In our previous article we introduced our latest Be Aware series ‘An Introduction to ESG for HR Professionals’. As we dive deeper into the key considerations of each ‘letter’ in the acronym, the first of these ESG pillars we are considering is E for ‘Environment’.

It goes without saying that the climate emergency is vast, complicated, and already impacting every business and worker to some degree. We are also acutely aware of the pressures being placed on HR professionals from both a regulatory and cultural perspective. This article aims to introduce some key buzzwords and themes related to environmental responsibility in the workplace to help increase awareness of the growing challenges. Whilst issues such as the expanding focus on green policies may already be familiar, there are several emerging areas in the nexus of employment law and climate change which all HR professionals should be aware of (and actively be preparing for) if they wish to become or remain an employer of choice.

Environmental whistleblowing

There are a broad range of climate-related whistleblowing issues emerging. One of the most common we are witnessing relates to greenwashing. It is vital that businesses ensure their green credentials are not overstated. Failure to do so can result in reputational damage and, following the development of the Green Claims Code by the Competition and Markets Authority in 2021, the potential for regulatory action.

Where an employee feels their employer is not meeting its environmental obligations, in the most extreme cases they might consider ‘blowing the whistle’. Employees of course have a legal right to do so if they disclose information which shows, in their reasonable belief, that “the environment has been, is being or is likely to be damaged”.[1] Last year, UK whistleblowing charity ‘Protect’ found that only 36% of workers in the UK believed they could be protected under whistleblowing law if they raised environmental issues[2]. Correspondingly, the number of environmental whistleblowing reports is relatively low, but we expect this number to rise in coming years as awareness and interest in the climate emergency grows.

In terms of next steps for employers, whistleblowing policies can be a valuable means of identifying problematic environmental issues at an early stage, when drafted well. Whilst not a legal requirement to list all types of protected disclosure, specific reference could be made in a policy to green considerations to help encourage the use of internal reporting procedures and drive a transparent workplace culture. The capacity to carry out investigations into environmental disclosures should also be explored to ensure reports are appropriately responded to.

Discrimination

There is a good basis for arguing that strong views on the environment may be protected under section 10 of the Equality Act 2010: Religion or Belief.  This understanding was supported by the landmark EAT case of Grainger v Nicholson in 2010. By way of summary, Mr Nicholson was made redundant and alleged that his dismissal was the result of his belief in climate change.  In its judgment the EAT confirmed that where a view on climate change is so strongly held that it amounts to more than just a mere opinion then it is possible for it to form the basis of a protected philosophical belief. It is unclear whether a lack of belief in climate change could also be protected but hypothetically an argument could at least be made that it would.

Green clauses

Employment contracts can be a good indicator of corporate priorities, including a commitment to sustainability & ESG. At DLA Piper, we have a close partnership with the Chancery Lane Project (CLP), an organisation which aims to drive climate action through contractual language. CLP has produced a range of template “green clauses” aimed at embedding climate change considerations into commercial and employment contracts. These could include the introduction of:

• mandatory training on sustainability & ESG;
• paid leave for employees volunteering with environmental organisations; or
• incentives for management teams to meet their environmental and sustainability goals.

The introduction of terms such as these can be a real differentiator in the market. Their prominence at such an early stage of the employment relationship can help to drive both talent retention and recruitment.

Green policy and practice

As the UK workforce demands more action from employers, the introduction of green policies can be an important first step for a company hoping to realise their sustainability & ESG ambitions.

There are a wide range of policies and practices which HR managers should be aware of. These may be subsumed within existing policies such as the need to consider the impact of greenhouse gases in a travel/expenses procedure, or climate-specific considerations within a Health and Safety policy. More progressive companies may even want to codify their environmental activities into a stand-alone environmental policy.

Climate-conscious pension schemes

Many employers are now giving serious consideration to occupational pension scheme climate risk and responsibility, particularly as the public demand for climate-conscious investing is growing. Section 124 of the Pensions Schemes Act 2021 sought to reflect this greater emphasis and mandates new governance and monitoring requirements in respect of climate risks and opportunities. Employers should also be aware of potential requirements to manage investment risks caused by environmental change and, in some cases, publish relevant information about the impact of these risks on the wider pension portfolio.

As both internal and external stakeholders become more sophisticated in this area, it is likely that corporate strategy generally will be placed under greater scrutiny through the lens of sustainability & ESG. Getting ahead of the curve and establishing your position on these matters will help to prepare you for any questions that arise, set you ahead of competitors and position your business as a market-leader in this space.

Click here to read our next article, in which we will be exploring matters of the social environment which HR professionals should be considering.

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[1] Section 43B (e) of the Employment Rights Act 1996

[2] Whistleblowing charity Protect finds ‘widespread lack of awareness of the law’ and how to raise environmental concerns | Law Gazette