SAVE A TONN€
Our world today faces many real challenges and the daily decisions we all make, endow future generations a planet that will be in a better, or worse condition than we found it.
When it comes to driving for work, sustainability and decarbonisation are key objectives that Irish businesses realise must be tackled sooner than later.
So why not join the national effort to cut CO2 by 50% before 2030 and help save a tonne of CO2e and €5,000 in a year*.
Of course, “a goal without a plan is just a wish”, so this “SAVE A TONN€” resource aims to show businesses the clear and not so obvious benefits of being proactive. It also suggests practical steps both they and individual drivers can take, to protect what matters and on average add €1,000 per vehicle to the bottom-line.
Let’s get started…
CO2 REDUCTION
To cut CO2 emissions - and simultaneously, rising fuel bills - SMEs with diesel/petrol cars or vans are embracing new ways of working like never before.
In short, these businesses are choosing to:
1. Drive less – as we now know, remote working and alternative transport modes can work
2. Switch - to more efficient vehicles such as electric cars, hybrid vehicles or newer vans
3. Improve performance - driving style can account for up to 30% more CO2e and significant excess fuel use.
These three options are complementary and many firms adopt a hybrid approach. The case for improving driving style is often overlooked by businesses outside the transport sector, as driving for work is seen as a non-core business activity. However, the simple consequence of not measuring and managing vehicle-related activity is additional CO2e, cost and risk.
The good news is that an improvement in average driving style can deliver multiple benefits. Because what gets measured gets managed, a good place to start is with some key facts (please see “SOURCES” in footnotes):
Unless your colleagues all drive electric vehicles (EVs), each car or van emits a massive 2.75 tonnes of tailpipe CO2e in a year. While emissions per vehicle have been steadily falling over the past two decades, the average car is nine years old and spews 135 g/km of CO2e and other pollutants into the air. Vans being larger and load-carrying emit even more. This all means that each of your vehicles releases one kilogramme or more, of CO2 every seven kilometres.
According to the SEAI, adopting an eco driving style can reduce fuel consumption by 10% on an ongoing basis. Where a business has just five cars or vans on the road, total emissions of 13.75 tonnes a year means that even a 7.5% improvement will SAVE A TONN€ of CO2e.
Achieving this is relatively easy and profitable. Below we will show you how.
PAYING FOR IT: FUEL-COST REDUCTION
Seismic global challenges have resulted in the cost of fuel rising by more than 50% in the past 12 months. While certainty about what lies around the corner is currently in short supply, businesses can at least take steps to measure current performance and take some simple steps that can only result in net savings.
For example, varying driving styles have an impact on your costs.
As a rule-of-thumb, 20% of your most efficient drivers use at least 20% less fuel than some of their peers with a heavy-right-foot. Translating this into financial terms, while the average driver in your fleet effectively pays pump prices of say €1.80 per litre, some of your staff effectively pay €1.60 and others around €2.00.
Simple eco driving tips, like choosing to drive at 110kmh rather than 120kmh on motorways can add 100kms to your fuel tank range (the optimum driving speed for most vehicles is actually 90kmh).
There is a clear environmental and cost-saving opportunity in encouraging drivers to adopt a more eco driving style. A conservative estimate of fuel savings per vehicle is €300 per annum. This is based on a 7.5% reduction in annual usage of 2,200 litres. Of course, if either the improvement or original usage is higher, savings will be even greater.
So, if you have 10 vehicles saving €300 on fuel, that’s €3,000 a year onto your bottom-line. If your business makes a net profit of 5%, that’s the equivalent of an extra €60,000 revenue. Or, another way of looking at this is that it pays you to spend as much time saving fuel, as you would making an additional €3,000.
And if you reckon realising savings with eco driving nudges is hard (and really, it’s not), just imagine an alternative path: asking your fuel card provider for a 13.5 cent reduction per-litre of fuel…
BEYOND FUEL-SAVING
While easily counted, fuel-saving typically accounts for just 35% of the total financial return resulting from drivers choosing good driving habits. Two other categories of cost are similar in size however they are often “hidden”, until you look closely or when “bad events” make them obvious.
The first is variable vehicle costs such as servicing, maintenance, repairs, depreciation and of course, insurance (see also our series on “The Path To Sustainable Low-Cost Motor Insurance”).
Secondly, ask anyone who has encountered a Revenue audit or a serious collision and they will tell you that penalties or “uninsured losses” respectively, are very real, significant and almost always avoidable.
Together with fuel reduction, you can expect eco driving to deliver total savings of €500 to €1,000 per vehicle, per annum. As touched on earlier, across just five cars or vans, SMEs can SAVE A TONNE of CO2e and save €5,000 a year.
While your savings may vary up or down, the key point is that you can’t improve what you can’t measure. If you look at the current costs and consequences of driving in your business - such as insurance claims, fuel costs and repair bills - you are likely to find opportunities to avoid loss. Beyond tangible CO2e and fuel-reduction, other reasons to act can be priceless.
