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Is our current prosperity based on carbon emissions?

Fri, 22 Apr 2022 15:45:53 GMT

In other words do historic emissions correlate with GDP?

The IPCC Sixth Assessment contained lots of fascinating insight and data, but one aspect which struck me and led me to do more analysis and research was the clear demonstration that western 'developed' economies had emitted the lion's share of CO2 emissions cumulatively. It made me wonder to what extent our current prosperity is based on the level of carbon emissions historically (1850-2019 to be precise)

So the question I set out to answer was "Is the developed world's current high GDP per Capita as a result of previous CO2 emissions?"

This is KISSing Sustainability, so keeping it short and sweet.... "Yes!"

As the graph shows there is a Very Strong correlation between Historic CO2 Emissions per Capita and Current GDP / Capita.

For the mathematicians amongst you the actual correlation coefficient is 0.942

Now I know that correlation does not prove causation; but given that there is strong evidence much of the economic growth the West has seen (certainly until the recent technology stock boom) is based on coal, oil, gas and related products, in this case it seems fair to say that correlation and causation are both there in this instance.

The logical conclusion therefore is that whilst we might like to try and put our great economic progress down to intellect, hard work, innovation, moral superiority or whatever else; the reality is that it has been driven by our use of fossil fuels leading to CO2 emissions and the current climate crisis.

To put this into perspective if Global GDP / Capita increased to the current European GDP / Capita as current average global carbon intensity; annual GHG emissions would increase from 59GT to 149GT. Over 250% increase.

Surely this highlights the moral obligation on the West to not only immediately halt any further expansion of fossil fuels usage but also to urgently support all other economies with a rapid transition to renewable energy. The alternative is that we deny the poorest in the world the opportunity for the benefits we enjoy now

All three parts of ESG - Environment, Social and Governance - are therefore critical and must be addressed together

What are your thoughts?

Keep KISSing Sustainability. Simon xx

Wage Inflation? Save thousands per employee using EVs!

Thu, 24 Mar 2022 12:37:56 GMT

Over £2k saving per middle / senior management level employee

Inflation is back, & it’s back in big way. In the Spring Statement yesterday (23 March 2022) Rishi Sunak said that inflation is expected to hit 8.7% in Q4 of 2022 & average 7.4%. Plus National Insurance will increase by 1.25% for both employees & employers in April

Cost of living if under massive pressure & this will understandably lead to expectation that employers increase salaries to protect employee standard of living. Combine this situation with the ‘seller’s market’ that currently exist for talented candidates looking for new jobs in the UK & wage rises could be an enormous cost impact for many companies

So, if there was a way of giving employees an attractive tax efficient benefit instead of a pay rise that worked financially for them & saved the employer thousands, with the added benefit of burnishing the employer’s ESG & Sustainability credentials, everyone would be doing it – right?

Well wrong. But they could, & arguably should, be

Electric Cars only attract 2% Benefit in Kind, so are a cost, tax & Employer NI efficient way of increasing the total reward package of an employee

Four examples to demonstrate:

Middle Manager earning £50k, 5% pension & 3% employer pension, with 10% bonus. An 8% pay rise cost the employer £5,724 & the employee only takes home £2,362 more (less than £200 a month). Or by giving the employee an MG5 Estate instead of the pay rise the employee’s take home only drops by £118 (less than £10 a month) & it costs the employer only £3,539 per annum. So the employee gets a fully funded car with 10k miles p.a. including maintenance for about £200 a month in take home pay & the employer saves £2,195 versus the pay rise

Senior Manager earning £75k, 8% pension & 5% employer pension, with 20% bonus. An 8% pay rise cost the employer £8,644 & the employee only takes home £3,510 more (less than £300 a month). Give the employee a VW ID.4 (318 mile WLTP range) instead of the pay rise the employee’s take home only drops by £337 (£28 a month) & it costs the employer only £6,309 per annum. So the employee gets a fully funded car with 10k miles p.a. including maintenance for about £320 a month in take home pay & the employer saves £2,335 versus the pay rise

An MD on £160k. Give them a BMWiX3 & save around £13k versus the pay rise

And what about a median salary employee on £27,500. Well, if you just swapped the pay rise for a VW e-Up it wouldn’t be a saving, but would only cost the employer £265 a year more. So a £20 a month salary sacrifice would make it stack up for the employer & the employee now has an EV for effectively £144 a month take-home

Given employers increasingly have to report Scope 3 emissions including commuting (for example under PPN06/21 for Government suppliers) it helps here too!

Being sustainable saves money too. Contact me to find out more by emailing simon@participation.co.uk or using one of the "Contact" buttons on the website

Keep KISSing Sustainability. Simon xx

IPCC 6th Assessment Report 2 – The Impact

Wed, 23 Mar 2022 12:56:27 GMT

Widespread and Adverse.

