The future of the planet is a topic that permeates public and private discourse today, with climate change cited as a concern by the majority of people.

In a previous article, we explored how approaching ESG and environmental issues can require companies to strike a delicate balance, matching rhetoric and ambitions with actions that are acknowledged and valued by employees.

Where they get it right, employers are not only able to support the planet, they are able to strengthen their appeal as destination for talent and reinforce loyalty among current employees.

And for an increasing proportion of today’s workforce, ‘getting it right’ means embedding sustainable thinking into all areas of a business, including the rewards and benefits that individuals might receive as part of an employment package or in relation to their performance.

Demand for sustainable benefits

However, this remains a relatively underdeveloped area. Indeed, one survey found that two-thirds of employees between the ages of 18 and 34 would like to see more sustainable benefits on offer, such as support for electric vehicle ownership and the option to invest in ethical pension funds.

While this figure is a little lower when all age ranges are taken into account (53%), the fact that a more planet-friendly approach to benefits still holds appeal for the majority is indicative of its relevance for the general workforce.

There are a variety of different areas where benefits are particularly aligned with carbon reduction, sustainability and the circular economy, but transport represents one of the main opportunities.

While perhaps less of a burden in a post-Covid hybrid world, the simple act of travelling to and from the workplace can carry a surprising carbon cost. Indeed, it is estimated to generate as much as 18 billion kg of CO₂, representing 5% of the UK’s total emissions.

Salary sacrifice for gains

Benefits such as the Cycle to Work scheme make it more cost effective for an employee to swap four wheels for two, helping reduce the number of journeys made in fossil fuel-burning vehicles. At the same time, cycling can provide health benefits that can have a knock-on effect for productivity.

Where cycling to work is not a feasible option, companies can support greener transport choices through benefits such as public transport subsidies, allowing workers to opt for buses and trains over single-occupancy car journeys.

And for employees who do still need the convenience of a car, employers can use the same salary sacrifice model used for Cycle to Work to help fund the transition from internal combustion engines to electric vehicles (EVs). Here, an employee essentially agrees to a reduction in their pre-tax salary equivalent to the benefit cost of an EV lease, while also paying benefit-in-kind (BiK) tax on the car, which is dependent on factors including its environmental impact.

This benefit has been shown to be particularly appealing among today’s workforce, with official industry data revealing that company and fleet vehicles accounted for more than three quarters (80%) of EV sales in the first three months of the year.

Support for sustainable choices

Beyond commuting, some companies are also encouraging their employees to travel responsibly when it comes to holidays. This takes the form of additional ‘journey days’, which are added to annual leave allowance as a reward for making travel choices that emit less carbon compared with flying.

Closer to home, some employers are providing their team with additional volunteering days under the proviso that the time is spent contributing to ethical causes. This might be as part of a company-led programme co-ordinated with an environmental partner organisation or it could simply be left to the employee to decide how best they can use their time to make a positive impact.

Furthermore, some employers are supporting employees in making more sustainable choices through access to retail discounts, green budget schemes, or subsidies for investment in low-carbon energy, including installation of solar panels. And at a more fundamental level, there is potential to simply provide workers with valuable, cost-effective and practical information on reducing the carbon footprint of their household.

Empowering individuals

So, while it is increasingly critical for companies to take the lead in establishing a company-wide ESG strategy, supporting sustainable, socially conscious practices and demonstrating their impact as a business, it’s clear that further gains can be made when they empower their employees.

By providing access to environment-benefiting benefits, employers can help augment the efforts of employees who are keen to make a difference – something that can have a positive impact on the planet as well as the relationship with your people.

The information contained within this communication does not constitute financial advice and is provided for general information purposes only. No warranty, whether express or implied is given in relation to such information. Vintage Corporate or any of its associated representatives shall not be liable for any technical, editorial, typographical or other errors or omissions within the content of this communication.

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