Thanks to the COP26 summit, employers are having to contend with considerably more than just “blah, blah, blah.”
Most large UK firms now know they will soon be required to provide a detailed plan on how they intend to help reduce carbon emissions, and employers who simply satisfy the legal minimum are likely to end up at a severe commercial disadvantage.
Any business of any size that fails to suitably outline its environmental ethos may find potential recruits and customers give them the cold shoulder in favour of a competitor that does. So, there is no longer anywhere to hide regarding the environmental challenge, which should be embraced wholeheartedly.
Chase de Vere has been noticing a massive increase in enquiries about green issues since the build up to COP26. It had been on our agenda at annual governance meetings for a couple of years but employers not previously really interested are now proactively asking questions – largely because their employees have been asking them questions.
We’ve even had one client who couldn’t get a new hire to sign their employment contract until they’d received answers to specific questions about environmental, social and governance (ESG) options on pensions.
All employers should draw up a totally transparent environmental policy to share with their workforce – even if it doesn’t feature prominently in their marketing strategy. It could spell out policies like maintaining an environmental risk register, waste management procedures and using environmentally conscious suppliers.
There are also a whole range of other steps that can be considered, many of which we can help you with. Arguably the most important of these is encouraging ESG investment in pensions.
Calculations made by Nordea Markets show moving one’s pensions savings to a sustainable fund saves 2,222.67 tonnes of CO2 emissions, making it 27 times more effective than the four other cited ways of reducing your carbon footprint – shortening all your showers by two minutes (1.06 tonnes), taking one less international flight per year (18.93 tonnes), taking the train instead of the car ( 26.73 tonnes), and eating only one piece of red meat a week (35.68 tonnes).
And don’t forget that the move can have financial benefits for employees in addition to the ethical ones. Nordea Markets research shows that companies that are leaders in sustainability financially outperform those with poor ESG credentials by more than 40%.
Even some group risk products now have environmental dimensions, with Zurich Corporate Risk offering to plant 10 trees in the Zurich forest for every 100 members covered by one of its schemes, and YulLfe providing health-conscious employees the chance to plant a mangrove tree in Madagascar for every 200 YuCoin donated via its app.
Offering staff access to financial education on ESG issues also has a valuable role to play. Chase de Vere has two different ESG modules in its financial education services that can help here. Our basic module, which educates employees on what ESG is, might be a good place to start, and it can be built on with the second more advanced module.
We are also experiencing an increasing number of enquiries from clients who want to encourage employees to switch to electric cars from conventional ones, and we are able to help by setting up salary exchange arrangements — which, as well as reducing tax and NI contributions for employees, usually result in lower NI contributions for employers.
Additionally, using online technology to communicate benefits instead of paper-based comms can play an important role in reducing a company’s carbon footprint. If clients are currently still paper-heavy and printing off and posting items like handbooks and welcome packs, then they might consider introducing an employee benefits portal. We can advise on how to set it up, depending on their objectives.
Other, perhaps more obvious, steps to consider include encouraging home working to save on commuting and flexible working to allow employees more time to walk or cycle to work, and preserving office energy use via methods such as draught proofing, insulation and temperature control.
If you would like any further information about how Chase de Vere can help your organisation reduce its carbon footprint then please don’t hesitate to contact us.
Content correct at the time of writing and is intended for general information only and should not be construed as advice.