Chipotle Values Environment, Diversity

Chipotle Mexican Grill (NYSE:CMG) said Thursday that executive compensation will now be linked to hitting targets tied to the company’s environmental and diversity goals.

The burrito chain is following in the footsteps of Starbucks (NASDAQ:SBUX) and McDonald’s (NYSE:MCD), both of which recently announced that performance for racial and gender diversity goals will impact executive compensation plans. Individual investors and large asset managers like BlackRock are increasingly picking stocks with strong environmental, social and corporate governance in mind, pushing companies to make changes to become a more attractive investment.

“I think the increased focus on performance around ESG and investor feedback was definitely behind our decision to go public with this,” said Laurie Schalow, who oversees sustainability and ESG reporting for Chipotle in her role as corporate affairs chief and food safety officer.

Starting this year, 10% of Chipotle executives’ annual incentives will be tied to their progress toward achieving company goals.

Those targets include increasing the pounds of organic, local or regeneratively grown or raised food from the previous year. Last year, Chipotle hit 31 million pounds of local produce under this umbrella, and it’s set a goal of 37 million pounds by the end of 2021.

The company plans to publish its carbon footprint, including all indirect emissions along its value chain, by the end of the year, faster than its prior expected publication date of 2025.

Schalow said that the company will announce new sustainability goals stemming from those learnings when the report is released.

CMG shares ducked $53.05, or 3.8%, to $1,355.17.