UPDATE, March 4, 2021: This article has been updated to include a statement from Chipotle.
- Chipotle will tie 10% of its executives' annual incentives to reaching the company's environmental and diversity goals starting this year, according to CNBC.
- The environmental targets include reaching 37 million pounds of organic, locally or regenerative grown or raised food in 2021. This is up from 31 million pounds reached last year. In terms of diversity, the company wants to maintain both racial and gender pay equity and aims to promote more women and people of color above the restaurant level, according to CNBC.
- Chipotle is among the latest public restaurant companies to hold its executives accountable for environmental, social and corporate governance goals. McDonald's and Starbucks also recently tied executive compensation to reaching corporate diversity goals.
While CNBC reports that Chipotle's move to publicize these goals was driven by investor and shareholder pressure, the chain already has several environmental and diversity initiatives in place.
"Transparency and accountability is of critical importance to Chipotle and we are dedicated to driving real change aligned with our brand purpose," Laurie Schalow, chief corporate affairs and food safety officer, said in an email. "The new compensation plan is another way Chipotle will continue to champion responsible leadership and sustainable solutions across food [and] animals, people and the environment."
Chipotle has long supported local farmers, creating its Chipotle Local Grower Support Initiative in 2016 to provide financial support for small- and medium-sized produce farmers. In January 2020, it launched an accelerator program, Chipotle Aluminaries Project 2.0, to support ventures in the U.S. that advance innovations to support farmers. Chipotle also added a Real Foodprint tracker to its app and website in October, allowing diners to measure and share the environmental impact of their orders.
The company has also been focused on providing more resources related to employee diversity. It launched United Network of Influencers Furthering Inclusion and Ethnic Diversity last month, its first employee resource group in a virtual setting. That group's goal is advancing an equal opportunity environment, supporting a minority mentorship program and having virtual roundtable discussions and quarterly training to promote workplace diversity and inclusion.
Chipotle is offering training with various online courses on a range of topics as well, such as conflict resolution and goal setting, to provide ways to help employees from all backgrounds rise up in the corporate ranks, according to CNBC.
Chipotle, Yum, Starbucks and McDonald's are among the QSRs to focus more on increasing sustainability efforts over the last few years. However, the pandemic has shifted how investors evaluate ESG goals alongside financial metrics, pushing these goals more into the limelight, according to CNBC. These investors have also been increasingly scrutinizing how companies responded to the COVID-19 crisis, such as focusing more on long-term goals than prioritizing profits at all costs, according to CNBC.
Chipotle provided restaurant team members nearly $40 million in discretionary bonuses and assistance pay, provided over $13 million in tuition costs, and raised nearly $4 million to support organizations helping underserved communities last year, Chipotle CEO Brian Niccol told investors during a February earnings call.
"Prior to this crisis there was a meaningful and increasing focus on ESG investing and it is likely that this focus will only increase following the coronavirus," Goldman Sachs told CNBC last year. “In addition to the environmental focus, the emphasis on corporate responsibilities towards stakeholders, including employees and suppliers, is likely to grow."