Using Rewards to Achieve an Organization’s Sustainability Objectives

Using Rewards to Achieve an Organization’s Sustainability Objectives

While most companies worldwide recognize sustainable business practices as a strategic imperative, many are not using rewards to incentivize progress toward their sustainability goals. This report examines the multiple levers companies use to enact sustainable strategies, the reasons why they are not using rewards, and how rewards can be used as a key lever in helping organizations improve their sustainability performance.

The Erb Institute is a partnership between the Ross School of Business and the School for Environment and Sustainability (SEAS) at the University of Michigan. The institute’s mission is to create a socially and environmentally sustainable world through the power of business. We do that through research, teaching and business engagement—all focused on preparing and supporting bold business leaders who can adeptly transform companies, industries and entire economies for systemic sustainability.

Acknowledgments The authors would like to sincerely thank the following contributors for their invaluable support, encouragement and guidance during the preparation of this report. The project advisors: Paul Turner, Senior Associate at the Cambridge Institute for Sustainability Leadership, and Dr. Andrew Hoffman, Holcim (US) Professor of Sustainable Enterprise at the University of Michigan. The staff at the Cambridge Institute for Sustainability Leadership: Dame Polly Courtice, DBE, LVO, Director; Dr. Theo Hacking, Director of the Graduate Programmes & Research Strategy; and Louise de Muscote, Programme Manager. The staff at the Erb Institute: Dr. Joe Ă rvai, Faculty Director; Terry Nelidov, Managing Director; and Melissa Zaksek, Research and Thought Leadership Manager.

Those interviewed for this study: John Viera, David Clark, Susie Hewson, Kari Bliss, and Hector Isadore.

Foreword from Research Advisors ANDREW HOFFMAN

Holcim (US) Professor of Sustainable Enterprise, Stephen M. Ross School of Business and the School for Environment &

Sustainability, the University of Michigan

Our sustainability challenges—climate change, species extinction, water scarcity, income inequality and the entire litany of sustainability problems—are falling on the next generation of business leaders.

While it may be fair to state that the cause of these problems comes from business and the market, it is not fair to state that business and the market cannot solve them. Indeed, business is the most powerful entity on Earth, and it must solve them.

Quite simply, without business engagement, no solutions will be found. Therefore, the hard work ahead lies not in calling out our challenges—we know these already—but, rather, in rolling up our sleeves and doing the careful work of developing solutions that steer the great power of business and the market toward addressing them. One critical component of that work is to find ways to integrate sustainability into the key facets of the organization, aligning all employees in the task of identifying and implementing solutions.

The students, our future business leaders, who worked on this report spanned the Atlantic Ocean, bringing together the talents and resources of two powerful sustainable business research institutions: the Cambridge Institute for Sustainable Leadership (CISL) at Cambridge University in the United Kingdom and the Erb Institute at the University of Michigan in the United States (Erb). This collaboration is significant because the problems we face are not situated in just one business, one market segment or one geographic region. They are truly global problems, requiring global solutions, and

I am thrilled that these two institutions have joined together to learn with and from each other, and to share that knowledge with the business world to put to use. I wish to thank all the people at both CISL and Erb for this important collaboration.

PAUL TURNER

Senior Associate at the Cambridge Institute for Sustainability Leadership and Former Director of Community & Sustainable Business, Lloyds Banking Group

Over the years, businesses from across the world have demonstrated their ability to adapt to seismic changes in local and global markets. Those that have thrived have not only been entrepreneurial and strategic in their approach but also organized themselves in the best ways possible to succeed.

It was said, apparently by Albert Einstein, that insanity is doing the same thing over and over again and expecting a different result. Continuing to do what we have always done will not enable businesses to seize new opportunities and manage the risks of our changing world. Nor will it result in the changes society expects of them. The nature and scale of these challenges means a different approach is needed. The students at the Cambridge Institute for Sustainability Leadership and the Erb Institute brought with them insights and experiences from different backgrounds and cultures, as well as commercial and academic experience. As part of their work, they conducted primary research, with help from a wide range of businesses, as well as looked afresh at existing research. This collaboration has resulted in a report that will help businesses navigate the uncharted waters ahead of them. I would like to thank all involved for their hard work and commitment.

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Contents Using Rewards to Achieve an Organization’s Sustainability Objectives

Executive Summary.......................................................5 Introduction ....................................................................7 Initial Research: Levers of Organizational Change .............................8 Deeper Exploration: Rewards.................................. 11 Conclusion..................................................................... 27 Appendix....................................................................... 34

Executive Summary This report documents separate, but complementary, research projects conducted by master’s students at both the Cambridge Institute for Sustainability Leadership and the University of Michigan’s Erb Institute. Using both quantitative and qualitative data via surveys and follow-up interviews, this research examined the levers of organizational design that could be used to accomplish sustainability-related goals.

An initial study by CISL used a survey of 361 respondents to examine five levers of organizational design that can be used to embed sustainability into business practices. Through this research, they found that strategy was the most effective lever, followed by processes, people and structure. Surprisingly, the study found that corporate leaders perceived rewards to have the least impact of the five levers.

Erb’s study then built on this result by delving more deeply into rewards. The authors of this study did a follow-up survey of 96 of the initial CISL respondents, followed by eight interviews, for which written permission was granted to publish the name of the interviewee, their organization and the content of the interview. This research confirmed that business leaders do not perceive rewards as an effective tool for achieving sustainability goals (see Figure 1).

However, a secondary finding suggests that rewards are only perceived as ineffective because most organizations are not employing them as a means of accomplishing sustainability objectives. Many of those organizations that do not employ rewards as a means of accomplishing their sustainability goals also reported being dissatisfied with their overall progress toward accomplishing sustainability objectives.

THIS RESEARCH FOUND THAT FIRMS IN THE FINANCIAL AND CONSUMER PRODUCTS SECTORS WERE MORE LIKELY TO USE REWARDS FOR SUSTAINABILITY PROGRESS, LARGELY BECAUSE THEY: 1. are aligned with the organization’s values and expectations, 2. are used as a catalyst for change and 3. enable accountability for sustainability in the organization. Survey results indicated that bonuses (64%) and recognition (61%) are most often used to reward sustainability-related goals, and that survey participants ranked recognition most often as the most effective reward type.

THIS REPORT CONCLUDES THAT FOUR MAIN FACTORS APPEAR TO ENABLE SUCCESS IN ACCOMPLISHING SUSTAINABILITY GOALS AND IMPROVING AN ORGANIZATION’S SUSTAINABILITY PERFORMANCE: 1. management buy-in is critical, 2. sustainability goals must align with corporate strategy, 3. sustainability goals should be broken down into employee level objectives and 4. rewards should be used to incentivize the achievement of those employee objectives.

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FIGURE 1: DOES THE ORGANIZATION HAVE SUSTAINABILITY GOALS?”

