On the Road to Sustainability?
The existing menu of e-mobility options runs from buses and boats, to e-bikes and maybe e-boards. Future green-sky thinking includes electric aeroplanes and hybrid airships. So, is there still a place at the table for the fading star of corporate travel, the car?
In terms of e-mobility in an urban context, we already have green transport options such as electric buses and water taxis. For longer trips, slower-travel alternatives like new sleeper trains are emerging on routes out of major European cities. The world’s largest electric cruise ship just made its maiden voyage on the Yangtze River.
Soon approaching commercialisation, far more innovative technologies might include an all-electric passenger plane called Alice, the Virgin hyperloop, or even helium-filled hybrid air vehicles, otherwise known as modern-day climate-friendly airships.
So where does all this leave that traditional workhorse of personal mobility, the car?
Driving the electric dream
Whilst the conventional company car market might be in decline, grant funding, tax breaks and incentives for electric vehicles have opened up a whole new window of opportunity. The car may never again be the star, as such, but the fact this popular mode of transport has begun to clean up its climate act now moves it back up the corporate travel agenda.
From an automaker’s point of view, the latest numbers look good and should only get better. Sales of electric vehicles (EVs) have skyrocketed recently, with new registrations in the Europe Union jumping over 240% year-on-year, from 2019 to 2020. The market is likely to accelerate still further as the decade wears on and net-zero targets loom large.
In effect, the writing is on the wall from policymakers and legislators. Following the UK’s landmark decision to end the sale of new petrol and diesel cars by 2030, the EU has also now proposed an equivalent ban to come into effect by 2035.
Financial assistance and incentives are certainly fuelling this growth, too, helping both individuals and businesses meet the cost of purchasing a new EV. Estonia, for example, originally offered the most generous deal in Europe, agreeing to pay up to half the price. The 'Mobility Budget' package in Belgium, by contrast, uses a Total Cost of Ownership (TCO) model, not just for electric or plug-in hybrid vehicles, but also funding towards alternative forms of sustainable transport, or, in some cases, a partial cash allowance.
In countries such as Germany, larger employers in particular are also looking at providing mobility budget packages for employees, taking advantage of such initiatives as the Bonvoyo product offered by the national rail operator Deutsche Bahn.
Prime corporate movers are already active in this space and SAP itself announced that starting in 2025, all new vehicles ordered as company cars will be emission free.
Making a fleet of 27,000 cars more carbon neutral will move SAP closer to its own ambitious climate targets and complements the company’s move to make sustainability central to its solution portfolio, explains Luka Mucic, SAP CFO, member of the Executive Board and Board sponsor for SAP´s sustainability efforts:
“Climate change is one of the most pressing challenges worldwide, and we want to be part of the solution. Our car fleet is an important factor here. We also want to help our customers to achieve their climate goals. That is why we are consistently expanding our portfolio of sustainability solutions.”
Surveying the business market at large, however, widespread signs of corporate commitment on this issue are much less evident. What the SAP Concur research findings show is that whilst many organisations might be keen to explore and adopt more sustainable mobility options for employees, few have followed through on these good intentions. Barely 1 in 3 has implemented even such basic incentives as schemes for reimbursing staff for their EV charging costs (33%).
To overcome some of the obstacles to ease of reporting, a new Concur Expense feature soon to be introduced by SAP will help customers leveraging E-Mobility to run their EV-charging infrastructure at offices. The benefit will be that it also offers integration to empower employees to quickly submit expenses for their EV charges incurred at home.
So, with petrol prices rising at alarming rates, could EVs prove a useful option in the e-mobility mix of benefit packages designed to help retain and attract employees, whilst also supporting sustainable corporate travel objectives?
Hire cars for lower carbon
Perhaps the first point to make is there are other mobility-as-a-service scenarios available, that do not necessarily involve owning or leasing a fleet of vehicles, even electric ones.
Entering into some form of agreement or contract with a zero-emission taxi, or executive chauffeur service, might tick many corporate sustainability boxes, flexibly. So, with almost half the survey respondents (46%) focused on cutting carbon this year as a core sustainability objective, clean, green car hire offers a quick and easy, measurable win.
