EV Salary Sacrifice and Net Zero: The ESG Case for HR Teams | loveelectric

Switching to renewable energy is no longer enough to demonstrate that your company is moving towards net zero. Increasingly, businesses are expected to measure and reduce emissions across their entire value chain, including employee commuting. EV salary sacrifice is one of the fastest, most measurable changes an employer can make.

Employee mobility sits in Scope 3 Category 7 under the Greenhouse Gas Protocol – and most companies haven’t tackled it yet. EV salary sacrifice helps companies move towards net zero by reducing Scope 3 employee commuting emissions, making those reductions measurable, reportable, and easier to include within ESG reporting.

At loveelectric by Perkbox, we help employers choose the right EV salary sacrifice scheme and improve their environmental credentials by reducing emissions associated with employee commuting. In this article, we’re exploring the ESG case for EV salary sacrifice and how to include it in your sustainability reporting. 

Why Employee Mobility Counts Toward Your Net Zero Target

Many companies have already made the easiest carbon reductions possible. The office building has switched to renewable electricity, there are recycling programmes in place, and energy-efficient lighting and equipment have become the norm. The next challenge for businesses is to address the carbon output of their employees.

Unlike many other Scope 3 categories, employers can directly influence commuting choices through workplace policies and benefits, making employee travel one of the most practical areas for emissions reduction. Under the Greenhouse Gas (GHG) Protocol Scope 3, employee commuting is classed as Category 7. 

For many service-based organisations, Scope 3 emissions represent the largest share of their overall greenhouse gas emissions, making it one of the most meaningful emissions reductions to focus on. Read our guide on Scope 3 emissions and how to reduce them to hit your ESG targets.

Businesses can reduce the emissions associated with their employees’ daily commute by encouraging them to switch from petrol or diesel vehicles to electric vehicles. Employee commuting data increasingly supports organisations reporting against recognised ESG and sustainability frameworks. 

There are a variety of reporting frameworks that companies can use:

• SECR (Streamlined Energy and Carbon Reporting): Mandatory
• ISO 14001: Voluntary
• B Corp certification: Voluntary
• SME Climate Hub: Voluntary

Depending on your organisation, employee commuting data can support reporting under frameworks such as the GHG Protocol, SECR, ISO 14001, B Corp certification, and wider climate disclosure programmes.

Although each reporting framework has different requirements, demonstrating measurable reductions in employee commuting emissions can strengthen wider ESG disclosures and support broader net zero commitments. An EV salary sacrifice represents measurable progress towards wider sustainability goals and is more than just an employee benefit.

How Much CO2 Does an EV Salary Sacrifice Scheme Actually Save?

Business owners and sustainability teams often struggle to demonstrate measurable carbon reductions. An EV salary sacrifice scheme helps because the impact can be estimated using recognised reporting methodologies.

Calculations below use the latest UK Government greenhouse gas conversion factors together with average UK annual mileage. These figures are illustrative only; organisations should use their own fleet and commuting data when preparing formal sustainability reports.

It’s important to note that while tailpipe emissions are zero for electric vehicles, the electricity generation and vehicle manufacturing still contribute emissions.

Methodology: 

Average UK annual mileage: 11,900km 

Average petrol vehicle: 11,900 km x 0.129 kg CO₂e = 1,535kg CO₂e

Average battery electric vehicle: 11,900km x 0.041 kg CO₂e = 488kg CO₂e

Estimated reduction = ~1.05 tonnes CO₂e per employee per year

Formal reporting should always use organisation-specific data. These estimates illustrate the potential carbon reduction using UK average mileage and the latest conversion factors.

We can see the impact of EV salary sacrifice when we apply these findings on a wider company level. Every employee makes a meaningful difference to your ESG reporting.

An EV salary sacrifice scheme creates measurable change in employee commuting emissions that can be monitored over time. One of the best ways to promote the sustainability of these schemes is by using real-world comparisons.

If 50 employees switch to electric vehicles, their annual CO2e reduction would be comparable to:

• Approximately 11 return flights between London and New York, based on average passenger emissions published by DEFRA/BEIS conversion factors.
• The equivalent of the annual carbon absorbed by approximately 2,400 mature trees, based on Woodland Trust assumptions.

The Wider ESG Case: Beyond Carbon

Carbon reduction is only one part of the wider ESG value of an EV salary sacrifice scheme. They can improve employee wellbeing as they’re quieter and generally less stressful to drive. Electric vehicles also contribute to lower traffic noise, particularly in urban areas, supporting healthier working environments.

Salary sacrifice represents an important social pillar for ESG, as it helps make new electric vehicles more financially accessible for many employees who might struggle with the upfront costs of ownership. As an Employer Value Proposition, salary sacrifice is also attractive for talent acquisition and retention.

It’s worth considering the wider ESG case for salary sacrifice electric vehicles beyond emissions. Here’s a breakdown:

• Environmental: Battery electric vehicles produce zero tailpipe CO2 and NOx emissions, helping improve local air quality, although upstream emissions from electricity generation and manufacturing still exist.
• Social: Salary sacrifice helps to make EVs financially accessible, including for employees who may otherwise be unable to access one through traditional personal leasing. 
• Governance: EV salary sacrifice can be measured, monitored, and incorporated into ESG reporting using recognised methodologies, making it a credible sustainability commitment that companies of all sizes can make and report on.
• Employer branding: EV salary sacrifice can offer a strong employee value proposition by boosting a sustainability-focused culture, helping to drive recruitment.

How to Include EV Salary Sacrifice in Your Sustainability Report

Organisations preparing sustainability, ESG, or climate reports may wish to use wording such as:

In [year], [X] employees joined our EV salary sacrifice scheme with Love Electric, reducing estimated Scope 3 Category 7 emissions by approximately [Y tonnes CO2e] compared to an equivalent petrol vehicle fleet.

Your reporting can also align your EV salary sacrifice scheme with UN Sustainable Development Goals, particularly SDG 13 (Climate Action) and SDG 11 (Sustainable Cities and Communities). Companies should always use their own data for formal reports.

Before you calculate your own Scope 3 savings, gather:

• Number of EV salary sacrifice participants
• Average commuting mileage
• Vehicle types replaced
• Reporting period
• DEFRA conversion factors used
• Calculation methodology

Using the earlier template, we can expand on it by incorporating the UN Sustainable Development Goals. For example:

In [year], [X] employees joined our EV salary sacrifice scheme with Love Electric, reducing estimated Scope 3 Category 7 emissions by approximately [Y tonnes CO2e] compared to an equivalent petrol vehicle fleet. This initiative supports our wider commitments to UN Sustainable Development Goal 13 (Climate Action) and SDG 11 (Sustainable Cities and Communities),

The ESG Case for EV Salary Sacrifice Schemes

EV salary sacrifice is one of the most measurable, lowest-friction Scope 3 actions an employer can take. It offers reportable Scope 3 improvements, helping companies reduce their emissions while giving their employees access to electric vehicles with potential savings of up to 60% compared with equivalent personal leasing, depending on salary, tax band and vehicle selected.

If you’re building the business case for an EV salary sacrifice scheme, loveelectric can help estimate your potential carbon impact and explain how it can contribute to your wider sustainability goals. 

Request a sustainability impact assessment or book a demo to speak to one of our experts about the ESG case for offering an EV salary sacrifice scheme.