Ethics and Employee Business Expenses

Business expenses are no stranger to the breach of ethics. But, many businesses are taking unique initiatives to ensure a sustainable and ethical future.

For most businesses, just trying to ensure that business expenses are legitimate is enough of a headache. But should companies also be looking at the ethical and environmental considerations of out-of-office costs?

It’s an interesting aspect of business expenses management that was raised by the New York-based real estate company, WeWork. They chose to stop reimbursing their employees’ for any meals that include poultry, pork or red meat.

It was part of a company wide policy driven by environmental concerns. An email to the 6,000 global staff explained the policy. It stated that avoiding meat was the most effective way to reduce, ‘personal environmental impact’.

Along with the meal expense restriction, the company proposed to remove meat products from staff events. They estimated the policy would help save around 445.1m pounds of CO2 emissions by 2023.

Ethics, expenses, and cutting carbon emissions

WeWork's stance may have been unusually proactive, but the environmental impact of business expenses is a commonplace concern for organisations. The prime example of this is with global efforts to reduce carbon dioxide emissions.

Companies are reducing unnecessary business trips and favouring forms of transportation with the least environmental impact. This includes seeking out alternative options such as virtual meetings, video conferencing, and other forms of communication that do not require physical transportation. 

Where business trips are unavoidable, companies are looking to favour forms of transportation that have the least amount of environmental impact. Examples include public transportation, carpooling, and eco-friendly vehicles.

Tools to help track and monitor a company’s carbon footprint are integrated into an expenses management system such as Webexpenses. It automatically calculates the carbon emissions for air, car and rail journeys. However, despite a recent upturn, Webexpenses’ carbon tracking feature is still only used by 5% of clients. This suggests that many businesses are not actively measuring their environmental footprint.

But alongside environmental concerns, there are also areas where the ethical considerations of an expense policy come into play. A typical example of this is the issue of whether employees should be allowed to claim for alcoholic beverages.

Negotiating ethical business expenses

The question of whether beer and wine reimbursements should be accepted as legitimate business costs is complex. Some companies set a strict limit on what can be claimed in terms of alcohol-related expenses, whereas others don’t reimburse any kind of alcohol-related expenses at all. 

It can be argued that allowing such reimbursements can help to improve employee morale and foster a sense of camaraderie between coworkers. But there are also valid concerns about the potential for excessive consumption or misuse of such reimbursements. Ultimately, it is up to each company to decide whether alcohol reimbursements should be accepted as legitimate business costs, taking into account the potential risks and benefits.

For companies who do reimburse, it opens up a series of potentially thorny issues related to company ethics and liability. For instance, if an employee is injured while under influence of alcohol, could the company be held partially liable? How can a company fulfil its legal responsibility to keep its employees safe while covering costs for activities outside the office?

So, while WeWork's policy may have been unusual, it highlighted some ethical considerations organisations have to face when managing employee expenses. It will be interesting to see whether other companies start to use expense management to shape their company culture.

Webexpenses provides a smarter and safer way to manage employee expenses. Find out how it can help your business by requesting a demo.

Learn more about Webexpenses’ carbon footprint tracking feature.