.svg)
Relocation can be handled in a variety of ways – from lump sum payments and reimbursement models to fully supported programs with pre-approved packages. The way organizations manage their relocation programs can be an opportunity to reduce emissions and contribute to broader ESG goals.
Many organizations adopt lump sum relocation policies because they appear flexible and cost-efficient. In reality, however, this approach may be undermining corporate sustainability goals.
A lump sum relocation policy typically involves giving the employees a fixed amount of money to cover their move-related expenses, which they have to manage independently. The intent of a lump-sum policy is to give flexibility and minimize the administrative effort to manage relocations. This shifts the entire responsibility onto the employee – who must navigate countless details in both the departure and destination location. – who must coordinate every detail, from finding a temporary home and hiring movers to setting up utilities and navigating local transportation options. While lump sum policies may seem simpler from an employer’s perspective, they place a heavy logistical burden on the assignee. In fact, the organization may miss a valuable opportunity to reduce its CO2 emissions through more guided and sustainable relocation practices.
With a lump sum, employees choose their own service providers, movers, temporary housing, transportation, etc. with no oversight or guidance from the employer. As relocating employees often have limited time and expertise in managing relocations, they might prioritize convenience and cost, which may not be aligned with the company’s sustainability goals.
You can’t improve what you don’t measure. Lump sum policies don’t generate usable data on how money is spent, what suppliers are used, or what the environmental impact is. This means that it is impossible to track emissions related to mobility, as well as include relocation in sustainability reporting. This creates a blind spot for ESG performance tracking – one that offers a big potential for reducing emissions.
A lump sum policy shifts the burden of relocation entirely onto the employee, requiring them to research, compare, and manage logistics with little to no support. This is not to say employees aren’t capable of managing a move, but asking them to do so during a major life transition adds unnecessary stress and complexity, and may result in frustration with the employer. Top talent expects support, not just funding. If relocation feels unsupported, employees may turn down assignments, or worse, leave altogether.
In short,
lump-sum equals sustainability failure.
To align relocation with sustainability and employee experience goals, companies need to move away from lump sum models and toward structured, guided relocation support.
1. Incorporate sustainability into policies
Embedding sustainability into relocation policies, ensures that they are aligned with broader corporate strategies. For a practical guide on how to do this effectively, take a look at [this article], which outlines a step-by-step approach to incorporating ESGs into policy design.
2. Offer sustainability-conscious suppliers
Provide employees with pre-vetted service providers that meet specific environmental and ethical standards. By offering a chosen set of options, companies reduce complexity for employees and ensure alignment with ESG standards. This approach also helps make the sustainable choice the default, and the easiest one to make.
3. Training and support
Equip employees with guidance, education, and access to tools or relocation consultants who can help them navigate the process. This support reduces stress and ensures sustainability is part of each relocation decision, from planning to execution. You can explore this approach in more detail in [this article], which highlights effective strategies for employee support during relocation.
By moving away from lump sum policies, companies unlock several advantages:
Relocation is not just a peripheral HR function, it’s a high-impact process that intersects with sustainability, compliance, and employee engagement. Treating it as a transaction via lump sum payments is a missed opportunity. Companies committed to environmental responsibility and modern workforce expectations need to modernize their relocation approach. That means structure over flexibility, guidance over guesswork, and data over assumptions. By doing so, they won’t just reduce emissions, they’ll reduce risk, improve experience, and drive real progress toward ESG goals.
Lump sum is easy. But guided, sustainable relocation is better for everyone. Your people, your planet, and your business.
Image credits:
1. Designed by Freepik
2. Designed by Freepik
.svg)
