HBOS provides retail, business and corporate banking, and insurance and investment services in the UK and internationally. Over 75,000 'colleagues' are employed across the Group. In the UK it has over 66,000 employees in 2,200 buildings.

HBOS is the UK's largest provider of mortgages, liquid savings and new investment products, with major brands including Halifax, Bank of Scotland, Clerical Medical, BankWest and Insight Investment.

As HBOS's senior CR officer Ian is responsible for the company's external reporting and benchmarking, strengthening sustainability and environmental performance and driving new CR initiatives across the Group.

"We're now the highest ranked UK bank in the Dow Jones Sustainability Index and the Carbon Disclosure Project, thanks in part to the new climate change strategy we launched last year. We have made our UK operations carbon neutral and we have become the first European company to carbon label a financial services product."

Ian Roe joined HBOS from a competitor where he was the Head of Corporate Responsibility reporting, though his background previously was more in financial services than sustainability - largely in strategy, governance and regulation and retail finance.

"Before joining the banking world 6 years ago I worked as a producer for a new media company based in Oxford - a city I fell in love while studying philosophy, politics and economics."

Do financial institutions have any specific role in fighting climate change?

"All large companies have a major role to play in fighting climate change. Quite apart from the environmental benefits, reducing resource use is good for the bottom line.

"Reducing energy and resource use helps keep costs low - in turn this helps us provide customers with better value products. Ultimately this contributes to the continued success of our company."

How has HBOS tackled its own carbon footprint?

"HBOS has reduced its carbon footprint by over two thirds since 2004 by moving to 100% renewable electricity, introducing energy efficiency initiatives and travel programmes such as Green Miles, a programme launched last year to reduce travel growth.

"These programmes and our transparency in disclosure have helped contribute to our position as the highest-scoring UK bank in the Dow Jones Sustainability Index and Carbon Disclosure Project Climate Leadership Index."

How do you encourage stakeholders to participate in your efforts?

"Our colleagues are one of the most important stakeholder groups. Many of the decisions required to reduce our use of resources and improve our performance are taken by colleagues on a daily basis - for example, whether to hold a conference call or a face-to-face meeting, or switching off PCs and monitors.

"At the same improving colleague advocacy is a major aim of our programme. We therefore place a great deal of emphasis on colleague communications - from a Co2 calculator to regular Green Miles updates and colleague newsletters. We have seen support from colleagues for our programme increase significantly, and that's a trend we're aiming to continue!"

Is the Government's approach to carbon reduction adequate?

"The Carbon Reduction Commitment, expected to begin from 2010, is likely to have a major impact on how large, non energy-intensive organisations manage their resources. By establishing a cost for carbon and financially rewarding the best performers the policy is likely to increase the number of companies seeking to reduce their energy use and carbon emissions."

How will the current economic climate affect the push to reduce carbon emissions?

"In the current economic climate it's more important than ever to get the basics right - offering customers good value products and services. We can only do that if we are really good at reducing inefficiency and waste. Thinking about the carbon emissions from this perspective is really about reducing cost through reducing our use of resources such as energy, travel and paper.

"More companies are likely to implement energy saving programmes and policies to reduce travel. However, businesses planning measures with long payback periods - say microgeneration - may begin to re-evaluate the business case and shift investment to initiatives that reduce cost as well as resource use."

What has been your most successful low carbon initiative and what made it so?

"Last year's new climate change strategy has been tremendously successful and had unprecedented colleague support. In the days following launch I received over 400 e-mails about the new strategy from interested colleagues. If I had to highlight 3 key aspects they would be as follows:

· Carbon neutrality: having already significantly reduced our carbon footprint - by two thirds since 2004 - we offset the remainder using only 100% Kyoto Protocol compliant carbon credits. Not only do the credits directly benefit the environment by supporting renewable energy generation in developing countries, but they also provide focus for our reduction efforts. The more we're able to reduce our carbon footprint, the fewer carbon credits we need to purchase to offset it.
· Renewable electricity: our UK electricity contract is for 100% renewable electricity. We are also a major lender to the renewable energy sector. We have worked with key sponsors in the renewables sector to provide finance for around 3,500MW of renewable energy - enough to power 2 million homes.
· Green Miles: we launched the Green Miles scheme last year to reduce our travel growth. The programme was a big success and raised £500,000 for HBOS's Charity of the Year."

