Sustainability continues to climb the corporate agenda for European fleets but electrification poses major challenges that many are under-prepared for, according to a new study by Alphabet.

Some 64% of European businesses regard sustainable fleets as a strategic goal – up from 61% in 2023

Now in its second year, the leasing giant’s European Fleet Emission Monitor (EFEM) surveyed more than 1,000 decision-makers across 12 countries, both within the EU and in non-EU countries such as Switzerland and the UK.

The results underscore the complexities companies face, from digital transformation hurdles to e-mobility adoption challenges, questioning their readiness to align with and leverage regulatory standards for environmental objectives.

The research shows that in the face of evolving environmental mandates, 64% of European businesses regard sustainable fleets as a strategic goal – up from 61% in 2023 – with 62% aspiring to fully electrify.

Despite a growing interest in sustainability, it is surprising to note that over half of fleet managers (56%) do not consider the EU’s Corporate Sustainability Reporting Directive (CSRD) as a major incentive to improve their sustainability measures, particularly in terms of collecting CO2 emission data.

By 2025, as part of the CRSD, the EU will expect businesses operating within the EU to report on their fleet emissions and continuously reduce their CO2 output. Given this will affect some UK fleet managers and with the likelihood of more legislation around emissions reporting coming into place soon on a global scale, businesses must understand their fleet’s data and have an electrification plan in place.

“Transitioning to a carbon-neutral fleet is a challenging and gradual process, not an overnight shift,” said Markus Deusing, CEO of Alphabet International. “Under the CSRD, companies are now obligated to reveal their progress, yet many still undervalue the extensive effort needed to minimise CO2 emissions and move towards electrification.”

The study echoes the green shift of 2023, highlighting that half of the companies now pledge to cut their vehicle emissions. There’s positive movement, with a 5% increase in leaders who keep tabs on their emission goals, now at 42%. Among these, 35% are winning the race, keeping the CO2 output below 100g/km. However, 44% still hover above this limit, showing a 6% drop compared to last year’s figures – a sign of slow but sure progress.

Although digitalisation is key, numerous companies continue to struggle with implementing digital fleet management and data analysis.

In a concerning trend, 22% of companies – a 5% increase since 2023 – can’t pinpoint their fleet’s CO2 emissions due to insufficient digitalisation.

While specialised fleet management tools enable businesses to bridge this gap by providing reliable data, many businesses find themselves at a crossroads and only three out of 10 fleet managers currently utilise tools to measure and analyse CO2 emissions.

Deusing further elaborated: “By not leveraging the insights gained from data analysis, companies are overlooking a golden opportunity. Such data is not only pivotal for enhancing sustainability reports but also for compiling the best drivetrain blend.”

The latest findings also indicate growing challenges in fleet electrification. Currently, 62% of businesses believe their fleet can become fully electric in the future, marking a decrease of seven percentage points compared to 2023. This shift may reflect companies underestimating the complexity involved.

Accordingly, 44% of surveyed fleet managers express feeling either not adequately or somewhat informed about e-mobility topics. Challenges in deciding on electric vehicles still include charging infrastructure and supposedly insufficient range.

To read the report in full, please click here.