Using benefits to cut your organisation’s carbon footprint

With most businesses taking the easier actions towards net zero, what can they do to take their efforts a step further?

Climate poses a genuine risk to business continuity. With the government having set a legally binding target for the UK to be net zero by 2050, many businesses are going through a period of great change.

Barnett Waddingham’s own 2022 Global Priorities Survey showed that 60% of European headquartered businesses had made net zero commitments and a further 20% were considering introducing one. The journey to net zero will be different for each of these organisations. There will be risks, but also great net zero opportunities.

The events of the last few years have altered how many employees view the world. Values seem to have increased in importance. More employees now need to feel they are working for an employer that takes sustainability seriously. With as much as a quarter of a company’s value attributed to reputation, it’s important for businesses get it right.

Scope of the problem

To reduce your organisation’s carbon footprint, you must start by understanding and the measuring it. The world’s most widely used greenhouse gas accounting standard splits corporate emissions into three ‘scopes’:

Scope 1 is what you ‘burn’ – the direct emissions from your company and its vehicles.
Scope 2 is what you ‘buy’ – the energy you purchase.
Scope 3 is your ‘supply chain’ – absolutely everything else, including employee commuting and business travel.

For now, most corporate net zero commitments relate to scope 1 and 2, the easier ones to deal with. However, with scope 3 typically accounting for 80% or even 90% of an organisation’s overall footprint, it is an important one.

Trail blazing organisations like Mars, Ford, Ikea and Apple are setting themselves apart by considering scope 3 now. The reality is that these leading companies are tracking and tackling supply chain emissions because it makes good business sense – it’s just a matter of time before more organisations follow. All of this has had an impact on the demand for larger cars, with these being the second largest contributor to the increase in global CO₂ emissions between 2010 and 2018.

One key area covered under Scope 3 is the employee commute. So, how do your employees travel to work? Do they take public transport, private cars, or active modes like biking and walking?

How benefits can help

A green car leasing scheme is a great way to help reduce the carbon footprint from commuting. Salary sacrifice savings and the current electric car benefit-in-kind rate of just 2% mean that these schemes represent great value for most employees too.

Example: Someone who currently has a 30-minute commute by car (using a petrol car with standard emissions) could reduce their carbon footprint by a massive 4.65kg per annum by switching to an electric car. This assumes the car uses green electricity, but many suppliers offer wind and solar-only tariffs.

It’s also helpful that employers can benefit from notable National Insurance savings from these schemes – typically around £700 per vehicle per annum.

Cycle-to-work schemes are also worth a fresh look. They not only save your employees money, but they are also a great way to help your employees transition to a green commute. Many employers are increasing or removing the upper limit on cycle-to-work schemes to enable employees to purchase electric bikes. Electric bikes make commuting a realistic option for so many more employees.

Example: One person living 5km from their workplace could deliver a CO₂ reduction of almost 1.8kg per annum by ditching their petrol car (with average emissions) and cycling each day.

As well as saving employees money – a basic rate taxpayer would sacrifice just £1,360 over 12 months for a £2,000 bike - remember that employers also benefit from National Insurance savings. This £2,000 bike would deliver a £276 saving to the employer.

A final, important, thought

Benefits can help deliver notable cuts in your employee commute scope 3 emissions while saving your employees money. They also deliver National Insurance savings for your organisation.

At Barnett Waddingham we are helping organisations take this a step further and make sustainability a true shared experience. Our clients are using some (or even all) of their NI savings to reward employees with sustainable incentives for making greener commuting choices (and many other benefits or actions they would like to support).

You could plant 100 trees for every car selected through a green car leasing scheme or, perhaps remove 10kg of ocean plastic for every new cycle-to-work bike. By providing employees with their own online tracking dashboard you can bring these incentives to life and showcase the great work of the charity and NGO partners. Importantly, these dashboards also promote the total impact of all your organisation’s incentives.