How changing expectations around ESG are influencing financial wellbeing offerings
Social value and corporate social responsibility (CSR) are terms we’re familiar with, but ESG is a relatively new player in the business landscape.
Environmental, social and governance are the three pillars that organisations use to measure their environmental and social impact. ESG applies to all areas of business, including investing, customers, suppliers, employees and the wider community.
ESG roots are typically within the investment space and the move towards more socially and environmentally friendly choices - mindful of potential impacts on communities and the planet.
Discussions on financial wellbeing in the workplace would have traditionally solely focused on retirement plans and shares.
Now the expectations include ESG demands that pensions and investments be ethical and sustainable.
The changing landscape of employee benefits
Employee expectations of financial wellbeing benefits have also evolved from the traditional offering.
The ESG positioning on financial wellbeing is one of financial resilience.
To be financially resilient is to have the means to withstand any future economic crisis without detrimentally impacting your way of life.
Statistics from the peak of the cost-of-living crisis showed that many Brits made significant cuts to afford necessities and bills.
Mental health in the UK declined in the wake of the pandemic and the cost-of-living crisis, and for many organisations, the was a reactive shift to prioritising employee financial wellbeing.
The last few years have seen this come to the forefront.
Employers understand the connection between financial, mental, physical, social and emotional wellbeing as a holistic offering.
In its article Why it pays to enhance employee financial resilience, Pluxee UK explores the business benefits of helping employees become financially resilient.
Prioritising employee needs
For employees to become financially resilient in the long term, they must be able to do the following things today:
- Adopt good financial habits
- Practice budgeting and money management skills
- Stretch their money further
- Have an alternative to credit cards and debt
- Be able to set money aside
- Have a pension
- Have somewhere to turn when they need guidance and support
The list isn’t exhaustive but does paint a picture of what it takes to become financially resilient.
ESG and employee expectations are putting the responsibility of achieving financial resilience partially on the employer.
The final item on the list links education and mental wellbeing together, and this is where an employee assistance programme cements itself as a vital part of your financial wellbeing strategy.
EAPs include information specialists who can offer insights and guidance on debt management, benefits, taxation, divorce, and legal and consumer issues.
An EAP offering can answer employee questions on almost any financial topic, lessening their financial anxiety and ensuring they understand their rights and options.
Pair this with the available mental health support and counselling services, and EAP is an ESG-approved financial and mental wellbeing benefit.
No longer just a perk, financial wellbeing benefits form an essential part of your employee value proposition, helping attract, engage and retain top talent.
Employees seek socially responsible employees who put their wellbeing first, making your CSR and ESG strategies fundamental to the future success of your business.
ESG and salary sacrifice schemes
ESG and salary sacrifice schemes are perfect partners, creating sustainable, environmentally friendly and cost-effective employee benefits packages.
Cycle to work and electric car salary sacrifice schemes give employees greener ways of travelling and commuting.
EV and low-emission vehicles are significantly cheaper to run than petrol and diesel alternatives, reducing employees' essential outgoings and helping them live more economically.
Better still, both cycle to work and green car salary sacrifice schemes give employees tax and NIC savings.
Employers also save on national insurance contributions for the duration of the salary sacrifice arrangement, reducing business overheads.
In its article, Save money & energy with green cars, Pluxee UK suggests that a business can generate more than £100,000 class one NIC savings by having just 30 employees enrol in an EV car scheme.
Companies can use these savings towards further ESG and financial wellbeing initiatives – a self-sufficient strategy that doesn’t require external investors.
In partnership with Pluxee UK
Pluxee UK, is a leading employee benefits and engagement partner that opens up a world of opportunities to help people enjoy more of what really matters in their lives.