If you missed my summary of Report 1 “Is Climate Change Real?”, you can read it via this link;

Report 1 “Is Climate Change Real?”

Spoiler Alert. The answer is ‘Unequivocally Yes’ and that it is caused by humans

Report 2 focuses on the impact. Given this is a KISSing Sustsinability article, it will be lowlights only.

Climate Change is already having a widespread and often irreversible impact. The most vulnerable people and systems are disproportionately affected

Half of humanity are living in danger zones now. Antonio Gueteres (UN Secretary-General and so a diplomat) said we were “guilty of arson on our only home”. Hardly traditional diplomatic language!

It is essential that we limit global heating to 1.5 oC, which requires a 45% reduction in emissions by 2030 and net zero by 2050. Current projections are for a 14% increase over the coming decade, so a massive improvement is required immediately. Investments in adaption work, so both need urgency but we must avoid the catastrophe associated with significant global heating

Terrestrial, Freshwater and Marine Ecosystems already see irreversible impacts, 50% of species have moved (either to higher altitude or towards the poles). Observed (i.e. already actually seen) impacts include heat related human mortality increases, coral dying, trees dying, more widespread wildfires and more impactful tropical cyclones

Mass mortality events, species extinction along with glaciers, artic & permafrost melting are already happening and will get worse the hotter the planet becomes

Negative impacts on the following human systems will be seen: Agriculture & Crop Production, Fisheries Yield, Infectious Diseases, Heat & Malnutrition, Mental Health, Displacement (refugees), Flooding, Coastal Damage, Infrastructure and Key Economic Sectors

A key message is that we are interdependent with ecosystems, in other words “A part of, not apart from”

There are 127 key risks which are multiple times higher if global heating is not addressed. Risks are not linear e.g. very high extinction risk doubles from 1.5 to 2.0oC, but increases at least ten-fold at 3oC

Overshooting 1.5oC risks releasing additional greenhouse gases, as we pass ‘tipping points’

Long term migration will occur (i.e. more climate refugees) although adaption helps to mitigate this

Adaption is really important but hard limits are already reached in some areas with the ability to implement climate resistant development projects increasingly limited if emissions do not rapidly decline, especially if 1.5oC is breached

So in summary be must reduce emissions by over 7% per annum immediately, rather than the current projected 2% increase, to avoid “arson” and significant irreversible impacts. And we need to invest in adaption

#sustainability #esg #climatechange

Hard to read. So we must all do all we can, now

Keep KISSing Sustainability, it’s our only hope. Simon xx

IPCC 6th Assessment Report 1 – Is Climate Change Real?

Sun, 13 Mar 2022 11:44:50 GMT

Is Climate Change Real and caused by us? Yes!

A quick explanation of terms the IPCC reports use. Scientists very rarely say something is certain, as there is always the possibility a better hypothesis or explanation will be found. The IPCC uses “likely” to mean greater than 66% chance, “very likely” to mean greater than 90% chance & “virtually certain” to mean more than 99% chance. “Unlikely” means there is less than a 33% chance (but more than a 10% chance)

It's important to remember this because if a statement said "The plane is unlikely to crash”, that would mean there is between a 10% & 33% chance it WILL crash! Not a plane I’d be getting on for sure. This detail is often not understood or considered when media report on IPCC documents.

So that said what does the report say?

It is unequivocal that global heating is human influenced. Read that again, unequivocal… given what I have written above think how certain the IPCC is to use that word. Next time anyone denies the reality of climate change or calls the impact it will have into question remember the IPCC are unequivocal in a report where “very likely” means 90%+

The level of global heating is unprecedented over thousands of years. It is affecting droughts, flooding & storms now. The global temperature will keep increasing in all scenarios (ie whatever we do) until mid-century & will exceed 2 ^o C in the 21 ^st century unless deep reductions are made now

Ocean & land sinks (parts of the planet than absorb CO ₂ like forests) will become less effective if CO ₂ keeps increasing. Ice-sheet collapse, abrupt ocean circulation changes & compound extreme events cannot be ruled out

CO ₂ is the priority, with levels the highest in over 2 million years, but Methane also needs significant focus (which as an aside is not good news for Gas even with carbon capture)

Current temperature increase is 1.1 ^o C with 1.6 ^o C over land (if that doesn’t sound much the pre-industrial average global temperature was 13.7 ^o C, so 1.6 ^o C is 12%)

Heating has caused more rain, glacial / artic melting & hotter less oxygenated oceans

Sea levels have risen 0.2m & are now rising at 0.4cm / year (note it was 0.13 in 1935, 0.19 in 1988 & 0.37 in 2012 – so expect that rate to accelerate a lot)

