May 2, 2024

Green Pay: How to integrate sustainability into your payroll process

Have you started to integrate sustainability into the payroll process yet? If not, it's high time. We explain why this is important, how to get started and what positive effect it can have for your organisation to work sustainably with payroll.

It was when Zennie Sjölund, industry manager for payroll at Srf konsulterna, realized that within the payroll process there are lots of key figures that not only promote sustainability, but also create added value for organisations that she coined the concept "Green Pay".  

"Green Pay represents a business practice that is in step with society's expectations and needs. Now it's time to make Green Pay a central part of your work as a payroll consultant," says Zennie Sjölund.  

Increased focus on sustainability reporting

According to the EU's Corporate Sustainability Reporting Directive (CSRD), which came into force on 1 January 2024, all major companies must report their environmental impact, social conditions and approach to human rights in their annual report.

This means that subcontractors are indirectly required to act sustainably when they have to deliver key figures to the larger companies. Sustainability reporting is therefore also important for small and medium-sized companies that want to future-proof their operations and maintain their market position.  

In short, the sustainability report is about delivering key figures on ESG that measure how the company's operations affect the environment (Environment), employment conditions and equality in the workplace (Social), as well as how effectively the company is governed (Governance/Finance). Obtaining these KPIs involves the entire company and not just the sustainability department.  

What is Green Pay?

By integrating sustainability principles into payroll processes and addressing social aspects such as fair pay, equal working conditions, and transparent pay processes, you can take your organisation one step closer to a more sustainable and fair business practice, which is crucial to meeting today's societal challenges.

The Effects of Green Pay

Green Pay means that payroll processes and hiring practices are managed in a way that promotes fairness, equality and transparency. By meeting high standards of working conditions and employment rights, the company not only contributes to the well-being of its employees but also to the sustainability of society as a whole.

How to get started with Green Pay:

1. Identify what payroll data you have available and how you could use it to support your company's sustainability goals and KPIs. For example, it can be staff turnover and sick leave rates, data on salaries, and gender distribution among managers in the workplace.  

2. Use this data to set measurable goals that promote the company's sustainability efforts.  

3. Develop policies and procedures that ensure sustainable choices and are in line with the company's sustainability goals, for example regarding travel, or the choice of company car.  

4. Once you have the data and start measuring, you can gradually analyze what you need to do to achieve your goals, such as reducing staff turnover or sick leave.

Photo: Malin Sydne

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