Breakdown of sustainability goals

Use of rewards to obtain goals

Satisfaction with progress toward sustainability

35%

4%

44%

16% 80%

65% Yes

56% No

This research study collected data on how organizations from across the spectrum of industries, sizes and locations are responding to the call for more sustainable business practices via their methods of internal management.

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I’m Not Sure

Introduction The existential threat posed by climate change is one that governments, businesses and individuals must come together to combat within this decade. While global governance structures are responsible for driving the transition to a less wasteful, decarbonized world, there is no denying the role that business plays in seeking, testing and deploying innovative methods to improve sustainable practices for improved social, economic and environmental well-being. As stated

by Laurence Fink, chairman and CEO of BlackRock, in his 2020 letter to the CEOs of the companies in which BlackRock is invested, “Companies must be deliberate and committed to embracing purpose and serving all stakeholders—your shareholders, customers, employees, and the communities where you operate,” which includes “making sustainability integral to portfolio construction and risk management; exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels; and strengthening our commitment to sustainability and transparency in our investment stewardship activities.”1

Fink called into question the predominant focus on short-term incentives and service to shareholders above all else, reporting that “awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.” Accompanying this reshaping will be a massive reallocation of capital, aiming both to confront and mitigate mounting climate risk and to support business models, products and services that are paving the way to a more sustainable world. In this new era, sustainability must become a core tenet of how companies are run. Doing so requires integrating sustainability into the strategy, structure and organizational management of the company or organization.

This research study collected data on how organizations from across the spectrum of industries, sizes and locations are responding to the call for more sustainable business practices via their methods of internal management. In delving into the use of rewards in sustainable management, this report sets a roadmap that companies of all descriptions can follow to encourage a shift in behavior and a culture that places sustainability at its helm.

1 Fink, Larry. “A Fundamental Reshaping of Finance.” January 2020 www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter

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Initial Research: Levers of Organizational Change During the 2018-19 academic year, a group of students enrolled in CISL’s Postgraduate Certificate in Sustainable Business undertook a project surveying business leaders. The goal of the research project was to collect data that would provide relevant new insights into the use of levers of organizational change for sustainability that can be deployed by business leaders, managers, sustainability practitioners and the investment industry.

Their study used Galbraith’s “star model” (see Figure 2) to determine five levers of organizational design that could be used to embed sustainability

into business practices: structure, strategy, reward systems, human resources and business processes.2 Also, the study leveraged Lueneburger and Goleman’s3 determination of three main phases through which corporate sustainability initiatives evolve: In the early phase, a compelling sustainability vision is needed to make the case for change; in the second stage, the organization needs to translate that vision into commercially oriented actions, aligning sustainability initiatives and value creation; in the advanced phase, a strong strategic orientation is required to leverage sustainability as a strategic opportunity and create a competitive advantage.

FIGURE 2: GALBRAITH’S STAR MODEL4 USED AS THE BASIS FOR CISL AND ERB’S RESEARCH

2 Galbraith, J.R. (2011). THE STAR MODEL™. Retrieved from www.jaygalbraith.com/images/pdfs/StarModel.pdf 3 Lueneburger, C., & Goleman, D. (2010). “The change leadership sustainability demands.” MIT Sloan Management Review, 51(4): 48–56.

4 Galbraith’s Star Model used as the basis for CISL and Erb’s research

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The CISL survey was used to obtain the views of individuals from public, private and nonprofit organizations of all sizes in a wide range of industries and sectors across the globe. Of the 361 survey respondents, most were either C-suite executives or reported to the C-suite. The wide geographic scope of the project ensured that the study’s authors—who, similarly, operate across a range of geographies and industries—could gain robust and actionable insights to inform improved sustainability performance in their respective organizations.

The key finding of the survey was that most respondents view strategy as the most effective lever for embedding sustainable business practices (see Figure 3). The levers of process, people and structure were the next most effective, with little identified difference among the three. The survey also found that all levers became more effective as a company moves from the early stage of embedding sustainability into its organizational structure to the advanced stage.

Rewards were consistently rated as significantly less effective than strategy, structure, process and people, regardless of the stage of development.

FIGURE 3: REPRESENTATION OF CISL’S RESULTS, SHOWS THE PERCENT OF CISL SURVEY RESPONDENTS WHO INDICATED THE LEVER TO BE EITHER “VERY EFFECTIVE” OR “EXTREMELY EFFECTIVE”

70%

60%

50%

40%

30%

20%

10%

0% Early Stage Strategy

Intermediate Stage Structure

Process

Advanced Stage People

Rewards

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Research specific to sustainability-linked rewards to date has been sparse and has focused primarily on the effectiveness of such rewards for executives, rather than nonexecutive employees.8

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Deeper Exploration: Rewards The Erb research team, comprised of four dual-degree master’s students, delved further into the CISL survey’s initial findings. The team was intrigued by the insight that survey respondents believed rewards to be the least effective lever of organizational design in accomplishing sustainability goals. Both CISL and Erb teams considered this finding to be counterintuitive, given previous research by Peterson and Luthans, which finds incentives and rewards to be effective tools for accomplishing broad business goals, including goals tied to financial and strategic objectives.5 Also, Peterson and Luthans’s research asserts that individual performance and the accomplishment of business objectives are closely tied to well-built and well-integrated incentive structures, both financial and non-financial in nature. Peterson and Luthans suggest that incentives, when properly implemented, can improve individual performance, and that collective incentives—those that are applied at a group level—have a positive impact on business outcomes.

In an additional study published by Accenture in 2019 of more than 1,000 top executives, researchers found that 95% of CEOs claimed they were personally committed to ensuring that their companies lead on

the sustainable development agenda.6 However, despite this understanding of the importance of sustainability, 28% of firms do not tie rewards to sustainability strategy.7 The CISL study confirmed this finding, revealing that rewards are not widely employed for sustainability goals, and that, when used, rewards for accomplishing sustainability goals do not tend to foster the same levels of performance improvement as those used for nonsustainability goals. Research specific to sustainabilitylinked rewards to date has been sparse and has focused primarily on the effectiveness of such rewards for executives, rather than non-executive employees.8 Another researcher, C.B. Bhattacharya, has found that corporate sustainability plans tend to fail due to a lack of employee ownership of accomplishing sustainability-related goals.9 Three quarters of all organizations studied in a 2014 report by Ceres do not link employee compensation to sustainability performance.10 The Erb research team posited that a reason sustainability initiatives fail to achieve their desired results is that most organizations do not have incentives—financial or otherwise—in place to reward performance tied to sustainability goals.

5 Peterson, S., and Luthans, F. (2006). “The impact of financial and nonfinancial incentives on business-unit outcomes over time. ” Journal of Applied Psychology, 91(1): 156–165.

