What Fleet Owners Need to Know about ESG Reporting

The SEC’s new climate disclosure rule, proposed in March 2022, has paved the way for the broadest federally mandated corporate ESG data disclosure requirement ever. The rule would require public companies to provide certain climate-related financial data, and greenhouse gas emissions insights, in public disclosure filings. That has put pressure on a host of industries, including transportation, to seek faster ways to reduce emissions as investors, shippers and consumers demand more ESG reporting and greater sustainability measures.

Pressure Mounts to Lower Emissions, Report Results

Companies have stepped up their Environmental, Social and Governance (ESG) reporting, or sustainability reporting, as global climate change measures have increased the demand for industries to lower greenhouse gas (GHG) emissions. 

Companies deemed more socially responsible are now far more appealing to investors and consumers. In response to the global cry for serious climate change response, more than 300 businesses have taken the Climate Pledge, including those in the transportation industry, to achieve net-zero carbon emissions by 2040 across its operations. That’s a decade ahead of the Paris Agreement, which requires countries to reduce emissions by 45 percent by 2030 and reach net zero by 2050.

In the United States, the transportation industry stands as one of the leading contributors of air pollution. Carbon dioxide (CO2) creates the vast majority of GHG emissions and major sources of CO2 include fossil fuel combustion. In fact, although freight trucks make up only 10 percent of the vehicles on the road, they produce 25 percent of all greenhouse gas emissions.

Now trucking fleet operators are feeling the pressure to produce ESG reports, especially data around emissions, and work more quickly to lower emissions and reduce their carbon footprint.

So, What is ESG Reporting Again?

ESG impacts represent a fairly broad umbrella of activities, and fleet operators are already doing many things that qualify, including using alternative fuels, running newer, lower-emission trucks, using products and technology solutions that create better freight efficiency, and even using energy-saving and recycling efforts at trucking facilities.

Trucking companies also are monitoring their social impact, which takes into account people and culture. Employee engagement initiatives and better standards for drivers fall into this category, along with monitoring labor standards among suppliers, data protection and privacy, and gender and diversity.

Good governance practices ensure transparency in operations and cover the procedures that help fleet owners stay ahead of violations, adopt sound internal systems of control, and maintain strong leadership.

ESG reporting makes public or available a list of Environmental, Social and Governance activities a transportation company is engaged in, and the impact those activites have had on reducing emissions. Socially responsible investors, shippers, and even consumers may use that data to make business, capital and purchasing decisions.

There is currently no law that mandates ESG disclosure for non-listed companies, but expectations have been raised for fleet operators and there are many ways to track ESG impacts. The three so-called pillars of ESG focus on people, process, and product.

Walmart Canada is offering carbon-neutral last mile delivery for e-commerce purchases. Ikea, which handles two million shipments a year, has set a goal to be climate positive by 2030 and has deployed transportation management systems to reduce trucking emissions. The retail giant has produced high-level reports describing activities related to its climate journey.

Trucking fleet operators also have Scope 1, 2 and 3 carbon emissions they can report and, by far, emissions controls and reductions remain the trucking industry’s largest focus when it comes to ESG reporting.

As Easy as Scope 1, 2 and 3

Source: https://pba.umich.edu/scopes-of-carbon-emissions-explained/

Tracking scope emissions opens ways to lower overall environmental impact and improve the bottom line.

Scope 1 emissions cover direct emissions generated from owned or controlled sources, including fleet fuel use.

Scope 2 emissions are indirect emissions from the generation of purchased energy, including from cooling systems, electricity, heating, and steam. Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts.

Scope 3 emissions could include those produced by business travel, employee commuting, waste disposal or the emissions generated by purchased goods and services or transportation and distribution.

Reporting results of emissions-reducing activities can be a part of good ESG reporting.

It’s Electric – The Promise of EV Looms, But What About Now?

