Cash for carbon reductions

By Beth Daley
Globe Staff

Would you reduce greenhouse gases if your pay depended on it?

National Grid thinks so. The London-based company – which delivers electricity to 3.3 million customers in Massachusetts, Rhode Island, New Hampshire and New York - is already known for its progressive climate-friendly ways, from aggressive targets to reduce its emissions 80 percent by 2050 to creating a low-emission vehicle fleet. They even send out a summary of the annual report to investors – urging them to read the full document on line – to save trees.

National Grid Chief Executive Steve Holliday

But the company ramped up its efforts this year by linking up to five percent of executives’ bonuses to carbon targets.

I met with Steve Holliday, the chief executive of NG last week before he was to give a speech at the British Consulate in Cambridge to the British American Business Council.

We talked broadly about National Grid’s strides to address global warming, invest deeply in energy efficiency and its out-front attitude supporting climate policies in the U.S. Yesterday, National Grid urged swift passage of a new Senate version of a climate bill that narrowly passed the House in June. Tom King, president of National Grid in the U.S. said "We are ready to work side-by-side with our political leaders on this critical path, ensuring that customers’ interests are protected as we move towards this goal." Here is the full statement .

The company’s list of environmental accomplishments and goals are impressive - especially the compensation piece.

Here’s how National Grid does it: Company officials recently recalculated what its emissions are to get a more accurate baseline. Then, execs were told their divisions had to meet reduction targets expressed in tons of carbon dioxide and a carbon efficiency target. For Holliday, it’s a target reflecting all lines of the business.

If they meet the greenhouse gas targets -- just like financial goals -- their bonuses are secure. If they do not, it could reduce bonuses by as much as five percent.

Granted, five percent may not be the largest incentive to go green if you are already being paid well. But the weaving of climate change into a companies’ bottom line – and in National Grid’s case its culture - is a critical necessity as the world tries to ratchet down heat-trapping emissions.