As more employees seek “green” benefits and more companies return to pre-pandemic office work, commuting is likely a place to focus efforts to integrate climate change into workplace benefits culture.
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More and more workers in the workforce want to do something about climate change through their jobs, but many face a major obstacle: lack of understanding of their employer’s commitment to this issue. So-called green benefits, also known as climate change benefits, could help close this gap. A growing, if still marginal, trend in the job market, employee incentivization and compensation programs related to climate change can help make these abstractions clearer and more actionable in the workplace.
Large companies’ environmental commitments tend to focus on major operational efficiency goals, such as Google’s carbon-free data centers, and from the supply chain to the end consumer market, such as the smart watch carbon neutral from Apple. Some companies, like Patagonia, are fully invested, as a brand, in the fight against climate change. And at the senior management level, it’s already a norm on the compensation side of the equation, with bonuses for executives at companies, like Apple, tied to ESG performance measures.
But for most rank-and-file employees, benefits in recent decades have essentially fallen into two main categories: health and retirement. There are now indications that green benefit packages may become more common. One potential spearhead of this nascent movement is benefits for commuters, particularly benefits that facilitate healthier and more environmentally friendly modes of transportation, allowing employers to facilitate and promote modes of lives that attract an increasingly environmentally conscious workforce, while reducing the company’s net carbon footprint.
Walmartthe country’s largest employer, has factored the environmental impact of its employees’ daily travel into its carbon footprint, an example of corporate culture change, while in recent years the retailer has promoted alternative forms of commuting that were integral to the design of its headquarters in Bentonville, Arkansas.
Walmart says “multi-modal and alternative transportation is an important part of the future of commuting,” the company has made cycling an eco-friendly perk for employees, investing in chargers for electric bikes and scooters, bike racks and showers. for cyclists arriving at work, while it has deliberately reduced the space provided for parking lots.
A bike rack outside of a Walmart Neighborhood Market in Bentonville, Arkansas.
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Walmart set a goal of having 10% of its workforce bike to work in Bentonville — but the goal has been difficult to achieve and has been pushed back from 2023 to 2025, when the headquarters is expected to be completed . Yet, like the challenges of broader adoption of electric vehicles, infrastructure plays a major role in getting employees to bike, and Walmart has pulled out all the stops in Bentonville.
Among 500 employers representing more than 8 million workers who respond to an annual survey conducted by a management consultant WTW, the topic of green benefits is starting to gain traction, says Caroline Mangiardi, the firm’s associate director, health and benefits. Although its annual best practices survey focuses on health care benefits, it began including a section on climate-related benefits in 2022 and it says employer attitudes are changing. According to the survey, increasing priority must be given to climate-related benefits in the coming years. Half of employers considered this concept a low priority over the past three years, but only a third now consider climate benefits a low priority.
Employer-funded home improvements and benefits for purchasing electric vehicles
The trend is not limited to cycling to work. “What’s exciting are innovative benefits like reimbursements specifically for sustainable home improvements, providing time off for weather-related events, and cycling programs,” Mangiardi said.
Bank of America has committed to more than doubling the availability of electric vehicle charging stations in its financial centers. Under the plan, it offered eligible employees up to $4,000 toward the purchase or $2,000 toward the lease of a new qualifying all-electric passenger car or truck.
Younger Gen Z workers may be at the forefront when it comes to including social and environmental consciousness in company benefits programs, but Mangiardi said, “It’s important to note that employees of all generations support sustainable development.
Some niche companies are integrating the concept of green benefits into their business model. Lauren Schneider, a spokeswoman for Compt, which offers employee expense management that replaces or consolidates existing benefits with allowances designed around employee lifestyle expenses, says such incentives can be environmentally focused . Although she also said the idea is still early days. “There is a nascent but growing interest in the benefits of climate change,” Schneider said, noting that Google searches for benefits for commuters, for example, are trending up.
Early adopters among employers could benefit. “Based on our more direct experience in the employee benefits space, the lack of widespread implementation suggests a significant opportunity for companies to innovate and become leaders in this area,” Schneider said. “By aligning employee benefits with environmental sustainability, companies are not only meeting a demand for talent (more people want CSR-focused, environmentally conscious employers), but also supporting that talent more holistically,” she said.
Recent data from employee benefits consultant Mercer indicates that facilitating green and healthy travel continues to become a priority in employee benefits. Nearly a third of companies aim to promote and facilitate eco-friendly travel modes for their employees, according to its Mercer Transportation Trends 2023 report.
A “carbon savings account” for work
Lizzy Kolar, co-founder and CEO of Scope Zero, which offers a carbon savings account (CSA) as a method of distributing green benefits to employees, compared it to a health savings account. “But for home technology and personal transportation improvements that boost companies’ ESG efforts,” she said. Allocations for commuter benefits, discounts on cycling and electric vehicles, and work-from-home expenses are key elements of the program.
The employer’s financial contribution to each employee’s CSA and discounts offered by its vendor marketplace significantly reduce the upfront costs of home technology and personal transportation upgrades, Kolar said. Providing a platform designed for these types of benefits also helps make personalized upgrade recommendations, direct employees to the best products and vendors, and identify relevant utility and government discounts.
Environmental benefits garner less headlines than the operational and supply chain commitments of large companies, and their impact is not yet sufficiently studied. But as return-to-work obligations continue to expand, there is an opportunity to integrate the concept into a new work-life balance. Green benefits are one area of benefits where demand appears to be outpacing supply, and green benefits for commuters could be the first sign of a broader wave of adoption.
This is Kolar’s bet. “This demand stems from growing individual interest in sustainability and the priorities of the 70% of Fortune 500 companies that have already made formal climate commitments,” she said. “Our prediction is that in the coming years, standard benefits will no longer only include health care and retirement, but also sustainability,” she said.
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