29 April, 2022
We’ve written many times about our shared responsibility for addressing the climate crisis. We’ve also called out to CEOs to lead on the issue, given their ability to drive change within their businesses, but also across industry and society.
Last week, Mastercard went further and tied all employee bonuses to performance against ESG metrics: carbon neutrality, financial inclusion and gender pay parity. This piqued our interest for a few reasons.
We believe reaching societal net zero is everyone’s job. Every decision made by companies, from R&D to HR to marketing and product development, needs a carbon lens to ensure financial flows are directed at solutions that will reduce carbon emissions across all areas of society and business. And for a financial services business, embedding a focus on financial inclusion across the business also makes excellent sense. After all, for Mastercard, what’s good for society is also good for business.
However, we are sceptical as to how much influence many employees, at all levels, will be able to have on these issues as individuals and whether therefore rewarding or penalizing them for things outside their control is as motivating as it may at first appear. And in the case of gender pay parity, there is a particular perversity in imposing financial penalties on employees for an already unfair pay policy that can be addressed by the leadership if it so chooses.
What this will do, of course, is prompt employees to engage, think and demand more from their employer. And this in turn will drive change. As ever, the devil is likely to be in the detail. What does success look like for each issue? Who will do the evaluation? How will it be reported and communicated internally and externally? We’ll be watching with interest…
By Jennie Mitchell