On May 13 – 15, Fleet Forum’s very own Paul Jansen, Executive Director, joined corporate industry leaders at the Global Fleet Summit, hosted by Nexus Communication.
This annual event gathered managers of the world’s largest multinational commercial fleets, offering a unique platform for dialogue and learning. In this article, we’ll share with you key insights from the event that are relevent for the aid & development community.
Don’t let perfect be the enemy of good
The climate emergency is real and the transport sector is making it worse. In the US, 38% of greenhouse gas emissions come from the transport sector and in Europe the figure is 25%, explained Dr Jose Pereira, Director, Frost & Sullivan. What’s more, while other industries are becoming cleaner, emissions from transport are rising, up by 16% in the EU between 1990-2021.
So, while it might be tempting to wait for EVs with longer ranges or hold out in the hope that hydrogen becomes a real possibility, the race to reduce emissions has to start now.
“Time is short but we are in a position where we can make a difference. Once you lose your ambition you lose it,” says Ilya Strumane, Global Procurement Director Business Services, Talent, IT, Travel & Fleet at UCB Biopharma.
Consider market-specific solutions
Global warming may be a worldwide danger, but there is a wide variance in the solutions available to fleets in different regions. Put bluntly, the gold standard of electric vehicles powered by renewable energy may simply not be possible everywhere, and fleet decision makers are forced to choose the cleanest viable powertrain for each market.
“As we grow in emerging markets, we have had to look at local EV readiness,” says Andrea Montuori, Senior Global Category Manager, Xylem. “We are exploring hybrids, PHEVs and alternative fuels in Latam [Latin America] where markets are not ready for EVs.”
Create a business plan for a sustainable fleet
Calculating the TCO of ultra-low and zero emission vehicles requires more analysis than for petrol and diesel models.
“When analysing TCO, take into account interest rates, energy costs, taxation, and look at where you are going to charge your vehicles, because charging costs can vary a lot. Be flexible and adaptable to new OEM brands. Right size your models, experiment with the mileage and duration of contracts,” says Amélie de Valroger, Global Head of Consultancy and Electric Solutions, Ayvens.
Engage all stakeholders
Transitioning to a more sustainable fleet can involve both budgetary and operational adjustments, so securing buy-in from senior management as well as drivers is essential.
Showcasing and demystifying electric vehicles can help with this process, says Alberto Mancillas, North America and Brazil Fleet Manager, ABB: “Once someone drives an EV it changes their perspective and they start to like the product.”
Choose green suppliers and products
The road to sustainability can be bumpy, so it helps to select suppliers and products that show similar environmental commitments. There’s little point choosing vehicles with zero tailpipe emissions, if they arrive with a huge carbon footprint from their production and manufacture.
Finding comparable, transparent ESG information can be a challenge, but leading fleets are now asking for it in tenders.
“We assess the sustainability of supplier as part of our tender process,” says Schneider Electric’s Linda Lin. “Because we are a sustainable business, we have a zero carbon project with our top 1,000 suppliers – we provide training, survey them and offer consultancy.”
Other companies are taking an even tougher line.“If you do not disclose your ESG you are out.,” says Elena Malagarriga, Fleet and Mobility Category Lead, Takeda.
Xylem’s Andrea Montuori, says: “We are now starting to work out what the circular economy looks like and we are asking OEMS and leasing companies for what information they can provide us with about the full life cycle of the vehicle.”
Think differently
Finding the optimum (cheapest) TCO of electric vehicles might require new lease durations and mileages. Given the turbulence in the residual values of EVs, there are benefits for leasing companies in maximising revenue from the full life cycle of the vehicles over seven or eight years, rather than the traditional three- or four-year leasing contract. This could lead to a multi-lease approach, with a first lease of 18 to 24 months, followed by a second lease and a third lease that takes the vehicle to seven or more years of age says Benjamin Koeck, associate partner, McKinsey & Co.
As a result, fleets could increase their procurement of used vehicles – 29% already buy or lease secondhand vehicles, according to Arval Mobility Observatory.
Fleet managers warn that this might cause ‘a revolt’ among company car drivers, but the offer of a used EV could be sweetened by including an e-bike or mobility budget, and still provide savings.
With Scope 3 emissions from commuting contributing to corporate carbon footprints, extending green fleet schemes to more employees can also help the environment.
“We have increased the number of people eligible for company car so people can go greener, which they could not when private car,” says UCB Pharma’s Ilya Strumane.
Measure progress
If you can’t measure it, you can’t manage it, so whether a business is required by regulation to disclose its greenhouse gas emissions or simply wants to track its progress, good data is essential.
Restricting the number of suppliers makes data collection, consolidation and standardisation easier.
The frequency of GHG reports is also an important consideration. “We would like to see trends on a quarter-by-quarter basis, or even month-by-month, so if we introduce a driver training programme, for example, we want to be able to measure the CO2 savings,” says HP’s Berta Mauri.
Focus resources where they will have the biggest impact
Data analysis plays a vital role in maximising bang for buck returns on investment. Using telematics data to identify higher risk drivers and design a safety programme for them can also deliver emissions reductions, says Andrew Bennett, Regional Leader, OCTO Telematics.
“There is an 80% correlation between eco-driving and risk. Focusing on risk will improve your fuel economy,” he says.
There’s no end point
Sustainability is a dynamic concept, so no fleet strategy is going to last for years.
“Conditions change repeatedly, regulations change. You need to refresh your fleet strategy and stay current,” says Laura Jozwiak, Chief Client Officer, Wheels.
But it’s also important to celebrate success along the way. “We have to counteract bad news with good news case studies,” she says.
We have reposted parts of an article from Global Fleet. For the full article, pleasse visit this link.
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