Next week sees the annual gathering of key decision makers at this year’s World Economic Forum in Davos — and one of the big topics they will be discussing is climate change. In our conclusion, the simplest action they could take to curb global emissions is to switch to low-emission vehicles.
This is the key finding of LeasePlan’s new Sustainable Fleet Benchmark, which clearly demonstrates just how big a difference corporate fleets can make. Based on an analysis of more than half a million vehicles in 32 countries, the average company vehicle emits 3.9 tonnes of CO2 a year.
In fact, according to our calculations, the 1,808 organisations participating in Davos this year are collectively responsible for fleets containing approximately 810,000 vehicles. If they were all to switch to a low-emission fleet, they could collectively cut a massive 3 million tonnes of CO2 a year.
The stakes are certainly high. Transport is the fastest-growing contributor to climate change, with road transport accounting for approximately 20% of carbon dioxide emissions in the EU alone. It is also the only major industrial sector in which emissions are still rising. Corporates collectively making the switch to a low-emission fleet could, therefore, make a big difference — especially when you consider that around half the cars on the road today belong to companies.
Are businesses realising this potential and rising to the challenge?
Some certainly are. LeasePlan’s data reveals that the number of electric and hybrid cars in fleets has almost trebled since 2012 — from 0.9% of all company cars then to 2.6% today.
The Sustainable Fleet Benchmark also identifies a number of companies that have become leaders in terms of fleet sustainability — taking simple actions such as offering low-emission cars as standard, providing charging points at offices, and viewing their fleets as an integral part of their overall carbon reduction programs. The companies that have achieved this leadership status represent a diverse range of industries and nationalities. They include Chinese internet giant Baidu; French electricity company EDF; Swedish furniture retailer IKEA; and Dutch engineering consultancy Royal HaskoningDHV, which has promised to switch its fleet to 100% electric vehicles by 2021.
It’s no coincidence that these companies, like LeasePlan, members of EV100, a global initiative launched in September 2017 by The Climate Group to help accelerate the transition to electric vehicles. All EV100 members must publicly commit to making the switch to an electric fleet by 2030, and to support that switch by installing charging infrastructure. LeasePlan, for example, is aiming to make its entire employee fleet electric by 2021, and to work with its customers to achieve net zero emissions from its entire fleet by 2030.
More, however, needs to be done. Our latest analysis shows that average CO2 emissions from company vehicles rose in 2017 — the first such rise in five years. The increase was caused partly by a slight rise in the popularity of petrol cars over diesel, and partly by growth in average business mileage, up 4.7% last year — a reflection of stronger economic conditions.
Cities around the world are introducing charges, or even bans, primarily impacting older vehicles which have high emissions footprints. Fortunately, the vast majority of our clients have already shifted to cleaner fleets of new cars. In London, for example, the world’s first Ultra Low Emission Zone will come into force in April next year, with daily charges on all but the cleanest vehicles. Amsterdam has already introduced a rigorous Environment Zone policy. Paris, meanwhile, is planning to ban all petrol and diesel vehicles from its roads by 2030.
I’m pleased to say it’s becoming easier and easier for fleets to make the switch to low-emission vehicles, and this shift all but inevitable in the long run. Manufacturers, for example, are continuously releasing new electric vehicle models with longer ranges and lower price tags. Governments have been generally supportive and consumers are in favour. Charging infrastructure, too, is growing, with charge points becoming an ever more common sight on streets, in car parks and many new-build homes.
Ultimately, all that’s required for most companies to adopt low-emission fleets is a decision from the top. So what’s next? The executives attending Davos simply need to say “we will make the switch”. No change of strategy is required. It can be done with the stroke of a pen.
Tex Gunning, LeasePlan CEO
