How can fleets prepare for decarbonisation?

Fleet owners and operators, more commonly referred to as mobility managers these days, face some tough decisions, from addressing the increasingly urgent need to decarbonise their operations to how they deal with growing complexity and rising costs. The problem is that fleet decision-making extends beyond mobility managers and drivers, and can have implications across an entire business. Including procurement and sustainability managers as well as IT departments and even CEOs, fleets are more intertwined with other stakeholders than ever. And if the wider organisation isn’t ready for the changes to come, mobility managers could see their progress stalled and targets missed.

So, how can they prepare their organisations for the road ahead and energise people across the business to drive real change?

Uncovering the organisational challenges fleets face

Decarbonisation is a core focus for many businesses, with a recent report from Shell and Deloitte, Navigating fleet decarbonisation: A guide to driving a successful transition, showing that decarbonisation is a top priority for most (85%) mobility managers. In fact, three-quarters have already implemented at least one solution to help them reduce emissions. But many also face organisational obstacles that prevent them from accelerating their journey to net zero. The report found that almost half of fleet executives (46%) see restrictive operations—such as staffing, systems, and current duty cycles—as a major barrier to decarbonisation.

Part of the problem stems from the fact that organisations typically focus on the asset-specific challenges they need to overcome. This means they often overlook the limitations in their operating models, undermining progress by not laying the proper groundwork for decarbonisation across areas like people, process, and governance.

Showcasing the factors behind decarbonisation success

To limit the negative impact of organisational challenges on their decarbonisation strategy, mobility managers need to look beyond the vehicles that make up their fleets. And there are four key areas to explore this in. The first is strategy and governance. It’s vital for organisations to have a clear decarbonisation plan that aligns with their corporate strategy. This should feature specific plans for net-zero fleet operations, with budgets and new policies in place. Companies need a roadmap with a destination. How they get there might change, but the end point needs to be clear and aligned with its overall strategy.

Then they need to consider people. Driving alignment across the organisation is a critical step towards achieving net-zero fleet operations. Mobility managers should see the decarbonisation of their fleet as a priority and have a clear understanding of the technological and operational considerations involved. Buy-in from other stakeholders like the CEO, CFO and procurement team is required, but the biggest task (and opportunity) is to gain buy-in from drivers and employees. This is because, for new technology and new processes to succeed, there needs to be a change in behaviour, such as how they operate and manage electric vehicles (EVs).

Process and technology is the third key area. To fully support fleet decarbonisation, organisations need to change both in their operations and in their IT functions. Operationally, being able to react rapidly to new requirement—such as route changes or new maintenance processes—is vital. Similarly, organisations need IT systems and integration that can support data-driven decision-making. This data will also be critical in measuring decarbonisation progress.

The fourth area relates to assets and infrastructure. To successfully decarbonise fleet operations, organisations need to have control over the vehicles that make up that fleet—more specifically control over their replacement. This means either owning the fleet or having flexible leasing arrangements. Businesses also need the ability to install any infrastructure required to support decarbonisation. For a company like Shell, the ability to place EV charge points at customer facilities or depots is essential, as is working with employees to install home-charging.

Mobility managers need to make sure their business is ready to operate the decarbonised fleet of the future

Without these elements in place to support their decarbonisation journey, mobility managers could find themselves coming up against barriers that set them back significantly, or even having to pause deployment entirely. One fleet owner interviewed in the Navigating Fleet Decarbonisation report research noted: “We had to pause the whole thing [transition] for six months while we got everyone on board.”

Driving the transition through EV adoption

Once an organisation is configured for change, it can then start making decisions about its fleet, especially how it plans to make the switch to zero-carbon alternatives. With hydrogen fuel cell technology and synthetic fuels unlikely to play a significant role for light-duty vehicles, transitioning to EVs is the clear route to success. The Shell/Deloitte research found that most mobility managers (95%) agree, seeing EVs as the long-term solution for fleet decarbonisation.

However, there are still many challenges to overcome before fleets see widespread adoption of EVs. Mobility managers want to know that EV performance will meet their needs (with 29% currently underestimating the range of an EV). They also need assurances that their vehicles will have easy and reliable access to charging infrastructure. Cost is another significant factor, with owners and operators unsure of how to make the business case for EVs.

To overcome these challenges, it’s essential for mobility managers to gain a clear and objective perspective on their performance requirements for an EV. This is where duty cycle assessments can be an effective tool. Providing in-depth insights into how vehicles are used, these assessments cover elements like distance travelled and the frequency and location of idle time. This enables fleets to explore the areas where EVs may already be a viable choice and, where they aren’t, make operational adjustments to make more of the fleet ready to transition.

Throughout this process, mobility managers will need to engage with procurement teams to identify and avoid costs where possible, and make the business case for change.

Case study: Gilead Sciences

A real-world example of the impact that organisational readiness can have is Gilead Sciences, a leading global pharmaceutical company that helped to inform the Navigating Fleet Decarbonisation report research.

Demonstrating that fleet decarbonisation requires buy-in from the wider business, Gilead has brought people at all levels along on the journey. Gilead has weaved sustainability into the cultural fabric of its organisation and made it a core element of its operations and procurement goals. Importantly it gave employees the tools to drive progress through initiatives such as EV incentivisation as a standard employee benefit, integrating EV and carbon emissions thresholds into company car policies, offering an electric commuter bus service so employees don’t always use personal vehicles, employee-accessible charging infrastructure and creating sustainability ambassadors at every level of the business

As well as helping its teams to make better personal and professional decisions around the environment, these efforts are delivering a material impact on Gilead’s targets while helping the company employees to embrace the case for change.

Mapping out the route to fleet decarbonisation

Mobility managers need to make sure their business is ready to operate the decarbonised fleet of the future. And that means preparing their wider organisation for change. To help them do this successfully—and engage effectively with stakeholders across their business—Shell and Deloitte have collaborated with fleet executives and experts to create an Organisational Readiness Toolset.

Highlighting the key success factors needed to accelerate decarbonisation, the toolset offers guidance on how to identify and potentially mitigate the challenges an organisation might face in developing its strategy, governance, people, technology, process, assets and infrastructure. By using the Organisational Readiness Toolset, fleets can map out their current state of readiness and energise their entire business while taking their next steps towards a successful transition.

About the author: Giorgio Delpiano is Senior Vice President, Shell Fleet Solutions & E-mobility