Should CEOs Consider Home Working to Reduce Scope 3?

In recent years, the shift towards flexible working patterns has been driven by both employee demand and environmental concerns.

With transportation being a major source of emissions, reducing commuting through remote work could significantly impact a company’s carbon footprint.

A shift in employee expectations

Since the pandemic, flexible working has become increasingly important to employees, who seek better alignment between their personal values and their workplace.

KPMG's 2024 CEO Outlook revealed further insights and, according to Nhlamu Dlomu, Global Head of People at KPMG International, leaders who succeed in this changing landscape are those who place people at the heart of their growth strategy.

Nhlamu explains: “This year’s findings highlight a widening gap between the expectations of CEOs and their employees. The world is changing at pace and the employee-value-proposition is changing with it.

"The successful leaders of tomorrow will be those who understand that their talent dilemma can only be solved by investing in, nurturing and supporting talent through a ‘social contract’ that understands today’s employees don’t just desire, but expect a more agile, flexible working environment and a better work-life balance – especially in the midst of a pervasive cost of living crisis.”

Despite these growing employee expectations, the debate about returning to the office continues.

CEOs are increasingly favouring a full return to pre-pandemic working conditions, with 83% of executives surveyed expecting to revert to office-based working within the next three years, a notable jump from 64% in 2023.

Age and gender also appear to play a role in these attitudes, with older and male CEOs 6% more likely to support a full return to office work, perhaps due to the increased cost of childcare when returning to office.

Moreover, 87% of CEOs said they would reward employees who regularly come into the office with promotions or raises.

The environmental case for remote work

Remote working can play a key role in reducing Scope 3 emissions, specifically in the area of employee commuting.

Transportation is one of the biggest contributors to greenhouse gas emissions globally, with personal car use accounting for more than half of transportation-related emissions in some countries.

In the United States, for example, about 90% of people drive to work and commuting can make up around 30% of an individual’s yearly driving. By reducing or eliminating daily commutes, companies could see a dramatic reduction in their transportation-related emissions.

However, while remote work reduces commuting emissions, it shifts energy consumption to employees' homes. This includes electricity used for home office equipment and heating or cooling costs. These residential energy uses must be included in a company's Scope 3 emissions.

Although indirect, companies need to account for these home-based emissions as part of their overall carbon footprint. Remote work may also reduce waste generation, as there is less reliance on single-use office supplies and packaging. 

Measuring and managing work-from-home emissions

Accurately measuring the emissions created by remote work can be complex.

Companies can estimate the energy consumption of home office equipment or survey employees about their energy use to calculate these emissions. Businesses should consider the environmental impact of remote work as part of their broader sustainability efforts.

Several companies are already taking steps in this direction.

Siemens AG, for example, has committed to reducing its Scope 3 emissions by 15% by 2030, with remote work playing a part in achieving that goal. While remote work can shift some of the emissions burden to employees, it still offers significant potential for reducing overall emissions, especially when organisations work closely with employees to develop sustainable home office practices.

Promoting work from home can be a valuable tool in reducing Scope 3 emissions, particularly by cutting down on commuting. For companies that are serious about achieving sustainability goals, encouraging flexible working arrangements could be a step in the right direction.

However, the environmental impact of home working must also be carefully monitored and managed to ensure these efforts contribute to genuine reductions in carbon footprints.

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