Trane Ties ESG Metrics to Executive & Employee Compensation - Smart Energy Decisions

Industrial  -  May 5, 2021

Trane Ties ESG Metrics to Executive & Employee Compensation

Trane Technologies announced the revision of its executive and senior leader incentive plans to link directly to Environmental, Social, and Governance (ESG) metrics that relate to the company’s 2030 Sustainability Commitments.

The company’s newly revised incentive plans hold its top executives and 2,300 managers accountable for meeting social and environmental sustainability goals. Salaried employee performance plans now include at least one goal tied to the company’s 2030 sustainability commitments. The company estimates that based on these goals, payment amounts could increase or decrease by up to 20 percent. 

“We are leading with a bold purpose to challenge what’s possible for a sustainable world, and have embedded leading environmental, social and governance practices into our strategy and operations,” said Mike Lamach, Trane Technologies chairman and CEO, in a statement. “Solving major global challenges like climate change and creating a more diverse and inclusive workplace requires courage, innovation, and accountability. Having everyone pull in the same direction toward our sustainability goals reinforces the right behaviors and decision-making to build a sustainable future for our customers, communities and the planet.”

The three ESG factors that will be part of the annual incentive plan for leaders include:

  • The Gigaton Challenge (Scope 3 Emissions)to reduce customer carbon emissions by a billion metric tons. The program consists of an annual greenhouse gas reduction target toward the gigaton goal.
  • Leading by Example (Carbon Neutral Operations) includes a commitment to achieve net-carbon neutral emissions across Trane’s global footprint by 2030. 
  • Opportunity for All (Gender, Racial and Ethnic Diversity) support the company’s 2030 commitments to achieve gender parity in leadership, workforce diversity, and community initiatives that support equitable education and pathways to green and STEM careers.



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