A Positive Impact

Remote, distributed, and hybrid work models are having a huge impact on ESG efforts. Here’s how.

With remote, distributed, and hybrid work becoming increasingly mainstream in the past few years, HR teams have been coming to grips with the challenges and opportunities created by greater workforce flexibility. A topic that is coming to the forefront is the potential for remote and distributed work to positively impact companies’ efforts around environmental, social, and corporate governance (ESG). If these positive benefits can be demonstrated, companies will need to adjust to best support their teams.

Here are some of the key areas HR leaders must think about when they consider the impact of the new world of work on ESG for their businesses.

Environmental Benefits: Reducing Emissions and More

When many people think of ESG issues, their thoughts first turn to environmental impacts. While research is still ongoing as to the potential environmental benefits of allowing staff to work remotely, there are three main ways in which distributed work stands to positively benefit companies’ environmental efforts.

1. Office spaces. Many companies with older office spaces that were not built with sustainability in mind have begun to consider how increased remote or distributed working might help their company reduce energy consumption. If some office spaces are inherently energy inefficient, fewer on-site workers means less demand for lighting, heating, and air conditioning.

2. At-home recyclingResearch conducted in the UK shows that employees adopt more sustainable waste practices at home than at the office, perhaps due to people being more aware of the environmental impact while in their own living space or to weaving personal habits with work habits while at home. Either way, this is a noteworthy benefit.

3. Reduced commutes. The switch to more frequent remote working is likely to significantly reduce the greenhouse gas emissions associated with a daily commute. When remote working became the norm for knowledge workers in 2020, Breathe London data showed that emissions were reduced by 25% during the normal morning commute and by 34% during the evening commute.

Social Benefits: Diversity, Inclusion, and Employee Well-being

The social dimension of ESG is perhaps the area where remote, distributed, and hybrid work stands to have the most obvious and measurable impacts.

Traditional office-based work arrangements often require employees to live in or near major cities, which can be expensive and difficult to access for many people. Remote work allows employees to live in areas with lower living costs, which can improve their quality of life and reduce financial stress. The knock-on impact is that a wider pool of people can apply for roles.

Offering employees more workplace location flexibility is also emerging as a meaningful way to move the needle on diversity, equity, and inclusion (DEI). Flexibility continues to be most valued by those who have been underrepresented in knowledge work, including women, people of color, and people with disabilities. Work location flexibility is already having some direct impacts on diversity – from both a hiring and retention perspective – at some of the world’s leading companies. As an industry example, tech giant Facebook reported an increase in diverse hires since expanding its remote working options, and another study showed that remote work has enabled higher employment levels among people with disabilities.

From a broader employee well-being, productivity, and motivation perspective, the option to have work location flexibility is valued across the workforce. In Topia’s annual Adapt survey, 94% of employees agreed that they should be able to work from anywhere, so long as they get their work done. Offering more choice around work location can improve employee engagement and productivity by giving employees more autonomy and flexibility in how they work. Research conducted by Ergotron suggests that flexibility in work location improves work-life balance, increases productivity, and fosters healthier lifestyles.

Governance Benefits: Greater Transparency and Accountability

In terms of the governance aspects of ESG in relation to remote and distributed work, there are two main considerations.

1. Companies need to ensure they are effectively prepared to address any compliance and duty of care issues that may arise due to distributed working. The new world of work has unveiled new compliance risks for companies with greater location flexibility and they need to know how to effectively mitigate them. They also need to know where employees are located so they can fulfill their duty of care as employers. Both rely on transparency from the employee as to where they are working from and the right systems in place to log and manage this data.

2. Employers need to have the right processes and procedures in place to be able to measure the impacts of distributed working to provide transparency and identify areas for continued improvement. For instance, by building diversity metrics into systems that capture data around the interest in distributed work, companies can start to track how workplace location flexibility impacts different populations within the organization.

Technology tools designed to support remote, hybrid, and distributed workforces should be able to help organizations keep tighter reins on their corporate governance as well as improve the employee experience.

Tracking Impact

For HR professionals to start to identify, track, and improve ESG metrics as well as launch ESG-focused remote work initiatives, here are some useful starting points.

  1. Begin with your existing data. Get a clear understanding of where your employees are located if they aren’t office-based. Make sure you can track this on an ongoing basis to manage risks and understand the impact of work location flexibility. If the right technology is in place, this should be relatively straightforward.
  2. Tighten up processes and procedures. To ensure the effectiveness of the governance side of ESG initiatives, revise and update company policies around work location expectations. This should then be clearly communicated to employees so they know what is and isn’t allowed.
  3. Educate senior leadership. HR teams should educate company leaders about the potential ESG benefits of remote, hybrid, and distributed work so they can better understand how it can contribute to the company’s long-term sustainability and financial performance.
  4. Pilot remote hybrid and distributed work programs. If distributed work is a new approach, consider running a pilot project to demonstrate effectiveness and start setting up the right measurement processes to demonstrate positive ESG impact. By testing remote work arrangements on a smaller scale, HR teams can gather data to support their case for remote work and address any concerns that company leaders may have.
  5. Communicate success stories. HR teams should communicate success stories about remote work arrangements and their ability to support ESG initiatives by sharing how remote work has improved employee well-being, diversity and inclusion, and sustainability.

As remote, hybrid, and distributed work practices continue to evolve, companies will need to continually assess and reassess the impact of work location flexibility and use people data effectively to ensure they can make the most of the ESG opportunities that the new world of work presents.

Jacky Turnbull is the chief people officer at Topia. 

Tags: esg, May 2023

Recent Articles