Prioritising a green culture: What employers need to know

Green culture: Commercial and ESG implications

In the context of the ‘great resignation’ and the ‘war on talent’, employers will be well aware of the importance of attracting and retaining talent. They should also be aware that employee expectations are changing. For example, a recent survey [1] showed that 82% of employees want to work for an organisation which has a clear purpose. Further, research [2] has shown that Millennial and Gen Z employees, who constitute a growing proportion of the workforce, are heavily influenced by employers’ ethical values in choosing where they work.

Adopting responsible values also has implications beyond a business’ own employees.  With investors, customers and, in some cases, even regulatory requirements [3], increasingly demanding ESG credentials which stand up to scrutiny, businesses with a genuine green culture can enjoy a variety of commercial benefits.

So, whilst many businesses demonstrate their commitment to sustainability through their external practices and connections, there can be real value in involving employees in sustainability initiatives and creating a ‘green culture’ within the workforce.

What are the benefits of a green culture?

The Intergovernmental Panel on Climate Change published its sixth assessment report last month, which will inform the next UN climate summit (COP28) later in the year. Speaking at the release of the report, UN Secretary General António Guterres stated “our world needs climate action on all fronts – everything, everywhere, all at once”. It’s clear that, to combat climate change, everyone (employees and employers alike) needs to play a role. Whilst some employees and employers will already be taking steps to improve their carbon footprint, creating a combined approach can help to maximise the positive impact.

In addition, having a purpose at work is key to job satisfaction.  Employees who are satisfied at work are generally more productive and less likely to leave, to raise grievances and/or claims to an employment tribunal. Job-seekers are increasingly considering businesses’ ESG commitments, and seeking to work for an employer with a clear purpose. Implementing sustainability initiatives and promoting a green culture within the workforce can help an employer stand out from its competitors and benefit from a motivated team, all whilst assisting the business in meeting its ESG commitments.

How can we create a green culture within our business?

It’s essential that employers communicate the business’ environmental aims to their workforce, and clarify how employees can help the business achieve these. For example, employees may be encouraged to travel sustainably (i.e. on public transport, avoiding flights) when travelling on business, or to reconsider travelling at all where meetings can be held online. Sustainability targets could also be used as a factor in employees’ performance/ salary reviews, or as a condition for their eligibility for a bonus payment.

Training and knowledge sessions are useful tools to increase awareness of the climate crisis, and the actions employees can take to mitigate their own carbon footprint. Such sessions might inspire wider conversations regarding the business’ sustainability initiatives, and employee forums (e.g. an employee-led sustainability committee) could help to elicit additional ideas as to how the business can further reduce its impact on the environment.

Environmentally-friendly benefits can also help to incentivise the workforce. In the context of the cost of living crisis, a competitive salary is clearly helpful to attract, motivate and retain employees.  However, a wider benefits package can also play a crucial role. Examples of ‘green’ benefits include:

• allowances for employees to purchase sustainable clothing
• recycling programs – for example, donation points for unwanted clothes
• incentives for more sustainable commuting – for example, an allowance for those who walk, run or cycle to work, or a contribution to public transport costs
• additional holiday to encourage sustainable travel – for example, an additional days’ holiday if the employee travels abroad without flying
• paid leave to volunteer for environmental organisations
• electric vehicle salary sacrifice schemes.

One of the most effective methods of communicating a business’ sustainability expectations and initiatives to employees, is the use of internal policies and procedures. This will be especially important where employees’ environmental conduct might play into their achievement of a benefit, or constitute grounds for disciplinary action. To bolster commitment to sustainability, employers may also consider implementing an environmental whistleblowing policy, enabling employees to hold their colleagues and the business to account for any environmental misconduct.

What are the employment law implications?

When implementing new policies and procedures, employers should ensure that these are drafted clearly and are readily accessible, so employees are able to fully understand what is expected of them and possible consequences for non-compliance. While it might currently seem a stretch to deny an employee a bonus or even discipline them for not acting in a sustainable manner, the world continues to change rapidly and this may become the norm in the future. Policies that are stated to be non-contractual will generally be easier to amend and update, which is likely to be helpful in the context of sustainability, where a business’ aims and objectives may develop over time.

The debate about remote, hybrid and office working will no doubt continue, and the question of whether a return to the office can be directed is likely to continue to be a feature of employment litigation. Within the context of sustainability, the impact of each business’ working model on carbon emissions will be different.  An assessment as to what works for the particular business is sensible, to fit with flexible working practices.

As always, employers should be mindful of how certain groups may be impacted by benefits and policies and whether there is a discrimination risk.

Creating a green culture: How we can help

Walker Morris is a multi-disciplinary commercial law firm, with specialist Employment lawyers working seamlessly with colleagues experienced in commercial contracts, corporate- and climate- reporting, energy/sustainability and all other aspects of the ESG agenda.  We can work with businesses at every step of their journey to instill an effective green culture and wider sustainability strategy.  In particular, we can:

• Undertake internal audits and contract reviews and draft/update policies, procedures and employment and commercial contracts from a green culture perspective
• Advise on, and help to communicate and implement, a range of green benefits
• Keep clients up-to-date on legal and regulatory developments associated with employment issues and instilling a green culture
• Provide practical, commercially-focused, advice in relation to the wider ESG agenda [4]
• Help clients to secure ‘green finance’ or other responsible investments.

More generally, our team of Employment & Immigration specialists provide advice on all types of complex employment, HR and business immigration matters.  We support private and listed companies operating in a broad range of sectors, including manufacturing, food and drink, technology, sport, retail, real estate, healthcare and education.

For advice, assistance or training in relation to instilling a green culture or on any employment or immigration issue, please contact Charlotte Smith, Alice Ruffell or Philippa de la Fuente.

[1] Three-quarters of young people would consider an apprenticeship – The Manufacturer

[2] The Deloitte Global 2022 Gen Z and Millennial Survey | Deloitte Global

[3] See Walker Morris’ earlier briefing on ESG and climate reporting

[4] See Walker Morris’ briefing A practical approach to addressing ESG challenges