functional heads -- will be explicitly accountable for achieving sustainability goals.
Executive & Employment Compensation
Sustainability performance results will be a core component of compensation packages and incentive plans for all executives and employees across the business. Companies will include sustainability criteria in all employee performance assessments.
Corporate Policies and Management System
Companies will embed sustainability considerations into corporate policies and risk management systems to guide day-to-day decision-making.
Companies will clearly state their position on relevant sustainability public policy issues. Any lobbying will be done transparently and in a manner consistent with the company’s sustainability commitments and strategies.
Wall Street research, academic papers, corporate reports and trends from major investors all underscore the same message: companies that adopt sustainable business practices deliver superior financial results and can face the future with more resilience.
The integration of sustainability into business begins with board oversight and commitment, and extends into management systems and processes that ensure sustainability is considered in day-to-day decision-making. It is this chain of accountability stretching from the boardroom to the copy room, from the factory floor to the farm, that drives home the importance of achieving truly sustainable business performance.
Corporate governance has always been a way to bring new thinking into decision-making at the top of the company. And as fiduciaries, corporate boards are responsible for overseeing the interests of shareholders in the long term by integrating material sustainability issues into board discussions on focused on strategy, risk and revenue.
Just as effective strategies for engaging the board have evolved, so too have strategies for building accountability for sustainability throughout the business. Corporations have long incentivized executive performance by tying compensation to financial metrics. The growing business case for sustainability strengthens the argument for linking compensation to sustainability performance for not only executives, but all employees. By tying executive compensation to sustainability metrics—to greenhouse gas (GHG) reduction targets and energy efficiency goals, for example—companies can boost both financial and sustainability performance.