Incentivising Sustainability: LEGO’s Bold Move to Reduce CO2

By Nina Buttle, Partner

At Page Executive we not only specialise in finding and assessing top-tier talent but we also advise organisations on how to design compensation structures that attract and retain talent as well as drive real impact. I recently had a fascinating conversation with Kent Frederiksen, Vice President Rewards at LEGO Group, who revealed a new initiative for the LEGO Group to support the journey of becoming carbon neutral by incorporating CO2 emission reduction targets into the employee bonus structures.

Linking emission reductions or broader ESG metrics with incentive schemes is not new. According to wtw’s 2023 Global Report on ESG Metrics in Executive Incentive Plans, “ESG metrics are now one of the most prevalent metrices in executive incentive plans’, however these tend to be aimed at Executive and Board-level employees. In LEGO Group’s case, it is aimed at all salaried employees. 

The company’s vision and purpose, encapsulated in its "Planet Promise," underpins its commitment to leaving the world a better place. Integrating emission targets into compensation wasn’t a sudden leap, but rather a natural evolution in a long-standing journey. “This step into linking bonuses with emissions reduction aligns with our broader commitment to sustainability,” Kent explained. “It’s a way to incentivise actions that positively impact the planet.”

Inclusivity in Sustainability

What sets LEGO Group apart is its decision to include all salaried employees in this initiative.

"Everyone at LEGO Group has a bonus program," Kent explains. “As a business we believe in shared responsibility and collective achievement, which applies whether you are an office-based employee, or a factory or retail worker."

The initiative reflects LEGO Group’s philosophy of “succeeding together,” where collaboration is rewarded, and sustainability becomes everyone’s responsibility.
 

First steps

Launching such a program required meticulous planning, particularly around data collection and measurement. Once you decide to embark on this journey, deciding on what data is relevant, how to collate it and ultimately measure success is always challenging. Kent tells me that the team spent over a year testing, refining and discussing targets before implementation to ensure both accuracy and fairness.

"Once you tie objectives to bonuses, people take it very seriously. Data integrity is paramount," he explains. "We also had to integrate diverse data streams from production, travel, and company cars into a unified reporting system—a complex but crucial step."

Creating a Culture of Change

This initiative isn’t just about metrics, it is about fostering and driving behavioural change. LEGO Group encourages sustainable practices across all levels of the organisation, from executives role-modeling, eco-friendly choices, like opting for electric vehicles, to employees sharing success stories, such as carpooling to reduce emissions, the message is clear: everyone has a role to play. 

Posters, internal communications, and digital nudges reinforce the sustainability message. Even booking systems prompt employees to consider lower-emission options like train travel over flights.

Positive Reception

Internally and externally, the initiative has been well-received. Employees appreciate the alignment of their work with LEGO Group’s sustainability goals, and prospective talent increasingly seeks out companies with strong ESG commitments – a trend Page Executive highlighted in our Talent Trends 2024 report.

“This is part of our value proposition,” Kent explains. “It attracts purpose-driven talent and assures customers, consumers and stakeholders that we’re serious about our promises.”

A Broader Sustainability Agenda

While linking bonuses to emission reductions is a significant step, it’s just one part of LEGO Group’s broader sustainability journey. The company is also tackling scope 1, 2, and 3 emissions, aiming to make its production processes more sustainable and eventually revolutionise the iconic LEGO Group brick to be fully environmentally friendly.

The Path Forward

LEGO Group’s initiative to tie employee bonuses to CO2 emission reductions sets a powerful benchmark in leadership strategy. It demonstrates how aligning compensation with organisational purpose can foster a culture of accountability, innovation, and collective impact. By making sustainability everyone’s responsibility, LEGO Group has shown that effective leadership is not just about setting goals but also about empowering people to achieve them together.

This approach highlights the importance of embedding purpose into every level of a company’s operations, a lesson that transcends industries. As organisations strive to attract purpose-driven talent and build resilient teams, this model of leadership—where vision translates into actionable and measurable outcomes—offers a roadmap for the future. It fascinates me and excites me! 

If you’re interested in exploring how to integrate leadership strategies like these into your organisation or discussing innovative approaches to compensation design and ESG strategies, I’d love to continue the conversation. Reach out, and let’s connect!