FORS Members Webinar. Learn how to reduce your fleet carbon emissions & provide your business with a competitive edge

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Raymond Hensley
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1 FORS Members Webinar Learn how to reduce your fleet carbon emissions & provide your business with a competitive edge

Introductions Your hosts for today Please post questions as we run through the presentation and we will try and respond as we get them Paul Wilkes FORS With over a

Previous roles have included managing the fleet plan for Royal Mail Group where he reviewed alternative fuel options for different types of fleet from network

Andy Allen BP Fuel cards Andy Allen is the BP s Fuel Card Manager, responsible for marketing BP s Fuel Cards to over 50,000 businesses across the UK.

2 Introductions Your hosts for today Please post questions as we run through the presentation and we will try and respond as we get them Paul Wilkes FORS With over a decade of experience in fleet management, Paul manages the day to day running of the Fleet Operator Recognition Scheme (FORS). Previous roles have included managing the fleet plan for Royal Mail Group where he reviewed alternative fuel options for different types of fleet from network trunking to courier deliveries. Andy Allen BP Fuel cards Andy Allen is the BP s Fuel Card Manager, responsible for marketing BP s Fuel Cards to over 50,000 businesses across the UK. Andy has been with BP for 19 years and previously worked in BP's Aviation Fuel division. Mike Capper BP Target Neutral Mike leads global business development for BP Target Neutral, BP s not-for-profit carbon management programme. Mike has helped develop and launch low carbon customer propositions across the fuels, lubricants and petrochemicals businesses. 2

3 Agenda Session 1, 3 rd May Why fleets should act now to cut costs and carbon? 1. Understanding the climate challenge at a global and business level 2. Why you should act now on reducing emissions and the business and brand reputation benefits of action 3. Understanding key concepts in carbon management 4. Building a carbon management plan

4 Understanding the climate challenge

5 Understanding the climate challenge The What effect is Climate of climate Change? change on our eco-system There is scientific certainty that human activities are the dominant cause of global warming, and with energy demand projected to increase by 37% ( ), associated emissions will rise by 25% * *IPCC Fifth Assessment Report Climate Change

6 Understanding the climate challenge Why is climate change happening? Greenhouse Gas (GHG) emissions are rising Atmospheric CO 2 concentration In Sept 2016 atmospheric CO 2 concentrations exceeded 400ppm Global Temperature: Difference from 20 th century average degrees Celcius Source: NOAA/Scripps 6

7 Understanding the climate challenge Where do GHG emissions come from? GHG emissions by economic sector GHG emissions by source Agriculture Buildings Transport Industry Other Coal Oil Gas Land-use change Other Source: IPCC AR5 Source: University of Cambridge 7

8 Understanding the climate challenge Transport is forecast to increase oil demand Transport & Industry accountable for much of this growth Driven by vehicle in demand ownership in China and India - Transport demand largely driven by vehicle ownership - Vehicle ownership doubles from 1.2bn to This is factoring in vehicle fleet efficiency increasing to 2-3% p.a. compared with 1.5% p.a. over the past decade. - That is 50mpg vs 30 today Source: BP 2035 Energy outlook, 2016; BASE case 8

Understanding the climate challenge but it can t be at the expense of Earth s energy balance 1) 75m years ago the climate experienced volcanic activity raising carbon levels significantly 2) Earth s

9 Understanding the climate challenge but it can t be at the expense of Earth s energy balance 1) 75m years ago the climate experienced volcanic activity raising carbon levels significantly 2) Earth s climate has been fairly stable over the past several million years 3) The increase in GHG levels could potentially cause impact faster climate change than the Earth has seen in 50 million years 4) The five coloured lines show potential pathways we ll follow, depending on how much fossil fuels humans burn over the coming decades. If we burn all available fossil fuel reserves (the black Wink12k line), we ll see faster climate change than in the entire 420 million year record. 100m years 1m years Nature Communications: Forster et al

Understanding the climate challenge The 2015 Paris agreement has been ratified Aim

Peak emissions asap and balance emission sources and sinks 2050-2100.

10 Understanding the climate challenge The 2015 Paris agreement has been ratified Aim to hold temperature rise to well below 2 o C, pursue efforts for 1.5 o C. Peak emissions asap and balance emission sources and sinks Allows for emissions trading and possible carbon pricing Supported by bottom up short-term climate pledges. Countries must: Submit nationally determined contributions (NDCs) Report every 5 years from 2023 and ramp up ambition each time Source: Climate Analytics, March

Understanding the climate challenge What the EU has committed to Based upon 1990 emissions figures the E.U has committed to ambitious carbon reduction goals: 1.

