Fleet News

Why going green doesn't cost the earth

“Going green? I’d love to, but we just can’t afford it.”

Chances are you’ll have heard fellow fleet managers excuse themselves from the green revolution with such a statement. You may even have used it yourself.

It’s all very well the government urging fleets to go green, but can you afford to replace all your cars with hybrids? Of course not.

A new survey reveals that a third of UK businesses think going green will cost them financially. But that’s highly unlikely to be the case, according to the Energy Saving Trust. In its new report Behind the Wheel, it argues that there are savings of £1,000 a car to be had by greening the fleet.

Running fuel-efficient vehicles, adopting eco-driving techniques and telematics, such as satellite navigation and vehicle tracking, can save companies considerable amounts of money.

The Energy Saving Trust (EST) estimates that a company with a 100-strong fleet can save around £90,000 a year, every year, after adopting a green fleet policy.

Nigel Underdown, EST’s head of transport advice, says the report is designed to provide a snapshot of the fleet landscape and examine organisations’ perceptions of the cost of a green fleet.

“Some of the results are rather disquieting,” he says.

“Too few businesses appeared to be concerned about the energy efficiency of their fleet. Too many thought it would be costly to change.

“And far too many suggested they had other things to worry about than changing their company car policy.”

Philip Sellwood, chief executive of the Energy Saving Trust, says: “When it comes to company car fleets, the business case is the environmental case.

“We frequently find that fleets are not being discussed at the right level in companies. Very few organisations discuss their company car fleet as a boardroom agenda item.

“Yet the firms who have shown leadership at a high level are the ones who are implementing green fleet policies with tremendous success – in terms of carbon and monetary savings. As with any serious operational restructure, buy-in at the top is essential.”

Tax

More than three-quarters (76%) of respondents said they advise employees on the levels of tax that apply to different cars. But 67% of firms said they offered alternative cash-for-car schemes, a huge rise from the 6% that offered the choice in the 1990s.

According to the EST, this has a mixed impact on the environment. Company cars tend to be newer vehicles and are serviced regularly – they are more technologically advanced and are better maintained than employees’ own vehicles.

There is also less tax penalty for private owners for having a high-polluting car.

Out of the firms with either corporate social responsibility or environmental policies, 38% offer cash-for car schemes. Surprisingly, they largely wash their hands of any interest in the environmental impact of that decision.

Just 25% of those firms have an age restriction on the cars used for business and only 3% restrict CO2 – lower figures than for those that don’t have a CSR commitment.

The EST says that cash-for-car scheme vehicles and the associated approved mileage allowance payments (AMAP) used to reimburse drivers for business mileage incentivices them to drive further. The organisation recommends extra AMAP payments for those car sharing and considering making greater use of pool cars and daily rental to reduce emissions and business costs.

Vehicles

Are firms jumping to bring in the latest, greenest vehicles? Some are, but not enough according to the EST.

Its shows only 41% of firms offer a low-emission company car, meaning that most drivers have the choice of a higher-emitting vehicle or taking the cash which, as mentioned earlier, is not always a greener option.

Of firms with a green option, only 27% actively encourage employees to choose the lower-emitting vehicle through financial incentives.

Larger companies are more likely to have a green option (69%), while firms with less than 10 employees are least likely to (26%). There seems to be little willingness to improve the situation – only 23% say they will amend their list to encourage low-emission cars. Generally, smaller cars are greener cars, but 21% of firms insist that employees drive a car that befits their grade – the more senior, the larger the car.

The EST wants a change of mindset from companies more concerned with making a statement than protecting the planet.

Corporate social responsibility

Half of all firms that give cars to employees do not have a corporate social responsibility (CSR) or environmental policy, despite an increasing belief that customer loyalty and profitability is linked to a firm’s wider economic, social and environmental impact.

Many smaller firms could be assumed to be concerned about day-to-day life rather than longer-term “peripheral” issues. But it’s the medium-sized firms that are least concerned with CSR – just 33% have a policy compared with 72% of firms with fewer than 10 employees, and the same proportion of large companies.

The survey also found that less than half of all companies that have a CSR or environmental policies consider the impact of vehicles as part of their policy.

This means that 58% of firms don’t even think about cars when they “commit to the environment”. The EST thinks too many companies are simply ticking the CSR box rather than undertaking a fundamental assessment of their environmental impact.

The organisation says this is because of a dilemma – go to smaller, less glamorous cars in the name of the environment and risk losing staff looking for more prestigious remuneration.

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