Sustainability at GFC 2023: Act now or become “tomorrow’s Nokia”
Sustainability was one of the two main threads running through the plenary sessions of the 2023 Global Fleet Conference. (The other was the eternal tension between global and local; more on that here). Loosely following this thread, what did we learn, last Tuesday in Cascais (Portugal)?
Sustainability in general, and even sustainable procurement in particular, is a complex and many-angled topic. It’s easy to get lost in a sea of information. That is precisely why an event like the Global Fleet Conference is helpful: world-class experts sort what’s relevant from what’s not. Conversations with peers tell you what works and what doesn’t. Here are some of our learnings:
To value EVs, manage their RVs
First up were a trio of McKinsey experts, presenting a study on how to de-risk sustainable mobility by better managing the Residual Values (RVs) of your EVs.
“By 2030, RV exposure in Europe will increase by 40% to more than half a trillion euros”, said Romain Zilahi. “The cherry on that cake is that the mainstreaming of EVs will not simplify the situation at all.”
Added Benjamin Köck: “Can you afford not to have accurate RV management? Because it allows you to implement various new business models, for instance used car leasing.”
A proprietary RV management solution can unlock substantial value, according to Benjamin Tschauner: “These are tiny steps, but they add up to something substantial”. For example, in the area of €400-€800 per vehicle remarketed.
Climate-neutral, cradle to grave
But sustainable EV management requires more than RV management. In fact, you need a holistic, cradle-to-grave approach, explained Virginie Sauvet-Goichon (Renault Group Climate Project Leader).
Renault Group aims to go climate neutral in Europe by 2040, and globally by 2050. That evolution in a microcosm: the changing carbon footprint of the Renault Mégane. “The ICE version of the Mégane produces 30 tons of CO2 equivalent over a 10-year life cycle. The electric version produces only a third – but the battery alone represents 5 tons.”
Green electricity shaves off another 10 tons, while increasingly lower-carbon batteries offer the prospect of total life cycle emissions of as few as 4 tons. Renault sees an increasing business in using recycled material in new cars – already more than 50 kg in the Mégane e-tech – until vehicle production is 100% circular.
“The future is neutral”, concluded Ms. Sauvet-Goichon. Nothing to do with Switzerland: she meant climate-neutral.
Push the suppliers in your Scope 3
CapGemini wants to be carbon neutral by 2025, but 90% of its emissions are Scope 3 (i.e. outside the company’s direct control). “So we can’t do this alone”, said Geert Bruyninckx, the company’s Global Lead Buyer for Mobility & Carbon.
Some important pieces of advice: “Manage your sustainability via one team rather than dispersed throughout the company. Data is complex, so start with what you have and work from there. Sometimes, you need to push your suppliers: Are they ready to dance?” And: “Sustainability is not for free. There are costs, and it requires reorganization.”
Make replicas of your awards
Guillaume de Subercasaux (Head of Global Indirect Procurement at Schindler; pictured) is Fleet Europe’s Global Fleet Manager of the Year. What he did with that award helps explain why he won: “I had 25 replicas made, and gave them to each of our national fleet managers. By myself, I don’t achieve anything.”
De Subercasaux came to share his views on reducing both cost and CO2 emissions. First, know your fleet. Second, get everybody talking to each other. And third, think ahead. Not all solutions will work everywhere. But that doesn’t mean you shouldn’t try them where they might.
“One of our solutions is a ‘suitcase scooter’, which we use in Asia. Essentially a toolbox on wheels, we use a few hundred in Asia, in urban environments. Obviously this won’t replace our 20,000-vehicle fleet. But it helps, even if only a little bit.”
It’s faster than you think
“If there’s anything you need to remember from this presentation, it’s that electrification is happening faster than you think. If you fail to make the right decisions now, it could have a disastrous effect. Who here remembers Nokia or Xerox? That’s the magnitude of what’s happening now”, said André ten Bloemendaal (Senior Vice President for Europe at ChargePoint) – indeed getting the attention of the audience.
Electrification is a new paradigm, and so is charging EVs. “You no longer have to go somewhere (i.e. a petrol station) to go somewhere (i.e. your destination). Charging will happen where you park. That’s why you don’t see so many charging stations along highways: because that’s not where they’ll be needed.”
