From EDF: Linking employee compensation to environmental metrics

This is the first in a weekly series highlighting 15 green business innovations from Environmental Defense Fund's Innovations Review 2009.

Companies reward the things that matter to them. If they want to drive sales, they provide incentives to sales people. The same now goes for environmental excellence.

Last year, for the first time, Intel included company-wide environmental metrics in the calculations that determine year-end bonuses. This change doesn't affect just the CSR team or the facilities staff or the environmental manager, but every Intel employee making it clear that reducing the company's footprint is everyone's business.

Surprisingly, according to research conducted by Environmental Defense Fund (EDF), Intel is the only major corporation in which all employees' compensation is affected by the company's environmental goals. That is why EDF highlighted this practice as one of the 15 most compelling green business innovations in its Innovations Review 2009.

Although environmental metrics make up a small percentage of the points that determine Intel bonuses only 4 of 125we believe it is an important new model.

Our Review also spotlights Pepsi-Co, which has taken a different approach to tying environmental performance to compensation. At the global beverage company, the responsibility is carried at the top: A portion of all executive officers' variable compensation is related to PepsiCo's "Performance with Purpose" priorities, which include environmental sustainability.

Our questions then for the Just Means Community are this: Should all companies link compensation to environmental metrics, and for which employees or executives? Will doing so drive environmental performance? We would love to hear your reactions.