Why taking action on air pollution is good for business
Reducing air pollution is good news for business. Introducing progressive policies that enable employees to work flexibly and travel actively will not only attract top talent but help you get the most out of your workforce. Companies can get ahead of the competition and delight investors and customers alike by demonstrating they are part of the solution to the air pollution problem. In short, by pursuing a ‘clean air agenda’ across your business companies can deliver number of stakeholder engagement, Corporate Sustainability and HR objectives, and generate cost savings too.
The Business Clean Air Taskforce has identified four broad opportunities that companies can reap by developing and implementing Clean Air Action Plans:
1. Employee wellness and productivity
Air pollution is responsible for an estimated 6 million sick days each year in the UK, with scientists estimating that air pollution cuts British people's lives by an average of six months. Wellbeing conscious companies will find that alleviating air pollution serves not only to protect people from toxic fumes, but generates upside benefits associated with more active lifestyles.
- Reduced sick days – Employees who are physically active take 27% fewer sick days. By walking, running or cycling to work employees can cut air pollution and improve their physical and mental health. Conversely, car commuters are at least 13% more likely to feel constantly under strain or unable to concentrate than those who cycle or walk.
- Employee satisfaction – Data conducted by Global Action Plan’s work with 02 Telefonica found that 100% of employees reported a better work/life balance when flexible working. Reasons included; less time spent travelling and benefits for working parents with childcare responsibilities.
- Increased productivity – Productivity can be generated through a wide range of ‘clean air activities’. Firstly, Transport for London reports 73% of employees who cycle feel it makes them more productive at work. Second, research by the World Green Building Council suggests that better indoor air quality (lower concentrations of CO2 and pollutants due to high ventilation rates) can lead to productivity improvements of 8-11%. And third, 91% of people who work from home feel that they’re more productive than when they’re in the office. Working from home would allow the average employee to save 90 minutes of commuting time each day and studies show 52% of this time is actually spent on work related activities.
Case study: Skanska
After Skanska rebuilt its new Northern England hub in Doncaster, UK with a BREEAM-UK ‘Outstanding’ rating, it saw 3.5 times fewer building-related sick days than other UK offices, saving the company £28,000 in staff costs in 2015. Improvements to layout and noise, indoor air quality, and a central light-well bringing more daylight into the building saw staff satisfaction with their office jump from 58% to 78%. (Health, Wellbeing & Productivity in offices, 2014, WGBC)
2. Talent attraction and retention
With employees increasingly expecting employers to take action on climate change, businesses that promote environmentalism are experiencing positive impacts on recruitment and staff retention.What is more, 3 in 4 workers will be millennials by 2025. This demographic is widely believed to be more environmentally focused with habits to match. In order to engage and motivate this section of the workforce, businesses can walk the talk and encourage agile working:
- Attracting talent - 70% of UK employees feel that flexible working makes a job more attractive to them and 30% would prefer flexible working to a pay rise. Data shows that 92% of millennials identify flexibility as a top priority when job hunting, and this group will comprise 75% of the workforce by 2025.
- Staff retention – Providing flexible working could prove a key mechanism to retain staff. When employees are asked what they would like to see businesses focus on to reduce air pollution, the top answer (34%) is that people would like to be able to work from home. Having agile working policies is fast becoming a differentiator for prospective employees who not only see the environmental benefits of cutting their commute, but improved work-life balance and productivity.
3. Financial savings
As well as the social benefits generated by reducing air pollution, promoting active, flexible and low impact environmental behaviours can result in cost savings from reduced need for office space, travel expenses and employee ill health.
Savings on Clean Air Zones - CAZ and LEZs are planned for a number of UK cities mean running polluting vehicles will become increasingly expensive. Companies that run commercial vehicles that do not meet Euro VI emissions standards will have to pay charges. Transitioning to newer and less polluting, and ideally electric vehicles, will save companies money on these charges.
- Savings through active travel - The Cycle to Work scheme generates at least £72 million in economic benefits for the UK economy and employers through improved physical fitness and associated health benefits. Given that eight bicycles can fit into just one car parking space, it is much less expensive to provide parking for staff who cycle than for those who drive. Some years ago, GlaxoSmithKline estimated that just one car parking space cost them over £2,000 to maintain at their West London offices.
- Savings in office space - Studies show companies could save over £5,700 per desk if they can reduce office space. Flexi working means that employees can work from home or other locations where appropriate, freeing up the need for every employee to have a permanent desk.
- Savings by transitioning to electric – Electric vehicles can be around 10p per mile cheaper to run than equivalent petrol or diesel vehicles. Early adopters can benefit from government grants, such as the Workplace Charging Scheme. Now with Salary Sacrifice for EVs, employees can acquire an EV cheaper than a diesel or electric vehicle due to favourable tax rates.
- Savings with suppliers – Data from Transport for London shows that businesses that have used cycles for local deliveries can save between 39%-64% on delivery costs. With CAZs and LEZs coming to cities and towns across the UK, cleaner last mile deliveries will make economic sense for many companies delivering to businesses and homes.
Case study: O2 Telefonica
From 2012-2014 Global Action worked with O2 Telefonica to replace employee travel with technology solutions to aid agile working.
The initiative saw an 84% increase in using O2’s ‘Lync’ technology, which resulted in 31% of employees reporting that they have fewer, more effective meetings. 13,672 journeys were avoided between home and work, saving the business £509,000, 29,000 hours, and 424 tonnes CO2. 78% of staff felt they were more productive. 48% felt they were less stressed, and 31% more engaged. Additionally, every permanent desk not required as a result of agile working was reported to save the business £7,000 per year.
“There are so many companies wanting to speak to us about flexi-working because they know we’re leading the way, and have experienced the pains and the pitfalls as well as the huge cost savings and benefits,” - O2 employee.
4. Getting ahead of sustainability risk and regulation
Tackling air pollution can help companies tackle increasing regulation on environment and health, plus respond to shifting public sentiment and investor standards on sustainability.
- Meeting regulations – Acting now on air pollution can help companies steal the march on competitors before regulation sets in. The government is introducing targets on air pollution in the forthcoming Environment Bill. Regulation is also likely to come from a health perspective in response to increasing concern from the WHO and other medical bodies about the impact of air pollution on human health. Click here for our breakdown of what the Environment Bill means for business.
- Meeting customer expectations on sustainability – 88% of consumers reportedly want brands to help make it easy for them to make a difference on environmental issues. If your brand isn’t helping people to improve their environmental and social footprint, then your business risks losing recognition as a purpose-driven brand.
- Managing investor sentiment and financial risk - Companies are increasingly preparing for shocks caused by climate change to their business model, driven in part the integration of “ESG” by investors into investment decisions. As awareness grows amongst the global community of the interplay between air pollution and climate change, air quality will likely become another lens for companies and their shareholders to assess corporate risk and profitability. The real estate investment community is already aware of the growing expectation for indoor air quality standards; if companies are not meeting air quality standards they could fall out of favour with investors and clients.
A growing number of financial institutions are commenting on the growing issue of air pollution.
“(Air quality) investment opportunities include EV manufacturers and enablers, as well as those reducing emissions from conventional engines (for instance through catalysts converting pollutants to less harmful by products). Taking steps to address the problem of air pollution offers a prime example of how social, political and economic pressures can combine to catalyse not only tangible solutions for a more sustainable future, but also financially attractive opportunities from participating in this progress” – Columbia Threadneedle Investments