Roadmap towards a sustainable fleet
Tools and best practices
Sylvia Van Den Broeck – HR Operations & Reward Manager BDO Belgium
Delphine Vanassche – Senior Manager BDO Tax
Leslie De Buyser – Manager BDO Legal
Christophe Charbel – Local Office & Facilities Supervisor Brussels & Wallonia
Stephan Vandewiele – Operations Director BDO Belgium
Climate change is no longer just a matter for the environment and the planet. It has penetrated every link in every business chain. And it determines to a significant extent how a company performs, which customers and employees it attracts, and with which suppliers it does or does not collaborate. When we zoom in on the greening of the vehicle fleet, for most companies this means electrifying their company cars. This is not an easy exercise! To help you on your way, we have listed the various steps. Together they form a script based on our own experience and best practices with customers. These are tools, not dogmas – because, just like very enterprising Belgium, we at BDO are still searching.
“Ban all company cars? You simply can’t do that.”
Perform a baseline measurement.
What are the ins and outs (including all costs) of your existing company car fleet?
Set realistic goals.
And communicate them internally and externally.
Convert your objectives into a design that you can adjust flexibly according to changing needs, requirements and new (tax) regulations. Ask yourself the following questions:
- How many (possibly electric) cars do I really need, taking into account digitisation, real estate strategy, etc.?
- Which employees are eligible for an electric vehicle? Depending on their driving profile, possible charging stations, etc.
- What charging infrastructure should I provide?
- What are the purchase criteria? E.g., are 4-year contracts still suitable? Is my current supply chain sufficient?
- What are the regulatory projections?
- Via which (communication) method do I strengthen the employee experience (creating involvement is better than imposing top-down).
Convert your design into a concrete action plan.
- A (possibly new) mobility policy
- Communication strategy
- Tenders to the supply chain (leasing companies, OEMs (Original Equipment Manufacturers), energy suppliers, etc.)
- Reporting progress. A sustainable fleet requires complex accounting (reporting commuting kilometres, business kilometres, share of renewable energy, etc.)
- Develop a realistic business case and calculate the Total Cost of Ownership! This is crucial because a number of parameters have a significant impact. For example, the actual cost of electrification is lower than most companies think because taxes will rise, residual values will fall, etc. Therefore, use an adjusted baseline measurement and not a fixed baseline measurement.
Roll out the action plan.
Make the tenders. Create an internal support base. Start communication and start with the easy targets.
Provide an evaluation (or re-evaluation) method
(e.g., Six Sigma)
‘Smart mobility’ & ‘employee experience’
How do you reconcile your employee experience with a fleet of green, or maybe even greener, vehicles? That is the big challenge, because both the BDO organisation and the employees are interested parties.
Our Mobility working group focuses on the commissioning of environmentally friendly cars combined with existing and new alternative mobility solutions. Consider a bicycle lease or bicycle allowance.
In addition, the mobility budget offers many possibilities (shared cars, shared bicycles, shared scooters, public transport tickets, mortgage instalment payments, etc.). Every employee chooses the mobility solution that best suits his or her needs, both professional and private. At the same time, we take our fleet service (purchasing procedure, bills of exchange, car checks, communication, etc.) to a higher level.
To achieve its objective, the working group surrounds itself with specialists from all of the fields concerned: legal (mobility budget/policies), tax, procurement (infrastructure/tenders/ etc.), communication, sustainability and fleet management.
Total Cost of Ownership
Taxation of car costs has been a hot topic for years, both for the user – the ‘benefit in kind’ now depends on the emissions and purchase value – and for the company, which makes the car available to the business manager or employees.
In the autumn of 2021, more major changes were made to car taxation. The common thread in the amended tax legislation no longer appears to be the greening of the vehicle fleet, but suggests that companies are gradually being forced to electrify their fleet in order to keep the cost of the fleet under control.
The purchase price of an electric vehicle is often significantly higher than that of a combustion engine vehicle (hybrid or non-hybrid). Is there still an incentive to switch to an electric car? Or will cars with traditional combustion engines remain the better choice thanks to their lower purchase price? We made the calculation and the outcome was clear. Although we must immediately say that fleet managers face a double challenge: on the one hand, choosing the best equivalent electric alternative to combustion engines for the existing fleet; and on the other hand, choosing the most appropriate form of financing (also read the article ‘Electrification of the fleet’).
Mobility policy, employment regulations, employment contract
Ban all company cars? You simply can’t do that. After all, the private use of the company car is regarded as pay. And you cannot change salary benefits unilaterally. This requires agreement between employer and employee. This may or may not be combined with compensation (also read the article ‘Greening or cancelling the vehicle fleet?’ on www.bdo.be/insights).:
Anyone opting for a greener fleet must take the labour law consequences into account. The impact varies depending on the company.
- Do the employment regulations make arrangements for company cars? Then the regulations must be adapted in accordance with standards of good practice.
- Is there a mobility or company car policy? Then it goes without saying that you also have to make adjustments and inform the employees.
- Do the employment contracts contain specific agreements on company cars as a salary benefit? Then it is advisable to add an annex to the agreement.
In any case, as an employer, you have a right to change, or ius variandi, as a result of which you may change the employment conditions within certain limits in order to adapt the work organisation to the economic situation or the needs of the company.
Procurement and charging stations
Given the complexity of charging stations, this is something to consider carefully. Do thorough market research and, at the same time, take inspiration from the best practices of fellow companies, taking into account the possibilities of your own site. Do the audit and ask the right questions:
- Am I a tenant or owner of the property?
- What is the owner’s policy regarding charging stations?
- How powerful is the electrical installation? How difficult or simple is it for us to scale up?
- Do we give customers/suppliers access to our future charging stations?
- Have we taken the tax incentives into account?
Anyone who knows these answers can make an informed decision to focus on charging stations at their employees’ homes (or in their surroundings) or to invest in charging stations on their own site. Or a mix of both. The solutions offered by the various market players (OEMs) are an important source of inspiration in this regard.
Ask how you can green your fleet. What is the impact on the various areas of your business model? Are you looking for help with the analysis of your situation?
If so, please contact the specialists in our ‘Sustainability’ team: Tessy Martens or Pierre Poncelet.