Carlotta Rossi Luciani
Executive Director,
CAREL Industries

CAREL Industries is one of the world’s leaders in control solutions for air conditioning, refrigeration and heating, as well as systems for humidification and evaporative cooling. Its products are designed to generate energy savings and reduce their environmental impact.

Since its beginnings 50 years ago, the company’s products have been created with sustainability at the forefront of the entire design, manufacturing and marketing processes and to achieve concrete and measurable objectives for the current and future generations.

To support the company’s strategic development, and recognizing that sustainability requires a medium-to long-term perspective, CAREL has put significant effort into designing a new remuneration policy with long-term incentive plans that are integrated with the company’s ESG objectives. Beginning in 2021, CAREL embarked on a multi-year path of concrete actions in its first sustainability strategic plan, with the concept summarized as “Driven by the Future — Sustainability in action”. The plan reflects CAREL's strategic vision on sustainability and is in line with the United Nations Sustainable Development Goals.

With this approach, CAREL intends to fully integrate sustainability into the company’s culture and the Group's vision, strategies and processes. The objectives of the plan will be updated annually based on the results that have been achieved to date and the addition of new ambitions.

This strategic approach also provides a clear link between pay and purpose. With remuneration aligned with CAREL’s economic, social and environmental values and performance, it encourages a longer-term perspective and encourages the active involvement of employees who benefit directly from achieving the company’s strategic objectives.

Carlotta Rossi Luciani remarks that “By realigning pay and purpose, CAREL has the opportunity to transform executive compensation from being a reputational risk factor to becoming a catalyst for change. Our remuneration policy’s objective is to go beyond the usual ‘attract and retain the right people’ objective and to become a catalyst for positive change in the organization and for all of its stakeholders.”

CAREL is aware of the importance of communicating the company’s sustainability commitment to all of its stakeholders and to measure and demonstrate consistency between what it says and what it does.

With ESG targets in place for the executive incentive program, disciplined disclosure practices play a vital role in providing transparent reporting on the progress that is being made. CAREL’s goal is to give investors, customers, employees and a range of other stakeholders an objective and accessible articulation of the coordinated efforts and progress that the company is making on its sustainability journey.

Measurable qualitative and quantitative reporting mechanisms for ESG objectives are not optional — they are fundamental to the company's mission and purpose. Because they are integrated with the business strategy, they must also be as measurable as the company’s financial results. CAREL produces an annual non-financial report, which is an essential
tool for managing and communicating the company’s sustainability commitment. As Carlotta Rossi Luciani emphasizes, “This ensures that we are accountable for our choices, activities, results and use of resources in a given period, and it allows our stakeholders to know and formulate their own opinions about how the company is carrying out its activities and its institutional mission.”

With this approach, CAREL is fully integrating sustainability throughout the company’s culture and into the Group's vision, strategies and operating practices.