Embedding sustainability into our organization
Our Global Sustainability Team, led by Jeffrey Hogue, our Chief Sustainability Officer (CSO), includes about 30 sustainability professionals dedicated to developing, coordinating and executing our sustainability strategy across the LS&Co. global organization. The Global Sustainability Team works with various functions throughout the company that focus on our strategy execution, measurement and performance disclosure, either as part of or in addition to their core responsibilities. The team works with leaders across the company, including Commercial, Sourcing, Product Development, Finance, Legal and other functions to integrate sustainability approaches, policies and goals throughout our business, while regularly reporting to and seeking input from the Executive Leadership Team and relevant committees of the Board.
Sustainability Team Mission: We endeavor to be a catalyst for positive change.
The LS&Co. Board of Directors oversees the company’s strategy and performance, including overall risks and opportunities. The Board reviews sustainability progress in the context of the company’s strategy through committees that focus on specific areas of risk and sustainability, including the Nominating, Governance and Corporate Citizenship Committee, which has responsibility for review and oversight of corporate citizenship, sustainability and corporate governance matters. The committee reviews with management the impact of the company’s business operations, policies and practices with respect to issues such as health and safety, corporate citizenship, public policy and community involvement. This includes, but is not limited to, sustainability and environmental, social and governance (ESG) matters that could have a significant impact on the company.
The Audit Committee reviews major financial risk exposures and the steps management has taken to monitor and control such exposures. In this context, management engages in discussions with the Audit Committee and the Board concerning risk, both periodically and annually, during a review of the key risks to the company’s plans and strategies and mitigation plans for those risks, which include climate-related risks.
The Compensation and Human Capital Committee of our Board of Directors provides assistance to our Board in its oversight of our compensation, benefits and human resources programs and of senior management performance, composition and compensation. The committee reviews the development, implementation and effectiveness of the company’s policies and strategies relating to human capital management, including policies and strategies regarding culture, recruiting, retention, career development and progression, talent planning and diversity and inclusion.
Executive Leadership Team Sustainability Responsibility
Our President and Chief Executive Officer (CEO), who also serves on our Board, holds the highest non-Board-level responsibility for environmental and social risks and opportunities. The Executive Vice President and Chief Financial Officer leads the efforts to integrate environmental, social and governance (ESG) initiatives into the company’s business models and financial decision making. The Chief Sustainability Officer, with oversight from the Executive Vice President and Chief Operations Officer, is responsible for all aspects of our environmental and social risks and opportunities, and leads the assessment and management of these across the organization and throughout our value chain.
Sustainability Linked to Compensation
Certain employees are eligible for incentive compensation for the effective management of sustainability issues. As a specific example, the Executive Vice President and Chief Operations Officer has an absolute operational greenhouse gas emissions reductions target and a renewable energy procurement target (as a percentage of absolute operational energy use) built into her performance objectives.
In addition, for all executive-level employees, including our Executive Leadership Team, a premium of up to 15% of their target of performance-based restricted stock units (PRSUs) is based on the attainment of diversity, equity and inclusion (DE&I) goals met over the three-year performance period. The DE&I goals include employee representation and engagement goals. We believe PRSUs, which are 50% of the executive long-term incentive mix, drive greater accountability for achieving our strategic plan and create long-term value for shareholders.
For more information about our corporate governance practices, including details on our Board of Directors and committees, shareholder outreach, voting rights and other practices, see our 2022 Notice of Annual Meeting of Shareholders and Proxy Statement.