From 2018 to 2022, 89 extreme weather events caused more than $1 billion in damage, which averages out to one every three weeks, according to the 2023 U.S. National Climate Assessment report. As the effects of climate change become more widespread—from severe storms, flooding, extreme heat, poor air quality, wildfires and more—business leaders are realizing how their employees are impacted.
As a result, more companies are prioritizing climate protection as part of a comprehensive employee benefits package. In fact, Gartner, Inc. included climate change employee benefits as part of its top nine workplace predictions that HR leaders will need to address in 2024 and beyond.
Why climate change employee benefits are good for business
“Employers have a direct stake in their workers’ stability and financial security, and strong business reasons to help employees manage, avoid and prepare for weather-related disruption and crises,” explains Timothy Flacke, co-founder and executive director at Commonwealth, a national nonprofit building financial security and opportunity for financially vulnerable people through innovation and partnerships. “As climate change weighs more heavily on workers’ financial situations, it’s a smart HR strategy for employers to invest in the resilience and productivity of their workforce by alleviating the financial impact of extreme weather.”
Offering climate-related employee benefits also helps boost employee satisfaction and morale, while attracting new talent who prefer companies that prioritize environmental issues. “As a CEO, I hold the belief that climate protection is not merely an environmental concern, but it also has significant implications for our business,” notes Jon Morgan, co-founder and chief editor of Venture Smarter, a consulting firm that specializes in helping startups and small businesses scale and grow.
Climate change protection
“This is why we are considering adding climate protection for our employees. We understand that the decisions and actions we take today will have a profound impact on the future,” says Morgan. The company views climate change protection as an investment in their employees’ well-being and productivity. “By creating a healthier, more sustainable working environment, we can help our employees feel better, work more efficiently and be more satisfied with their jobs. This, in turn, can lead to lower turnover rates, higher employee engagement and, ultimately, better business performance.”
Plus, many companies have long supported staff during crises, and climate change is a critical challenge of today. “As extreme weather events become more frequent and severe, it’s natural for employers to respond here as well,” says Flacke. “And it’s important to recognize that the need and the business case for addressing it exist regardless of the cause of extreme weather.”
Types of climate protection employee benefits
Commonwealth’s recent report Feeling the Heat: Climate Change’s Impact on Worker Financial Security found that workers are looking to their employers to mitigate the financial effects of extreme or unusual weather, Flacke notes. “Eighty percent of workers surveyed would like greater assistance from their employers, such as paid and extended time off, flexibility in work schedules and additional financial resources.” With over half of workers surveyed reporting that extreme weather is already impacting their work, education, finances, home or living situation and/or health, it is clear that businesses need to explore adding climate change protection employee benefits, if they haven’t done so already.
Morgan has already heard from employees sharing personal stories about how climate change impacted their families or communities, and others have expressed concerns about the environmental impact of business operations. “While we haven’t had specific requests for climate resilience stipends or climate-focused mental health support yet, we’re proactively addressing these issues to demonstrate our commitment to our employees’ well-being.”
Here are seven of the most common climate change employee protection benefits available. If your company isn’t offering them yet, contact the HR department for consideration.
Climate leave, as it’s often referred to, allows staff to take time off during a severe weather event. Conor Hughes, a human resources consultant who shares his expertise on SMB Guide, has collaborated with firms to integrate climate resilience into their employee benefits offerings. “This has taken the form of specifically scheduled paid time off, which enables workers to get ready for potential dangers and safely evacuate.”
2. Financial support for evacuation, short-term housing and relocation assistance
When a disaster strikes, some employees may need to evacuate and find a temporary or permanent place to live. Without a stable place to call home, they won’t be able to be productive at work. Therefore, it’s important for companies to provide support, such as monetary assistance for transportation to evacuate, temporary housing and/or relocation costs.
3. Climate change mental health support
Having access to mental health services in a time of climate change is more important than ever, as 43% of workers are experiencing persistent eco-anxiety, resulting in work demotivation and lost focus, according to a survey from The Conference Board. Venture Smarter is looking into providing access to climate-related mental health resources and counseling services. “We recognize that climate change can have a significant emotional impact, and we want to help our employees maintain their mental health and resilience in the face of this global challenge,” Morgan acknowledges.
4. Telemedicine and pharmacy perks
Climate-related health costs in the U.S. total over $800 billion per year, according to Natural Resources Defense Council, and Mercer’s Inside Employees’ Minds study found that the majority of employees (62%) are concerned about the impact of climate change on their health. During a crisis, people may need to access telemedicine if they have evacuated or if their providers’ offices are closed. Being able to do so for free could be extremely beneficial. Also, pharmacy benefit vendors can provide no-questions-asked grace refills for prescriptions, which is critical for those who have not been able to get medications from their local pharmacy or mail-order program.
5. Climate change funding for special equipment
Some companies may invest in critical emergency supplies to distribute to employees during a disaster, such as bottled water, shelf-stable food, air purifiers, generators and solar-powered radios. This benefit may also be in the form of a reimbursement to employees who purchase these items themselves.
6. 401(k) hardship withdrawals and expedited insurance payments
For those in a real financial crunch, having the option to withdraw money from a retirement plan early can be a lifeline. Also, carriers for home, automobile, boat, motorcycle and pet insurance may offer expedited payment services following a climate disaster. “Looking at it pragmatically, permitting early withdrawals from retirement accounts or speeding up insurance payouts after disaster strikes are key benefits,” Hughes states.
Setting up a fund in advance can provide a safety net for employees facing climate-related challenges. “We’re thinking about offering a climate resilience grant to help employees cover the costs of climate-related home improvements like flood-proofing and wildfire-resistant construction,” Morgan notes. This grant would provide financial assistance to employees who are taking proactive measures to protect their homes and families from the effects of climate change.
Finally, Flacke highlights what Julie Gehrki, vice president of philanthropy at Walmart and Walmart Foundation, discussed during a recent webinar: “She notes that the first topic their emergency operations team raises during a climate-related event is the safety and well-being of their employees. Are they healthy? Are they safe? [And] are we in contact? How are we supporting them? In circumstances where employees need financial support during acute issues, such as losing a car or house damage, [Gehrki] says Walmart activates its employee assistance fund and offers financial grants intended to supplement the assistance from insurance and FEMA.”
Photo courtesy of Peopleimages.com – Yuri A/Shutterstock