6 Kingo, L., Lacy, P., et al. (2019) CEO Study on Sustainability. Accenture/UN Global Compact September. www.accenture.com/_acnmedia/PDF-109/Accenture-UNGC-CEO-Study.pdf 7 Kingo, L., Lacy, P., et al. (2019) CEO Study on Sustainability. Accenture/UN Global Compact September. www.accenture.com/_acnmedia/PDF-109/Accenture-UNGC-CEO-Study.pdf 8 Merriman, K., Sen, S., Felo, A., & Litzky, B. (2016). “Employees and sustainability: the role of incentives.” Journal of Managerial Psychology, 31(4): 820–836.

9 Bhattacharya, C.B. (2018) “How to make sustainability every employee’s responsibility.” Harvard Business Review, 23 Feb. https://hbr.org/2018/02/how-to-make-sustainability-every-employees-responsibility.

10 Ceres. (2014). “Gaining Ground: Corporate Progress on the Ceres Roadmap for Sustainability.” www.ceres.org/resources/reports/gaining-ground-corporate-progress-ceres-roadmap-sustainability

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If organizations are to link sustainability objectives to incentive systems, the success of these rewards is contingent on them being dynamic and flexible enough to change as the organization’s goals evolve.11 One of the survey participants interviewed in this study, who granted us permission to publish their insights, was Kari Bliss, Head of Customer Experience & Sustainability at PADNOS. According to Bliss, PADNOS has implemented

strategic sustainability goals for its organization but has not created rewards to incentivize their accomplishment, preferring instead to leverage their people and organizational culture to prioritize sustainability (see Interview 1). Due to the danger of poorly crafted incentives fostering unintended and perverse behaviors,12 it is imperative that incentives and rewards are aligned with the organization’s overarching goals and values.13

INTERVIEW 1: Kari Bliss, Customer Experience & Sustainability, PADNOS

As a recycling company, PADNOS has made sustainability a key strategic priority. Operating more sustainably is not only beneficial to the environment, but it’s also in the best interest of our customers. As we build out our sustainability strategy, the most important component in accomplishing the goals we set in that space is our people. We have improved our team members’ understanding of the important role the recycling industry plays in resource management, created educational opportunities to better inform our workforce about how to reduce their own waste outputs by recycling and composting properly, and established sustainable behavior as a tenet of the company’s culture. We have found that our people are motivated to work towards accomplishing our sustainability goals because they have a strong sense that it is the right thing to do. In leveraging our people to accomplish sustainability goals, we have found that our workforce is now better able to have more nuanced conversations with our customers about how they can become more sustainable in their own operations.

The Erb research team sought to delve deeper into the reasons why rewards and incentives are not widely used, and why, when used, they are not perceived as successful in accomplishing sustainability-related goals within organizations.

The resulting survey identified some of the root causes of why rewards have been perceived as ineffective and, through interviews, this report outlines best practices for organizations seeking to improve their sustainability performance.

11 Sivadasan, J. (2019, November 19). Personal Interview.

12 Kerr, S. (1995) “On the folly of rewarding A, while hoping for B,” Academy of Management Executive, 9(1): 7-14.

13 Barron, D., Georgiadis, G. & Swinkels, J. (2016). “Finding the Right Performance Incentives to Motivate Employees.” Kellogg Insight, https://insight.kellogg.northwestern.edu/article/finding-the-right-performance-incentives-to-motivate-employees.

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Methodology and survey respondent demographics Building on CISL’s research, the Erb team chose to explore the more focused question of why rewards and incentives are not considered effective levers for accomplishing sustainability goals. Erb’s research uses CISL’s definition of reward as: “a motivational element of people management and includes both financial (salary, benefits, bonuses) and non-financial incentives (recognition, career and training opportunity).”14 Between May 13 and June 30 of 2019, the Erb survey was sent to the 195 respondents to the original CISL survey who agreed to a follow-up survey. The team received responses from 117 respondents, 96 of whom completed the questionnaire in its entirety. Partial responses were counted if enough information was provided

to be usable, and if the IP address was unique, to avoid double-counting responses. The survey responses came from individuals representing a wide variety of industries, including utilities and energy, finance, professional services, industrial and nongovernmental organizations (see Figure 4). Most survey respondents were either executive level or higher (46%) or managers (40%) within their organizations. Adding to the diversity of the survey results, the Erb research team received responses from organizations both large and small, which is important in contextualizing the degree to which most organizations face difficulties when dealing with developing and executing sustainability-related initiatives (see Figure 5).

FIGURE 4: BREAKDOWN OF INDUSTRIES FROM RESPONSE TO THE ERB SURVEY

14 Felden, B., Fraser, T., Gifford, B., Gutowski, L., Janssens de Vroom, H., Timms, J., Yamada, E. (2018-19). How Effective are the Levers of Organisational Design in Embedding Sustainability Practices in Business?. University of Cambridge Institute for Sustainability Leadership.

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FIGURE 5: BREAKDOWN OF ORGANIZATIONAL SIZE FROM RESPONSES TO THE ERB SURVEY

Total # of Firm Employees (percent of all respondants)

1-99 22%

>10,000 41%

100-499 12%

500-999 6%

1,000-9,999 19%

Sixty-two survey respondents stated a willingness to participate in a follow-up interview. The purpose of conducting interviews was to add qualitative depth, “color” and narrative support to the quantitative survey results. To garner a holistic picture of sustainable business practices, the Erb research team categorized prospective interviewees into three profiles (Table 1) based on how they viewed their organization’s progress toward setting and achieving sustainability goals. From the organizations

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categorized into these profiles, interview participants were selected with the aim of collecting perspectives from employees at organizations that ranged in size, worked in diverse industries, and were located in different parts of the world. The team also wanted interviewees to represent both private and public sectors, nonprofits and government agencies.

Twenty-two survey respondents were asked to participate, leading to eight interviews that are included in this report.

TABLE 1: PROFILES OF INTERVIEW PARTICIPANTS FROM THE ERB SURVEY

STAGE

INTERVIEWEE COMPANY Bodywise (UK) Ltd- Natracare

1

Advanced

Organizations with clearly defined sustainability goals & rewards in place to attain those goals

PADNOS Amcor Ford

2

3

Too Early

Strategic Misalignment

Organizations that are beginning to understand the importance of creating sustainability-related goals & rewards, but haven’t incorporated them into organization strategy

Organizations that face a strategic misalignment between organization goals and sustainability objectives

Anonymous Automotive Company Anonymous City Government Guyana Sugar Corporation Inc. (GuySuCo) Public Organization Focused on Environmental Protection Solar Financing Company

Most organizations have sustainability goals.

The Erb research team’s first key finding was that the vast majority (80%) of the organizations surveyed have sustainability-related goals in place (see Figure 6). This finding is consistent with other surveys of major corporations, showing that between 78%15 and 95%16 of organizations have adopted

sustainability goals. From here, the research team wanted to investigate how rewards are being used to achieve these goals. From the survey results, the team found that organizations implemented rewards in various ways, ranging from financial compensation to recognition (see Interview 2).

