UK employers turn company car benefits green

17 Nov 2021

With the recent COP26 Summit, the climate crisis is at the top of the global agenda. All businesses have an impact on the environment and environmental factors are a huge concern for many UK employers. A large number are now seeking to overhaul their company car policies, according to Willis Towers Watson’s 2021 Car Benefits Survey Report.

Introducing more environmentally-friendly cars is top of the list of planned car benefit changes in the next 12 months. Over four-in-ten (43%) UK companies named it in their top five priorities, up from 33% in 2020. In 2021, another 40% of companies were planning to change the make and models allocated, which could again refer to the introduction of more environmentally-friendly cars.

Well over half (61%) of UK companies plan to review their company car benefit policies over the next year. The most common reason was to align with market best practice or competitiveness, with 71% indicating this was the main trigger. Another frequent prompt for a review was the introduction of more environmentally-friendly behaviours and policies (57%).

Going hybrid
Environmental concerns are inspiring companies to make other changes. Organisations are seeking to reduce car travel, and their carbon footprints, by embracing work-from-home policies.

The pandemic-prompted work-from-home revolution is increasingly being reflected in car benefits policies. Only 3% of employers planned to reduce car journeys through embracing work from home in 2020. In 2021, this leapt up to 27%, with similar numbers planning to reduce car travel through increased tele/web conferencing.

Allowing employees to choose electric or hybrid vehicles is becoming much more commonplace. Just over a third (35%) of UK organisations now give sales professionals and managers the option to go electric or hybrid, a rapid jump from 19% in 2020. Almost a quarter (21%) of companies will even cover the home installation of a charging point, as well as the charging costs for plug-in vehicles.

Companies are also seeking to play their part in getting high-emitting cars off the road. A quarter (24%) plan to introduce a CO₂ emission ceiling on cars. They will join the almost half (45%) of UK organisations that already have a ceiling on CO₂ emissions.

Samantha Rogers, Reward Data Service Consultant at Willis Towers Watson, said:

“It is very encouraging to see that so many employers are planning to introduce green alternatives within their car benefits policies. Companies are clearly aware of the growing urgency of the climate emergency. The pandemic has prompted organisations and employees to re-evaluate whether as many in-person meetings are necessary. It’s also great to see that so many employers are planning to introduce electric or hybrid cars, and those that do will be able to benefit from tax advantages in some circumstances. It will be interesting to see how employers seek to make their car benefit policies more environmentally friendly in the years to come.”