Linking bonus to sustainability

18 January 2010 – Linking sustainability performance to the remuneration of business managers is possible, according to the Sustainable Remuneration guide, which the Hay Group and DHV consultancies have produced on commission from the Dutch Association of Investors for Sustainable Development (VBDO) and with the support of the Dutch Ministry of Economic Affairs. The guide shows the different ways that performance in the area of sustainability can be linked to the bonus.

The guide was produced on the basis of discussions with stakeholders and managers and of the experience of DHV, Hay Group, and the VBDO. The result is a step-by-step plan for determining sustainability performance and linking it to bonuses. In the process, the following kinds of questions are addressed: Why is it important to link sustainability performance to remuneration?, How can relevant sustainability indicators be selected?, and What objectives are to be reached? Also, a number practical examples are drawn from AEX- and internationally-listed companies.

According to Rob van Tilburg of DHV, the degree to which sustainability is developed within a company to a great extent determines the kind of indicators that it can used. Advanced companies can make use of performance indicators like CO2 emissions or the number of points scored on a sustainability index. Companies just starting out, for their part, can be stimulated to link a bonus to the production of a sustainability report.