Data-Driven Green Fleet Management: How the Wave of the Future Gives a Bottom-Line Boost
ESG. You see those three letters everywhere these days, but what do they have to do with fleets? The truth is they are more important than you might think.
Environmental, social, and corporate governance (ESG) is a stakeholder-centric business method that’s quickly growing in importance and popularity. Investors, board members, and executives are all demanding sustainable practices, which is affecting organizations in most industries – especially high-emissions sectors like transportation fleets.
That means that business operations that place a higher emphasis on ESG are much more likely to earn, and keep, the respect of environmentally conscious clients, prospects, and community members.
Green fleet management is a step in the right direction, allowing companies to meet their sustainability goals by using digital technology to take action and mitigate any negative environmental impacts. The advanced fleet analytics available today also allows companies to easily demonstrate their compliance with regulations as well as showcase their own sustainability initiatives.
Defining green fleet management
Green fleet management involves devising and implementing a strategy to reduce greenhouse gas emissions. How this is achieved depends on the fleet, but green fleet management should be focused on improving environmental sustainability while reducing the carbon footprint of fleet vehicles.
The ESG impacts on fleets and fleet management
You may have already received an RFP from a shipper wanting information on your company’s ESG policies or general sustainability efforts. If you haven’t, there’s no doubt one will be coming your way soon. ESG causes include:
- Social issues like workforce diversity
- Ethical corporate governance that includes anti-corruption initiatives
- Environmental standards like reduced greenhouse gas emissions
There are both internal and external environment-related ESG pressures, particularly amid increased regulatory and social scrutiny of global carbon emissions. Investors pay close attention to these issues, as do shippers, consumers, current employees, and potential employees.
Why all of the attention on green fleet management? The answer is simple:
- The transportation sector generates more greenhouse gas emissions than any other at 27%.
- Every gallon of diesel fuel produces 22.38 pounds of carbon dioxide.
- Almost 17% of carbon emissions in the United States come from light-duty vehicles, including pickup trucks, creating 1.1 billion tons of carbon dioxide.
Transportation is a necessary element of business and the economy, but it must adapt to protect the future of global trade and development as well as safeguard against the climate crisis.
To that end, the International Organization for Standardization created ISO14090, entitled “Adaptation to climate change–Principals, requirements, and guidelines” which was adopted in 2019. It was the first international climate change standard ever adopted, and its purpose is to provide organizations with a consistent, structured, pragmatic approach to preventing or minimizing the harm from climate change.
Some of the strategies outlined in ISO14090 include:
- Identifying the risks climate change poses to your fleet, and how you will adapt in the short, medium, and long term.
- Researching how your value chain will be impacted by climate change, then looking for solutions that allow you to both mitigate risk and leverage opportunities.
- Understanding what resilience means for your organization and using that as a basis for decisions.
- Defining both hard and soft measures, then using proven methods to reduce environmental impact, embed policies into your organization, and implement company-wide training.
By applying this approach, fleets and fleet management organizations can design, implement, improve, and update their policies and plans effectively. This general guidance is invaluable, and plays a crucial role in how ESG looks when it comes to green fleet management.
The whats and whys of green fleet management
There are numerous environmental benefits of green fleet management strategies, including that they save your company money on fuel, oil, and maintenance while ensuring you comply with all emissions regulations. Your overall goal should be fleet operations that make a positive impact on the environment by reducing emissions, though.
Your strategy should include:
- Reducing idling
- Increased usage of alternative fuels, including biodiesel
- Deployment of electric vehicles
- Right-sizing fleets to fit your company’s need
- Reducing miles traveled
Other tactics involve replacing vehicles with those that are more fuel efficient, tracking fuel consumption, and keeping up with maintenance for fuel economy improvements. Improving driver behavior helps as well, especially reducing speeding and frequent braking.
The crucial thing to note is that each effort you make adds up. Green fleet management can only happen when you realize how your decisions impact not only your company, but also the entire planet.
The global fleet sustainability push and why it matters
Of course, green fleet management should be done for planet-positive reasons, but regulations and stakeholder input are prime motivators. Emissions reached their highest point during the last 20 years, despite the fact that climate change has been on the world’s radar. At the same time, governments worldwide are now imposing stricter regulations on greenhouse gas emissions. Here is a look at a few of the actions:
- The United Kingdom already has a number of clean air zones in place, with more coming. There is a daily charge of $118 US for entry into these zones in London, for example, and unregistered non-compliant vehicles, incorrect data entry of vehicle details, and slow payment fines start at $189 US.
- The European Union had more than 250 low emission zones as of March 2020. Fines vary per country, and even by city. A violation will cost $45 US in Spain, for example, and in Barcelona you’ll pay over $1,800 US.
- Many eyes are on corporate sustainability behavior, and cities and counties in the U.S. are now initiating and enforcing their own regulations. California recently fined Schnieder National and Old Dominion a combined $225,000 in penalties, and both were ordered to spend $575,000 on air filtration systems for Los Angeles schools.
These actions are setting business operations in a more sustainable-focused direction. Public concerns about climate change are at an all-time high, and green fleet management means your company gets measurable results you can report to all stakeholders – including your employees, customers, and your board.
It’s not all regulations and fines, either. There are some excellent bottom-line benefits to having a green fleet, including:
- A more efficiently run business will save money
- A sustainable business attracts more investment
- A properly implemented sustainability plan reduces the risk of fines
- Sustainable businesses make more money
Companies that actively manage and plan for climate change get an 18% higher ROI than companies who don’t, and a 67% higher ROI than companies who won’t disclose their emissions.
Green fleet management made easy
Fleet operations can take a toll on the environment, but there are ways to mitigate or repair your company’s negative impacts. You don’t need to go it alone, either.
Gridline can help you shrink your carbon footprint, and our smart, streamlined fleet management software gives you the tools you need for productivity, safety, compliance, and 360-degree fleet intelligence. Schedule a call with us today to learn more.