15 Lukomnik, J. (2019) “State of integrated and sustainability reporting 2018.” The Harvard Law School Forum on Corporate Governance and Financial Regulation, 3 Dec. https://corpgov.law.harvard.edu/2018/12/03/state-of-integrated-and-sustainability-reporting-2018.

16 Winston, A. (2017) “The rise of corporate sustainability goals: Some hard data.” Sustainable Brands, 1 Dec. https://sustainablebrands.com/read/marketing-and-comms/the-rise-of-corporate-sustainability-goals-some-hard-data.

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INTERVIEW 2: Susie Hewson, Founder and CEO, Natracare

While sustainability goals are entrenched in our culture and embedded in our policy and operations, Natracare doesn’t, and has never issued financial rewards for accomplishing those sustainability goals. The only “reward” we implement is sharing accomplishments—feedback on achievements and interactions is shared within the business, meeting the need workers have for recognition of their good work. We are a company that seeks to maintain the highest possible ethical and moral standards throughout its supply chain and operations. Successfully attaining those standards is a reward in and of itself.

FIGURE 6: PERCENTAGE OF RESPONSES TO THE QUESTION: “DOES YOUR ORGANIZATION HAVE GOALS TIED TO SUSTAINABILITY?”

No 16% Yes 80%

Of the 20% of respondents whose organizations lacked sustainability goals, most responded that sustainability is not a priority for either their organization or its leadership. One respondent stated that their organization “does not have the finances or time,” while another stated that “sustainability is not yet ingrained into the company’s DNA. There is a group of us who work to change this, but it has not yet been adopted or sponsored at an executive level.” An

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I'm not sure 4%

interview conducted with Hector Isadore, Head of Information Systems at the Guyana Sugar Corporation, revealed that, while the organization is new to incorporating sustainability into its business strategy, individuals are committed to increasing executive buy-in for sustainability-related goals, with the aim of eventually tying sustainability to performance management and incentive structures (see Interview 3).

INTERVIEW 3: Hector Isadore, Head of Information Systems, Guyana Sugar Corporation (GuySuCo)

The Guyana Sugar Company is still a relative newcomer to the world of sustainable business. But, because the company is in the throes of redoing its corporate strategy and building a new system of performance management, it is an opportune time for GuySuCo to integrate sustainabilityrelated objectives into the company’s operations. Even though sustainability isn’t quite a part of the business’s vocabulary yet, they perform a variety of sustainability initiatives that aren’t labeled as such. Key proponents within the organization have recognized the opportunity to present a business case for the integration of sustainability-related goals into the company’s strategy. Once they have attained executive-level buy-in of the new strategy, these sustainability goals can then be cascaded throughout the organization. This integrative strategic approach complements the company’s move to revamp its performance management system to ensure they are measuring the right outcomes, which are aligned to the company’s overall business strategy. In doing so, all employees at GuySuCo will become motivated to attain the company’s new sustainability targets.

Organizations don’t tie sustainability goals to rewards.

While most of the 96 organizations surveyed have sustainability-related goals in place, only 28% use individual rewards to incentivize efforts to attain these goals; hence, only these organizations could comment on the successful accomplishment of their sustainability goals via incentive systems (see Table 1). The remaining 69 organizations (72%) stated a variety of reasons for not using rewards to achieve their sustainability goals. The most common reason was a misalignment between the organization’s business strategy and its sustainability strategy. Other organizations indicated a desire for rewards to be tied to sustainability, but these initiatives had yet to be implemented. The last group stated that rewards were unnecessary for their organization due to its size, industry or corporate culture (see Comment Box 1).

This last group, the Erb research team believes, presents the most concerning response to achieving sustainability-related goals. From the interview with an anonymous director of

business operations at a solar financing firm, the use of individual, role-specific rewards to achieve sustainability goals is seen as superfluous, given that the organization’s main measures for success (increasing access to solar financing) will inevitably promote the uptake of renewable energy. This example is emblematic of a fundamental flaw that plagues many organizations in professional services: When the company’s business model is founded on principles to combat climate change, the organization perceives itself as exempt from additional responsibility to improve its sustainability performance. However, the Erb research team believes that every organization, regardless of business model, has a responsibility to continuously improve its operations in an environmentally conscious manner. Even companies with inherently sustainable missions have the capacity to improve their sustainability performance through the actions of individual employees or management (see Interview 4).

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INTERVIEW 4: Anonymous Director of Business Operations, Solar Financing Company

As a company with a specifically sustainable mission—to improve access to financing for home solar projects—the solar financing company’s sustainability goals are enmeshed in our business strategy and objectives. If the business does well, we are increasing our sustainability outcomes.

That being said, improving sustainability performance within the company’s internal operations is not a high priority, and we do not have rewards tied to internal sustainability objectives. Without buy-in from executive leadership and pressure from investors, internal sustainability is not likely to rise in importance, due to the cost burden it places on our small, lean operation.

COMMENT BOX 1: BARRIERS TO USING REWARDS

Why organizations say they don’t tie rewards to sustainability goals “As a small company, our people do not need incentives to embrace sustainability goals.”

“Rewards in our opinion [are] not justified for achieving sustainability goals.”

“Sustainability is woven into everything we do. I would not keep it separate and offer separate rewards, as it would just create unnecessary work.”

“Implementing rewards is a difficult task.”

“Reward system could work if proper scorecards are used for sustainability measurement and the scorecard is really meaningfully designed. Very difficult task for many of the organisations I know about. I am highly interested in creating good ESG scorecards for different companies and the audit of such systems.”

“It has been our long-term intention to build sustainability into the reward/compensation package for all employees. Doing so in practice is a large and complex task.”

Organizations that are dissatisfied with their progress toward their sustainability goals stated “strategic misalignment with management” as the primary reason for not using rewards to achieve sustainability goals (68% of responses) (see Figure 7).

For organizations that reported they are satisfied with

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their progress toward sustainability goals, rewards were reported as “not needed” (40%) (see Comment Box 2). Also, the survey results and interviews revealed that management buy-in is a critical requirement for feeling a sense of satisfaction about an organization’s progress toward its sustainability goals.

Not Needed 23%

Organizational Misalignment 55%

Too Early 22%

FIGURE 7: BREAKDOWN OF CODED ANSWERS TO THE QUESTION: “WHY HAS YOUR ORGANIZATION NOT IMPLEMENTED REWARDS FOR MEETING SUSTAINABILITY GOALS?’

