Employers turning company car benefits green, survey suggests

UK employers, driven by environmental concerns, are 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, with almost half (43%) of UK companies naming it in their top five priorities, up from 33% in 2020.

Furthermore, the survey suggests that almost two-thirds (61%) of UK companies plan to review their company car benefit policies over the next year.

The most common reason given 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%).

“It is very encouraging to see that so many employers are planning to introduce green alternatives within their car benefits policies,” said Samantha Rogers, reward data service consultant at Willis Towers Watson. “Companies are clearly aware of the growing urgency of the climate emergency.”

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 which already have a ceiling on CO2 emissions.

Rogers continued: “The pandemic has prompted organisations and employees to re-evaluate whether as many in-person meetings are necessary.

“It is 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.”

Willis Towers Watson surveyed 620 UK organisations about their company car benefit policies and practices during the second half of 2020 and early 2021.

Further information on the factors shaping company car policies in 2021 can be found on its website.