Switch to less polluting cars could save UK firms £3bn a year

UK companies could save £3bn annually by switching to greener company cars, new research has suggested.

A survey of 400 board-level executives, by environmental organisation Energy Saving Trust, found that 55% of respondents were encouraged by their employer to try to reduce their carbon emissions from business travel.

The report found that through new government tax breaks which came into force earlier this week, UK firms who swapped company cars for vehicles that emit less than 120 grammes of carbon dioxide per kilometre could mean a £250m saving for UK employers through reduced National Insurance contributions.

Additional savings could include:

• £645m saving for UK employees through reduced benefits-in-kind income tax contributions
• £780m saving for UK employers through reduced fuel consumption
• A saving of £1.2bn on the fuel bill of company cars driven privately.
• A reduction in transport emissions from UK company cars used on company business of around 1.9 million tonnes per year.

The report found that such changes would see a reduction in UK carbon emissions of around 4.9 million tonnes a year.

Phil Day, head of HR at the Energy Saving Trust said giving staff the option of choosing a vehicle that emits less carbon dioxide sent out a strong message, both internally and externally, about a company's environmental awareness.

"Offering choice sends a strong message to staff about the values of the organisation and so has a positive impact on how they perceive you as an employer - whether they decide to choose a more sustainable vehicle or not," he said.