How To Offer ESG-Aligned Employee Benefits
Key Insights:
Over 50% of employees say they wouldn't work for a company whose benefits lack strong environmental and/or social causes,
Almost 80% of employees would prefer new or additional benefits over a salary increase,
Companies implementing ESG-focused benefits see improved talent attraction and retention,
Green initiatives through employee benefits can significantly reduce a company's carbon footprint.
In today's business landscape, companies are increasingly judged not just by their bottom line, but by their commitment to Environmental, Social, and Governance (ESG) practices. This shift has transformed how organisations approach employee benefits, with a growing focus on offerings that support sustainability and social responsibility.
What Is ESG?
ESG stands for Environmental, Social, and Governance - a framework used to measure a company's commitment to creating a sustainable future. Companies are evaluated not only on their financial performance but also on their impact across these three key pillars:
Environmental
Addresses the impact on the physical environment and climate-related risks
Waste management,
Biodiversity and ecosystems,
Eco efficiencies,
Climate change and greenhouse emissions,
Air pollution.
Social
Involves treatment of employees, supply chain workers, customers, and community members
Fair pay and living wages,
Diversity, equity, and inclusion initiatives,
Workplace health and safety,
Fair treatment of customers and suppliers,
Community impact.
Governance
Covers internal management practices, policies, and controls
Regulatory compliance,
Risk management,
Corporate policies,
Leadership structure,
Ethical practices.
Measuring ESG
This involves both quantitative and qualitative indicators. These indicators include metrics such as carbon emissions, water usage, employee turnover rates, board diversity, executive compensation, and more.
Why Do Companies Need ESG Reporting?
Companies require ESG reporting for regulatory compliance and risk management. ESG reports allow companies to proactively disclose their activities and identify potential areas of risk. Such reporting also helps companies address global challenges like climate change and social unrest.
According to KnowESG, "Companies and investors are placing greater importance on ESG performance." A strong ESG performance enhances a company's reputation as responsible and sustainable, attracting more investors and customers. Tracking carbon emissions and conducting energy audits are two examples of how companies can monitor ESG.
Why Focus On ESG-Aligned Benefits?
The landscape of employee benefits is evolving, with a growing emphasis on sustainability and social responsibility. Recent studies show that employee preferences are shifting significantly: almost four in five employees would rather have a new or additional benefit than a salary increase, while over 50% of employees say they wouldn't work for a company whose benefits lack strong environmental and/or social causes.
A strong ESG commitment, reflected in employee benefits, can:
Enhance company brand reputation,
Attract sustainability-minded customers,
Appeal to socially conscious investors,
Improve employee satisfaction and retention,
Support long-term business growth.
By implementing benefits that align with ESG goals, companies can create a more attractive workplace while contributing to a more sustainable future. Whether starting with environmental initiatives or expanding social support programmes, every step toward ESG-aligned benefits helps build a stronger, more responsible organisation.
Does Company Size Impact ESG Efforts?
The successful implementation of green initiatives depends on decision-makers within a company and the internal review process. In small businesses, decisions may be made by the owner or a small team. In larger companies, it may involve multiple stakeholders, departments, and rigorous internal processes, leading to a longer approval timeline. Engaging key decision-makers and ensuring they understand the value of ESG and green initiatives is vital for success.
The scale of green initiatives can vary based on a company's size. Smaller companies, often perceived as lacking resources and time for ESG efforts, are increasingly recognising the need to compete for talent by demonstrating their commitment to sustainability. Medium-sized businesses can benefit from sustainability reporting to track and improve their environmental performance. Large corporations can address global supply chain management and ensure sustainability across their entire network, from sourcing to distribution.
Employee Benefits That Will Help Meet Your ESG Goals
Promoting sustainable behaviour through employee benefits is an effective way to incorporate ESG into your business. This can include initiatives like tree planting and environmentally friendly travel options.
Environmental Benefits
These benefits encourage eco-friendly behaviour and help reduce your company's carbon footprint:
Electric Car Salary Sacrifice
Helps employees save 30-60% on any electric car through salary sacrifice.
