COVID-19 has fundamentally altered the workplace. We’re embracing new daily routines, growing intimately familiar with our colleagues’ children and pets, and exploring new ways of collaborating remotely. As organisations across the world consider returning to the office, many are embracing the idea of a radical shift in their approach to remote work. Previously, work from home (WFH) programs have been adopted in order to attract and retain talent and maybe save money. Now they’re vital to protecting the health and safety of employees while keeping businesses operating. But in the future, organisations are considering additional benefits: the ability to reduce emissions, foster productivity and increase resilience. With these benefits growing increasingly clear, organisations are no longer asking ‘if’ they should adapt to remote work, but instead, ‘how?’ In recent months, we’ve taken a close look at both the environmental and economic impacts of various WFH models, which we’ll share in this article.
COVID-19 has taught us that businesses can significantly improve their environmental performance by incorporating flexible working policies into their long-term strategy without workforce disruption. Uncomfortable journeys on crowded public transport and dashes through bustling city streets for meetings that could have been conducted remotely are proving unnecessary. In the UK alone, ‘homeworking’ has the potential to reduce carbon emissions by over three million tonnes a year across the whole country. While cuts in spending of an average of £75 per week by not commuting or buying lunch in city centres are simply another bonus. Operationally, real estate and energy prices are major contributors to the total expenditure of a business, which begs the question: Is having an expensive office space really necessary?
During the COVID-19 response, energy costs and carbon emissions in the short and medium terms have reduced, with many companies announcing new strategies to cement this change by operating partially in a WFH model. This has led to questions about what to do in the longer term, and how best to do it.
According to an ENGIE Impact study, the average carbon footprint per employee is approximately 1.3-1.5 tCO2e over the course of one year.
But using a proprietary WFH calculator, we estimated that during the lockdown, companies only partially balanced these emissions through reduced office energy and emissions. Organisations need to evaluate the impact of working from home compared with their operational footprint to ensure that overall energy and emissions are reduced.
The COVID-19 response has resulted in a significant drop in energy and direct carbon emissions generated directly by buildings and facilities, leading to a decrease in what’s called Scope 1 and Scope 2 emissions. Indirect emissions, like those driven by employee commuting and business travel (known as Scope 3 emissions), have also significantly decreased. However, this is not the whole story. While some businesses will have seen a 20-30% decrease in operational footprint, how might they account for the footprint of employees working from home? Actions such as boiling the kettle, heating the home, using multiple screens all have energy and costs associated. A UK-based price comparison service and switching website estimates households where people are working from home will use 25% more electricity and 17% more gas per day, adding up to a potential yearly increase of up to £195 per household or £16 per month for customers on Standard Variable Tariffs.
If there is a planned move to increased working from home, organisations should consider whether to include these emissions in their operational boundary. In this case, there are options to offset these emissions or even offer employees a green tariff. Considering the full environmental impacts of the changes while addressing employee concerns along the way can keep organisations honest in their sustainability ambitions and increase employee acceptance of the new ways of working.
Before making long term decisions on work from home policies, it’s important to evaluate and stress test under various scenarios what the new normal will look like.
Preparing for the new normal requires commitment from across the organisation. Once the outcomes have been assessed and a decision has been made, the next step is to identify and lock in the long-term sustainability benefits for the business while maintaining organisational culture and growth. Organisations should consider making changes now to an already disrupted workforce as employees will likely be more receptive and there is an opportunity to surpass market competitors. One lens through which to consider necessary changes is real estate.
The chaos of COVID-19 will eventually subside. When it does, working from home will be more appealing for some and, having often been an impossible luxury beforehand, will become a possibility in the new world. With organisations moving towards working-from-home, supported by automation, enhanced digital tools and platforms, we expect to see a rise in smaller local offices or ‘hub spots.’ These hub spots would incorporate collaboration rooms, communal areas and flexible working spaces, offering an opportunity to indulge our human instinct to be together and to share experiences. Teams will be able to meet virtually when required to strategise and solve client issues instead of rushing around buildings searching for a meeting room. We’ve seen the world’s largest companies take the opportunity to optimise their businesses while still having an aggressive Net Zero target. Leaders will seize this unique moment to make the bold changes that enact positive social and environmental change.