ESG Is Now Playing a Prominent Role in Fleet Strategy
In this interview, Bob White, president of Holman Fleet and Mobility, talks about trends he’s seeing in fleet ESG and provides tips for fleet managers starting their ESG journey.
NAFA: How can implementing ESG initiatives help a fleet?
White: Today, many organizations are exploring a variety of strategies to meet various ESG goals and mandates. From a fleet perspective, this often means finding new, innovative ways to reduce a fleet’s carbon footprint to align with and support the company’s overall sustainability strategy. These initial efforts often focus on cutting scope 1 GHG gas emissions by reducing fuel consumption and maximizing efficiency. These types of sustainable strategies help to highlight an organization’s commitment to being a good steward of the environment and demonstrate corporate social responsibility efforts to various stakeholders.
Additionally, fostering an increasingly diverse supply chain continues to be a top strategic priority for a number of organizations. Today’s supply chain partners must provide the services and resources a business needs to maximize revenue while also aligning with their corporate social responsibility philosophies and goals. However, as organizations look for ways to diversify their fleet spend — often among the largest line items in the operating budget — they’re left with limited, if any, options.
NAFA: What ESG-related metrics do you encourage fleets to track and report?
White: We typically advise to begin monitoring key performance indicators such as MPG as well GHG emissions including CO2e, CO2 emissions per mile, and CO2 emissions per vehicle. Once you establish a solid foundation with these baseline KPIs, you can dive deeper into more nuanced metrics and continue to build momentum.
NAFA: Is the fleet industry putting the right amount of focus on ESG?
White: There’s a great deal of momentum in the industry in prioritizing ESG initiatives. We work with a number of customers who have an extremely strong ESG focus, providing significant resources to meet their fleet-related sustainability and supplier diversity objectives. This topic is very much top-of-mind for the majority of our fleet customers — playing a prominent role in shaping overall fleet strategies — and I anticipate these efforts will only continue to expand.
NAFA: What ESG best practices do you encourage?
White: In terms of sustainability, we typically recommend strategies to reduce fuel consumption and maximize fuel efficiency. Whether that’s through fleet right-sizing initiatives, electrification projects, route optimization, or monitoring/correcting driver behavior, these efforts can help to significantly reduce emissions and create a more sustainable fleet.
From a supply chain perspective, there’s certainly a desire to increase diversity, optimize the fleet, and control operating costs. As a supplier, we are also committed to having a supplier base that is as diverse as our employees and the communities we serve. We have an extensive supplier diversity program that helps us engage qualified, diversely owned suppliers who can support our organization. We also coordinate with supplier diversity programs at other like-minded organizations to further support diverse supplier development.
NAFA: How can a fleet advance its ESG reporting and performance?
White: A thorough understanding of your fleet’s fuel consumption and CO2 emissions is often the foundation of most ESG reporting. By monitoring metrics such as CO2 per mile, fleet operators can measure efficiency regardless of fleet size. Tracking this data year over year to assess performance will help fleets make incremental improvements over time and allow them to establish phases for their sustainable fleet journey.
This remains a particular area of emphasis for us, as a growing number of organizations explore implementing various ESG initiatives. Fleets are focused onaggregating and centralizing the data coming in from various sources to streamline the tracking of these KPIs to ensure they can properly convey the information to their ESG stakeholders, meet international reporting standards, and most importantly, make the data actionable to help drive meaningful change.
NAFA: What advice do you have for fleets starting their ESG journey?
White: The best advice I can offer fleet operators is to let your environmental and supplier diversity goals shape your ESG strategy. For example, if your goal is to operate a fully electric fleet in 10 years, your strategy will need to prioritize the acquisition of EVs, whereas if your goal is focused on reducing your fleet’s carbon footprint, you can make strides toward that goal with EVs as well as CNG-powered units, hydrogen fuel cell vehicles, etc. The strategy to meet a CO2 emissions-reduction goal is likely to be vastly different from the strategy for transitioning to 100% electric vehicles by a particular date.
As you explore potential fleet ESG initiatives, you’ll want to work closely with various stakeholders from across the organization — procurement, sustainability, operations, facilities, etc. — to identify your overarching goals and determine how fleet aligns with those objectives. It’s vital that you begin your ESG journey with well-defined goals and objectives.
Looking for more information on ESG for fleets?
Be on the lookout for the May/June issue of FLEETSolutions magazine, hitting your inbox shortly. Also, check out NAFA’s ESG Reporting Tool for Fleets and the upcoming FLEETSolutions Live! Seminar Series: What Implementing ESG Initiatives Can Do For You.