Written by Ged Cosgrove, group managing partner
Carbon emissions currently dominate the headlines and will no doubt continue to do so as world leaders gather for another week of talks in Glasgow. As figureheads debate targets and quotas, what’s already known is that the UK government will ban the sale of all new petrol and diesel cars from 2030 – a target that’s already been brought forward by five years – followed by a ban on new hybrid cars from 2035 and new diesel lorries from 2040 (or earlier, if technically feasible).
Transport decarbonisation is a political priority, with the government’s plan affecting every business, be that directly or via their supply chain. Some 1.6 billion tons of freight is transported throughout the UK every year; a figure that will rise even further due to the boom in eCommerce. Whilst these targets may seem like a lifetime away, businesses must begin proactively planning for what is likely to result in a rise in costs due to more expensive zero-emission vehicles.
Environmental costs are already affecting those businesses with commercial fleets that travel throughout London’s Ultra Low Emission Zone (ULEZ) and fail to meet emissions standards. The Greater Manchester Clean Air Zone goes a step further than London by charging non-compliant HGVs, for example, an increased sum of £60 per day to drive in the Clean Air Zone, which is expected to come into force from 30th May 2022.
Manchester will soon join a growing list of Clean Air Zones, making it increasingly important to examine commercial fleet costs. As a result of such forecasting, it may become more cost-effective to invest in zero-emission alternatives when considering the lifespan of a vehicle. Businesses must also examine the value of your existing commercial fleet stock, which could decrease considerably as we creep closer to the above deadlines.
As interest in environmental, social and governance (ESG) continues to build, an increasing number of Banks and lenders are also favouring investment opportunities with organisations that support sustainability and who are actively working to do the right thing; and we only see this trend continuing as ESG becomes increasingly important in the economic equation.
Do not delay in understanding your financial position, and speak with your Champion advisor.