Karen Healey

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The greening of the corporate fleet
Karen Healey Manager, Green Initiative PHH Arval
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Its true!

• Corporate fleets are good for the environment

• Government wants to partner with us on
  environmental issues

• You can be a leader

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Why am I talking about this?

• Working on environmental issues for more than 10
  years
• Leading PHHs environmental initiative

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Agenda

• Background on issue
• Impact on fleet
• Lessons learned from other industries
• Opportunities within fleet
• Next steps

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Why is this important?

• Media coverage
• Lawsuits
• Shareholder resolutions
• Insurance costs

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Why are we talking about this?
Is the environment a priority for your company?
Only 30 of fleet managers said environmental
factors were highly important in selecting
vehicles
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About greenhouse gases

• Primarily produced from burning of fossil fuels
• Trap heat in earths atmosphere
• Lead to global warming
• Largest greenhouse gas is CO2
• Greenhouse gases are not the same as smog

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Global warming

• Scientists agree
• Earth is warming
• Humans are the cause
• Threat is real
• Impact
• Oceans
• Agriculture
• Weather
• Animal habitat

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How does fleet impact the environment?

• In the U.S., cars and light trucks contribute
  1/3 of all CO2 emissions
• 22 pounds of greenhouse gases are produced with
  every gallon of fuel burned
• 19 pounds of carbon dioxide (CO2) are produced
  for every gallon of fuel burned

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And that means?

• Average fleet of 500 vehicles
• 6,750 tons of CO2 every year.

It would take 2000 acres of trees to absorb
that much CO2
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What about hydrogen?

• The basics
• Fuel cell is the technology
• Hydrogen is the fuel
• The vision
• Eliminates dependency on foreign oil
• Non polluting fuel

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What about hydrogen?

• Several challenges
• Creating the fuel
• Infrastructure
• Cost

Hydrogen could fundamentally transform the US
energy system. It is only a matter of time
lots of time. -- National Academy of Sciences
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Reimbursement is not the answer

• When companies switch to reimbursement
• 45 of employees driving their own vehicles are
  driving more polluting vehicles
• Older
• Larger
• Or both
• Only 16 chose cleaner cars
• Fact You cant outsource your emissions

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Actual fleet example

• 9,000 vehicles cars, SUVs, vans
• Average mpg 18.8
• Yearly fuel purchase 11.5 million gallons
• GHG emissions 126,500 tons annually

• GOAL
• 15 improvement 21.5 mpg
• Reduce GHG by 19,000 tons (5,600 acres of trees)
• Reduce fuel costs by 3.5 million

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Managed fleets are good for the environment

• Newer vehicles
• Better maintained
• Often more fuel efficient

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Lessons learned from other industries

• Two paths
• Traditional
• Innovative

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Traditional

• - Targeted by government
• - Lobby for no regulation
• - Picketed by environmental groups

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Example Timber Industry
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Innovative leadership

• Proactive collaboration with government to
  develop voluntary programs
• Work with environmental groups to
• Reduce environmental impact
• Improve business performance
• Example
• McDonalds

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Who are the innovators?

• Dupont 1999 goals
• Reduce GHG emission by 65 below 1990 levels
• Hold energy use flat at 1990 levels
• Supply 10 of energy needs from renewable
  resources
• The results
• Overall energy consumption remained flat in the
  1990s while production grew 35
• In 2000 alone, this results in a savings of 16.2
  million barrels of crude oil

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Dupont an innovator

• Benefits
• Energy costs savings of 1.65 billion over 10
  years
• Also resulted in 5 million metric tons of reduced
  CO2 emissions
• Good for Dupont, good for the environment

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FedEx an innovator

• Partnered to develop hybrid diesel engine for
  its trucks
•    Results
• Particulate matter reduced by 90,
• Smog emissions reduced by 75,
• Fuel efficiency increased by 50
• Good for FedEx, good for the environment, good
  for other users of medium/HD trucks

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Opportunities for fleets

Opportunities
for the industry

• For individual fleets
• For suppliers
• For industry

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Opportunities Vehicle selection
Assdf

• Moving drivers into the right vehicle can have a
  significant impact on the environment
• Hybrids are not necessarily the answer
• Need to consider vehicle costs, life cycle costs

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Opportunities

• New technologies
• Reducing fuel use
• Improving emissions performance
• Maintenance practices
• Well maintained vehicles are better for the
  environment, more fuel efficient
• Driver behavior, cargo, etc
• Reduce speeding, aggressive driving
• Carry minimum amount of cargo

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Opportunities

• Carbon neutral products
• Offset GHG
• New marketing opportunity
• Certify and promote green practices
• Reduce
• Recover
• Recycle

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Opportunities for the industry

• Consider government agencies as partners
• SmartWay program
• Could we do something similar for fleet?
• Work together to develop and test new technology
• Partnerships with environmental nonprofits

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Next steps

• Need leadership from across the industry
• We will all benefit from a proactive approach
• Reduce risk of government regs that harm
  industry
• Significant improvement to environment
• Government interested in industry-wide
  initiatives, not just with a single company

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In closing

• Corporate fleets are good for the environment
• Environmental goals do not need to be in conflict
  with business goals
• Government wants to partner with us
• We each have the ability to make a difference on
  this issue
• Small changes can have a big impact

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Opportunities for fleets

Thank you!

• For individual fleets
• For suppliers
• For industry

Any questions?
My contact infokaren.healey_at_phh.com 410 771
1791