Simply uttering the term "going green" seems to lend itself to a number of public relations advantages nowadays. So it’s not surprising that many companies – in a quest to stay relevant and please shareholders – now dedicate a greater percentage of their budgets to sustainable solutions.
One method that has been gaining ground in the business world ties environmental protection to executive pay packages. In other words, the efforts a senior manager makes to "green" business operations and meet predefined targets determines his or her rewards.
"If you are a company’s CEO, and the board of governors wants to measure your sustainability performance, you wouldn’t disagree. But there have to be credible measurements," said Berrefjord.
Most companies opting for such incentive schemes in China are international firms. In 2008, for example, Intel (INTC.NASDAQ, 4335.HK, INCO.Euronext) expanded its green incentives program – previously just for top executives – and applied it to all global employees. As such, the company not only uses environmental metrics to evaluate senior managers’ yearly bonuses, it also measures all employees on a similar scale to determine annual incentives.
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