Return-to-office (RTO) requirements have become commonplace in offices across the U.S., ending remote working norms during the COVID-19 pandemic. Large companies like Google, Amazon, and Meta have called their employees back to work for three days a week. Now, the federal government is following suit, as the Trump Administration promises to bring federal governmental employees back to the office.
At the start of the remote and hybrid work boom, a significant drop in travel emissions from employee commutes showed a silver lining to lockdowns. Positive environmental impacts related to remote work suggested it was a winning combination for both employee flexibility and the environment. Other reductions in resource use also drew attention as remote work correlated to office waste reduction and lower office energy consumption.
Over time, these positive impacts have been overshadowed by trade-offs with other important impacts for business owners. Companies implement RTO policies for different reasons highlighting complex impacts from fully remote and hybrid work arrangements. Beyond the short-term environmental improvement, corporate headquarters are considering the impacts on office work culture and on their commercial real estate investments.
Managing trade-offs while maintaining strong environmental commitments remains key. Whether bringing employees home or enhancing hybrid work opportunities, strong environmental data management helps corporate decision-makers balance multiple priorities at once.
RTO Orders from Companies
A Resume-builder.com survey of 1,000 companies suggests 90% of workers have already or will return to their offices at least part time by the end of 2024. To implement these changes, 83% of employers track employee in-office attendance. Other approaches include incentives for commuter benefits (72%), childcare benefits (57%) and catered meals (64%). Stricter rules apply at some offices with 28% of companies threatening to fire employees for noncompliance.
Given these numbers, it’s clear that offices expect greater in-person attendance at offices from their employees. Here are some of the reasons driving this change away from the fully remote, heavily digitized office model. Companies responding to the resume-builder.com survey claim RTO links to improvements such as revenue (72%), productivity (81%), worker retention (63%), employee relationships (79%) and company culture (75%).
Data from Statista on global RTO policies confirms some of these reasons, as well: 52% of employers reported their main reason for bringing employees back to the office relates to office culture and connection. With the option to choose multiple reasons in Statista’s survey, another motivating factor came to the fore for nearly half of global respondents (45%): commercial real estate investments.
Commercial real estate impacts from remote work
Remote work is one of the contributing factors to a rapidly changing commercial real estate market in cities across the U.S. This impacts not only businesses directly, but also municipal city budgets where large corporations lease space. Office vacancy rates in the U.S. reached 18.2% for the first time in 30 years, according to CBRE.
Mayor of San Francisco London Breed announced he estimates a $780 million budget shortfall due to high interest rates and remote work. Both contributing factors stem from pandemic era disruption to norms in the economy, giving rise to rapid inflation and population shifts. With employees moving away from areas with a high cost of living, office space in those areas also becomes less attractive to corporations.
Beyond commercial real estate, another impact on city budgets from remote work is a drop in public transit fares. While this may be more prevalent in cities with substantial public transit infrastructure, research suggests that 10 percent of the workforce working remotely would correlate to a 27 percent drop in fare revenue in the U.S.
There’s no one-size-fits-all approach
Remote work figures vary not only by company, but also by employee role and company industry. Globally, the top industries for remote work in 2023 were technology (67.8%), consulting (50.6%) and finance (48.7%). An estimated 37% of all roles in the U.S. could be performed from fully remote work environments. Employees who can work from home tend to prefer that arrangement: 91% of workers in the U.S. wanted to keep their right to work from home at least part-time.
Depending on the distribution of remote workers and the geographic locations of their operations, companies are adopting new approaches to office arrangements. Finding a middle ground is a way to both achieve in-person connection while also reducing employee commuting emissions. Here are the estimated emissions impacts based on the number of days working from home is allowed:
- One day: 2% emissions reduction
- Two to four days: 11%-29% emissions reduction
- Fully remote: 58% emissions reduction
Alongside hybrid work, companies may opt for flexible workspaces that can be repurposed as event spaces or flexible lease terms to enable on-site employee attendance fluctuations. Another strategy is to diversify employee office locations, by selecting key hubs serving as flexible office spaces that employees can travel to across in different regions. This can also stratify the talent pools employers draw from.
Considering environmental impacts alongside other factors
Even if commercial real estate investments and in-office work expectations are here to stay, companies still have environmental targets their stakeholders expect them to achieve. Companies navigating various trade-offs will need to find compelling ways to reduce emissions other ways besides employee commuting emissions.
Another issue to consider is how companies are tracking their emissions. For many companies, employee travel is not part of their core strategy, if they only track and monitor their operational and purchased Scope 1 and 2 emissions. As a category of Scope 3 emissions, employee commutes are an area that would benefit from oversight, but many companies have not measured these emissions to understand their total impact. Gathering environmental data with a sustainability software like Atrius, no matter which strategy a company takes, is key to developing a sound sustainability strategy that balances multiple interests at the same time.
With data in hand, additional strategies become simpler to both justify in terms of a cost-benefit analysis and implement with a strong environmental logic to back up projects.
Traditional ways of operating commercial spaces are likely to give way to smart-building technologies and stronger digitization. Given the flexible space requirements that today’s workforce demands, spaces need to be adaptable from a central planning hub where all of the data is visible.
Companies can benefit from data collection related to trends in office attendance by their hybrid workforces. This can help them better plan their on-site energy, water and waste management approaches to streamline operations, reduce costs, and minimize operational environmental impacts.
If there’s a lesson to learn, it’s that the shift to remote work and subsequent return to work demonstrated how behavior change leads to significant environmental and systemic impacts. Promoting a culture of sustainability at work that leads to impactful behavior change can significantly reduce environmental impacts. Creating systems that encourage employees to make better environmental choices is key to minimizing workplace impacts.