No net cost to implement for employers,
Complete risk protection included,
Directly reduces company carbon emissions,
Makes sustainable transport accessible to employees,
Access to the best prices in the EV market through providers like The Electric Car Scheme.
Green Transport Initiatives
Cycle to work schemes,
Public transport subsidies,
Electric bike programmes,
Sustainable commuting incentives.
Workplace Sustainability Programs
Recycling initiatives,
Paperless workflows,
Green office supplies,
Energy-efficient equipment,
Waste reduction programmes.
Social Benefits
These benefits focus on employee well-being, health, and community impact:
Health and Wellness
Comprehensive healthcare coverage,
Mental health support services,
Fitness programmes and gym memberships,
Wellness resources and programmes.
Family Support Programmes
Assisted reproduction and fertility benefits,
Gender reassignment support and coverage,
Extended parental leave policies,
Childcare support,
Financial wellness programmes,
Workplace pension schemes.
Community Engagement
Fair pay and living wages,
Supply chain worker protection,
Customer-fair treatment policies,
Community impact initiatives.
Governance Benefits
These benefits promote strong corporate governance practices and ethical leadership:
Professional Development
Diversity and mentorship programmes,
Leadership training,
Skills development,
Career advancement opportunities.
Corporate Ethics Programmes
Regulatory compliance training,
Risk management education,
Anti-corruption policies,
Ethical business practices training.
Diversity and Inclusion Initiatives
Employee resource groups,
Inclusive workplace policies,
Equitable advancement opportunities,
Fair treatment policies.
Each of these benefit categories helps organisations meet specific ESG criteria while creating value for employees. By implementing a mix of benefits across these three areas, companies can create a comprehensive ESG strategy that attracts and retains talent while contributing to broader sustainability goals.
Implementing ESG-Focussed Benefits
To successfully implement ESG-aligned benefits:
Assess Current Offerings,
Review your existing benefits package,
Identify gaps in ESG alignment,
Survey employee preferences and needs.
Set Clear Goals,
Define specific ESG targets,
Establish measurement criteria,
Create implementation timelines.
Choose Appropriate Benefits
Select benefits that align with company values,
Consider employee demographics and preferences,
Balance cost with impact.
Monitor and Adjust
Track the use of the benefits,
Measure impact on ESG goals,
Gather employee feedback,
Adjust offerings as needed.
Looking Ahead
The landscape of employee benefits continues to evolve with increasing emphasis on ESG principles. Companies that align their benefits packages with ESG goals position themselves to:
Meet changing employee expectations,
Attract and retain top talent,
Demonstrate corporate responsibility,
Build long-term sustainability,
Create positive environmental and social impact.
By implementing benefits that support ESG goals, companies can create a more attractive workplace while contributing to a more sustainable future. Whether starting with environmental initiatives like The Electric Car Scheme or expanding social support programs, every step toward ESG-aligned benefits helps build a stronger, more responsible organisation.
EV Salary Sacrifice With The Electric Car Scheme
Introducing electric car salary sacrifice as an employee benefit can enhance employee satisfaction and reduce a company's carbon emissions. The Electric Car Scheme offers the best prices, complete risk protection, and a trusted 5-star service for you and your team, ensuring a win-win scenario for all.
Key benefits:
Make your team feel rewarded.
Save your team 30-60% on car costs through salary sacrifice.
No cost to the company.
Access the best prices in the EV market.
Complete risk protection for employers.
Sustainability Reporting At The Electric Car Scheme
Implementing electric car salary sacrifice can be complemented with impact reporting, which tracks total committed mileage, cars ordered and delivered, and carbon dioxide equivalent savings. These reports demonstrate your company's commitment to sustainability and can be shared internally with stakeholders.
Successfully implementing green initiatives is an ESG responsibility and an opportunity for businesses to enhance their reputation while playing a vital role in preserving the planet. When such initiatives positively impact employees, it's a win-win for all parties involved!
Last updated: 13.02.25
