Between 2018 and 2022, 89 catastrophic weather incidents resulted in damages exceeding $1 billion, translating to an occurrence roughly every three weeks, as stated in the 2023 U.S. National Climate Assessment report. The repercussions of climate change are increasingly evident—ranging from intense storms and flooding to extreme temperatures, inadequate air quality, wildfires, and more—prompting business executives to comprehend their employees’ vulnerabilities.
Consequently, a growing number of organizations are integrating climate protection into their extensive employee benefits offerings. According to Gartner, Inc., climate change-related employee benefits rank among the top nine workplace trends that HR leaders must address in 2024 and beyond.
The Business Case for Climate Change Employee Benefits
“Employers have a vested interest in their employees’ financial stability and overall security, with compelling business incentives to assist workers in managing and preparing for disruptions due to severe weather,” states Timothy Flacke, co-founder and executive director of Commonwealth, a national nonprofit organization dedicated to enhancing financial security and opportunities for economically vulnerable populations through innovative solutions and partnerships. “As climate change increasingly strains workers’ financial circumstances, it becomes a prudent HR approach for employers to bolster the resilience and productivity of their employees by mitigating the economic impacts of extreme weather events.”
Providing climate-related employee benefits can also enhance workplace satisfaction and morale, attracting talent that favors organizations committed to environmental stewardship. “From my perspective as a CEO, I assert that climate protection is not solely an environmental issue; it carries major implications for our business as well,” remarks Jon Morgan, co-founder and chief editor of Venture Smarter, a consulting firm focused on aiding startups and small businesses in scaling effectively.
Commitment to Climate Change Protection
“This is the impetus behind our consideration of climate protection initiatives for our workforce. We recognize that the actions we undertake today will significantly influence the future,” explains Morgan. The organization views climate change protection as a vital investment in the welfare and productivity of their employees. “By fostering a healthier, more sustainable workplace, we can promote enhanced employee well-being, leading to more efficient work habits and greater job satisfaction, ultimately reducing turnover and driving improved business outcomes.”
Moreover, many organizations have historically supported their personnel during crises; addressing climate change is an essential challenge of our time. “As extreme weather incidents become more common and destructive, it is only natural for employers to respond accordingly,” Flacke notes. “Additionally, it’s crucial to acknowledge that the requirement and the business rationale for addressing these issues remain regardless of the origins of such extreme weather.”
Various Forms of Climate Protection Employee Benefits
A recent report by Commonwealth, titled Feeling the Heat: Climate Change’s Impact on Worker Financial Security, indicates that employees are increasingly looking towards their employers for support in alleviating the financial burdens linked to severe or unusual weather events, according to Flacke. “Eighty percent of the workers surveyed expressed a desire for enhanced assistance from their employers, including paid time off, flexible work schedules, and additional financial support.” With over half of the respondents indicating that extreme weather already affects their employment, education, finances, housing, or health, it is evident that businesses must consider implementing climate change protection benefits if they have not done so already.
Morgan has already received feedback from employees sharing personal accounts regarding how climate change has affected their families and communities, with others voicing concerns about the environmental consequences of business operations. “Though we have yet to receive specific appeals for climate resilience stipends or climate-focused mental health support, we are actively tackling these matters to show our commitment to our employees’ well-being.”
Here are seven prevalent forms of climate change employee protection benefits currently available. If your organization does not offer these yet, consider reaching out to the HR department for evaluation.
1. Paid Time Off and Flexible Schedules for Climate-Related Events
Often referred to as climate leave, this allows employees to take time off during severe weather situations. Conor Hughes, a human resources consultant who shares insights on SMB Guide, has collaborated with organizations to incorporate climate resilience into their employee benefits. “This typically manifests as specifically allocated paid time off, enabling employees to prepare for potential dangers and evacuate safely.”
2. Financial Aid for Evacuations, Temporary Housing, and Relocation Assistance
When a disaster occurs, some workers might require evacuation and the need to secure temporary or permanent housing. Without a stable residence, maintaining productivity at work becomes challenging. Thus, it is vital for companies to offer assistance, such as financial support for transportation for evacuation, temporary lodging, and/or relocation expenses.
3. Mental Health Support Addressing Climate Change
Access to mental health resources amid climate change is increasingly crucial, with 43% of workers experiencing ongoing eco-anxiety that detracts from their motivation and focus, according to a survey by The Conference Board. Venture Smarter is exploring means to provide access to mental health services related to climate concerns and counseling options. “We acknowledge that climate change can create a substantial emotional toll, and we aim to assist our employees in maintaining mental health and resilience amidst this global challenge,” Morgan affirms.
4. Telemedicine Services and Pharmacy Benefits
The health costs associated with climate change in the United States exceed $800 billion annually, as stated by the Natural Resources Defense Council. Mercer’s Inside Employees’ Minds study revealed that a majority of employees (62%) express concern regarding the impact of climate change on their health. In emergencies, individuals may need telemedicine services if they’ve evacuated or if their healthcare providers are unavailable. Having free access to such services can be extremely advantageous. Additionally, pharmacy benefit providers may offer no-questions-asked refill options for prescriptions, vital for those unable to access medications locally or through mail orders.
5. Funding for Essential Equipment Related to Climate Change
Some organizations may choose to invest in critical emergency supplies for employees during a disaster, such as bottled water, non-perishable food, air purifiers, generators, and solar-powered radios. Alternatively, this benefit may manifest as reimbursements for employees who personally procure these items.
6. 401(k) Hardship Withdrawals and Accelerated Insurance Payments
For those facing significant financial hardships, having the option of early retirement plan withdrawals can be a critical lifeline. Additionally, home, automobile, boat, motorcycle, and pet insurance providers may offer expedited payment services following a climate catastrophe. “From a practical perspective, allowing early withdrawals from retirement funds or expediting insurance payments post-disaster are significant benefits,” Hughes explains.
7. Employee Funds for Climate Resilience or Relief
Establishing a fund in advance can act as a safety net for workers confronting climate-related challenges. “We are considering the introduction of a climate resilience grant to assist employees with the costs of climate-proofing their homes, such as flood-resistant designs or wildfire-resistant construction,” notes Morgan. This grant would offer financial aid to employees who are taking proactive measures to safeguard their living environments against the effects of climate change.
Finally, Flacke highlights a point made by Julie Gehrki, Walmart’s vice president of philanthropy, during a recent webinar: “The primary concern of their emergency operations team during a climate-related event is the health and safety of their employees. Are they unharmed? Are they sheltered? [Furthermore,] are we maintaining contact? How are we supporting them? In situations where employees require financial assistance during pressing challenges, such as loss of transportation or property damage, [Gehrki] states that Walmart activates its employee assistance fund and provides financial grants aimed at complementing insurance and FEMA support.”
