You’ve got most (or even some) of the fundamentals in place when it comes to your company’s sustainability program established. The business has the right policies in place. Goals or objectives related to those policies are set. Near-term targets, key results, KPIs, etc. associated with your goals are locked into annual workplans across functions. Well done. We know how hard getting those foundations in place can be. It can take years. And it will probably never be exactly how you want it to be. That’s okay. It doesn’t have to be perfect. Now it’s time to deliver the kind of action necessary to meet the performance expectations you’ve set across the business.

If you’ve been doing this long enough and well enough to successfully drive the kind of integration we just described (i.e. policies, goals, KPIs, workplans), then you’re already pretty great at the kind of project management that is required to keep all the teams on track. You’re also probably really solid when it comes to effective stakeholder engagement, the kind that surfaces roadblocks, anticipates needs, and communicates impact in ways that resonate.

You’ve also probably realized by now that those two things are enough to drive the kind of sustained action and prioritization that is necessary to deliver performance improvements on complex, cross-functional initiatives. In other words, basically every project, process, or activity involved in the sustainability arena.

One of the other tools you have to help strengthen accountability for hitting those targets and delivering on those scopes of work is by leveraging the existing performance tools that are likely already in place in your business. Make them part of the evaluation criteria for performance-based compensation. In other words, link them to annual bonuses for the people responsible for delivering the results.

As you might suspect, getting sustainability performance metrics integrated into your company’s annual compensation process can be challenging. And the best way to go about doing it will depend on the specifics of your business. We won’t dive into the approaches we’ve seen be successful in other companies in this blog post, but a smartly built sustainability committee can be helpful.

As you assemble your proposal and work to get it implemented by your People Team or HR, here are some of the most important elements to make sure you include:‍

Focus on quantifiable metrics

‍The measures of success used should be based on numbers, not subjective perspective. In some cases, a yes/no metric may be appropriate but the underlying data for determining it should be quantitative and clear.

Strive for broad coverage

‍The nature of sustainability means that the number of executives and directors that are involved in delivering the work and creating the impact. That means many of them should likely have sustainability performance metrics and incentives, particularly leaders in R&D, Operations, Product Development, and Supply Chain. ‍

Make them context specific

‍It may seem obvious, but the metrics being applied should be specific to the nature of the work and the functional role being played in delivering it. They may require a mix of both shorter-term and longer-term metrics, and they should be integrated into OKRs if your company uses that system.

Make them meaningful

‍For a material incentive like money to be effective, it needs to be meaningful. That means they should account for at least 25% of an annual performance bonus, for example.

Keep your metrics updated and relevant. Even if your company doesn’t have a formal or regular business planning process that can help structure development and deployment of these metrics, make the effort to keep them relevant and integrated. Try not to let them fall out for even one cycle because it can be hard to get them embedded again.

You’ve probably seen this dynamic before: doing what’s right for people and the planet by improving the sustainability performance of the business pushes up against perceptions of what’s “best for the business”, investors, etc. Some of that push back may be legitimate in that making the business more sustainably requires changes to expectations of financial performance e.g. margins, costs, etc. The same dynamic will likely play out as you push to link financial incentives to sustainability performance. Our advice is to not shy away from those sources of friction. Dig in to why those metrics may be competing, how they could be better aligned, and work to surface those conflicts openly. Your sustainability steering committee is a great place to tackle this work. Alternatively, convening a task-specific workgroup with key stakeholders can also work.

Ultimately what we’re trying to do by linking financial incentives to sustainability performance metrics is drive behavior change. The science of behavior change tells us that this kind of mechanism, and others as well, are going to be more effective when they are coupled with one or more complimentary mechanisms. The other behavior change levers that you could deploy with this kind of material incentive will depend on the individuals and organizational context. Pairing it with messaging related to ethical obligations, emotional appeals, or using social influences are both ways to help drive action.