Green benefits rise in popularity

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• Environmental benefits fit into two categories: stand-alone benefits and an alignment with the CSR profile.
• Green benefits include bikes-for-work schemes, low-emission company cars, telecommuting and online benefits communication.
• Other strategies include community volunteering, carbon offsetting and ethical pension investment.

Case study: Marriott staff create woodland

Marriott UK has introduced a carbon capture payroll-giving scheme through The Woodland Trust. By donating part of their salary, staff can reduce their carbon footprint by having trees planted.

The benefit, which is aligned to Marriott’s environmental strategy ‘Spirit to Preserve’, was communicated using its benefits website, payslip flyers and a benefits guide. Sarah Newsome, manager of compensation and benefits at Marriott Europe, says: “Staff have embraced the opportunity to reduce their carbon footprint. It is important large employers do their bit for the environment – and what better way than by creating new woodland, so people can see the their donations’ effect on the landscape for years to come.”

Case study: Archant reduces emissions

One-third (30%) of media group Archant’s 2,000 staff have opted for lower-carbon-emitting cars through the firm’s green contract hire and leasing car scheme. CLM manages the scheme, which was introduced to reduce the fleet’s carbon footprint.

As well as aiming to drive current CO2 emission levels from an average of 146g/km down to about 118g/km, Archant has set its drivers an extra incentive by offering the Vauxhall Corsa ecoFlex model, which emits just 98g/km of CO2. Staff who opt for this car will have their benefit-in-kind tax bills paid by Archant.

Greg Parton, the firm’s head of procurement and sustainability, says: “Archant is not saving money by introducing it, but we are doing our bit for the environment.”

This is one of a series of green initiatives by the firm. It has also rolled out a green champions forum, central recycling points, a green staff award to recognise sustainability ideas, and has appointed a sustainability correspondent.

Environmentally-friendly benefits are becoming a priority for employers and employees, says Jennifer Paterson

Under the EU Renewable Energy Directive, the UK aims to derive 15% of its energy from renewable sources by 2020. And as the focus on environmental issues grows, employers are adding a green tinge to their benefits. For example, Marks and Spencer has offered its staff free loft or cavity wall insulation to coincide with the launch of its Home Energy Service; B&Q has rolled out an eco-incentives programme that could save 19 million kg of CO2; and Diageo has launched an eco-friendly volunteering programme for staff.

Employers have two main options when looking to go green: offer environmentally friendly benefits such as low-emission company cars and paperless online benefits packages, or align the organisation’s corporate social responsibility (CSR) profile to a sustainable strategy.

Jeff Fox, head of consulting at Benefex, says: “Where organisations have adopted [stand-alone benefits] like bikes for work or a low-emission car fleet, it is mainly tactical. If they want to be more strategic, the question ‘what does green mean?’ comes into focus, looking at the organisation as a whole and how [green] fits into its CSR [strategy].”

Benefits that provide staff with a greener commute to work include bikes-for-work schemes and low-emission company cars. However, the vast majority of employers can no longer offer staff bus passes via salary sacrifice, after HM Revenue and Customs confirmed that the benefit-in-kind tax exemption would no longer apply in certain circumstances. For the tax and national insurance exemption to apply to bus travel, employers must pay a subsidy to help finance a local public bus service that is potentially useful to staff. In return, staff get free or reduced-rate transport on the supported route, but must travel by bus for at least part of the way on journeys between home and work, or between workplaces.

Clarification on bikes for work

Although bikes-for-work schemes have met a few challenges over the past year, clarification from HMRC and product developments by scheme providers have made these tax-free loans popular. Philip Curtis, managing director at Fair Care, says: “It is a very easy tick for an employer to go some way to encourage staff to leave their cars at home.”

Low-emission cars will also boost environmental credentials. Cars that emit less than 120g/km of CO2 attract the lowest rate of company car benefit-in-kind tax. These can be offered via salary sacrifice. Curtis says: “[Green fleet salary sacrifice] is encouraging people to drive brand new efficient cars. It is currently not accessible for small or medium organisations. Employers need to have a minimum number going through or there will be fees attached.”

Putting benefits communication and administration online is another green strategy. Andy Philpott, marketing director at Edenred, which offers ethical incentive and reward product Compliments Green, says: “Organisations and employees are sensitive to seeing too much printed material, so making the benefit communications process smarter and greener is important.”

Employers can also align green perks with their corporate social responsibility strategy. Ashbridge Business School’s 2009 Principles for Responsible Management Education survey Adapting to a changing context: The role of management education found 96% of chief executive officers believe sustainability must be fully integrated into an organisation’s strategy and operations.

Community volunteering programmes

One way to do this is through community volunteering programmes. For example, Edenred gives staff time off to volunteer for projects such as planting trees. Philpott adds: “Things like that have a huge impact on morale in a business. Allowing staff time off to organise or participate in green events is a powerful motivational tool.”

Carbon offsetting schemes are another way to enhance an organisation’s CSR profile. These enable staff to calculate the amount of carbon they produce, through car journeys, flights or the energy they use at home. They can then offset the damage they inflict on the planet, for example by donating to a charity that plants trees or by buying units of carbon. Katherine Jaiteh, corporate fundraiser at The Woodland Trust, says: “A lot of [organisations] do what they can to compensate for their carbon, but they want to be able to offer this to their staff as well.”

Pensions investment can also take on a green slant, for instance by investing in a company that is focused on environmental conservation or by avoiding one that is involved in activities that have a negative impact. Stephen Isgar, UK sales and business development manager at Kas Bank, says: “Employers have got to take into account future conditions affecting the long-term returns [of pension schemes].”

How do employers decide what form their green benefits should take? Benefex’s Fox says: “They have to baseline what their [environmental] impact at the moment is. It is also about getting buy-in from staff because if they are not going to participate, it will backfire. This goes into communication and helping staff understand this is a real issue.”

As the UK emerges from the recession and begins to tiptoe towards environmental goals, the link between an employer’s corporate social responsibility and employee motivation will continue to grow stronger.

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