What the environmental revolution means for employee benefits

The trend towards employee benefits that benefit the environment has been gathering momentum for some time. In the past, the humble cycle to work scheme might have been considered the main ‘green’ employee benefit, but things are now changing at speed. Organisations are now not only looking at the type of benefits they offer, but also doing due diligence on the businesses they are partnering with to provide those benefits.

What the environmental revolution means for employee benefits

Scott Baker, reward consultant at Road to Green, is currently undertaking a benefits project with a sustainable twist. Here he shares the green benefits and perks he is investigating and what he believes the green revolution will do for employee benefits in the future.

Reducing the collective carbon footprint

At REBA we often write about the importance of aligning broader business strategy with reward and employee benefits. And for many organisations, environmental, social and corporate governance (ESG) measures are part of their business strategy. Working towards reducing the carbon footprint of an organisation is something that many businesses are aiming to achieve – with some setting carbon neutral or even carbon positive targets.

Investigating how employee benefits can help with these goals was the driving factor behind Baker’s latest project. “Having reviewed the benefits strategy and looked at the standard benefits for employees, we’ve also been looking at what else we can be doing that will help to reduce the collective carbon footprint of the company.”

There are the more obvious practices such as ensuring the workplace pension has access to an ESG fund, with an investment approach that matches the employer’s broader views on ESG. It is also key that employees are aware of ESG funds and how their pension contributions are invested. Offering electric vehicles, either as company cars or as salary-sacrifice purchase schemes, is another example. However, there are also more innovative perks that employers can offer.

One example relates to employee travel. Flying less is one of the most powerful actions we can take to cut CO2 emissions, and employers could off-set employees’ flight-free travel plans, as Baker explains: “Climate Perks has created a fantastic initiative whereby employees are encouraged to choose the ferry, train or coach instead of flying to their holiday destination. The employer can offer a number or paid ‘journey days’ per year to help incentivise this. This is a powerful way of reducing the collective carbon footprint of a workforce.”

By offering journey days employees won’t ‘waste’ annual leave on travelling to their holiday destination, thus encouraging them to look at alternative methods of transport. It will also make the employer more attractive to new employees with shared values.

“This might sound like a ridiculous thing to think about right now (during lockdown), but in the longer term it will inevitably become relevant again,” says Baker. 

Other innovative benefits

Another element to consider are the companies you may be partnering with on your employee benefits platform. For example, some employers are looking to offer discounts on ethical brands or offer alternative rewards on recognition platforms, such as tree planting or charitable donations rather than vouchers, experiences or goods.

Baker gives the example of offering discounted sportswear through an ethical brand partnership with Sundried. “It’s a great win-win; to support employee health and wellbeing, support an independent ethical sportswear brand and something we can offer to all staff in all locations.”

Other more unusual ideas involve sacrificing a work phone – thus negating the energy and materials needed to produce another phone – in favour of giving people dual sims.

“Is there a way that we could reward staff where they don’t take a work phone but use their existing phone and have a dual sim?” asks Baker. “There is, however, the problem of not being able to switch off which is a valid argument, but it’s good to have this type of option in the mix and to ask whether we really need all of these items.”

There are of course other benefits which contribute to sustainability, such as offering green energy tariffs at discounted costs, charitable giving and volunteering schemes, and incentives to walk/take public transport rather than drive, as well as many others. But as Baker notes: “A lot of these benefits depend on the organisation you work for and what they would be willing to take on board.”

It’s not just about the benefits

“People are frequently thinking about these issues – where they invest and spend their money, what they eat and what they drive. Companies and their senior leaders will need to consider their carbon impact and, as a result, all this will flow through and affect how we offer employee benefits,” believes Baker.

“Employee benefits will have to adapt to the call for a more sustainable and green approach, and there will be a mix of new benefits and adapted older ones.”

It’s not just the benefits themselves that will need to change, but also the providers. Increasingly employers are becoming more interested in who they are partnering with. Do the companies they invest in have a similar ethos and values? What is their approach to looking after the environment? Who are their suppliers?

In a competitive market a key differentiator can be an organisation’s green and sustainability credentials. Employers are becoming more mindful that their partners – including those they engage to provide employee benefits – are an extension of their own brand, and so it makes sense for them to be a close cultural fit and share similar values.

As Baker says: “You need to know that you’re partnering with the right sort of provider, even for something as common as cycle to work.”

“Some companies will be stronger minded about this than others – sustainability and green initiatives may not be on their agenda yet – but it’s going to go that way and is just so important.”

The challenge of a greener future

“[Green benefits] are going to be intrinsic to future benefits strategy. It’s how responsible employers can make meaningful contributions towards global initiatives such as the United Nation’s Sustainable Development Goals and also ensure that they continue to attract and retain talent whose value-set aligns with their own.” says Baker.

“The challenge for myself and other reward professionals is how do we tap into ‘green’ trends in a meaningful way that helps with the wider reward and company strategy?”

The author is Dawn Lewis, content editor at REBA.

If you’ve introduced ‘green’ employee benefits we’d love to hear about them. Get in contact with us.

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