4 June 2015 | By Terry Parker
Businesses that fall under the 'large enterprise' bracket are facing a daunting task to reduce their carbon output or face hefty penalties.
This mandatory EU legislation has been predicted to save nearly £2 billion, but many are confused as to what they can do reduce their output. Under the scope will be your building energy use, industrial process energy use and your transport energy use.
You must calculate energy used per employee and demonstrate potential measures that could save energy. Keep in mind that grey fleet (vehicles owned by employees and used for business purposes) is included, and you must conduct an audit if transport is more than 10 per cent of your businesses significant energy use.
1. Review your fleet's age
The very start of your audit should naturally focus on what you have within your fleet. Older vehicles will suffer from reduced efficiency. Technology within engines and the materials used to make vehicles are evolving at an incredibly fast pace - review what you have and what you could potentially upgrade to take advantage of the latest in vehicle technology.
This will also bolster your health and safety credentials, as newer vehicles will always have more advanced features to protect your drivers.
2. What about your drivers' performance?
Often this can cause some controversy, but you should be reviewing your drivers' performance to spot where they may be using more energy than is necessary. By fitting a telematics system into your fleet you will be able to spot poor performance, idling issues and fuel wastage - which should ultimately spur on a driving training programme. If you have drivers who are consistently driving erratically, accelerating aggressively, as well as idling engines and taking less favourable routes your carbon output will suffer. Get them trained and introduce new driving policies - it protects you and your drivers.
3. Operational changes
This is all about scheduling and planning - vehicle policy, sharing and tracking. There are always ways to make sure your fleet works better for you. Consider mileage reduction strategies and employee incentives to do so. A solid operational change you can introduce today is a simple checklist when acquiring new vehicles. You should be looking at the life-cycle running costs - also known as whole life costs - of the vehicle, to give you a complete overview of the vehicle costing's from price to tax, to NIC contributions right the way down to lease rental restrictions.
4. Can you adopt electric and hybrid?
It's no secret that electric low carbon vehicles (LCVs) are on the market. Renault and Nissan have both spent a lot of time and money on developing an electric van that can fit into a business fleet. There are concerns about their range and capability when fully loaded - but they are coming and they're only going to be getting better. So if you perform a lot of inner-city driving they could be perfect for you. London in particular has more electric charge points than ever, and more are being installed every day. Not only would this give you a zero-carbon output, but would yield benefits to company car tax as well as exemption from emission charges.
If you can't yet adopt these types of vehicles into your fleet, you should at the very least be considering which ones you can change for newer, cleaner vehicles that are still fit for purpose.
5. Adopt green credentials
A direct path to ESOS observance across the board is compliance with ISO 50001, a management system model for continual improvement. With this certification already understood and well in place with many large businesses, it could be a better way towards ESOS compliance owing to the level of support and understanding to gain the certification. This will also help your business to stand out from others that are not compliant or do not have this ISO - there is a growing trend towards consumers and other businesses wishing to deal with those who put the environment at the forefront. Other ISO certifications can also help, such as ISO 14001 Environmental Management.
6. Corporate schemes and procedures
Most large fleets should have a fleet policy in place; if you don't you will need one. This will not only protect you legally, but also allow you to run an effective and compliant fleet. By keeping detailed logs (preferably digitally via telematics) you can see where your cash flow is going and where problems are - this will flag up issues with efficiency in vehicles and driver behaviour problems. It's vital to have checklists, logs and reports about your fleet - they are often the second biggest expense behind salaries for businesses. By adopting telematics you will naturally adopt schemes, procedures and put in place solid plans to decrease your carbon output and lead change towards ESOS compliancy.
Terry Parker is director for Alternative Route Finance