It’s Time for HR to Meet the Climate Moment

Aligning people and planet policies is essential to attracting and retaining top talent.

By Kelley Fairman

February 27, 2023

three people sitting in front of laptops

The Great Resignation has prompted employers to reevaluate how they can keep their star employees and fill empty roles. The year 2021 proved to be a “quitter’s market,” with nearly 48 million workers leaving their jobs in the United States. According to PwC’s Saratoga workforce benchmarking survey, voluntary resignations increased by 37% in 2021 compared to 2020 as employees sought better pay and benefits, advancement opportunities, flexible work arrangements, and respectful work environments.


As Chief People Officers and recruitment teams scramble to respond, they may be overlooking an issue critical to a growing faction of the workforce: authentically addressing climate change at the organizational and employee levels.

Top Highlights (→ jump to section):

  • Climate change is the 2nd highest concern for Gen Z and millennial workers — just under cost of living.
  • Telework is a fantastic way to cut down on your company’s Scope 3 emissions while increasing employee happiness.
  • The healthcare sector is responsible for about 8.5% of US greenhouse gas emissions.
  • Wellness stipends should take climate into account: A 2021 landmark study found that over 45% of respondents said the state of the climate negatively impacted their daily lives.
  • Sustainable retirement offerings are available after a recent Biden administration ruling.
  • Employers can include climate action as a part of their charitable giving and community involvement efforts.

In survey after survey, employees share that they are looking for employers who take climate action seriously—and will leave if they don’t.

woman pointing at sticky notes on a wall at a team meeting

According to the Deloitte Global 2022 Gen Z and Millennial Survey, climate change is a top concern for Gen Z and millennial workers, second only to the cost of living. These generations, which make up nearly half of the US workforce, are more worried about climate change than unemployment, personal safety, and disease prevention — and that’s in the midst of a pandemic. Gen Z and millennials are disappointed in companies’ efforts to combat climate change and are pushing their organizations to act. 65% percent of C-suite executives surveyed in Deloitte’s 2022 CxO Sustainability Report are feeling moderate to large pressure from employees to address climate change.

IBM’s Institute for Business Values survey revealed that 71% of employees say sustainable companies are more attractive employers. Over half of employees would exclude companies from their job search if the organization does not align with their beliefs in environmental responsibility, according to BCG.


It’s not just attracting talent that is on the line — employees who perceive their employer as acting on climate are more loyal. Deloitte found that millennial and Gen Z workers are more likely to remain with their employer beyond five years if they are satisfied with their organization’s commitment to sustainability. Leadership and HR teams are beginning to realize that acting on climate is an attraction and retention issue that cannot be ignored, but progress is mixed.

WTW’s 2021 North America HR and Climate Survey finds that 81% of employers believe that climate strategy should be a part of the value proposition for prospective hires and current employees. Companies have begun to introduce roles specific to sustainability and climate action. Organizations are announcing net zero plans (many of which are bathed in greenwashing). Business leaders are flying across the world in private jets to attend global climate summits. However, the transformation of people policies has lagged. Only 10% of companies report that their HR team is significantly involved in delivering climate strategy.

"climate is an attraction and retention issue that cannot be ignored"

Opportunities for HR to meet the climate moment

Representing about 30% of labor costs, employer-sponsored benefits are an untapped opportunity to incorporate climate impact into people policies.


Here are five examples demonstrating how employers can connect the dots between benefits strategy and climate strategy.

Hybrid and work-from-home policies meet the demands of a workforce that prioritizes flexibility and helps reduce greenhouse gas emissions from commuting. For employees that commute to the office, employers can offer tax-advantaged public transportation subsidies and stipends for sustainable transport options such as biking and electric vehicles. 

green leaves in front of laptop screen with people grid

Policies such as those outlined in the City of Boston’s How-to Guide for starting an electric vehicle workplace charging program serve as a model for incentivizing sustainable travel. Frequent business travel has negative impacts on employee well-being and the environment, and employees are demanding change.


Action: Employers should consider hybrid and work-from-home models, incentivize clean transport, and reduce unnecessary business travel.

