Car fleets, driving to work and ESG

22 November 2021

Companies need cars to get their people around – or do they? Conventional wisdom is that the bigger the company, the bigger the fleet – and the higher the position of the employee within the organisation, the grander the car.

BPCC's green blog:

COP26 – after the party, the fallout
Car fleets, driving to work and ESG
Communicating the Green Imperative within your firm

Sales reps are on the road, showing samples, delivering product, making several visits a day every day. But can companies justify the purchase or lease of a car used solely for the use of an executive that sits in the office just to drive themselves to the office from home and back? A car that spends 95% of its time stationary is not the best use of capital. But it’s a war for talent! Without a top-of-the-range SUV, our CEO will feel undervalued and will move to another employer!

Really? Senior executives’ behaviour sends strong signals that reverberate throughout the organisation. A CEO that eschews the big car in favour of cycling to work has immediately gained much support from their millennial and Gen Z staff. [And don’t believe that swapping a diesel SUV for a battery-powered one will change much; 20% of all the CO2 generated by a car in its lifetime is in its construction, and a two-tonne SUV needs bigger and heavier batteries to drag its bulk along, and more electricity to charge it up than a smaller city car.]

Can the world, teetering on the edge of climate disaster, really afford to see corporate car fleets choking our cities, emitting significant amounts of greenhouse gas just to move employees from suburb to city-centre offices and back again?

Can shareholders sit back and continue to invest in companies that are taking no action to reduce their vehicle-fleet’s carbon footprint?

COP26’s transport day, which saw the signing of a pledge by some car-making countries, car makers, car financiers and car users to cut tailpipe emissions to zero by 2040, was overshadowed by the announcement of the US-China joint declaration to cooperate more closely together on cutting greenhouse gases.

A mere 32 countries committed to ban the sale of fossil-fuel-powered vehicles by 2040 at the latest, including the UK, India, Turkey and 12 EU members, including Poland. The US, China, Germany and France did not sign. Of the car-makers, Ford, General Motors, Mercedes-Benz and Volvo agreed to the plan, whilst BMW, Nissan, Renault, Stellantis [Fiat/Chrysler/Citroen/Peugeot/Opel/Vauxhall] and Volkswagen opted out. The declaration commits signatories to work toward all new cars and van sales "being zero emission by 2040 or earlier, or by no later than 2035 in leading markets." For the car-makers, it means that 100% of their sales will be zero emission by 2035 at the latest. Signatories to the declaration also includes fleet operators, including AstraZeneca, GlaxoSmithKline and LeasePlan, financial institutions including Aviva and local authorities, including Barcelona, Bristol, Los Angeles, New York and Rome. The European Commission wants to ban the sale of combustion engine cars from 2035 through new emission-reduction targets.

Companies seriously wishing to reduce their carbon footprints should take a long – and usually painful – look at their car policies. Which employees really do need a car as a tool of their job? Can those cars be electric? For whom is a car merely a perk?

With more employees (from the very top down) motivated to get to work by public transport (including ride-hailing or ride-sharing) or by bicycle, the company car park can be dramatically reduced in size. Property owners can go green by replacing the asphalt with meadowland and wildflowers, attracting a greater diversity of insect and bird life.

Poland (and the CEE region in general) has a problem with the motor car, which is seen as a status symbol, something with which to show off. An irrational love-affair that the western world had back in the second half of the 20th century. Cars spark strong emotions in Poland. A marketing director once decided that the entire fleet should be branded in company colours. The cars, he reasoned, were moving billboards, and should be used to advertise the company’s services. There was uproar from the staff. Many of them assumed that their friends and neighbours would see this as a demotion! The marketing director was blunt – accept the branding, or hand back the car keys. This happened several years ago, but shows just how Poles are attached to their cars. Warsaw has more cars per 1,000 citizens than Berlin – indeed Poland has more cars per 1,000 citizens (617) than Germany (567)!

One in two new cars purchased in Poland is bought by a company. The burden therefore falls on the corporate sector is to reduce emissions stemming from them.

CEOs, sustainability managers, HR directors – corporate leaders in general – need to get the point across that the way we move about our cities, our countries, our planet, has a huge impact in terms of climate change. A call to action is needed here – how much can we save by optimising our company car fleets?

This is where the future is – small, innovative electric vehicles designed for congested city centres. Triggo.city. Pop your senior executives into these, and make a strong statement.

 

Day 1: BPCC’s green blog on COP 26 in Glasgow
Day 2: Methane emission pledge hailed as success on second day of COP26
Day 3: Coal and climate finance are the focus of the third day of COP26
Day 4: Youth activism flavours fourth day of COP26
Day 7: Barack Obama’s speech highlighted start of second week of COP26
Day 8: Gender equality – focus of eighth day of COP26 – overshadowed by new heat calculation
Day 10&11: China-US ‘breakthrough’ as final statement is hammered out
Summary: COP26 disappoints with the loss of strong commitment