Exploring the Environmental Impact of Hybrid Working

25 Feb 2025

7 Min Read

Dr Karen Tsen Mung Khie (Academic Contributor), Dr Gan Jen Ling (Academic Contributor), and Dr ‘Aqilah Binti Yaacob (Academic Contributor)

IN THIS ARTICLE

Remote working has become one of the most significant developments in the modern workplace. The COVID-19 pandemic accelerated its adoption, and both employees and businesses have been quick to highlight the benefits.

Employees cite improved work-life balance, time saved from commuting, and the convenience of a home-based workspace. Companies, on the other hand, enjoy reduced overhead costs associated with maintaining physical office spaces. Moreover, the reduced number of employees commuting daily has led to a noticeable decrease in traffic congestion and vehicle emissions, contributing to lower carbon footprints in major cities.

This reduction in environmental strain has been celebrated as a significant win for sustainability efforts, further driving the hybrid work movement. A 2022 survey conducted by the Malaysian Employers Federation (MEF) underscored this shift, revealing that 61.7% of Malaysian companies expressed a desire to continue embracing hybrid work models—whether a mix of virtual and on-site or fully virtual.

The Malaysian government has responded to the shift toward hybrid and remote work by enacting amendments to the Employment Act 19952, which officially recognises flexible work arrangements as a legal form of incentive. This legislative step, effective from January 1, 2023, reflects the growing acceptance of remote work as a long-term employment model.

However, while these perks have driven widespread enthusiasm for hybrid work, the bigger picture is more complex, especially when considering its financial and environmental impacts.

Contextual Challenges in Malaysia

For a country like Malaysia, the widespread shift to remote work carries unforeseen consequences. Malaysia’s hot and humid climate necessitates frequent air conditioning use, especially for those working from home in urban areas. Studies have shown that buildings in Malaysia contribute significantly to energy consumption, with cooling accounting for a large proportion of electricity usage.3 This means that employees working from home now face the challenge of increased energy consumption to maintain a comfortable working environment. What was once the office’s responsibility—managing climate control for large numbers of employees—has now become a household burden.

As more Malaysians work from home, their reliance on cooling appliances increases, pushing energy consumption upwards, especially in densely populated urban centres. This dynamic has contributed to a marked rise in both energy demand and utility bills for households, complicating the environmental narrative around hybrid working. A simulation in Penang revealed that cooling energy alone accounted for 36% of the total electricity consumption in residential areas.4 Transitioning to work-from-home dispersed employees across many home offices, potentially increasing household energy use, leading to higher utility bills and creating a larger ecological footprint.

In fact, experts argue that the collective energy footprint of thousands of individual home offices may surpass that of a centralised corporate workspace, especially when factoring in air-conditioning, lighting, and other appliances running during work hours. Thus, while hybrid work may reduce some emissions related to commuting, its overall sustainability benefits are less clear when the increased home energy consumption is considered.

Re-examining the Employee Perspective

While much of the discourse around remote work has focused on its potential benefits, a more balanced view is essential. Employees may benefit from avoiding the stress of daily commuting and enjoy more time with family, but their financial burden has also increased. Utility costs, particularly electricity and internet services, have surged for many. A study conducted in Malaysia revealed that the increased use of air-conditioning and kitchen appliances during the stay-home period contributed significantly to the rise in electricity consumption.5 This trend parallels what many Malaysian households are experiencing, highlighting a broader regional issue related to the increased costs of remote work.

This rise in expenses directly impacts those working from home, particularly employees in lower-income brackets, who may find that the increased utility costs offset any savings on commuting. This shift raises important questions about corporate responsibility. Companies may need to be more proactive in subsidising these costs and provide allowances or reimbursements for the additional expenses that remote work entails.

Consequently, companies that are enthusiastic about maintaining remote or hybrid models must carefully evaluate how they can support employees in managing these new expenditures. Some companies in other countries have already begun offering stipends or financial support to help cover the increased costs of home-based work. For example, the Netherlands government recognises the additional costs that homeworkers incur compared to working in the office and allows companies to provide a tax-free allowance to employees.6 It may be worth exploring similar initiatives in Malaysia, ensuring that employees are not unfairly burdened by their new working conditions.

As the world adjusts to this new normal, it is crucial to foster a balanced dialogue around remote work. It is not enough to simply celebrate its benefits. Companies must also acknowledge and address the less glamorous aspects of this shift. From ensuring that employees are not overburdened by increased costs to rethinking how energy usage impacts both personal and environmental sustainability, we must take a comprehensive view. A commitment to employee well-being means considering every angle, not just the ones that reduce corporate costs.

Dr Karen Tsen Mung Khie, Dr Gan Jen Ling and Dr ‘Aqilah Binti Yaacob are Lectures from the School of Management & Marketing, under Taylor's Business School. Taylor's Business School is the leading private business school in Southeast Asia for Business and Management Studies based on the 2024 QS World University Rankings by Subject and has received the Association to Advance Collegiate Schools of Business (AACSB) accreditation.

This article was originally published on Awani International on 25 May 2025

BACK TO NEWS & ARTICLES

{{ firstlevel.title }}

{{ firstlevel.title ? firstlevel.title : vm.computedTitle(firstlevel.path) }}

{{ secondlevel.title }}

{{ secondlevel.title }}

{{ secondlevel.title }}

{{ secondlevel.title }}

{{ thirdLevel.title }}