INTERVIEW 5: Anonymous Automotive Company

We are focusing our efforts to reduce carbon dioxide emissions from our vehicles. In the U.S., personal cars are responsible for 20% of emissions. And, while electric vehicles are an important step towards reducing those emissions, hydrocarbon-fuelled vehicles are oftentimes less resourceintensive to manufacture and thus pose fewer environmental issues in the manufacturing and disposal periods of their life cycles. Therefore, our current position is that we need diesel, petrol, and electric vehicles in varying ratios for the foreseeable future in order to get to a point that there is an acceptable environmental impact of transporting passengers. At our company, there is a general trend towards greater sustainability for the whole life of a vehicle, not just the creation.

In order for us to meet these goals, we are focusing our efforts in two areas: legislation and consumer trends. We are working with regulatory bodies to implement sensible motoring taxes and laws, and to send out the right messages about internal combustion engines. Diesel has fallen out of fashion and far more petrol engines are being sold. This shift has caused higher average carbon dioxide output from new cars for the first time ever between 2016 and 2017 , and again in 2018 . We see our ability to create the greatest positive environmental impact by meeting with governments and politicians to influence sensible policy and messages. We have seen the negative impacts of extreme austerity and cutting major programs, and hope to change these trends.

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COMMENT BOX 2: ORGANIZATIONAL MATURITY, MISALIGNMENT AND USE OF REWARDS

Organizations facing a misalignment between sustainability goals and management objectives “Rewards are focused on achieving business targets. Our business strategy and sustainability strategies are closely linked. We avoid implementing rewards that could be perceived [as] not being aligned with overall business goals.”

“The management perspective of sustainability did not change over the years—they think achieving sustainability goals is not cost-effective.”

Organizations that are still early in the process of creating a sustainability strategy “Matrixed organization where our top-level KPIs have no one clear owner, and we’re so massive that it would require deep education, root cause analysis and more sustainability literacy across the org. …”

“As a small company, our people do not need incentives to embrace sustainability goals.”

“Lack of data available to build reliable KPI that impacts $ rewards”

Rewards are used to accomplish sustainability goals and demonstrate corporate values. for sustainability in the organization (see Figure 8). Some of the organizations surveyed believed that tying sustainability goals to rewards will both encourage accountability and demonstrate company values to internal and external stakeholders (see Comment Box 3).

Of the 27 organizations in the group surveyed that have sustainability-related rewards in place, the three main reasons for creating those rewards were because: (1) they align with organization values and expectations, (2) they are used as a catalyst for change and (3) they enable accountability

FIGURE 8: REPRESENTATION OF CODED RESPONSES TO THE QUESTION: “WHY HAS YOUR ORGANIZATION IMPLEMENTED REWARDS FOR MEETING SUSTAINABILITY GOALS?”

Why has your organization implemented rewards for meeting sustainability goals?

14

Values & Expectations

11

Catalyst for Change

10

Accountability

2

Best Practice

1

Regulatory Pressure 0

1

2

3

4

5

6

7

8

9

10

11

12

Count of Participant Respondents (note: participants could select multiple attributes)

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13

14

COMMENT BOX 3: MOTIVATIONS FOR USING REWARDS

Companies use rewards tied to sustainability for numerous reasons.

“Rewards align with our priority of recognizing positive impacts within our company” “Tangible: putting money where the mouth is” “To demonstrate to external stakeholders that we are serious about sustainability” “As sustainability forms part of our company strategy, sustainability KPIs are built into our company balanced scorecard, along with other key performance indicators. This influences the performancerelated compensation of all employees; annual performance scores merge company overall performance with individual performance. This is our standard approach to measuring and rewarding implementation of company strategy.”

“When it hits the pockets, people will ensure to deliver.”

The survey results indicate that consumer goods and financial companies, when compared to other industries, were most likely to use rewards to achieve their sustainability goals (see Figure 9).

FIGURE 9: REPRESENTATION OF SECTORS THAT HAVE BOTH SUSTAINABILITY GOALS AND REWARDS TIED TO SUSTAINABILITY

Representation of sectors that have both sustainability goals and rewards tied to sustainability Consumer Goods

18%

Financial

18%

Energy

15%

Industrial

9%

Transportation

5%

Materials

5%

Agriculture

5%

IT & Telecommunications

5%

Conglomerate

5%

Utilities

5%

Professional Services

5%

Other

5% 0%

5%

10%

15%

20%

% of Total Number of Records

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Organizations have a variety of rewards from which to choose.

To further explore the variety of rewards survey respondents employed, nine types of incentives were investigated: stock options, salary increases, recognition, promotions, compensatory benefits (additional days off, subsidized healthcare), noncompensatory benefits (casual Fridays, office perks), gifts, career and training opportunities, and bonuses. Survey results found that bonuses (64%) and recognition (60%) are most often used to achieve sustainability-related goals, whereas gifts (4%) are the least often used (see Figure 10). The survey also found recognition to be one of the most

effective reward types, while all other reward types received similar scores (see Figure 11). David Clark, vice president of sustainability at Amcor, speaks about the successful use of recognition as a reward within his company (see Interview 6). Several organizations mentioned using more creative rewards as part of their incentive plans, which can be found in Comment Box 4. This finding reiterates that rewards need not be financial in nature, and that companies may benefit from employing a combination of financial and non-financial rewards.

(See Comment Box 4.)

INTERVIEW 6: David Clark, Vice President, Sustainability, Amcor

Over the past 2 years, sustainability has become a chief priority for Amcor. Amcor’s CEO, Ron Delia, has been leading the charge on emphasizing sustainability as one of Amcor’s core values. In the 4th quarter last year, we revised our sustainability strategy to increase focus on six key areas: operations, supply chain, product development, procurement, collecting & recycling, and advocacy & communications with governments. The goal of this revision was to create simple but actionable goals that everyone can understand and align with. Additionally, we made an effort to always tie the goal to a clear business objective which allowed us to create focus and measure our progress.

These cascading goals are generally not tied to financial incentives, but recognition. We have found recognition to be a powerful tool in incentivizing sustainable initiatives. Some examples of recognition we have used are profiling, where we highlight high performers or plants that have been able to accomplish substantial water, energy or waste reductions. On a local level, parties, where managers have the discretion to celebrate team accomplishments with a catered lunch or party. At the corporate level, certificates, where we display zero waste certificates in the lobby of our buildings.

COMMENT BOX 4: INTERESTING REWARDS

Organizations listed several interesting types of rewards.

“Widespread recognition at internal town hall meetings has probably been the most notable.”

“Paid trip to origin countries to help on a corporate sustainability initiative” “Organic fruit boxes and garden time”

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FIGURE 10: PERCENT OF RESPONSES THAT USE OF EACH TYPE OF REWARD

Percent of responses that use of each type of reward 65%

Bonus

61%

Recognition

43%

Career & Training Opportunities

35%

Salary Increases

30%

Non-Compensatory Benefits

22%

Stock Options

17%

Compensatory Benefits

13%

Promotions

4%

Gifts

0%

10%

20%

30%

40%

50%

60%

70%

% of Responses per Reward Type FIGURE 11: REPRESENTATION OF EFFECTIVENESS OF REWARD TYPES. RESPONDENTS WERE ASKED TO RANK EFFECTIVENESS OF THE REWARD FROM 1 TO 5, WITH 1 INDICATING HIGH EFFECTIVENESS AND 5 INDICATING LOW EFFECTIVENESS.