Are there any particular pitfalls you've encountered?

"The carbon offsetting market is still relatively new so it is very important to check the credibility of offset providers. We did many months of due diligence before opting for Kyoto regulated credits to help ensure we buy high quality credits.

"The UK Government's code of best practice for offsetting will help provide clarity and we expect standards to improve in the voluntary market as it matures."

What's next on your agenda?

"After energy and travel, our biggest environmental impact is our use of paper, so in the next couple of months we're launching a new paper strategy to reduce our use of paper, increase the proportion of recycled paper we use and increase the proportion of waste we recycle.

"We have just set new three year targets for Co2, energy, paper, waste, recycling and water so over the next 12-18 months we will be rolling out new initiatives to help us meet those targets."

What advice would you give to someone taking on a role similar to yours?

"The success of environmental and CR strategies is very much dependent on the engagement of the senior leaders in the business.

"At HBOS this comes right from the Chairman, Chief Executive and Board. Philip Gore-Randall, our Chief Operating Officer, chairs our Climate Change Action Group, a committee of senior leaders from across HBOS which meets quarterly to progress new initiatives, set targets and drive our programme forward. Having such a forum is a huge help in keeping up the momentum behind our climate change programme."

Low Carbon Board Report

How Green Is My Workplace?

Climate change is arguably the biggest issue facing the world today. As Professor Stern’s Government-commissioned report shows, the global economic cost of climate change could eventually amount to 20% of world GDP if nothing is done, so there is a big potential payback to changing our ways.

This message seems to be getting through to us as consumers. But as research consistently shows, we are much less green at work. With UK business and public sector organisations generating more than a third of carbon dioxide emissions, the potential for UK organisations to make further improvements is vast. And the HR profession has a critical role to play in helping to ensure that UK organisations in all sectors make these improvements.

Some may question the link between HR practice and the environment. But a moment’s thought demonstrates the obvious direct and indirect links. Green transport plans, the flexible working arrangements, recruitment and retention and reward are all policies on which HR leads. HR already leads on seeking employee buy-in to drive through change in UK organisations.

Surely HR professionals are best placed to lead on encouraging a cultural change that puts the issue of sustainable development at the heart of their organisation?

Rising to new challenges

The timing could not be better for HR to help pave the way for UK organisations to improve upon their environmental performance. First, climate change is rising rapidly up the business agenda, with many organisations such as HSBC and Marks & Spencer wishing to go ‘carbon neutral’. HR professionals should rise to the challenge by showing that they are in the best position to help their Chief Executives to deliver on green objectives.

The environment will also be a key battleground in the run-up to the next election, which may force employers to implement green measures in the workplace through targets and legislation. Forward-looking employers will therefore be thinking about introducing changes now, as they would for any future piece of employment legislation, in order to avoid hurried changes when such legislation forces action.

And while energy costs may fluctuate year-by-year, the long-run trend is for such costs to rise – making energy efficiency a bottom line as well as green issue for most organisations. The Carbon Trust says that offices waste an annual average of £6,000 by leaving equipment on over weekends and bank holidays and that reducing energy consumption by 20% can add the same amount to profits as a 5% increase in sales. However, with research showing a direct link between an environmentally-friendly organisation and the employer brand, perhaps the most compelling argument for employers to adopt green practices lies with enhancing the ability to attract and retain the best recruits - particularly for younger workers. More than three quarters of UK employees now consider it important to work for a company that has an active policy to reduce its carbon emissions. A shared sense of ethical purpose and values is likely to lead to a more committed and loyal workforce that enhances the business performance of an organisation. Stronger green credentials also help boost a business’s commercial proposition. As a recent TNS survey shows, six in ten consumers think about ethics and green issues when deciding what to buy.

