German Manager Magazin: Company cars: What companies can do to reduce CO₂ emissions002027

It is estimated that every fifth newly registered car in Germany is a company car. After a short holding period, these vehicles come onto the used car market and thus mostly into private hands. Company cars have a correspondingly large impact on CO₂ emissions in road traffic – and their reduction. So far, however, only a few companies have adopted a company car guideline – also known as a car policy – that sets clear goals for environmental and climate protection.

The Öko-Institut and the think tank Agora Verkehrswende have come together to see what such a guideline could look like thesis paper

developed, which also contains formulation aids. It starts with procurement: the authors recommend that companies should set themselves ambitious CO₂ limits for their fleet or for new vehicles. In addition, they should specify permissible vehicle and drive types, ideally with a high proportion of battery-electric cars. You can reward employees with a bonus-penalty system for choosing low-emission company cars. The ideas range from better car equipment and subsidies for old-age provision to the payment of saved leasing rates.

In order to save CO₂, a car policy needs clear guidelines for energy-efficient vehicle use. Companies should set incentives for economical driving, such as a voluntary internal speed limit (e.g. 130 kilometers per hour), competitions for the most fuel-efficient drivers or a limited fuel budget.

Since vehicles with internal combustion engines are increasingly becoming obsolete, companies should start electrifying their fleet now and involve their employees in the process. For example, they could offer them to test the suitability for everyday use of e-cars for a few weeks with pool vehicles. Of course, this also includes expanding the company’s own charging infrastructure, financing a wall box at the place of residence for employees or giving them access to public fast charging stations via charging card or app.

According to the study, the effect of a sustainable car policy goes beyond the emissions of companies because of the effects on the used car market. These should be “aware of their steering effect in order to accelerate the ramp-up of electromobility overall.”

Source: Luis Karcher et al.: “Car Policy for a climate-friendly fleet of company cars”, Agora Verkehrswende and Öko-Institut, August 2022

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