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Climate Protection & Labor Law – What are the responsibilities for companies?

van_portraits_840x840px_20_rutmann.png Maria Rutmann

June 2025

Estimated read time: Min

Climate change is one of the most urgent global challenges of our time. Companies also bear a responsibility in this regard. This responsibility is commonly referred to as Corporate Social Responsibility (CSR), which encompasses ecological, social, and economic dimensions. This article aims to explore the possibilities and limitations that labor law presents in this context.

Climate Protection as a Component of Modern Corporate Governance

Many companies have already developed climate protection strategies. These typically focus on production processes and the delivery of services. Increasingly, however, climate strategies also affect employee behavior and rights. Possible measures includes Remote work policies to reduce commuting, Company bicycles and BahnCard (train pass) offers, Business travel guidelines, Transitioning company vehicle fleets to zero-emission alternatives, Trainings and policies on resource-saving behavior at work, Integrating environmental criteria into performance reviews and target agreements. However, many of these measures lie in a tension field between the freedom of action for employers and employee rights. Labor law plays a mediating – and protective – role here.

Individual Labor Law Aspects: Freedom of Contract and Managerial Authority

The first question is whether, and to what extent, employers may unilaterally impose and/or enforce climate-related directives. In principle, under Section 106 of the German Trade Regulation Act (Gewerbeordnung, GewO), employers may determine the content, place, and time of work performance at their reasonable discretion. However, this is only permissible within the boundaries of the employment contract and must consider employee interests. For example, an employer’s instruction to prefer rail over air travel for business trips may fall within this discretion. In contrast, mandating specific transportation methods for commuting or imposing a blanket remote work requirement for CO₂ savings is not permissible without an agreement with the employees. In general, employers must ensure reasonableness and proportionality. If a contractual basis is lacking, employers may need to pursue contract amendments or even consider a termination with an offer of altered terms.

Collective Labor Law: Role and Participation of the Works Council

The participation rights of the works council must be observed when implementing company-level climate protection measures. The co-determination rights under Section 87(1) of the Works Constitution Act (BetrVG) play a central role:

  • Sec. 87 para.1 no. 1 BetrVG: Co-determination in matters concerning workplace rules or employee behavior affected by climate initiatives.

  • Sec. 87 para. 1 no. 2 and 3 BetrVG: Co-determination for climate-friendly working time models.

  • Sec. 87 para. 1 no. 6 BetrVG: Introduction of technical systems (e.g., for energy monitoring or sustainability platforms) may require co-determination.

  • Sec. 87 para. 1 no. 10 BetrVG: Ecological performance targets in incentive or bonus systems are subject to co-determination.

  • Sec. 87 para. 1 no. 14 BetrVG: Co-determination on organization of mobile work.

It is advisable to involve the works council early and transparently. Climate protection efforts are more likely to succeed when jointly supported and implemented.

Limits and Protections for Employees

Employees may wonder whether – and to what extent – they can be obligated to participate in climate protection measures. In general a contractual basis is required, if a measure exceeds the scope of existing contractual obligations. Employers must also ensure proportionality and reasonableness.

Planned measures must be transparent, proportionate, and appropriate. Additionally, aspects such as occupational health and safety, the employer’s duty of care, and anti-discrimination rules must be observed.

Examples of proportionate measures:

  • If the employer plans to transition to electric vehicles, this must come with clear usage policies.

  • If the employer wants to include ecological targets in individual agreements, these must be based on clear, measurable, and achievable criteria, and communicated transparently.

Outlook: Labor Law as a Tool for Sustainable Transformation

Climate protection will continue to gain importance in the corporate context. It is likely that lawmakers will introduce regulations requiring companies to assume ecological responsibility – including regulations within labor law. However, labor law will continue to serve as an interface between business goals and employee rights. Employers should already begin working toward legally sound, fair, and cooperative arrangements to align environmental objectives with employee interests and fulfill their broader social responsibility.

Conclusion

Climate protection is no longer just a marketing tool. It is a legally and socially anchored corporate responsibility. This brings far-reaching implications for labor law. Employers should take a holistic view of these issues. Ultimately, close cooperation with employees and works councils is key. Labor law can serve as the foundation for successfully implementing climate protection in daily operations.

Do you have further questions on this topic?

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