August 19, 2020

Managing Fleet Risk Part 3

Managing Fleet Risk | Reputational Risk

In this third post in our series of five on managing fleet risks, we look at the specific decisions and actions that need to be taken to manage the reputational aspects of fleet risk.

The series covers the fleet risk topics below and the links will become live as each one is published:

  1. Strategic Aspects of Risk
  2. Financial Risk
  3. Reputational Risk
  4. Human Resource Risk
  5. Legal Risk

We also have a comprehensive PDF report which includes all of the topics covered in this series – simply click here if you would like to receive your copy.

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Reputational Risk

In the past, reputational risk tended to be the preserve of very large organisations, aiming to avoid or mitigate negative publicity following major events involving their operations, products or employees. Today, the expectations placed on businesses go far beyond avoiding catastrophic incidents, to include all aspects of their impact on individuals, the environment and society in general. Questions are even being asked about the role that business plays in society and how this needs to extend beyond the pursuit of profit.

A second, and equally significant change, is that businesses of all sizes are now open to much greater public scrutiny than ever before. Even the sole trader is likely to have online reviews of their performance that can have a very significant impact on their future success.

From a fleet perspective this means that many more factors need to be considered than in the past.

1. Service delivery – For many organisations the performance of their fleet is absolutely fundamental to the service they provide to their customers. Be this delivery of physical goods or the provision of services at customer locations, a failure to arrive on-time, or at all, means dissatisfaction and the potential for lost business or poor customer reviews.

For businesses like this, minimising vehicle downtime and the immediate availability of back-up vehicles is key. This can be a particular issue for businesses that utilise a range of highly specialised commercial vehicles.

Luckily there are solutions available; from accident management services that can reduce downtime to an absolute minimum, to vehicle logistics services and specialist vehicle short-term rental that can ensure replacement vehicle availability. Click here to read more about logistic services and here for specialist short-term rental.

2. Fleet emissions – Fleets now face increasing public scrutiny regarding the types of vehicles they run, particularly since the Government’s introduction of the Streamlined Energy and Carbon Reporting (SECR) in April 2019, which increased the number of businesses needing to record and report on their carbon emissions. Failure to demonstrate continuing reductions in CO2 emissions, which for many organisations will be heavily contributed to by their fleet, is likely to be noted and publicly commented on.

Local air quality has also become big news, particularly in urban areas, and those running large numbers of vehicles in these locations will come under increasing pressure to use cleaner vehicles and end practices such as engine idling when stopped or parked for short periods. Choice of fuels is also an important area for consideration and the best fuel for overall emissions efficiency (including CO2, NOx and particulates) will vary depending on the types and length of journeys being undertaken.

3. Health & safety performance – While the public reporting of H&S performance is not as regulated as environmental reporting, many organisations are now taking a more open approach to this, bringing them under greater scrutiny. With Department for Transport figures2 suggesting that more than a quarter of all road accidents involve someone driving for work, both major incidents and cumulative performance provide potential reputational risk.

4. Driver behaviour – The fleet, and in particular commercial vehicles with branding, are a very public expression of the organisation’s culture and values. Poor driver behaviour can present a highly negative view of the brand, whether this is failure to adhere to road laws, aggressive behaviour behind the wheel or simple discourtesy. It is essential that all drivers recognise that they are representatives of the organisation when they are driving for business and behave accordingly.

5. Vehicle condition and the grey fleet – In a similar way to driver behaviour, the condition of vehicles being used for company business is a direct reflection of the brand. For the company owned, or leased, fleet this is relatively simple to control with quality marque selection, moderate replacement cycles, good maintenance policies and clear instructions to drivers about vehicle cleanliness and appearance.

All of these factors become more difficult to manage when employees use their own vehicles for business journeys. Development of a fleet policy that incorporates grey fleet vehicles, and mandates their maintenance and general condition, is essential. To find out more about grey fleet management click here.

Next in the series – Human Resource Risk

To read more about CLM’s approach to fleet risk management and to contact us for a no-obligation discussion click here.

2 Reported casualties in accidents by journey purpose and casualty type (Department for Transport statistics, updated annually): www.gov.uk/government/uploads/system/uploads/attachment_data/file/239770/ ras30037.xls