Using green employee benefits to help reduce your carbon footprint

By understanding and measuring the impact of workforce on carbon emissions, offering green employee benefits can ultimately boost your organisation’s journey to sustainability whilst providing real value to your people.

Climate change is real. It’s happening now and it poses a genuine risk to business continuity. With the Government having set a legally binding target for the UK to be net zero by 2050, many businesses are now going through a period of great change – their journey to sustainability. 

Barnett Waddingham’s own 2022 Global Priorities Survey showed that 60% of European headquartered businesses had made net zero commitments and a further 20% were considering introducing one. The journey to net zero will be different for every one of these organisations. There will be risks but there are also great net zero opportunities. 

Let’s also not forget that what we have all gone through in the last few years has altered how many employees view the world. Values seem to have increased in importance; more employees now need to feel that they are working with an employer that takes sustainability seriously. With as much as a quarter of a company’s value being attributed to its reputation, it’s important for businesses get it right.

The scope of the problem

To reduce your organisation’s carbon footprint, you must start by understanding and measuring it. The world’s most widely used greenhouse gas accounting standard splits corporate emissions into three so called ‘scopes’:

• Scope 1 is what you ‘burn’; the direct emissions from your company and its vehicles
• Scope 2 is what you ‘buy’; it covers the energy you purchase
• Scope 3 is your ‘supply chain’; absolutely everything else including employee commuting and business travel

For now, most corporate net zero commitments just relate just to scope 1 and 2. These are the easier scopes to deal with. With scope 3 covering so many areas it can be a mind-boggling challenge. However, with scope 3 typically accounting for 80% or even 90% of an organisation’s overall footprint, it is an important one.

Trail blazing organisations like Mars, Ford, Ikea and Apple are setting themselves apart by considering scope 3 now. The reality is that these leading companies are tracking and tackling supply chain emissions because it makes good business sense - it’s just a matter of time before more organisations follow. All of this has had quite an impact on the demand for larger cars, with these being the second largest contributor to the increase in global CO2 emissions between 2010 and 2018.

The impact of your employees’ commute

One key area covered under Scope 3 is the employee commute. That’s the carbon emissions caused due to the transportation of employees to work. Just how much of scope 3 this makes up varies significantly but it’s fair to say that it is always a notable amount.

So, how do your employees travel to work? How often and what modes of travel do they use? Do they take public transportation, private cars, or active modes like biking and walking?

With lots of parameters, you may think that it’s difficult to calculate but Barnett Waddingham’s sustainability experts have recently been helping organisations to do this accurately, and more importantly, to understand the climate impact of their employees' commute. Using integrations with Google Maps, we can predict commuter routes and in turn understand the CO2 reduction that can be achieved by changing commuter habits. 

Green employee benefits have already made a difference

We worked with English Heritage, a charity that manages 100s of historic monuments, buildings and places to understand how employee benefits could be used to help reduce it’s scope 3 employee commute emissions.

We analysed the commuter options of thousands of employees and helped to identify significant potential CO2 reductions. Our data insights are now helping the charity take the next steps in their sustainability journey. Our work with English Heritage heavily contributed to us being named ‘Best Sustainable Benefits Adviser’ at the Corporate Adviser Awards 2023.

How greener employee benefits can help you

For many businesses with a large commuter base, a Green Car Leasing scheme could be a great way to help reduce the carbon footprint from commuting. Salary sacrifice savings and the current electric car benefit-in-kind rate of just 2% mean that these schemes represent great value for most employees too.

Example: Someone who currently has a 30-minute commute by car (using a petrol car with standard emissions) could reduce their carbon footprint by a massive 4.65kg per annum by switching to an electric car. This does of course assume that the car uses green electricity, but many suppliers offer wind and solar only tariffs.

It’s also helpful that employers can benefit from notable National Insurance savings from these schemes – it’s too early to say the full extent of these savings in the above example but savings are typically around £700 per vehicle per annum. Employers can of course choose to pass back all or some of this saving to make the scheme more attractive to their employees. 

Cycle to work schemes are also worth a fresh look. They not only save your employees money, but they are also a great way to help your employees transition to a green commute. Many employers are increasing or removing the upper limit on cycle to work schemes to enable employees to purchase electric bikes. Electric bikes make commuting a realistic option for so many more employees.

Example: One person living 5km from their workplace could deliver a CO2 reduction of almost 1.8kg per annum by ditching their petrol car (with average emissions) and cycling each day. In case you are wondering, that’s only about a 15-minute cycle each way… or 10 minutes on an e-bike!

As well as saving employees money – a basic rate taxpayer would sacrifice just £1,360 over 12 months for a £2,000 bike – please do remember that employers also benefit from National Insurance savings. This £2,000 bike would deliver a £276 saving back to the employer.

A final, and important, thought

As you can see, green employee benefits can help deliver notable reductions in your employee commute scope 3 emissions whilst saving your employees money. They also deliver National Insurance savings for your organisation. All of this is great but there’s more; they can also be used to take your employees along with you on your organisation’s journey to sustainability.

At Barnett Waddingham we are helping organisations take this a step further and make sustainabile benefits a true shared experience. Our clients are using some (or even all) of their NI savings to reward employees with sustainable incentives for making greener commuting choices (and many other benefits or actions they would like to support). 

You could plant 100 trees for every car selected through a Green Car leasing scheme or, perhaps remove 10kg of ocean plastic for every new Cycle to Work bike. By providing employees with their own online tracking dashboard you can bring these incentives to life and showcase the great work of the charity and NGO partners. Importantly, these dashboards also promote the total impact of all your organisation’s incentives – a truly engaging and powerful way to share your sustainability journey with your employees.