How can HR introduce more environmentally friendly benefits?
As the climate crisis continues, there is mounting pressure on companies to showcase a commitment to sustainability. But how can HR respond through less environmentally damaging benefits?
Prior to the pandemic, there was a huge shift in public attitude towards the environment. Amid widespread media coverage about the damage humanity is causing to the planet, coupled with global protests, many people were left contemplating the sustainability of their lifestyles, and in particular their workplaces.
In the summer of 2020, research conducted by O2 backed this up, revealing that nearly half of UK workers were concerned about the environmental impact of their travel to and from work, a figure that increases to over 50% among Generation Y and Z workers.
A survey conducted by pension provider Cushon also found 84% employees are concerned about climate change and a further 69% said they are specifically worried that their company pension could be investing in businesses that are contributing the issue.
The rise of remote working
So, with a clear demand for more impactful and sustainable workplaces, how can HR respond? One of the most common starting points is the creation of a flexible work from home policy, one that goes beyond pandemic-enforced restrictions.
According to O2’s summer 2020 research, if employees who could work from home did so twice a week, it would lead to a reduction in greenhouse gas emissions by a staggering 14.3 megatonnes of CO2 equivalent.
Many companies have already made this transition, particularly since the COVID-19 pandemic which has flung them into a ‘remote-first’ way of working. Cryptocurrency service provider Coinbase and Dropbox are both examples, allowing employees to work from home indefinitely in a bid to provide greater flexibility, cut costs and reduce the number of people commuting to work.
Capgemini has also accepted a future of more remote working. Annie Hughes, corporate responsibility and sustainability communications consultant at the global consultancy and services group, says that COVID has accelerated the company’s sustainability efforts by default in a new working model that otherwise would have taken decades to be implemented.
“We were able to continue delivering client work globally with 95% of people working from home. We’ve all become experienced at not travelling, while eating locally, staying local and these have all had sustainable impacts,” she says.
Hughes adds the company now plans to transition “at speed” to be a net-zero business, requiring this way of working to continue.
Sustainability rises up the corporate agenda:
A greener commute
Remote working doesn’t suit all businesses though, and in these instances, HR can look towards promoting more eco-friendly commutes instead. Examples include the Cycle2Work scheme, which allows employees to spread the cost of commuter bikes and cycling accessories through their employer over 12 months, and electric vehicle salary sacrifice schemes.
Jon Smith, relationship director at electric vehicle provider Zenith, says his firm has seen a record growth in salary sacrifice car scheme orders over the last 12 months, which has been largely driven by rising demand from companies for battery electric vehicles (BEVs).
“In one scheme that launched this year, 85% of orders have been for BEVs, with the remaining 15% for plug-in hybrid electric vehicles. It will lead to an average saving of 372 tonnes of carbon for each year the vehicles are on the road,” says Smith.
Capgemini currently offers the Cycle2Work scheme to staff, which it says has been particularly successful for the firm. But Hughes admits there is a need to move towards electric vehicles, too. She says: “We need an electric fleet, as this is an important move towards net-zero. As we need to reduce employee commuting impacts, we must introduce more sustainable ways of getting to and from work, too.”
Severn Trent also currently adopts an EV scheme, which it says is its newest and largest green employee offering. Renu Birla, senior rewards and benefits advisor at the firm suggests that by doing this: “We’re offering our employees the chance to reduce their personal carbon footprint, both in and outside of work, helping to make massive, green environmental benefits.
“We’re also providing discounts for eco-friendly purchases, as well as a travel loan scheme for buses and trains to encourage greener travel.”
Matthew Gregson, head of corporate at Howden Employee Benefits & Wellbeing, points out that benefits such as EVs and Cycle2Work have around 5-10% take-up among employees.
“This is a fair target, in terms of take-up, to try to achieve for each benefit, and with employers typically offering 10-12 benefits through a flexible benefits scheme, if each one experiences this level of take-up, you’ve got something for everyone across the flex programme,” he says.
Embedding cultural changes
While physical benefits like these may seem like an obvious choice for many employers, some HR professionals believe a commitment to sustainability needs to happen at a deeper, cultural level.
Alex Arundale, chief people officer at software developer Advanced, argues that too much focus on the benefit, rather than the culture, is kind of a false economy. She says: “Eco-friendly benefits such as electric cars and bikes are one way, but arguably they can be viewed in the same way as a faux fur coat.
“It is incumbent on us as a thoughtful employer to seek cultural change in the way we work, not just giving another vehicle to do the same tired old nine-to-five.”
Another option for companies in which staff can’t work remotely is to offer recycle reward schemes, which are set up to encourage more recycling in exchange for points, tokens and prizes, or team away days that involve community-based activities such as tree planting or litter picking.
Pensions is another key area HR can demonstrate its deep-rooted commitment to sustainability. According to Cushon’s research, 99.5% of employees are oblivious to their pension’s carbon emissions, yet the average UK pension pot finances 23 tonnes of CO2 emissions each year – around four times an individual’s carbon footprint. Almost half (48%) of employees asked said they would like the option to invest their pension in businesses that do not contribute to climate change.
Advanced reports the past year has been a game changer in its communication with employees about how it cares about
eco-issues, and it has launched annual pension workshops for all those in the UK to assist in their pensions education.
Meanwhile, at Siemens UK, education is provided for managers and staff on environmental issues and the circular economy – although the firm says this approach is still very much in its infancy.
Benefits to business
There is no doubt implementing eco-friendly benefits has a positive impact on business. Tobin Murphy-Coles, CEO at PES, explains that with Generation Z and millennials now representing over half of the UK workforce, employers have no choice but to consider the strong values and ethics they bring with them.
“This translates into a number of areas, including an increased focus on the ethical values of their employer and what they are doing to make both the workplace, and the world, a better place to live in,” he says.
As a result, businesses are having to rethink benefits and culture in the workplace in order to remain competitive among this growing talent pool.”
Beyond that, Howden’s Gregson says: “There is a secondary buy-in from employees, who tend to seek more corporate responsibility from their employers and so are attracted to businesses with a culture of ethics and eco-friendliness.
“Being a caring employer drives results, through increased engagement.”
Pandemic or not, it is evident there is an increasing demand for more sustainable and purpose-led ways of working, and it would be remiss for HR not to take the opportunity to step up. The key to success? Flexibility and individuality.
Arundale concludes: “The future is about a full pivot from the traditional benefits. It is about focusing on what makes us all unique, and ensuring benefits are relevant to the needs of each individual. Flexibility is key, and the more we seek to turn the old traditional on its head, then we will be truly listening to our people.”
The full piece of the above appears in the March/April 2021 issue of HR magazine. Subscribe today to have all our latest articles delivered right to your desk.