(Credit: Chipotle)Focusing on cutting Scope 1 and 2 emissions with a broader use of science-based targets as well as sourcing food from regenerative practices, Chipotle Mexican Grill says it will tie 2022 environmental, social and governance results to executive compensation.
Chipotle says the company’s achievement of these goals will positively or negatively impact executive officers’ annual incentives by up to 15%. The company outlined its focus in three areas: food and animals, environment and people.
The company plans to reduce Scope 1 and 2 greenhouse gas emissions by at least 5% this year. In 2021, Chipotle announced wider goals in alignment with the Science Based Targets initiative (SBTi) to reduce Scope 1, 2 and 3 emissions by 50% by 2030 based on 2019 levels.
Late in 2021 Chipotle revealed ways it would tackle their emissions and SBTi efforts. Those goals included more sustainable restaurant design and construction and using recyclable building materials, installing building management systems, reducing emissions in transportation and the food supply chain and using more sustainable packaging.
Chipotle is a member of the SBTi, which also introduced a Net-Zero Corporate Standard in 2021 that set more ambitious emissions reductions targets including efforts in all three scopes. Chipotle, which has 3,000 restaurants, says it will announce what its 2021 Scope 1, 2 and 3 emissions were in the company’s sustainability report update this spring.
The company also says it will increase its use of organic, local and regeneratively grown and raised food. It says it will purchase at least 57 million pounds, up from 55 million pounds in 2021. Rice and beans are not included in the goal due to external crop factors, Chipotle says.
Sustainable agriculture has been a recent priority of many corporations with Walmart, McDonald’s and PepsiCo among those making moves in the area. The US Department of Agriculture also plans to invest $1 billion in partnerships to support sustainable farming.
Chipotle says it will support the National Young Farmers Coalition and promote policy change in the 2023 Farm Bill to help create equitable access to farmland.
Addressing the people part of the ESG goals, Chipotle says it plans to increase diversity within internal candidates for promotions and salaried positions.
The company’s most recently published sustainability efforts in 2020 said Chipotle had diverted more than 50% of its waste from landfills and reduced more than 65,500 megawatt hours of energy through energy management systems. The company said at the time it planned to reduce waste another 5% through 2025 and that it had purchased nearly a quarter of its electricity from renewable sources in 2020.
In tying ESG achievements to executive bonuses, Chipotle says it is the company’s responsibility to be transparent in its progress. The effort is similar to one announced in 2021 when Chipotle said it would tie 10% of executive bonuses to ESG goals.