To summarise, there are major reasons why your business can benefit from eco-driving:
1. REDUCE: CO2 emissions, fuel costs, servicing, maintenance and repairs (SMR), insurance and vehicle depreciation
2. IMPROVE: sustainability, operational efficiency, customer service, compliance, ESG, tender attractiveness, employee care and wellness
3. AVOID: uninsured losses, business disruption, brand damage and harm to your people or others.
Insurance providers too are increasingly rewarding businesses that proactively measure and improve driving style as it directly reduces risk exposure. Ask your broker about insurance savings programmes such as AVERT.
HOW TO SAVE A TONNE:
Every business is different and so any plan for improvement needs to take into account vehicle types, available data sets and resources. At a high-level, here are some useful pointers:
1. Gather data on who exactly drives and how much fuel is used per vehicle (L/100kms)
2. Leverage the fact that driving-related sustainability, economy and safety are aligned
3. Set objectives and key results for improvement – e.g aim for 10% reduction in CO2e
4. Sign-up to the ECOFleet programme and get a bonus payment when you save fuel
5. Consider alternatives to driving and switch to more efficient vehicles where possible
6. Share these 10 Eco Driving Tips and video with all your staff – even those who only commute
7. Motivate staff to drive sustainably with goals, incentives, rewards and group discussion
8. Keep it positive - recognise drivers or teams who show the most improvement
9. Engage with drivers whose performance slips to understand why and offer supports
10. Explore how eco driver training options, telematics and dashcams can help reduce losses
11. Remember, even EV drivers can see a 20% improvement in range by adopting eco driving
12. Learn from others – engage your business support group, LEO or contact us in DriverFocus.
FINALLY – SOME FREQUENTLY ASKED QUESTIONS
While you might agree that the rational business-case above is compelling, perhaps you have a niggle about promoting eco driving or trying ALLY? If so, here are four common, initial responses - and their counter-points - to consider. If there is anything else, or if you would like to discuss further, we would love to hear from you.
1. TIME:
“We’re too busy” is not the same as being productive. Reducing CO2e and costs is important, and increasingly urgent. However, we know there will always be more urgent and less important activities. Our recommendation is to commit just two hours to get started, 10-15 minutes a week to visibly “coach” (i.e. have a simple conversation with) drivers and one hour a quarter to review progress. That’s all it should take and we can show you how each step of the way.
2. COST:
As with any business decision, consider the cost as an investment and weigh it up against the potential return. This at least gives you a return on investment (ROI) that you can weigh up against competing alternatives. Another approach is to quantify the cost of ignoring (COI) business driving. Taking an objective, scientific approach helps so remember, the management mantras: “you can’t manage what you can’t measure” and “measure what matters”. You might be surprised to find the business case for not acting is rather weak.
3. PRIVACY:
Data capture is understandably an important element to get right. Clear communication with staff about what trip data is captured and for what purpose is key. When it comes to data, often “less is more”, so only gather or ask us for what you really need. Be honest and positive with staff. Most people understand that climate action means compromise. We all have to do what we can for our planet and being part of a collective response – such as a team challenge to SAVE A TONNE- is a great path to take.
4. INSTINCT:
Many who drive (84% according to AA Ireland research) self-rate their driving ability as above average - they see themselves as “good” drivers when they are perhaps just “lucky”. This over-confidence invariably leads to problems for businesses and individuals. Recent Canadian research found that 84% of at-work drivers also believe crashes are unavoidable when in fact, the opposite is the case (85% of fatal crashes in Ireland are primarily due to driver error). Against such widely-held but mistaken beliefs, it is also understandable why business-owners or managers often assume that they cannot influence driving outcomes or they may be reluctant to question a driver's performance. However, when a positive, "progress not perfection" approach is taken, research shows that bad habits and often costly mistakes can be coached out. As the National Office of Traffic Medicine explains, what improves driver behaviour are "incentive schemes, group-based discussions... goal-setting and feedback programmes". Mindset matters.
Fortes fortuna adiuvat (fortune favours the brave)!
Footnotes:
* SAVE A TONNE of CO2e and €5,000:
With the adoption of eco driving practices, the one tonne of CO2e figure is based on SEAI estimates of annual emissions of 2.75 tonnes per car, coupled with five cars/vans averaging a 7.5% improvement. Similarly, the savings figure is based on per vehicle fuel savings (7.5% x 2,200 litres per annum @ €1.85 per litre); plus estimated annual reduction in vehicle running costs (SMR), insurance and depreciation of €350 due to less aggressive driving; plus avoidance of uninsured losses of €350. All of these estimates are generally accepted industry midpoints so actual savings in any given fleet can be higher or lower.
Sources:
Authentic Energy Management [Fuel-usage facts]
Sustainable Energy Authority of Ireland (SEAI) - "Energy in Ireland Report" and “Eco Driving Course”
Irish Independent – [Our cars emitting 2.75 tonnes of CO2]
Cartell – [Average vehicle age in Ireland]
Energy Savings Trust (EST) UK - Eco Driving Guide
The Irish Times [Fuel costs Jan 2021]
European Environment Agency - [The effect of lower speed limits on motorways]
Small Firms Association (SFA) - “61% of small businesses see the green economy as a priority in 2022”
DriverFocus - [Driving Costs Down - the effect of eco-driving / driving style on costs]
DriverFocus - Top 10 Eco Driving Tips for drivers.