Effectiveness of reward types (average)

1.778

Recognition

2.5

Stock Options

2.75

Compensatory Benefits

2.8

Bonuses

2.857

Career and training

3

Promotions

3.167

Non-Compensatory

5

Gifts 0

1

2

3

4

5

Average Value of Effectiveness (1-5 Ranking)

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Rewards are applied to various proportions of employees.

For 22% of survey respondents, sustainability-related rewards were granted to only a small percentage of employees (0-10% of employees), most of whom were at senior management levels or higher (see Figure 12). Thirty-six percent of respondents stated that sustainability rewards are instituted across most employees at the organization. This disparity in the proportion of employees at an organization who are rewarded for accomplishing sustainability objectives may be hampering progress by contributing to the lack of ownership for sustainability outcomes.

C.B. Bhattacharya states in his research that most

sustainability efforts fail to embed sustainability into their organizations because most employees lack ownership of implementing sustainability goals.17 An individual from a public organization focused on environmental protection, states their organization’s recognition of the importance of redesigning its sustainability strategy to encompass goals for 100% of its employees, which was accomplished through a stakeholder-driven process (see Interview 7). The survey also revealed key considerations for organizations in ensuring successful rewards implementation (see Comment Box 5).

FIGURE 12: GRAPHICAL REPRESENTATION OF PERCENT OF TOTAL EMPLOYEES WITH REWARDS TIED TO SUSTAINABILITY GOALS

8 7

7

6 5

5

4 3 2

2

1

2 1

1

1

1

1

21-30

31-40

41-50

51-60

61-70

1

0 0-10

11-20

71-80

Percent of Employees w/ Rewards Tied to Sustainability Goals

17 Bhattacharya, C.B. (2018) “How to make sustainability every employee’s responsibility.” Harvard Business Review, 23 Feb. https://hbr.org/2018/02/how-to-make-sustainability-every-employees-responsibility.

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81-90

91-100

INTERVIEW 7: Anonymous, Public Organization Focused on Environmental Protection

[We are a] company with 10,000 employees, essentially all of whom would consider themselves environmentalists. In conjunction with the explicitly sustainable objective of the agency, the organization is somewhat uniquely positioned to be a leader in sustainable performance. They are in the process of updating their sustainability strategy to more closely adhere to the UN Sustainable Development Goals, and are incorporating inspiration from industry leaders like Unilever, Marks & Spencer, and Patagonia. However, well-positioned as the organization is to create a robust sustainability strategy, the organization still needs to ensure both executive and organization-wide buy-in, ensure its goals and objectives are ambitious but feasible, and find adequate reward mechanisms under budgetary constraints.

To create their sustainability strategy, they met with a cross-section of the entire organization, sitting with individuals and teams to discuss their priorities and where they can make the most impact. After painstakingly workshopping the strategy, the organization can now ensure that every single employee will feel that they have skin in the game when it came to accomplishing the organization’s new, and more ambitious sustainability goals.

COMMENT BOX 5: REWARD CONSIDERATIONS

Organizations mentioned that correct use of rewards is critical to success.

“The rewards need to be targeted to different groups within the organisation and must incentivise the right behaviours.”

“The weighting of the reward metric in relation to other reward metrics is critical.”

“Incentives and rewards can be strong levers for change, especially if linked to financial rewards and KPAs.” “They should be simple, meaningful and consistently reiterated to all associates.”

This concept has been recognized in other facets of business operations as rewards were tied to strategic objectives in the mid-1990s by Continental Airlines executives who were tasked with turning around an ailing company. Many employees, particularly at the lower levels of the organizational hierarchy, were skeptical of the C-suite’s push for change, because the strategic activities required for the organization’s revitalization often were viewed as unrelated to the scope of a sub-team’s functional role. In turn, this increased the difficulty of achieving necessary buy-in across the organization, which is very similar to how stakeholders often

view corporate sustainability initiatives.

Ultimately, to engender a shift in employees’ mindset by demonstrating the importance of working collectively to improve Continental Airlines’ ranking among domestic air carriers, executives instituted a $65 financial reward for all hourly employees.18 Through these actions, the organization demonstrated how sub-teams are critical to achieving the organization’s higherlevel strategy. Moreover, the use of individual rewards was essential to incentivize seemingly disparate sub-teams to remain committed to working toward the common objective.

18 Frank, D. H. (2009). Continental Airlines: The Go Forward Plan. INSEAD Publishing, 5565(4), 1–5.

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This study’s survey responses and interviews reveal that most organizations don’t implement rewards to complement sustainability-related goals.

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Conclusion The results of the Erb research team’s survey revealed some interesting insights about why rewards are not widely used to achieve sustainability-related goals, and how organizations could better leverage rewards to accomplish their sustainability strategies.

This study’s survey responses and interviews reveal that most organizations don’t implement rewards to complement sustainability-related goals, because most organizations view rewards as the least effective lever

of organizational design that can be used to improve sustainability performance. However, organizations that successfully implement rewards to achieve their sustainability objectives do so by attaining management-level buy-in, creating goals informed by their sustainability strategy, breaking down those goals into achievable employee level objectives, and then using rewards to encourage the achievement of those objectives. This model is outlined below.

FIGURE 13: EFFECTIVE REWARDS MODEL

L EA DERS H I P

1

TOP-DOWN LEADERSHIP: For organizations to successfully achieve their sustainability goal, it is necessary for upper management to be brought into the sustainability strategy

ST RAT E GY

2

TIE SUSTAINABILITY STRATEGY TO GOALS: The sustainability strategy needs to be separated into individual achievable goals

3

CREATE KPIs FOR EACH OF THE GOALS: Break goals into KPIs that can be tied to individual teams or employees

G OA L 1

G OA L 2

G OA L 3

Achievement

KPI

KPI

KPI

Reward

KPI

KPI

KPI

Achievement

KPI

KPI

KPI

Reward

Achievement Reward

4

TEAM 1

TEAM 3

USE REWARDS TO INCENTIVIZE ACHIEVEMENTS OF KPIs: Creat a reward structure to incentivize team or individual to meet the KPIs assigned to them

TEAM 2

USING REWARDS TO ACHIEVE AN ORGANIZATION’S SUSTAINABILITY OBJECTIVES

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1

TOP-LEVEL COMMITMENT IS CRITICAL. A robust, integrated sustainability strategy must receive buy-in and engagement from senior management for it to be successfully instituted across all levels of the organization (see Comment Box 6).

