Chipotle Links Executive Compensation to ESG Goals

(Credit: Chipotle Mexican Grill)

by | Mar 5, 2021

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Chipotle Mexican Grill has gone public with its intention to tie executive compensation to its environmental, social and governance (ESG)  goals. The company has introduced a new ESG metric that will hold its executive leadership team responsible for making business decisions that prioritize corporate responsibility. Ten percent of the annual incentive bonus for officers will be tied to the company’s progress toward achieving those ESG goals.

The announcement comes following a year in which a litany of disrupters boosted the profile of corporate responsibility  issues. With the pandemic, social injustice, extreme weather and wildfire events setting a magnifying glass over how ESG influences the global economy in 2020, such topics will continue to play out on a larger stage in 2021, S&P Global Ratings said earlier this year.

Chipotle’s executive leadership team will be evaluated on progress toward achieving the following goals:

Environment

Originally announced for 2025, Chipotle is moving up its goal to publish its Scope 3 emissions to December 31, 2021. The company currently publishes its Scope 1 and Scope 2 emissions in its annual Sustainability Report and Report Update.

Food & Animals

In effort to support more sustainable small farms, Chipotle will increase pounds of organic, local, and/or regeneratively grown/raised food used in its restaurants year over year.

People

Chipotle has set out to maintain both racial and gender pay equity. It is also implementing a program to accelerate the development of its diverse field organization and support center employees for promotion to above restaurant and next level roles.

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