The healthcare sector is responsible for approximately 8.5% of US greenhouse gas emissions. Since nearly 60% of non-elderly Americans are covered by employer-sponsored health insurance, providing climate-friendly health plan options represents a significant opportunity for employers to green their benefits. 

people sitting on concrete bench in front of green trees and black glass skyscraper


Some healthcare providers and insurance companies are stepping up to the climate plate. Integrated health plan and hospital system Kaiser Permanente, for example, reached carbon neutral status in 2020 and has pledged to become net zero by 2050 (what’s the difference between carbon neutral and net zero? Find out here). Anthem, Blue Shield of California, Kaiser Permanente, and others signed onto the Biden Administration’s Health Sector Climate Pledge, with promises to cut greenhouse gasses in half by 2030.


Action: Employers should consider climate impact during the request-for-proposal process when determining their health insurance carrier and communicate climate-friendly options to employees during open enrollment periods.

A trend that has dominated human capital management is centering employee benefits around well-being, with offerings frequently classified into physical, mental/emotional, and financial pillars. Employers are doling out cash on innovative programs such as concierge mental healthcare, wellness stipends, and financial wellness benefits, but incorporating the environment into well-being is noticeably absent.

woman in an orange sweater sitting

Climate anxiety is soaring. In a landmark study published in 2021, researchers found that 59% of young people ages 16-25 are very or extremely worried about climate change. Over 45% of respondents said that the state of the climate negatively impacted daily life. Employers should ensure their mental health and employee assistance programs are equipped to address climate anxiety and should encourage environmental employee resource groups where employees can channel climate anxiety into climate action.

Companies are rapidly implementing wellness stipends, or lumps of money provided to employees for them to spend on eligible purchases that are most relevant to them. Gym memberships, meditation services, grocery delivery, work-from-home equipment, and more are made available for purchase via a marketplace facilitated by a stipend vendor. Employers should add climate solutions such as home solar, heat pumps, and electric vehicles as eligible items.


The financial wellness pillar of well-being has become increasingly important. According to Morgan Stanley, 91% of employees say they would feel more invested in remaining with their employer if financial wellness benefits were provided that met their needs, and 95% of HR executives are prioritizing the review of their financial wellness offerings. Interest in sustainable investing, particularly among millennials, remains strong. Employers can elevate their financial wellness program by providing employees with tools to evaluate their assets for climate impact. 


Action: Employers should integrate the environment into their well-being program by reevaluating mental health services, wellness stipends, and financial wellness benefits through the lens of sustainability. Get in touch with GreenPortfolio to discuss how our platform can help your employees power up their financial climate impact.

solar panels on rooftop of brown house

If upheld, the Department of Labor’s new rule, effective January 30, 2023, paves the way for plan sponsors to provide sustainable retirement options to employees. The ruling permits the following: (1) Retirement plan fiduciaries can consider environmental, social, and governance (ESG) factors when selecting retirement options; (2) Funds that incorporate ESG objectives as part of risk and return analysis can be set as a default retirement option; and (3) Collateral factors such as ESG can serve as a tiebreaker between investment options that are financially prudent. 


If you’re just starting out, Carbon Collective and Sphere are two options for sustainable 401(k)s alternatives.


Action: Employers should discuss sustainable retirement options with their 401(k) provider and should provide employees with tools to analyze the environmental metrics of retirement options.

Employers can amplify an employee’s climate impact by matching charitable donations to non-profit organizations working to address climate change, the biodiversity crisis, clean energy deployment, and other pressing environmental issues. Nearly half of companies provide community volunteer days to employees. Centering volunteer activities around the environment is an opportunity to merge employee engagement with sustainability efforts.


Action: Employers should implement environmental gift matching and volunteer days.

people's palms touching tree branch

Green benefits are low-hanging fruit

For employers to meet their climate commitments, large-scale changes are required across company operations, supply chains, financial portfolios, employee behavior, energy procurement, and waste management. Providing green benefits to employees is a cost-effective, low-lift option to demonstrate a company’s commitment to climate action and improve employee attraction and retention.

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