Trucking industry leaders agree that trucks of all sizes are ready for electrification, but large-scale fleet conversions to EVs across the transportation industry are still years away. With trucking accounting for a quarter of all U.S. carbon emissions, the move to zero-emission vehicles will deliver tremendous benefits.

But other new technologies, products, and practices can assist the trucking industry directly with reducing carbon emissions in the meantime and produce a measurable impact right away. Here are some of those go-to resources:

  • Aerodynamics: Products like TruckWings can significantly increase fuel efficiency. The tractor-mounted aerodynamic device automatically closes the gap between cab and the trailer, reducing drag. Use of the device can mean 3-6% fuel savings which can lead to millions of dollars in savings per fleet. TruckWings is the only fully automated aerodynamic device that works without driver interaction.
  • Tracking Vendors: Make sure vendors and suppliers are jumping on board with their emission-reducing practices. Do business with companies and partners that are actively shrinking their carbon footprint.
  • Alternative Fuels: Alternative fuels which have the potential to be used in trucking include biodiesel, gasoline, electric trucks, natural gas, and hydrogen fuel cells.

How to Get Started on ESG Reporting

Even if you don’t need an official ESG report for investors yet, it is a good idea to develop some sort of documentation, maybe even a website page, to show your ESG activities. Here are four quick tips to consider:

  1. Have an ESG Strategy – Develop a sustainability strategy and set short-term and long-term goals. Work with different departments to gather input and buy-in on the strategy.
  2. Decide on a Reporting Framework – There are still no right or wrong ways to produce ESG reports, but determine how you will consistently track, collect and report ESG activities and use a consistent framework. Consider who will be viewing the reports and what information they will most need.
  3. Reliability and Transparency – Decide on which activities you will report and ensure that consistent, reliable data can be collected. All ESG activities should be transparent both internally and to vendors and partners. Include activities that can be reliably measured.
  4. Watch Competitors – Pay attention to how your competitors are tracking and reporting ESG and tear a page from their playbook, or make sure your reporting is at industry standard.

ESG Reporting Delivers On-Time Benefits

Despite the pressure fleet owners and operators are feeling about carbon emission reduction and reporting, there are simple ways to demonstrate sustainability and get started now with improved practices and policies.

Driving forward with an ESG strategy can not only place your company in a better light with investors, partners, and customers, but also deliver significant cost savings. Fuel efficiency solutions lower costs and can even improve driver comfort.

As climate change measures increase globally and the carbon footprint of the transportation industry draws greater scrutiny, the promise of change can be a benefit for all.

Top Ten Ways to Improve Semi-Truck Fuel Efficiency

New semi-truck emissions regulations, along with higher fuel costs, have trucking fleet operators looking harder for additional ways to gain fuel efficiency. 

Record costs for fleets have come in the form of driver pay increases and a jump in repair and maintenance costs, but nothing has been more costly than the rising price of diesel. The American Transportation Research Institute reports that fleet operators saw a more than 35 percent increase in fuel prices last year, bringing per-mile trucking costs to their highest levels on record.

Now the Biden administration has proposed new emissions regulations that put the transportation industry at the center of attention, with goals to speed up the path to zero-emission semi-trucks and stringent new standards to reduce pollution.

But, there are many ways to increase fuel efficiency and reduce fuel costs, including quick and easy options that bring immediate results.

Semi-Truck MPGs at a Glance

Most semi-trucks have one or two fuel tanks that hold up to around 300 gallons of gas combined.

On average, semi-trucks get anywhere from 5.6 miles per gallon (mpg) to about 6.5 mpg. That fuel efficiency can range more widely when trucks are climbing steep uphill grades, which can push fuel efficiency down to 3 mpg, or coasting downhill when fuel efficiency can top 23 mpg. On a long route, fuel is consumed quickly and refueling is always top of mind for drivers.