The more ESG-enlightened business clients are already asking the right questions of service providers, as standard, says Jonny Goldstone, Founder, Green Tomato Cars:
“Over recent years, it has become expected behaviour to provide in-depth information about our low- and zero-emission fleet; and details about private hire operators' carbon reporting capabilities are invariably requested as part of tender submissions for large contracts. Any corporate not asking these questions would appear distinctly out of touch.”
The market is seeing rapidly increasing demand for zero-emission solutions for events and hospitality, in particular — for ground transport at the likes of COP26, for example. As with all corporate travel planning, insights in the pre-booking process around carbon footprints, as well as cost, can help optimise the most sustainable choices on a case-by-case-basis.
Turning the grey fleet green
There is also what is known as the ‘grey fleet’ option, where an organisation incentivises employees to use their own private vehicles for work travel. Greening of the grey fleet might be achieved by weighting expenses and benefits in favour of EVs and hybrids. This could, however, raise concerns around discrimination against petrol or diesel users.
Furthermore, Approved Mileage Allowance Payments (AMAP) historically proved popular with staff as a relatively generous expenses benefit. Since EVs do not incur the same fuel costs, however, recommended AMAP rates in the UK currently range anywhere from 5p a mile, to 45p — a difference of financial significance. In this respect, tools like the Concur Expense product that provide regularly updated statutory mileage rates across multiple counties, for all kinds of vehicles, help make benefit calculations both faster and fairer.
Charging ahead on mobility
One of the concerns with earlier generations of EVs was, of course, range anxiety, making them problematic for longer-distance travel. Now, with journey capabilities of up to 485 miles between charges, the technology has advanced. In addition, improvements around faster charging options make it much easier to top-up the battery en route.
Whilst charging facilities at the office are likely to be made available as a benefit to staff, the roll-out of charging infrastructure nationwide, though, remains a big factor for companies to consider. The level of provision is not only poor overall, but often patchy, too.
This March, for instance, the UK government, announced its intention to increase numbers of EV chargepoints tenfold. These plans are put into context, however, by results of a 2021 Freedom of Information (FOI) campaign run by DevicePilot, a service monitoring and management platform for EV chargepoint operators. The response revealed more than half the UK councils (52%) had spent absolutely nothing on chargepoints over 12 months.
These discrepancies in charging provision make for something of a postcode lottery — gaps in the maps that amount to a form of infrastructural discrimination, and give rise to issues of inequality, says Pilgrim Beart, CEO and co-founder of DevicePilot:
"The UK is still deeply divided between the EV haves and have-nots. There needs to be a more even distribution of EV funding across the nation, since many local councils are yet to receive a penny from the Government, while others are flush for EV investment.”
For those who live in more remote or rural locations, away from public transport hubs or airports, post-pandemic arrangements for working from home might make car travel direct to site an attractive option. Such flexibility, however, could be undermined if those same regions provide limited scope for EV charging on the road.
A workspace on four wheels
The final aspect to consider is the ability to work while in transit. A solo traveller stuck behind the wheel cannot access a laptop, unlike one sat at a table on a high-speed train.
Looking ahead, maybe the gamechanger for productivity will be driverless cars. As EVs, these would function much like a zero-emission workspace on four wheels, a mobile office. Whether such vehicles were to be owned, leased, pooled, hired or hailed, might obviously tip the balance of benefits more or less in favour of either the employee, or organisation.
For now, though, EVs, hybrids and hydrogen fuel-cell cars clearly have a supporting role to play as part of a wider e-mobility strategy, that might include buses, boats, even e-bikes. Together, they can help drive brand positioning around sustainability, which is ultimately so vital in the fight for talent, concludes Jonny Goldstone:
“The race to recruit and retain the best of Gen-Y and Gen-Z makes a zero-emission transport plan as important for what it says about corporate culture, as for the emission reduction benefits it brings. Viewed this way, responsible travel sits alongside procurement and facilities management throughout a business, and broader ethical concerns generally.”