Smart charging will not be about the hardware, Mr Ten Bloemendaal said: “The right software will be what brings it all together.” The lack of software standardization, and a lack of connections to the grid (rather than shortage of power) are two major stumbling blocks, he concluded.
An EV battery is a system, not a component
Elysia Battery Intelligence was spun off from WAE, which is itself a daughter of the Williams Formula 1 racing team. Which gives an indication of how serious and knowledgeable they are about EV battery technology. Key lesson: “An EV battery is not a component, it’s a system”, said Timothy Engstrom (Technical Lead at Elysia).
Put another way: “The battery lifetime is path dependent. Meaning that if you have two batteries who are both at 85%, they can still have divergent degradation paths going forward.” Whether and how that happens, depends on what happened before. For example: “We know that rapid charging degrades batteries faster. So why not disincentivize rapid charging?” That would save battery capacity, and in a world where battery capacity is measured better, it would also protect Residual Values.
EV manufacture and charging aren’t green - yet
How green is your EV fleet? That’s the question moderator Steven Schoefs put to four panelists. But most of all: What are your ambitions, and what are the challenges?
“Our global fleet is two-thirds electrified, with BEVs making up 15% of the total now, and 32% by the end of the year”, said Andy Leeden (Global Mobility Director at AstraZeneca). “The big challenge we have is home charging, because you can’t control where the electricity comes from. That’s why we’re trying to encourage our drivers to take green electricity contracts.”
“By 2030, we’ll offer only full electric cars where market conditions allow, and from 2025, all our new launches will be electric”, said Sabrina Eickelkamp (Senior Manager International Corporate, Direct & Guard Sales). “As for our production: at our Factory 56 in Sindelfingen, we’re running a carbon-neutral production line, with power coming from the roof and from recycled EV batteries.”
Representing a electric-only brand, Matthias Schabetsberger (Head of Global Key Accounts at Polestar) had the simplest answer – 100% of his product is full-electric. “And our sales are growing fast”, he observed. But what about production? “With our Polestar Zero project, we aim to produce a fully carbon-neutral car by 2030.”
Florian Lüft (Director Sales & Marketing at Envision Digital) explained why his company, a charging specialist, branched out into electricity production: “To make charging green, you have to be brave. You need to make sure the electricity is green, that’s why we’re now also an electricity supplier. Green electricity can cut back 80% to 90% of your total emissions, so it’s a no-brainer, really.”
E-fuels are a distraction
As Mr Lüft sees it, there’s a big overlap between going green and going digital: “Aggregated billing, detailed reporting, over-the-air updates of charging points, etcetera: all that is essential for EV management. And all that is only possible with digitalization.”
And what about e-fuels? “A bit of a distraction, I don’t think it’s the way to go”, said Mr Leeden. “Perhaps a good alternative for ships, airplanes, etcetera. But as for cars, I’d rather use the energy needed to manufacture e-fuels for EVs”, added Ms Eickelkamp. With or without e-fuels, “ICEs have no future”, Mr Schabetsberger put it bluntly. “Stick with the game plan (in other words: electrification, Ed.)”, concluded Mr Lüft.
Corporate mobility has a bigger footprint than air travel
A recent study in France showed that ‘everyday corporate mobility’ (employees commuting and driving around for work) generates 6% of total carbon emissions. “That’s more than air travel”, said Amélie de Valroger (Head of Consultancy & EV Solutions at ALD Automotive), co-presenting with Stéphane Rénie (Head of CSR at ALD Automotive).
We need to act, and one way to do that is to offer mobility alternatives to company cars. But mobility budgets might backfire: “If you replace a company car by a 10-year-old diesel, the net outcome is worse.”
Changing corporate mobility “is not an easy ride”, she added. Up to 70% of change initiatives ultimately fail due to lack of leadership and adequate change management. “People fear change because it’s difficult, uncertain and costly. Yet the cost of not developing sustainable mobility will be much greater in the end.”
The good news is that technology is available to help. “Globally, BEVs are already more greenhouse gas-efficient today in terms of life-cycle emissions than ICEs, and they will continue to improve”, said Mr Renie.
Image: Benjamin Brolet