The salaries and bonuses paid to Heineken managers may soon depend on how committed these leaders are to fighting climate change.
The salaries and bonuses paid to Heineken managers may soon depend on how committed these leaders are to the fight against climate change, at a time when the world’s second-largest brewer is trying to find a way to reach its goal of zero emissions by 2040.
“We are investigating how we can link this to executive compensation,” CEO Dolf van den Brink said in an interview with Bloomberg TV this Wednesday.
Companies are facing increasing pressure from board members, investors and customers to prove they are taking significant steps to ease their impact on the planet. Experts say linking to executive maturity is a key step in encouraging corporate management to meet climate goals.
Heineken has noticed a “remarkable acceleration” over the past year in how climate action has gained importance among the company’s shareholders, Van den Brink said, and how this will be a key point in attracting and retaining future employees. At the same time as there is a greater understanding among consumers that tackling global warming is crucial, Van den Brink says he is not sure customers will be willing to pay a “premium value” for green improvements in the company’s value chain.
About 90% of Heineken’s emissions come from suppliers, packaging and the logistics of storing and transporting the beer. The remainder is generated by the production of the drink.
Reducing emissions in the value chain is a difficult part. And that’s why Van der Brink says Heineken may cut links with suppliers who are not decarbonising their operations fast enough. It is too early to say when that might happen, the executive said.
In setting short-term climate targets, validated by the Science-Based Targets initiative, Heineken has committed to reducing all its emissions by 35% by 2030 from the 2018 baseline. And this is also in line with the Paris Agreement, which aims to keep global warming below 2 degrees.
“I see an awareness is rapidly emerging that this needs to be done,” Van den Brink said of Heineken’s pledges. “The days of delegating this to the sustainability team and corporate issues are long gone.”
