Bamboo Bridge Logistics: Linking executive remuneration to sustainability goals

• Main Authors: WANG, Rencheng, YANG, Holly I., Lim, Wee-Kiat
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2024
• Subjects: Board of Directors; compensation and benefits; performance indicators; Human resource management; Climate change; Environmental sustainability; Accounting; Human Resources Management
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/495; https://cmp-shop.smu.edu.sg/products/bamboo-bridge-logistics-linking-executive-remuneration-to-sustainability-goals
• Institution: Singapore Management University

In January 2024, Mei Lin was appointed as Chief Sustainability Officer of Bamboo Bridge Logistics (BB), a mid-sized logistics operator based in Singapore. Her key task over the next three years is to support the newly-formed sustainability committee that would report to the Board of Directors (BOD). Mei faced significant challenges in weaving environmental, social, and governance (ESG) principles into BB’s fabric. She not only had to put in place measures for ESG goals on climate change, but also to link these goals to executive remuneration. She was also aware that the company harboured ambition to become publicly listed on Singapore’s stock exchange, the SGX, likely not long after implementing its sustainability initiatives. How could Mei help BB’s sustainability committee in selecting the appropriate indicators that reflect the company’s commitment addressing climate change challenges, while mitigating the potential negative financial impact? What roles should BB’s BOD play to ensure the effective implementation of ESG metrics in executive remuneration, bearing in mind the balance between short-term financial profitability and long-term environmental sustainability? Students should be able to (1) apply the concepts, frameworks, and principles related to corporate governance, executive remuneration, and business practices (e.g., principal-agent theory); (2) Identify the roles and responsibilities of the BOD under the stakeholder view of corporate governance, particularly on sustainability; (3) Analyse the considerations for choosing ESG metrics, especially climate-related ones, and their implications for designing remuneration for senior executives; (4) Appreciate the importance of disclosing ESG metrics with respective stakeholders; (5) Appreciate the challenges that confront firms, especially SMEs, when instituting the appropriate ESG or climate-related metrics and executive remuneration.