11 Understanding the climate challenge What the EU has committed to Based upon 1990 emissions figures the E.U has committed to ambitious carbon reduction goals: 1. Domestic reduction of at least 40% by Long-term reduction of 80-95% by 2050 Performance of the EU between 1990 and 2014 has decreased emissions by 27%, or approximately 1.3% per year 11

12 Why you should act now Question: What is your main reason for action on climate change? 1. Brand/Reputation 2. Legislation 3. Business/Tenders 4. Stand out from competitors 5. Want to do the right thing 12

13 Why fleets should act now

14 Why fleets should act now GHG emissions are of growing significance for fleets for a number of reasons 1. Legislative: meeting the Paris goals will encourage Governments to introduce policies which focus on decarbonisation of the transport fleet (EU legislation) 2. Business: end users are seeking products and services with environmental and ethical authenticity (sales driven) 3. Reputation/Investment Profile: organisations want to be seen to be a good corporate citizen which is driving company policies on carbon (impacting tenders) 4. Differentiation: helping a business to stand out from its competitors 14

15 Why fleets should act now Sustainable business is going mainstream PWC Report on Sustainability, 2015: Not so long ago, most companies saw sustainability as little more than a peripheral green issue useful for reducing energy and waste disposal costs or supporting some worthy community causes but hardly central to a company s core business. That view is changing. Companies all over the world are waking up to the reality that environmental sustainability is a key consideration as they confront and adapt to a range of disruptive forces including globalisation, increased urbanisation, access to raw materials and the availability of natural resources like water, uncertain energy costs, and looming regulation on carbon emissions. As a result sustainability is moving from the corporate side-lines into the mainstream. 15

16 Why fleets should act now Legislative Driven by the E.U, decarbonising transport has three priority areas: Increasing the efficiency of the transport system by making the most of digital technologies, smart pricing and further encouraging the shift to lower emission transport modes Speeding up the deployment of low emission alternative energy for transport, such as advanced biofuels, electricity, hydrogen and renewable synthetic fuels and removing obstacles to the electrification of transport Moving towards zero-emission vehicles. While further improvement to the internal combustion engine will be needed. Europe needs to accelerate the transition towards low and zero-emission vehicles Cities and local authorities will play a crucial role in delivering this strategy. They are already implementing incentives for low-emission alternative energies and vehicles, encouraging active travel (cycling and walking), public transport and bicycle and sharing / pooling schemes to reduce congestion and pollution. 16

17 Why fleets should act now Business green is good approach With over 97% of FTSE 100* companies having sustainability reports and plans in place, the approach has shifted from reducing their own emissions to seeking supply chain support in reducing emissions Organisations which can offer a green solution enable themselves to tap into the sustainability needs of these organisations This also can provide a unique selling point to an offer Within BP we have seen this, with a number of large scale fuel customers asking for environmental solutions within fuel tenders *2015 PWC report 17

18 Why fleets should act now Reputation / Investment profile but actions need to align with your brand and business objectives Brand Trust - For more than half of consumers (62%) in the Nielsen global survey, brand trust tops the list of factors that influences purchasing sustainable products and services. Brands may have an opportunity to increase trust by demonstrating commitment to social and environmental sustainability, which is even more important for consumers who are willing to pay more. Consumers in developed markets (like the UK) are harder to influence and many consider sustainability a basic cost of entry. Brands have to define a credible, relevant social purpose and deliver greater value. 18

Why fleets should act now DPD ships 3 million parcels every day The shipping of parcels generates a considerable volume of CO 2, with 90 % of

However, DPD committed to providing carbon-neutral shipping for all parcels at no additional cost to customers Achieved by relying on three

Reducing: activities aimed at reducing CO 2 emissions on a continuous basis like electric or gas powered vehicles and investment in IT to drive

19 Why fleets should act now DPD ships 3 million parcels every day The shipping of parcels generates a considerable volume of CO 2, with 90 % of emissions created by the actual transport operations At present there is no economically viable way of avoiding these emissions completely. However, DPD committed to providing carbon-neutral shipping for all parcels at no additional cost to customers Achieved by relying on three interrelated processes: measuring, reducing and offsetting. Measuring: regularly measure the greenhouse gas emissions created by the company. Reducing: activities aimed at reducing CO 2 emissions on a continuous basis like electric or gas powered vehicles and investment in IT to drive efficiencies Offsetting: By purchasing carbon credits DPDgroup finances projects for renewable energies and clean energy generation and offsets unavoidable transport emissions 19

offsets the CO2 of 200 million envelope deliveries every year FedEx pair the offsetting with a full Reduce, Replace strategy

20 Why fleets should act now As part of their EarthSmart initiative, FedEx has chosen BP Target Neutral as sole provider of carbon offsets to neutralize the transport emissions associated with the global delivery of every FedEx envelope BP Target Neutral offsets the CO2 of 200 million envelope deliveries every year FedEx pair the offsetting with a full Reduce, Replace strategy which includes looking at lower carbon delivery options such as a pilot with Nissan using the e-nv200 delivery van in cities like Singapore 20