In the last year, diesel fuel prices have spiked dramatically. Filling up used to cost around $300 to $400, but it can now cost over $1,000 to fill up the same Class 8 truck. Earlier this year the price of diesel fuel jumped by more than $1.50 per gallon in roughly two months, surpassing $6 per gallon in some markets. Since last year, truck fleets’ fuel spending has increased by around 25 percent to 30 percent. According to the American Trucking Associations, semi-trucks burn about 36.5 billion gallons of diesel annually.

New Standards for GHG Emissions Loom

In March of 2022, the Environmental Protection Agency (EPA) announced a proposed rule to set stricter pollution and emissions standards for heavy-duty vehicles, including semi-trucks. The proposed new standards come as President Biden’s new Inflation Reduction Act becomes law. Hailed as the country’s most ambitious climate change legislation ever, the Act takes aim at greenhouse gas emissions (GHG), proposing to reduce them by about 40 percent by 2030.

The new emissions standards go after smog and soot-forming emissions from heavy-duty gasoline and diesel engines and would place new rules on commercial vehicles. Biden’s Act works more quickly towards zero-emission trucks and buses. Last year the EPA said it wanted about 1.5 percent of new truck sales to be zero emission by 2027, but vehicle and truck manufacturers are jumping on loftier goals. Daimler, for example, says up to 60 percent of its sales will be zero-emission vehicles (ZEV) by 2030. Volvo Group says its going for 100 percent zero-emissions truck sales by 2040.

These new rules and goals are putting pressure on truck fleet operators already dealing with fuel costs and driver shortages. Gaining better fuel efficiency can significantly drive down costs in the face of those pressures.

Best Ways to Gain Fuel Efficiency

From simple and immediate, to long-term and lucrative, there are many ways to get better gas mileage in a truck. Here are ten top ways to gain fuel efficiency.

  1. Use Cruise Control – Inconsistent speed can be a common cause of poor mileage. Using cruise control regulates speed and creates more efficiency.
  2. Avoid Idling – Idling is a waste of gas. Find easy ways to stop idling, including using truck stop showers while waiting in line.
  3. Keep Up on Maintenance – Make sure trucks receive regular maintenance checks as recommended by the manufacturer. Consider using a lower-viscosity oil.
  4. Improve Truck Aerodynamics – There are a number of products on the market that can improve truck aerodynamics and significantly reduce fuel costs, including TruckWings, which close the gap between the cab and trailer to reduce drag. Other aerodynamic devices include wheel covers, roof farings and side extenders.
  5. Plan Ahead – Pre-plan your trip to avoid unnecessary stops and use the latest GPS equipment to keep routes accurate.
  6. Lighten the Load – Reduce excess weight by removing unnecessary cargo or equipment. Every extra pound counts.
  7. Don’t Speed – Drive at the posted speed limit or slightly below. This cuts down on wind resistance which, in turn, cuts down on fuel consumption.
  8. Easy on the Brakes – Use momentum to your advantage and avoid sudden accelerations and excessive braking, which increase fuel consumption.
  9. Use Low-Rolling Tires – Low-rolling resistance tires made for trucks require less energy to move and can cut down on fuel use.
  10. Minimize AC Use – When and where possible, cut back on how much the AC is used. Air conditioning can be another drag on fuel use.

Get Started Today

Pressure from rising fuel prices and driver shortages, along with new legislation aimed at reducing emissions produced by trucks, is giving fleet owners and operators a lot to think about. But easy solutions and smart steps can make a big difference almost immediately. Using fuel efficiency measures can add up quickly and provide relief.

TruckWings can help fleets reduce drag and cut fuel costs by 3% to 6% annually, which can be thousands of dollars in savings per truck, leading to millions of dollars per fleet.

TruckWings is the only fully automated aerodynamic device that works without driver interaction. Drivers can count on it to deploy when speed goes above 52mph, and retract when speed goes below 50mph. So there’s no need to take their eyes off their driving or their hands off the wheel. Closing the gap reduces buffeting and trailer sway in cross-winds outperforming even the longest side-extenders on the market today.

Give us a call today to find out more about quick installation.