GreeninG your fleet

automotive fleet & leasing association white paper series • volume 10

Many companies are “going green,” as corporate executives pursue sustainability in their companies. PHH recently conducted its annual survey of public and private sector fleet managers designed to gauge awareness of environmental issues and barriers to implement solutions. Following are key findings from the survey results, along with PHH’s recommendations for best practices:

1. Corporate interest in the environment continues to grow

Asked to rate how their organizations’ interest in the envi-ronment has changed over the past year, 80% of the surveyed fleet managers reported that interest in their fleets’ environmen-tal impact continues to grow at their organizations, up slightly from last year (77%). However, there is still work to be done: according to the survey, almost 15% of private sector fleet managers said the environmental impact of their fleets is not a priority at their organization.

2. Few use best practices when setting environmental goals

PHH has found that a key best practice for environmental effectiveness is to set greenhouse gas (GHG) goals for fleet performance. A GHG goal allows fleet managers to track im-provements in fuel efficiency, account for the impact of business changes on emissions, and assess the impact of driver behavior programs. However, according to the PHH survey, only 25% of survey respondents have GHG goals for their fleets.

In addition, the survey found that most companies do not measure greenhouse emissions from their fleets – only 28% of the respondents said they were doing so.

What gets measured gets managedThe survey shows that what gets measured gets managed.

If you aren’t actively measuring and reporting on the emissions, you probably aren’t considering emissions when deciding which

Greening Your FleetPHH’s 2008 Green Survey reveals progress combined with need for better understanding of best practices.

by PHH Arval

2008: Have you been asked about the environmental impact of your fleet?

80%

20%

Yes

No

2007: Have you been asked about the environmental impact of your fleet?

77%

23%

Yes

No

Does your company have a GHG reduction goal for fleet?

05

1015202530354045

GHG goal MPG goal Tech goal No goal Don't know

% responding "yes"

Is your company measuring GHG emissions from the fleet?

28.4%

64.9%

6.8%

Yes

No

Don't know

vehicles best meet your fleet needs. Ideally, you would measure all of the GHG emissions from

your fleet using actual fuel use data. Vehicle use (city vs. highway driving, the vehicle’s cargo load, etc.), maintenance and driving behavior (speeding, aggressive driving, idling) can all have a sig-nificant impact on a vehicle’s fuel economy. By looking at actual fuel data, you have precise information on how your vehicles are

performing compared to the EPA estimates of vehicle fuel efficiency.

Focus on the outcome, not the technology

When considering what goal to set for the fleet, it’s important to keep in mind the outcome that we’re trying to achieve – real reductions in greenhouse gas emissions.

Many companies are understandably excited about hybrid technology or ethanol as a renewable fuel source, and they develop goals around the technology. These goals can have unintended consequences:

} A large consumer products company instituted a policy that all leased vehicles for executives had to be hybrids. If the executive did not want a hybrid, they would be given a car allowance. Although the lease was better financially for the executive, most did not want a hybrid and took the allowance to get whatever vehicle they wanted. The company had no way to track what vehicle they were driving. As a result, it was impossible to measure the environmental impact of this policy.

} Another large company set a goal of putting as many E85 vehicles in their fleet as possible. In some cases they moved drivers out of fuel efficient vehicles that were not E85 compatible. Their drivers are not in-structed to use E85 and often don’t have access to the fuel. The environmental impact of this goal is question-able.

Our recommendation is that you set a GHG reduction goal, not a goal around a specific technology. This has several benefits:

} It gives you the flexibility to look at all technologies available to determine how best to meet that goal. For many companies, using a mix of technologies depend-ing on the needs of different segments of the fleet is the best way to maximize reductions.

} If you set a GHG goal instead of a technology goal,

you will be able to measure the impact of anti-idling campaigns, more efficient routing, or better vehicle maintenance.

By setting a GHG goal and regularly reporting on progress, you can report on fleet emissions as part of your overall GHG reporting.

3. A significant number of organizations are finding cost-effective ways to reduce fleet emissions

The most encouraging finding from the PHH survey of fleet managers was that more than a third of fleet managers are finding ways to save money while reducing fleet emissions (37% in the private sector and 39% in the public sector). For remain-ing private sector companies, 50% continue to view cost as an

obstacle, but this is down from last year’s survey. In the public sector, the concern about cost has remained relatively flat.

Look for cost-effective ways to improve efficiency and reduce emissions

Because the environment is the hot topic in business today, some companies are willing to increase their fleet budgets to get environmental reductions. This is terrific, and we hope it will continue for years to come. But business cycles being what they are, it is unrealistic to think companies will be willing to indefi-nitely pay a price premium for environmental reductions.

Fortunately, most compa-nies don’t have to. Every company we have analyzed has opportunities to reduce

emissions without increasing costs. Our recommendation is that you start by looking for the most cost-effective ways to reduce emissions. Initiatives that have both business and environmental benefits will have more staying power and will continue even if your company’s interest in environmental issues wanes.

Enlist the help of your driversIn addition, more education and communication are critical

to successfully greening the fleet, and PHH’s survey shows that both of these areas still have plenty of room for growth. Cur-rently 42% of all private sector fleet managers are not doing any

Best practice: Actively measure and report on your fleet’s emissions

Best practice: Focus your goal on lowering GHG emissions, rather than vehicle or fuel types

Best practice: Find opportunities to reduce GHG emissions without increasing costs

Is cost a barrier to reducing fleet emissions?

0

10

20

30

40

50

60

70

Yes No - findingsavings

No - pay extra

Percentage

Public Sector FleetsPrivate Sector Fleets

communications to their drivers around the role they play in fleet emissions.

The most common driver communications are around driver behavior. This is certainly a good area to focus on, as driver be-havior – including idling, exces-sive speeding, and jack rabbit starts – can have a significant impact on the fuel economy of a vehicle.

For fleets where drivers have a choice of vehicles, the choices they make can be the most significant thing they can do to reduce their individual emissions. Although significant num-

bers of public and private sector fleets are com-municating to drivers about this, there is additional room for improvement.

Other best practicesReduce what you can, offset what you can’t

We recommend that you make the most cost-effective reduc-tions you can, and then, using some of the savings generated, offset the remaining emissions of your fleet. There are a number of viable offset opportunities, but it’s best to get good advice on which have delivered proven value to the environment. We recommend that companies only consider projects that have been independently audited and found to deliver the reductions that are claimed.

What applies to fleets applies to all practices For many companies, fleet is a significant and visible part of

a company’s GHG footprint, and it is important to look for ways to reduce emissions that still make good business sense.

The best practices described above don’t only apply to fleet – these are best practices for any environmental initiative that

a company would undertake. By including fleet in these best practices, you have an opportunity to make real,

measurable, and cost effective reductions to the greenhouse gas emissions of your corporate cars and trucks. n

Best practice: Enhance driver education and communication about green choices

Best practice: Offset your remaining emissions through viable projects

Have you communicated to drivers on ways they can minimize emissions?

01020304050607080

Yes - vehicle selectionYes - vehicle maintenance

Yes - driver behavior

Yes - other

No

Public Sector Fleets

Privete Sector Fleets