COMMENT BOX 6: MANAGEMENT BUY-IN IS CRITICAL

“Vision, inspiration and enthusiasm are needed both from C suite [and] from people with their boots on the ground” “More than one lever is required! Embedding sustainability into everyday processes makes it feel ‘normal’ and therefore helped to change culture. Strategic level buy-in was critical. Both levers work in tandem.”

“I am convinced that the top management engagement is crucial, and for including all the organization, the best way is to put KPIs and bonus for high-level achievements.”

“If an organisation defines the right indicator and gets the necessary buy-in, it can really improve the organisation’s progress on the SDGs.”

2

TIE SUSTAINABILITY STRATEGY TO GOALS. Sustainability goals must be fully integrated into the organization’s overarching corporate strategy, goals and values. Without full integration, sustainability goals may be perceived as contrary to business objectives, and employees may find it difficult to see their importance and relevance to organization-wide goals (see Comment Box 7).

COMMENT BOX 7: ALIGN CORPORATE STRATEGY TO SUSTAINABILITY GOALS

“The development of more consistent, standardised goals is key to enabling external stakeholders to compare and contrast companies. [T]his is a prerequisite for incentivising sustainability goals.”

“Aligning company’s ambition with business objectives is fundamental to give employees the license to drive sustainability.”

“Sustainability should be integrated in the strategy, business model and institutionalized into the various levels of the organisation, Another very important point is that capacity building and creating greater awareness should be targeted at both internal and external stakeholders, including senior managers/leaders.”

“Creating purpose, ensuring long-term viability for the business, and aligning sustainability goals to the overall business strategy can be more effective than short-term financial goals to achieve sustainability targets.”

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3

CREATE EMPLOYEE-LEVEL OBJECTIVES FOR EACH OF THE GOALS. Creating team and employee objectives that tie back to corporate sustainability goals produces accountability for each goal and a clear path toward accomplishing these goals at the individual contributor level. These objectives should be tied to employees throughout the organization, to further embed sustainability in the organization’s core strategy (see Comment Box 8).

COMMENT BOX 8: SUSTAINABILITY GOALS SHOULD TIE TO EMPLOYEE OBJECTIVES

“The rewards need to be targeted to different groups within the organisation and must incentivise the right behaviours.”

“I think a reward system could work if proper scorecards are used for sustainability measurement and the scorecard is really meaningfully designed.” “.... [I]ncentives are part of a larger structure called ‘corporate government,’ which is the most important factor to provide support and sustain any sustainable goal success, so if it is not ‘mature enough,’ any of the said goals will just be ‘‘cosmetic.’

“If an organisation defines the right indicator and gets the necessary buy-in, it can really improve the organisation’s progress on the SDGs.”

4

USE REWARDS TO INCENTIVIZE ACHIEVEMENT OF EMPLOYEE OBJECTIVES. Once employee-level objectives for sustainability goals are in place, organizations will be able to measure progress toward these objectives. Individuals or teams of employees can then be rewarded for accomplishing sustainability-related goals. As a wealth of academic research has indicated, rewards are effective tools for accomplishing organizational goals across many facets of business operations; applying rewards to sustainability goals should be no less successful in incentivizing the accomplishment of such goals.19 Rewards, once implemented, can expand beyond traditional financial incentives to include a host of creative options, including team lunches, recognition, time off and planned outings. Another key consideration is that, if organizations link sustainability objectives to rewards systems, those rewards must fit with the culture of the organization and be dynamic enough to change as the organization’s goals evolve20 (see Comment Box 9).

COMMENT BOX 9: REWARDS INCENTIVIZE EMPLOYEES TO ACHIEVE GOALS

“experiential rewards over financial, they capture the imagination, support initiatives and awareness and get people excited.... Whale watching, lion views on foot, wildlife rehabilitation trips, nuclear historical sites, arctic destruction, famous wildlife reserves, etc., all create awareness and environmental concern.”

“It has been our long-term intention to build sustainability into the reward/compensation package for all employees. Doing so in practice is a large and complex task.”

19 Peterson, S., and Luthans, F. (2006). “The impact of financial and nonfinancial incentives on business-unit outcomes over time.”

Journal of Applied Psychology, 91(1): 156–165.

20 Sivadasan, J. (2019, November 19). Personal Interview.

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Interview: John Viera from Ford Motor Company The four-step model proposed above provides guidance on how to leverage rewards to improve performance toward accomplishing sustainability-related goals. However, systematically integrating a sustainability strategy, both horizontally and vertically, throughout an organization can often be so complex that it hinders action. Thus, to gain insight into navigating the potentially unprecedented complexity of making changes to an organization’s performance management system, the Erb researchers interviewed John Viera, former global director of sustainability at Ford Motor Company. The interview helped identify how the continuity of collaboration and communications were key drivers of success as Ford developed and deployed a new incentive system to move the company toward its sustainability goals.

The interview with Viera demonstrates that rewards and incentives can be a valuable lever in achieving sustainability goals, while highlighting considerations to address the complexities associated with their implementation in organizations of any size.

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JOHN VIERA, Former Global Director of Sustainability & Vehicle Environmental Matters, Ford Motor Company

INTERVIEW 8A: Management buy-in is critical.

At Ford Motor Company, commitment to sustainability starts with the CEO’s strong insistence on positive corporate citizenship and cascades down through every level of organizational management. When in the process of crafting its sustainability strategy, Ford sought buy-in and feedback from stakeholders throughout the company and defined sustainability goals that could be aligned to and bolstered by business objectives. Individual and team compensation was tied to the accomplishment of these goals, and a top-down educational effort was instituted to ensure that the entire organization understood the tie-in of sustainability to Ford’s corporate strategy.

INTERVIEW 8B: Sustainability goals must align with corporate strategy.

In the beginning, Ford focused mainly on the environmental impact of its plants, its cars’ fuel economy, and its emissions. In 2015, when the UN Sustainable Development Goals were announced, we shifted our focus. We saw the 17 SDGs as a way to drive sustainability goals into every part of the organization. First, we took a look at the goals and figured out which ones we believed Ford could impact. We then mapped those goals to all the functions within the company.

From there, we tied the goals to specific activities and objectives. Once we had those objectives, it was important to us that employees were incentivized to not just see sustainability as a side project, but be motivated to work towards the SDGs in tandem with their original work streams. To do this, we added the new SDG objectives to our employees’ annual rewards and compensation.

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INTERVIEW 8C: Sustainability goals should tie to employee objectives.

Institutionalization of rewards tied to sustainability will also lead to the attainment of goals. In one facility, water usage was a concern, so engineers were given the task to address water usage.

Engineers attempted to financially justify the project as the water was purchased from a local municipality. Instead, the municipality raised the price per gallon to compensate for loss of volume.

