Choosing greener vehicles?

Organisations who want to introduce greener vehicles into their fleets should follow proven fleet management principles if they want to achieve sustainable change, says the ICM's John Webb

With a fragile UK economy and public sector spending under enormous pressure, now is not a time to abandon proven industry best practice in the pursuit of a greener fleet. However, following a structured approach to vehicle selection can deliver a greener fleet and sustainable cost reduction.     

This article will be of interest to all stakeholders involved in car and light commercial vehicle operations, HR professionals with an interest in company car benefits and business travel. It should also be of interest to those who formulate policy on the environment and health and safety across their organisations.

A RETURN ON INVESTMENT
In a previous GreenFleet article I discussed the importance of stakeholder buy-in to the business case for a greener fleet. This is the reference point against which all fleet investment decisions must be made. Fleet is usually one of the highest costs of a business alongside estates, IT and salaries. So, these are costly assets that must support core business activities and business objectives. That is, you need to consider if the car and van fleet supports operational targets such as sales numbers; or, are company cars a valued recruitment and retention tool? An overly restrictive car policy that reduces choice can also push company car drivers into a cash option which can prove to be more expensive, less safe and less environmentally friendly, as older, higher emitting cars are often chosen by employees.

It was assumed that public sector fleets would be at the forefront of the uptake of green vehicle procurement. However, while stretching emission reduction targets remain in place for public sector fleets, it is clear that prudence with fleet expenditure will be the order of the day.  

WHAT TECHNOLOGY?
There is no ‘one size fits all’ green solution for fleet operators. Starting the process with a fixed view of the technology to be chosen is often the source of problems further down the line. While a bold step change to introduce the latest low emission vehicles can offer the potential for a significant drop in emissions, this may be at the cost of driver dissatisfaction, reduced operational performance and increased costs. Therefore, the needs of a range of business stakeholders needs to be taken on board if the end users are to buy in to the change.
    

The key to successful green fleet management is to identify the needs of the business and ensure the fleet matches those needs efficiently and effectively. The best approach is therefore to adopt a ‘technologically neutral’ approach which aims to provide the lowest CO2 emitting vehicle which is right for the job – ‘fit for purpose’. This means that a mix of diesel, dual-fuel, hybrid and electric may exist successfully within the same fleet – and why not?
    

Selecting the right low CO2 emitting vehicles in this way will result in significant cost savings and will not require revisiting every time new vehicle technologies arrive on the market. Targeting CO2 works across all fuel types, regardless of the technology.
    

Effective green fleet management should focus on the careful management of all the key elements of business travel and optimising these to minimise non-productive mileage, inefficient vehicles and inefficient driving practices.

VEHICLE EVALUATION
Would you buy an expensive asset without seeing it? Would you believe what the salesman told you or just relied on the advertising? No. You would do your research and often try it out. You would look across a range of suppliers and maybe seek testimonials or customer reviews. Doing your research thoroughly will bear dividends and give you the answers to the questions that your stakeholders will seek.
    

It’s good practice to set clear technical and qualitative evaluation criteria including cost and performance at the outset. Give the manufacturers feedback. They need this to develop the product – and hopefully enable them to make a sale next time round. One area where innovative vehicle technology can provide challenges is the service, maintenance and repair infrastructure to support the new vehicles. So any decisions about new vehicle models must include adequate provision for keeping them on the road.
    

Speak to other businesses that use the vehicles. Manufacturers and leasing companies will often be more than willing to enlist other customers as advocates of their products.
    

Enlisting the support of drivers is also a critical element of selection and evaluation, particularly for job-need cars or vans. On the road trials are an invaluable opportunity to put vehicles to the test. However, this must be done by employees who understand the evaluation criteria and can make an objective assessment. The aim here is evaluation – not testing to destruction. Also remember, badly driven ‘green’ vehicles can be more polluting than a well driven conventional car.
    

A critical success factor in successful green fleet management is securing drivers’ buy-in to the new vehicles. Even when given the most efficient and clean vehicle available in the market today, an employee who resents having the vehicle will manage to make it perform inefficiently. This was a particular problem with dual-fuel Liquid Petroleum Gas (LPG) powered vehicles that could run on both unleaded petrol and LPG. The environmental and cost benefits of these vehicles were often lost by drivers predominantly running them on unleaded fuel and driving them aggressively believing they were under-powered.
    

Therefore get the drivers’ early buy-in to your environmental policy and then the objectives will be much more achievable. Ensure that employees are made aware of any financial savings available to them – low CO2 emitting cars will reduce company car tax and private fuel costs. Employees need to be shown the key features of vehicles to understand any special driving characteristics of say, hybrids which require a different driving style to optimise their dual power systems.
    

Fuel economy gauges and gear change indicators also encourage a more efficient driving style.

SAFETY FIRST
Any successful vehicle selection policies must have safety at the core. Therefore any vehicle evaluation must include factors such as Euro NCAP (European New Car Assessment Programme) rating. Although legislation sets minimum standards which cars must meet in order to be sold in Europe, Euro NCAP tests are more severe, allowing the differences between cars’ safety to be highlighted. Although safety is an important factor, there are other factors that have to be taken into account when buying a car. In terms of choosing safety, start by deciding on the size and kind of car needed, then look for the best performers in that group. Some buyers may be interested in particular aspects of a car’s performance and under the rating scheme, a car’s score are given for each part of the assessment, as well as the overall star rating.
    

Most fleet selection policies will include front and side airbags and, of course seatbelts which are a legal requirement. However, most manufacturers are developing innovative safety features which you also need to consider if available.  
  

 Anti–lock Braking System (ABS) has been a standard feature of all new cars since 2004 and helps you to maintain steering control under emergency braking. Electronic Brake Assist senses how firmly you brake and keeps applying the brake to help the ABS work. Cars fitted with Electronic Stability Control (ESC) are significantly less likely to be involved in accidents. ESC detects differences between a car's course and the driver's intended course and can sense when a driver's about to lose control. By automatically and selectively applying the brakes to individual wheels, Electronic Stability Control helps the driver maintain control and steer safely. It has been shown to reduce fatalities by 25 per cent.
    

The overall message here is to ensure that safety is not compromised for CO2 reduction.  

HOW TO COMPARE COSTS
At a recent ICFM Conference workshop I asked a group of 20 members how they managed fleet costs. Nearly all responded with Whole Life Costs. The total cost of ownership over the life of a vehicle is a proven, robust method of cost comparison that works on many levels as WLC modelling involves calculations on lease rate, blocked VAT, National Insurance Class 1, fuel and of course taxation which is based on a car’s CO2 emissions.

This will ‘future proof’ policies and ensure that the effects of the tax changes are reflected in the formation of policy and therefore the choices which drivers make. This will ensure that companies make efficient decisions when it comes to vehicle provision and do not incur unnecessary cost. 
     

WLC is also a proven method of influencing the vehicle choice of ‘perk’ company car drivers where the imposition of a CO2 cap restricting choice below say 160 g/km may go against rewards and benefits objectives.
  

 For those of you who don’t put finance at the top of your skill set, help is usually at hand with your leasing provider who should be more than willing to assist you with WLC calculations. Take care though to ensure that all elements of the calculation are understood as interpretation of what constitutes WLCs can vary.
    

The final element of the process is monitoring costs throughout the life of the vehicle and ensuring that the objectives of the original business case have been met.
    

Following this structured planned approach to fleet acquisition may require additional effort but the benefits will be accrued for many years.