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Lego links employee compensation to decarbonization goals

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Dive Brief:

  • The Lego Group will tie part of its salaried employees’ bonuses to its annual carbon footprint beginning this year, the company announced Wednesday. While the performance metric is primarily based on direct emissions — scope 1 and 2 — the company said it aims to “expand” it over time to include scope 3 as well.
  • The Danish toy maker also unveiled a new key performance indicator to measure emissions generated from its direct operations and business travel — a scope 3 category — and compare it to the amount of toy bricks manufactured in the same period. Lego said the comparison allows it to attain a measurable “carbon intensity metric” that can be tracked over time.
  • Lego said it established these performance metrics to motivate employees “to help make a positive impact” as the company aims to reduce emissions across its factories, stores and offices.

Dive Insight:

The Denmark-based retailer behind the popular children’s plastic bricks has a goal to reduce its absolute carbon emissions by 37% by 2032, compared to a 2019 baseline. Lego previously told ESG Dive it was on track to meet that goal. 

Last year, the company also committed to achieve net-zero emissions by 2050 and said it would triple its sustainability investments to $1.4 billion over the course of the next three years. The funding, according to Lego, would allow it to design factories and buildings that operate in a carbon neutral way; increase the production and acquisition of renewable energy at its plants, offices and stores; and take emissions into account when making corporate decisions, from new investments to employee air travel. Additionally, the company said it would work with its suppliers to collectively decrease their environmental impact.

The August announcement built on Lego’s Green Consumption Pledge, introduced in 2021 to align its operations with the Paris Agreement.

The company said in its latest sustainability update that it’s improving its energy efficiency, growing its renewable energy production onsite and procuring renewable energy for its operations. However, Lego said collaboration across all components of its business is key to meet its decarbonization goals.

We know that we can’t meet our targets alone,” Lego wrote on its website.

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