Why fleets should act now Since 2014, Grundon have achieved CarbonNeutral certification across their entire 491-strong road-going vehicle fleet Grundon have minimise have invested in new

the largest contributor to the overall carbon footprint For the CO2 emissions that can t currently be avoided Grundon work with Natural Capital Partners to purchase offsets and attain carbon neutral

21 Why fleets should act now Since 2014, Grundon have achieved CarbonNeutral certification across their entire 491-strong road-going vehicle fleet Grundon have minimise have invested in new environmentally-friendly vehicles and worked with our drivers to provide fuel efficiency training Despite successfully reducing fuel consumption per mile year-on-year, fleet emissions continue to be the largest contributor to the overall carbon footprint For the CO2 emissions that can t currently be avoided Grundon work with Natural Capital Partners to purchase offsets and attain carbon neutral certification To offset fleet emissions Grundon support a community reforestation project in Uganda. Over the last three years: 1,187 farmers have joined the community reforestation project in Uganda Forming 185 new small groups Planting a further 1.2 million trees Taking the project to a total of 5.9 million trees across 5,335 hectares - that's equivalent to 3,330 football pitches 21

associated with the purchase will be calculated and offset, leaving the adi Group fleet driving carbon neutral 1,200 tonnes of carbon

22 Why fleets should act now The multi-disciplined engineering company, adi Group, offset their fleet s carbon emissions through the BP Plus Fuel Card Each time one of adi Group s fleet of vehicles refuels at a BP service station and uses the BP fuel card to pay, the carbon emissions associated with the purchase will be calculated and offset, leaving the adi Group fleet driving carbon neutral 1,200 tonnes of carbon equivalent emissions offset on an annual basis for adi Group Aligned to the government s new legislation The Energy Savings Opportunities Scheme (ESOS) 22

23 Understanding key concepts in carbon management

24 Understanding key concepts in carbon management How Green House Gases are reported Green House Gases (GHG s) are categorised into three core elements Scope 3 Scope 2 Scope 1 Type Description Scope 1 Emissions Emissions originating onsite or through company owned Scope vehicles 3 Scope 2 Emissions Scope 3 Emissions Emissions through sourced electricity or heat Emissions from customer and supply chain (everything else) 24

Understanding key concepts in carbon management Terminology: vehicle CO 2 emissions

Emissions created Vehicle CO 2 from raw material emissions = + extraction,

energy source + Emissions created in using the fuel / energy source in the vehicle

25 Understanding key concepts in carbon management Terminology: vehicle CO 2 emissions accounting. Emissions created Vehicle CO 2 from raw material emissions = + extraction, production of vehicle Emissions created in producing and distributing the fuel / energy source + Emissions created in using the fuel / energy source in the vehicle + Vehicle Disposal WTT well-to-tank TTW tank-to-wheels WTW well-to-wheels Other terms Carbon intensity : fossil CO2 emitted per unit energy LCA life-cycle analysis 25

26 Understanding key concepts in carbon management Question: Do you already measure emissions? 1. Full life-cycle 2. Just tail pipe emissions 3. Just fuel 4. Not measuring 26

27 Building a carbon management plan

Building a carbon management plan How to build a carbon management plan 9. Reporting 1. Commitment 2. Base Year Stage Activity 1. Commitment Confirming what is being committed to and timeframe 2.

28 Building a carbon management plan How to build a carbon management plan 9. Reporting 1. Commitment 2. Base Year Stage Activity 1. Commitment Confirming what is being committed to and timeframe 2. Base Year The year a footprint will be baselined against 8. Certification 3. Subject Matter 3. Subject Matter Define what will be included in the footprint 4. GHG Footprint Calculate the footprint 5. Carbon Reduction Plan Develop a carbon reduction plan 7. Verification 4. GHG Footprint 6. Carbon Offsetting Offset remaining carbon footprint 7. Verification Verification of footprint, reduction and offsetting activity 6. Carbon Offsetting 5. Carbon Reduction Plan 8. Certification Certification awarded 9. Reporting Publish carbon reduction report 28

29 Building a carbon management plan Question: Do you have a carbon management plan in place? 1. Yes 2. No, but planning to implement 3. No, wouldn t unless we had to 29

30 Next week Next week s webinar, 9 th May, 3-4 pm, we will focus on Best practice in carbon management following a : 1. MEASURE: Understanding how you can measure your emissions through existing tools at your disposal 2. REDUCE: lowering emissions through methods such as improved driving techniques and how fleet monitoring via telematics and tools 3. REPLACE: how selecting alternatives can lower your emissions, ranging from fuel type, lubricants, vehicle selection 4. NEUTRALIZE: how carbon offsetting can work as part of a broader carbon management strategy. How it works, the environmental, social and economic benefits How you can integrate these into a single solution 30

Science Based Targets Setting yourself up for climate leadership

Science Based Targets Setting yourself up for climate leadership Alexander Farsan Head of Business Services, India India GHG Program Workshop 2017, Kochi, 14/09/2017 About the Carbon Trust Advise businesses,