A ‘green fleet’ strategy will contribute to a company’s overall
sustainability strategy, which can also positively impact on a
company’s reputation. The challenge is how to assess, measure and
reduce the company’s carbon footprint in an effective and
meaningful way.

Currently, companies are using different approaches and tactics to
reduce their carbon footprint, ranging from introducing
eco-efficient internal processes; product and service innovation to
carbon offsetting.
   
Measuring your carbon footprint

To develop an environmental strategy for your
vehicle fleet you need to first understand your carbon output.
While it may be easier to purchase carbon ‘offsets’ to compensate
for greenhouse gas emissions, the primary focus should be aimed at
addressing the root cause of emissions: the individual car and
driver.

 A strategy can be designed around the following five
steps:

1. Understand the carbon footprint across the full value
chain
2. Implement measures to reduce emissions, including
addressing driver behaviour
3. Review sources of renewable energy as part of your
reduction strategy
4. Develop carbon reduction initiatives with clients,
suppliers and employees
5. Offset your remaining emissions.

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Understand your carbon footprint

To understand your carbon footprint you should first take stock of
your own CO2 emissions (internal operations) but also take into
account upstream emissions (suppliers providing goods and services)
and downstream emissions (clients and employees using cars). The
carbon footprint of a car leasing company lies mainly downstream
with the drivers and cars. It is important to make an informed
decision based on what the company views as within its sphere of
influence. A car leasing company that only assumes responsibility
for its own internal emissions without addressing downstream
emissions will simply not be credible.

Next, assess the level of detail and accuracy needed to calculate
your carbon footprint. For example, will you use default, projected
or actual fuel use and emission factors? Do you include driver
behavior, tyre wear, maintenance and repairs in the calculation?
Which carbon protocol will you use to calculate CO2 emissions?
Today’s generation of fleet management systems and vehicle black
box systems offer the necessary data to calculate an accurate and
robust footprint. Once you understand the composition of your
carbon footprint, it is possible to create a meaningful and
effective reduction strategy.

Implement measures to reduce
emissions

As drivers and their cars are the key sources of a carbon
footprint, an important focus for reducing emissions is to target
driver behaviour. Driver buying decisions can be influenced by
offering incentives, such as a decreased contribution for private
mileage when a ‘green’ car is chosen.

Black boxes and sophisticated fleet management systems aid the
implementation of real efficiency programmes including driver
incentive schemes, re-training schemes and performance monitoring.
These reduce costs in fuel and maintenance as well as reducing the
carbon footprint. Drivers also tend to respond positively when they
know that their driving habits are visible and have a change to
improve them.

Some leasing companies have started offering features to enable
individuals to plan their journeys using different modes of
transport. These companies use incentives like train ticket
discounts or car-pooling options as part of the leasing contract.
This has energy saving and traffic congestion benefits. Tomorrow’s
leasing company might consider extending its services beyond
financing and managing assets, to offer other transport options –
the company car being just one part of the solution.

Renewable sources

Companies can consider funding or supporting projects related to
renewable energy, such as wind, solar, water, biogas and biomass,
as well as contributing to energy efficiency programmes, including
waste reduction or waste usage initiatives.

 Currently, alternative fuels only present a feasible option
where the infrastructure allows it. Although most cars can drive on
alternative fuels such as liquid gas or biodiesel, these options
are still inaccessible in many countries. The government has an
important role to play in promoting alternative fuels by reducing
excise taxes.

Develop initiatives with clients, suppliers and
employees

A meaningful yet sometimes difficult step to take is to work with
clients and suppliers. Companies from a range of sectors have
already achieved significant reductions by initiatives in this
area. This includes financial institutions (HSBC, Swiss RE),
logistics (TNT), electronics (Royal Philips Electronics) and retail
(Tesco, Boots).

 Fleet managers and the leasing industry should not only
challenge automotive OEMs to offer a broader range of ‘green’
solutions, but also dare to engage with their clients. Working with
clients may be daunting, but the leading multinationals show
positive results.

Focusing on employees can also be beneficial for companies.
Employee motivation survey results indicate that workforces
appreciate employers who take their environmental responsibility
seriously and engage them in meaningful contributions – even where
it involves adjustments like choosing a low emission company
car.

Carbon offsetting

Carbon offsetting should be the final step for consideration in an
environmental strategy. Any offset scheme must be accompanied by
the first four steps above and supported by a long-term strategy to
change the composition of the car fleet. Offsetting alone offers no
substitute for improving eco-efficiency within the business.

However, carbon offset schemes can be beneficial as a creative way
of generating capital and supporting environmental projects with
valuable funding, but should not be used to alleviate the guilt of
running a high-polluting car. They can also be impractical for
large fleets: matching emissions for driving 35,000km a year
requires 360 trees to be planted.

Conclusion

Fleet managers may initially think that measuring
the carbon footprint of a fleet is too difficult and lies beyond
their responsibility or sphere of influence. However, it is fast
becoming integral to business structures, particularly for those
businesses with visible ‘green’ credentials.

Many leasing companies already have ‘green’ programmes, but these
are often offsetting schemes that fail to address the root cause of
emissions. Consequently, there is still plenty of scope for
creative thinking and solutions around reducing fleet emissions. We
challenge companies to take the lead.

Marc Peeters, associate director, KPMG IT Advisory, Barend
van Bergen, director, KPMG
Sustainability.