In order to motivate engineers to reduce water usage, the objective was built into their yearly goals and the goals were tied to compensation. The facility substantially decreased water usage because engineers prioritized the project. Completion of this project may not have been prioritized had we not tied this sustainability goal to an incentivized objective.

INTERVIEW 8D: Rewards incentivize employees to achieve goals.

One interesting way we did this was through our purchasing function. This group of employees visits suppliers regularly to assess the quality of their products. To incentivize good quality, the purchasing function’s compensation was based on the quality of the suppliers they purchased from. After our work with the SDGs, we added criteria for human working conditions. Ford saw the relationship between the purchaser and the supplier as an opportunity to improve supplier working conditions. We implemented a training program and added text to the purchaser’s ID badge outlining the six elements at each supplier that needed to be reviewed. The goal of the program was not to throw out the supplier but to bring them up to a higher standard. At the end of the year, we would then look back on the data collected and see how our suppliers ranked and 20% of our purchaser’s compensation would be reflective of this ranking.

Integrating corporate-wide sustainability goals is challenging work; through the survey results and eight interviews, the Erb research team found that rewards can be used as a tool to motivate not only executive-level employees but also front-line employees. Such examples show how strategically employed rewards can unify an organization around a common goal and accelerate progress toward a strategic initiative.

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Future Research This research, conducted by students from CISL and Erb, is valuable to organizations working to become more sustainable. While this research uncovered higher-level methods of employing rewards to drive sustainability within an organization, further research is needed to determine industry- and company-level best practices.

As we enter into a new decade, sustainability must become a core tenet of how organizations are run. To accomplish this, organizations must integrate sustainability into the strategy, structure and organizational management of their operations. The authors of this study hope to enable corporations to integrate sustainability strategies into all levels of their organization, facilitating large-scale climate mitigation and adaptation efforts.

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Appendix

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UNIVERSITY OF MICHIGAN | Erb Institute | Business for Sustainability

ERB TEAM Chantelle Barretto, MBA/MS 2020 Barretto has a background in the world of tech startups and software, and she is attending the Erb Institute to pivot her career into the energy industry, with a focus on renewable power. Barretto has previously performed research into ocean-generated energy, revenue streams for the Michigan State Parks system, and resource provision for climate leaders.

Kelsey Pace, MBA/MS 2019 Pace comes to the University of Michigan from the chemical industry and will be pursuing a career in strategy consulting upon graduation. Her interest in sustainability comes from experience working in multiple roles, including engineering, sustainability, sales and business development.

Chelsea Blau, MBA/MS 2021 Blau is a degreed meteorologist who had a career in mobile software development before graduate school. She is now attending the Erb Institute to learn more about how business can be a force for positive social and environmental change.

Her studies are focused on corporate climate adaptation strategies, and she is pursuing a career in consulting.

Joshua Tooker, MBA/MS 2021 Tooker is at the University of Michigan pursuing studies in strategy, computational social science and sustainability to work toward eliminating economic insecurity. Before graduate school, Tooker helped multinational Fortune 100 companies develop and deploy innovative strategies that continue to drive cost savings and deliver revenue growth.

CISL TEAM Ben Felden, Senior Environmental Management Specialist, Swiss Re, Global Felden is a senior environmental management specialist at Swiss Re’s Operations division, with responsibility for ISO14001 certification, the COyou2 employee programme, reporting and development of sustainable office initiatives.

Tara-Jane Fraser, Senior Governance & Sustainability Analyst, Baillie Gifford Fraser joined Baillie Gifford’s Governance and Sustainability team in 2014. As a senior analyst, she oversees research and engagement of ESG issues for several BG portfolios and is involved with the strategy and long-term development of the function. She received her undergraduate law degree from the University of Dundee and Leiden University and completed her law master’s and further legal postgraduate degree at the University of Edinburgh. Fraser recently completed a postgraduate in Sustainable Business at the University of Cambridge Institute for Sustainability Leadership.

Simone Gemkow, Principal Passive Safety Engineer, McLaren Automotive Gemkow is the principal engineer for passive safety at McLaren. She is responsible for the occupant safety concepts and crashworthiness of McLaren’s prestigious automotive products. Before this position, she worked for the premium car brand Jaguar Land Rover, developing car body concepts for safety. Following her interest and aptitude in science, she graduated with an engineering BSc degree from Berlin’s technical institute. She then continued her education with an MSc and Ph.D. in the U.K. Laura Gutowski, Global Director of Strategy & Sustainability, Pret A Manger Gutowski is the global director of Strategy & Sustainability for Pret A Manger, responsible for strategy, sustainability and the Pret Foundation, which targets the alleviation of poverty and homelessness. She also sits on the boards of the Pret Foundation, Project Artworks, One Degree and Farmstand.

Before joining Pret, Laura worked in management consulting and investment banking for clients such as Nestle, CocaCola, Pernod Ricard and Associated British Foods. She holds

an MBA, with a concentration in Strategy, from London Business School, and a B.A. in History, with honors, from Yale University.

Harald Janssens de Vroom, Director, Refopar Janssens de Vroom holds an MBA from the Rotterdam School of Management and completed a Postgraduate Certificate in Sustainable Business at the University of Cambridge Institute for Sustainability Leadership. He has extensive experience in asset management and private banking and a keen interest in topics relating to sustainability. He is also involved with an NGO in Paraguay, Refopar, that is focused on reforestation projects and raising environmental awareness.

Jonathan Timms, Director: Sustainable Solutions, MacDermid Enthone Timms holds the position of Director, Sustainable Solutions, for MacDermid Enthone Industrial Solutions, a division of Element Solutions Inc. He has been working in the field of surface finishing for over 30 years, holding a variety of technical and managerial roles with a focus on providing processing solutions to the automotive and electronic manufacturing markets. Timms undertook this newly created role in January 2019 and is now working toward creating both an internal long-term sustainable business culture and creating external partnerships to enable circular manufacturing processes in the surface finishing sector.

Erika Yamada, Manager, Mitsubishi Corporation, Japan Yamada is a manager in the Corporate Sustainability & CSR Department of Mitsubishi Corporation (Japan), which has a diverse business portfolio, consisting of natural resources, renewable energies, agriculture, fish farming, chemicals and automobiles. Her responsibilities include CSR risk management, analyzing and managing the social and environmental risk of business projects and stakeholder engagement. Yamada has also worked on social contribution projects, including improving access to safe water and organizing Malawi’s first international sport competition, in liaison with the Japanese Government’s project “Sport for Tomorrow.”

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CONTACT US erb.umich.edu erbinstitute@umich.edu 734.647.9799 ROSS SCHOOL OF BUSINESS 701 Tappan Street AnnArbor, Michigan 48109-1234 SCHOOL FOR ENVIRONMENT AND SUSTAINABILITY 440 Church Street Ann Arbor, Michigan 48109-1041