Chipotle Announces 2023 ESG Goals Tied To Executive Compensation
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- The company is aiming to increase pounds of local produce purchased, improve diverse employee retention, and increase the number of restaurants with composting programs
- These quantitative goals can increase or decrease executives’ overall bonus payout by up to 15%
- Through its Cultivate Next venture fund, Chipotle is investing in an operating system for the local food supply chain and a cultured oil company
Chipotle Mexican Grill announced its 2023 Environmental, Social and Governance (ESG) goals tied to executive compensation:
- Purchase at least 37.5 million pounds of local produce, up from 36.4 million pounds in 2022.
- Improve the retention of its diverse U.S.-based restaurant support center and field operations employees.
- Institute composting programs in at least 23% more restaurants.
- This goal aligns with Chipotle’s broader objectives of increasing its diversion rate and reducing waste to landfills by 5% by 2025.
The achievement of these goals, which are categorized by Food & Animals, People, and the Environment, can positively or negatively impact Chipotle officers’ 2023 annual incentive bonus by up to 15%.
“Chipotle’s ESG goals are a direct reflection of our commitment to inspire real, sustainable change with a potential impact far beyond this Company,” said Laurie Schalow, Chief Corporate Affairs, Chipotle. “We hold our executive leadership team accountable to make business decisions that Cultivate a Better World, and we want to continue to transparently showcase the steps we’re taking to help meet these objectives.”
See related article: Chipotle Mexican Grill Makes Strategic Investment in Hyphen, A Food Robotics Company
Food & Animals
Chipotle is committed to increasing total pounds of produce purchased from local farmers year over year. In 2023, Chipotle’s goal is to purchase at least 37.5 million pounds of local produce, up from 36.4 million pounds purchased in 2022. The organization met its 2022 goal of purchasing more than 57 million pounds of organic, transitional and/or locally grown ingredients, achieving 58.3 million pounds, with rice and beans excluded from this goal due to external crop factors.
Developing and retaining diverse talent at every level of the organization plays a key role in Chipotle’s Diversity, Equity & Inclusion strategy. In 2023, Chipotle plans to continue these efforts by improving the retention rate for diverse employees in restaurant support center and field operations positions.
Last year, Chipotle aimed to increase diversity within its internal pipeline of candidates for all promotions into salaried restaurant support center positions and field management roles. As a result, 90% of all restaurant management roles were internal promotions including 100% of US Regional Vice President (RVP) roles, 81% of Team Directors, and 74% of Field Leader positions. The company also aimed to increase diversity above its 60% rate within its internal pipeline of candidates for all promotions into these positions, which it achieved at 63.6%.
Sustainability also remains a key strategic priority for Chipotle. As of January 2023, about 1,000 of its restaurants participate in composting programs. Throughout the year, Chipotle intends to increase the number of its restaurants that compost by at least 23%.
The composting program supports Chipotle’s broader goals of increasing its diversion rate and reducing waste to landfills by 5% by 2025. Chipotle exceeded its 2022 goal of reducing its Scope 1 and 2 greenhouse gas (GHG) emissions by at least 5%, achieving a 13% reduction against 2019 emissions.
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