One intuitive answer would be that businesses such as financial services firms that adopted WFH arrangements for the majority of their employees should see a reduction in their carbon emissions. Such emission ‘savings’ may come from reduced energy usage with low office-based activity and decreased energy-sapping commuting.
Another, perhaps equally appealing view is that energy consumption simply transfers greenhouse gas (GHG) production from the office to homes. Sustainability accounting expert Maria Balatbat of UNSW Business School says, “During the COVID-19 pandemic, WFH reduced GHG emissions of businesses but this has increased household emissions. Environment is worse off under the WFH model as homes are typically less energy-efficient and lack the economies of scale of large offices with concentrated workforces.”
Even higher emissions could be expected if you consider the double-whammy of increases on both sides: the hybrid WFH model may consume more energy and raise emissions as both homes and offices are operating at to or at full capacity to enable both remote and office workers to do their jobs. The reasons why the flexible hybrid model has become attractive to both the company and its employees feed into this dual impact. On the one hand, corporations see savings in real estate costs. Increasingly, Australian financial firms are paying employees to work from home, likely driven by this motive. Workers associate WFH with gaining more control over their lives. On the other, companies have incentives to encourage some office-based activity given the benefits of face-to-face interactions.
Other hidden impacts are difficult to predict. For example, what is the impact of WFH on commercial property usage besides reduced office activity? Walking through the CBDs of Sydney and Melbourne, one saw that perhaps two out of three retail outlets such as eateries were not open as at the end of November 2021. The slower than expected pace of reopening of commercial activity in major cities may have flow-on impact on emissions that go beyond the obvious suspects of office work, WFH and commuting.
Ultimately, the true outcomes will be determined on a business-by-business basis. This raises a further question – can WFH-related carbon emissions be reliably estimated? The sustainability reports accompanying the 2020 annual reports of Australian financial services firms routinely cite WFH emission figures. The reporting is in line with guidelines for companies and other organizations preparing a corporate-level emissions inventory. The National Greenhouse and Energy Reporting Scheme (NGERS) were introduced by the Federal Government in 2007 as the first mandated national reporting guidelines for Australian companies. Internationally, the GHG Protocol is regarded as the most widely used greenhouse gas accounting standards.
