As reported by ESG Today, Hewlett Packard Enterprises is joining a growing group of companies in linking executive pay to climate initiatives. HPE’s sustainability report notes:
Achieving our net-zero commitment will require a complete business transformation for which every leader at HPE will be responsible. In 2022, we will launch a mandatory climate learning program to empower and enable all our executives to contribute toward our climate goals. In addition, as of 2022, climate metrics are linked directly to the compensation of our executive committee.
The accompanying press release says that the climate metrics are part of variable pay and will relate to management of carbon emissions across the value chain.
HPE had already incorporated DEI metrics into executive pay. We’ve blogged that DEI metrics are more common (but still tricky) — and highlighted considerations in implementing climate-related metrics. The new HPE climate metrics appear to tie-in to the company’s commitment to reduce its global emissions footprint, including Scope 3 emissions.
The “climate incentive” train appears to be heading our way. Anyone who plans to jump aboard first needs to take foundational steps on socializing climate priorities, tracking data and preparing for disclosure — especially where the full value chain is involved. We’ve just posted sample annotated climate disclosures for members of PracticalESG.com based on the proposed rules that the SEC wants to adopt this fall, which will be key to this effort. We’ll be sharing practical step-by-step guidance this October at our 1st Annual Practical ESG Conference, as well as our Proxy Disclosure and Executive Compensation Conferences. You can register online, email Sales@CCRcorp.com or call 1-800-737-1271. Members can also access lots of guidance in our “Sustainability Metrics” Practice Area.
— Liz Dunshee, CompensationStandards.com, July 19, 2022
