A major UK fleet cut emissions from its new company cars from an average of 148g/km to 123g/km in a little over a year.
Stairlift supplier Otis, which comprises 650 commercial vehicles and 307 passenger cars, achieved this despite widening the choice of cars on its policy and allowing drivers to upgrade their cars.
When all the cars on the four-year replacement cycle, which are supplied on an outsourced contract hire service from Lex Autolease, are changed, the company says it
will have cut emissions by 17% – the equivalent of reducing its fleet by 52 cars.
The new strategy followed a review of fleet policy.
Otis set a target to cut CO2 emissions by 15% from the 148g/km it was achieving across its diesel-only car fleet by capping emissions at 139g/km.
But the fleet was also coming to the attention of management for another reason – staff were unhappy about the choice of vehicles offered in one of the four grades.
“We reviewed employee satisfaction and deduced that we could improve on the offering of cars,” says Otis executive director Keith Ball.
“We reviewed costs looking at the total cost of ownership, including things like National Insurance and the actual cost of travel over the 20,000 miles each car covered annually, and we identified a wide variance in costs – as high as £1,000 per annum.”
This led to the setting of the CO2 cap at 139g/km.
“By capping at this level we noticed NI was costing us less, the employees’ BIK costs were also less and the vehicles were achieving a higher mpg,” says Ball.
“So we enabled some employees to effectively upgrade to a more expensive car at no cost to the business.”
The company is still saving money despite allowing its employees to opt for these more expensive cars.
This is because they are more economical, says Ball, so wholelife costs are lower.
The average fuel consumption, based on manufacturer figures, across the fleet in October 2008 was 53.4mpg – this has risen to 58.4mpg.
“The money we have saved we have re-invested into the business, enabling employees to select a better vehicle,” says Ball.
Many employees opted for cars significantly below the 139g/km limit, taking the average for the 150 cars that have so far been replaced to just 123g/km – the equivalent of taking 25 vehicles off the fleet.
The cap is linked directly to the HMRC benefit-in-kind tax scale, which will be reduced in 5g/km increments annually.
Next year, Otis will drop its cap to 134g, then in 2012 to 129g.
'Managers have to be on board to make this work'
Managers have been key to implementing Otis’s CO2 initiative.
And they have led from the front.
They too have downsized their vehicles to bring them in line with the new caps.
“We introduced CO2 caps to all the grades, and in fact senior management faced the biggest reduction,” explains Keith Ball.
“Managers have to be on board to make this work.
"I designed the policy and presented it and it was subject to the same rigorous process, and what we found was that our CO2 targets were met.”
According to Lex Autolease, Otis has the best CO2 rating of all its fleet-managed customers within corporate sales – it is number one out of 21.
“Working closely with the customer on their targets helped us to focus our energies on driver ordering behaviour and driver awareness of the environment with green incentives,” said a spokesman for the leasing company.
“As a result, we are already seeing the benefits that we were expecting to see much further down the line.”
Excelsior & Oakland is also exploring ‘zero-emission’ vehicles with Lex Autolease, although it is not yet convinced of the ability of electric vehicles to meet its needs.