Feature – Environmental benefits

With environmental sustainability such a hot issue in the shadow of the next G8 summit, Jamin Robertson finds employers investing in green benefits developing a sought after image as an employer of choice

Case Study: KPMG (UK)

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Environmental sustainability is a burning issue. Transport now contributes 30% of Europe’s CO2 emissions, and with a projected increase in motor vehicle traffic of 22% in this decade alone, it is easy to understand the angst of environmentalists and politicians.

By adding green perks to the benefits package, large employers are investing in corporate social responsibility (CSR) and a marketable image as an employer of choice, while forward-thinking smaller organisations are showing that thinking green need not cost the Earth.

But there is plenty still to be done. According to the Environmental Information Exchange, an Oxfordshire-based university and business partnership, the UK annually bins 40% of its paper and cardboard. Included in this 40m tonnes, the commercial sector gets rid of 50% of its paper, when it is 28% more energy efficient to recycle and often cheaper to remove than to pay landfill charges. And as our air quality falls amid burgeoning road congestion, we are left to count the cost of traffic jams. The Confederation of British Industry puts traffic congestion costs at £15 billion per annum.

So organisations are drumming up green rewards to attract an increasing band of savvy juniors looking for employers that are seen to care about more than just the bottom line. Employers know good environmental performance is noticed by clients, customers and staff, and is rewarded with their loyalty.

A number of UK employers are involved with global environmental conservation body Earthwatch Institute (Europe), as part of their corporate responsibility agenda. Financial heavyweights HSBC, Barclays, KPMG and consumables giants Cadbury Schweppes and Diageo reward green-thinking employees with a two-week field research project designed to bring environmental themes back to the office. The staff suggestion scheme has transported employees to work on environmental projects in such exotic outposts as the Australian outback, the Pantanal wetlands in Brazil and forests in Guanacaste, Costa Rica.

So far, Diageo has rewarded 30 employees with a place on the scheme. Sally Russell, global supply risk manager, says: "It’s been quite inspirational for the local business, and it’s an awesome opportunity. [Staff come back with] a great deal of passion about what they can do for our business. It promotes leadership skills, with people stretching themselves to do something outside their usual sphere."

Allie Devenny, a project manager at Diageo, went to Costa Rica where she helped conduct an insect census as part of a forest regeneration project in Guanacaste. "It was fabulous. I was working with people from other cultures in a makeshift lab in the forest. You don’t need any great training to make a difference." Since returning she has worked on creating a wildlife garden for staff. The company chips in with project grants, and has seen bottom-line benefits on at least one occasion. An Italian employee involved with Earthwatch recommended Diageo switch to a water-based varnish on bottles of the alcoholic soda Smirnoff Ice, which brought cost savings of around £111,000.

But Louise Barrett, director of consultancy The Success Group and board member and trustee of Earthwatch, says too many organisations have been tardy on green issues. "Corporates are only just waking up to this and becoming aware of their own responsibility, and that’s because clients are asking about it. I think they’ve been a bit slow to act."

The Environment Agency, the national body for the protection and improvement of the environment, recently added ethical parameters to its £1.1bn pension fund, and increased its exposure to earth-friendly investments. The agency will include environmental criteria in its evaluation of fund manager performance, benchmarking risk management and stock selection.

Electricity and gas trader E.on UK, that operates electricity supplier Powergen, meanwhile, is among those getting into ethical transport, with plans to introduce 70 hybrid petrol-electric Toyota Prius cars to its pool fleet of 250 vehicles.

Other companies are keeping it green at a local level through national volunteering body Community Service Volunteers (CSV), which sets corporate taskforces to work on community projects, often on company time. Mike Williams, director of the CSV’s environment division in Birmingham, explains: "They do a range of things. Lately in Bristol, we worked with Natwest and the Royal Bank of Scotland, doing pathway work, clearing overgrown vegetation and doing a litter pick. A lot of companies have a clear policy that they want to give something back to the community, doing whatever needs to be done. The projects are self-contained so that there’s a sense of achievement. People can make a difference after a few hours of hard work." He adds that work is often carried out in response to requests for help from community organisations, but in many cases, the CSV actively locates projects.

On a similar theme, environmental services group Severn Trent allows staff to take paid leave on a casual basis for green causes. Steve Hodgson, press officer, says: "We’re happy to support employees who get involved in a project they’re interested in. Alternatively, they can make a management request to use it as team building exercise."

And it is not just the big guys spreading the word. Smaller organisations are typically agents of change and international environmental organisation Friends of the Earth is naturally at the forefront of green benefits. Staff are encouraged to buy bicycles with tax-free loans, and human resources manager, Carol Hughes, says around a quarter of its 90 staff cycle to work daily. The company also has a flexible working policy that allows home workers to avoid London’s congested roads. Employees can make use of regular organic food runs, and space is provided to grow fruit and vegetables. "You can say we harvest lunch as well as eat it," she adds.

Ethical firm Triodos Bank also offers a tax-efficient bicycle scheme using a salary sacrifice arrangement, with free service check ups and discounts to encourage take-up rates. And Delta International, a compliance resource provider to the financial services industry, has introduced an earth-friendly expenses system. Staff that swap their car for public transport are rewarded with first class train travel, and mobile employees are encouraged to use hotels instead of burning up the motorway.

In the public sector, the Government’s work around transport sustainability has devolved to a local level. According to the Environmental Information Exchange, some 58% of journeys are less than 5km in length, so there is plenty of potential to curb carbon emissions. The Department of Transport recommends using a green travel plan (GTP) as implemented in many parts of North America. Its suggestions include advocating a flexible benefits package which contains an attractive alternative to a company car.

Cheshire County Council has picked up on some key ideas of the GTP. Jenny Lees, travel plan co-ordinator, says: "We’ve got discounts at local cycle stores and we [try to encourage] public transport systems. We negotiate with the operator for a [travel] season ticket for the price of nine months, and we’re looking at others."

So large organisations with the resources to devote to sophisticated CSR budgets are not the only ones that are taking action, with smaller employers also doing their bit to build an earth-friendly package that doesn’t bust the budget. Earthwatch Trustee Barrett adds: "People are thinking about [the environment] a lot more. When it comes to [benefits] things like attention to the environment, work-life balance, and just having a bit of fun is very important. [Staff] are looking for an organisation that will consider these needs."

Case Study: KPMG (UK)

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In 2002, KPMG (UK) introduced an environmental innovation scheme in conjunction with the Earthwatch Institute (Europe).

A Leeds-based KPMG trainee auditor was a recent winner, having designed a portable pack to allow mobile staff to recycle non-confidential reports. Mike Kelly, director of corporate social responsibility, explains the company’s interest in the scheme: "The UK graduate survey of 2004 showed 78% want to work for a environmentally-responsible employer, so it’s not just about [attracting] 25-year old eco-warriors. We’re appealing directly to that [demand]. It helps us as an employer of choice, so we can expand our hires, and keep the existing workforce as well. It also benefits [staff], it develops project management skills and challenges their creativity."