A cure for headaches

So, where and how should we get started? This, together with a lack of leadership, seems to be a common headache facing employees and organisations. As Dr Garry Felgate, Director of Business Delivery and External Relations at the Carbon Trust points out: “The majority of UK employees want to become more environmentally friendly at work, but many don’t know where to start.”

HR is best placed to fill this leadership vacuum. It can start by incorporating the environment into its leadership and management training schemes. Further it could develop an environmental report that may include an environmental policy statement, the setting of targets and measurement of progress against those targets and an overall assessment of key environmental impacts. And where leadership on environmental issues is provided by other specialist functions such as the CSR teams, HR can provide leadership itself on core HR policy areas like recruitment, reward and work-life balance. It can do this too by binding together transport, flexible working, energy efficiency and recycling into a policy framework that takes the environment into account.

On recruitment, with so many businesses claiming to be environmentally-friendly, would job adverts or application forms be more powerful if these messages were replicated in them? Organisations can also include financial incentives in their reward strategies – with perhaps a reward for those teams or individuals who have demonstrated excellence (and who have probably saved the organisation money in doing so).

HR departments could also initiate a green transport plan to offset the rise in the cost of motoring. The plan could promote cycling, public transport and provide free or subsidised mini-buses if public transport is not a viable alternative. The plan could also include limiting car parking places or subsidising those who car-share.

Taxation changes also favour loaning cycles and safety equipment to employees and a less polluting vehicle fleet. Flexible working arrangements and the ability to work from home offer huge potential to reduce employee costs and stress levels which would arguably lead to a sizeable productivity dividend.

Leading by example

Boots has succeeded in reducing car journeys by 20% with its green transport plan. It has established a car pooling intranet scheme that rewards staff who sign up by entering them for a prize draw to win bicycles for their families. The scheme, introduced alongside improved facilities and showers for cyclists, was advertised through newsletters, posters and leaflets. It has allowed an extra 1,500 staff to be accommodated on-site.

Meanwhile, Sky has encouraged its people to act through a number of campaigns communicated via its Bigger Picture website. They have introduced a £1,300 cash incentive for employees to buy a hybrid vehicle as well as a carbon credit card where it’s possible to accrue credits for environmentally friendly actions. The latest research shows that only 4% of employers provide carbon credits in their flex plan. These can be earned for a whole raft of activities that include using video conferencing, lift-sharing, or cycling to work.

Sky has also switched its taxi supplier to a local firm that only uses hybrid cars. Other measures that the HR department have led on or helped coordinate include a campaign for people to turn off PCs, TVs, and lights, a commitment to use 100% renewable energy and the introduction of solar lighting.

So taking green measures in the workplace makes business as well as environmental sense, and will become a more critical element of Human Resource Management as this issue rises even further up the agenda. And whether leading on policy or not, HR management practices can help to maximise the impact of any environmentally friendly schemes by gaining the employee buy-in that is essential to their success.

HR can make a start by:

· Consulting with staff about producing an overarching environmental report or environmental policy statement
· Setting up an environmental management system. This could include a code of conduct or an environmental evaluation assessment and a register of legislation
· Communicating environmental achievements to inform and motivate internal and external stakeholders
· Appointing champions or change agents. Volunteers are best because they are more likely to be committed
· Introducing staff suggestion schemes

These should be followed by a policy review that looks to:
· Embed sustainability into management, leadership and induction training
· Use newsletters, notice boards, intranets and other communication techniques to spread interest and ideas
· Put the environment at the heart of an organisation’s transport, reward and recruitment policies – for the benefit of an organisation’s ability to recruit, retain and motivate its employees, and the good of the planet

Gerwyn Davies is Public Policy Adviser at the Chartered Institute of Personnel and Development, the professional body for those involved in the management and development of people.