If we just carry on at the historic rate of emissions we will likely see 4.4 ^o C (possibly 5.7 ^o C) by 2100 (SSP5 – 8.5)

If emissions broadly double by 2100 we will likely see 3.6 ^o C (possibly 4.6 ^o C, SP3 – 7.0)

If levels drop in 2 ^nd half of the century to net zero by 2100 likely to see 2.7 ^o C (possibly 3.5 ^o C)

Immediate reductions with net zero by 2075 & negative (!!) after that 1.8 ^o C (possibly 2.5 ^o C)

Net zero by 2050 with negative after that 1.6 ^o C (possibly 2.0 ^o C)

Even the low end assume negative emissions! That we’ll suck carbon out of the atmosphere once we hit net zero. A significant risk. To have any chance of keeping near 1.5 ^o C we need massive reductions in emissions now.

The next article covers “So What?” based on the 2nd IPCC Sixth Assessment Report, so look out for that

Keep KISSing Sustainability, Simon xx

EVs – Range per Grand

Fri, 04 Mar 2022 12:05:26 GMT

You get what you pay for – or do you?

I’m sure most of us assume that if we spend a bit more on something we get a better quality.

That’s certainly what many companies promote. The “Good, Better, Best” school of marketing. It is most obvious in everyday life if you go to the supermarket and look at own brand goods.

If you shop at Tesco, you’ll know Tesco Value has been replaced by ‘Exclusively at Tesco’, then you have normal Tesco own brand then ‘Tesco finest’.

If it’s Sainsbury’s you’ll see ‘basics’ then ‘by Sainsbury’s’ and then ‘Taste the Difference’.

Or maybe you go to discounters for some items and then Waitrose or M&S for certain ‘premium’ products.

So it wouldn’t be surprising if one assumed the same to be true with Electric Vehicles.

If you spend more you’d expect to get a vehicle which if more efficient and takes you further for your money. All that extra cost must go into high quality parts, better design, industry leading aerodynamics, reduced rolling resistance and so on… surely?

Well No. It appears not.

In fact having just analysed all the main EVs currently available on the UK market it appears that generally the more you spend the less miles per grand (i.e. miles per thousand pounds of purchase price) you actually get!

As you’d expect it’s not perfectly correlated.

(All the dots being on the trendline – whether a straight, exponential, power trend – would show that).

But I hope you’ll agree the trend certainly suggests the MORE you spend the LESS Miles/Grand you get.

The highest Miles/Grand (and so arguably best value EV on the market) achieves 9.93 miles per grand you spend.

The lowest 3.09.

But maybe the car with 3.09 costs a lot but has a massive range you ask? (I excluded people carriers to make it fair and like for like)

Well no again.

The range of the lowest scoring car on this metric is 197 miles and the top performer is 273 miles.

In fact the top 5 performers on Mile/Grand average 278 miles whereas the bottom 5 average 228.

All the ranges are WLTP and all the prices are the entry level spec for that battery size using the Manufacturer quoted OTR (On-the-road) price. And only one car that costs more than £50k scores above 7 (and that gets 7.26)

So what’s different? Well as is often the case in “Good, Better, Best” the brand.

Now it may well be that the quality of the lower performers on this metrics is so much better in your eyes that you’re prepared to pay lots of extra money (albeit the great research by Adrian Porter and his Which team might suggest otherwise when it comes to reliability at least but you can read that on LinkedIn or click on the picture on the right and make your own mind up), or the badge is all important to you.

But personally I wouldn’t want to spend three times as much on a Miles/Grand basis for the logo on the car.

I'm sure by now you want to know detail of which cars sit where, so below is a zoom in with labels of the relevant part of the graph, then right at the bottom of the post is the table of all the cars analysed.

If you've found this useful please subscribe to future articles or if I can help with anything you are working on in the ESG, Sustainability, Electric Vehicles space contact me via one of the links on the site or email me direct at simon@participation.co.uk

Keep KISSING Sustainability. Simon xx

How Urgent’s Urgent?

Tue, 01 Mar 2022 17:49:50 GMT

Surely we can wait until the pandemic is history?

There’s a lot going on right now.

There’s been a lot going on for the last couple of years and unfortunately it doesn’t seem as though that is going to change any time soon.

I wish it would, especially for those living through hell in Ukraine, but it doesn’t look like there will be a period of global calm any time soon.

So given that, can’t we just wait a bit before addressing the climate crisis? I mean after all emissions have been high for years, so another 5 or 10 won’t make much difference will it?

In short, “ YES – it will make a massive difference” and “ NO – we can’t wait”.

Even for KISSing Sustainability that’s a bit too short though, so a few more details.

Globally current heating is about 1.1 ^o C. It is crucial to keep heating below 1.5 ^o C (as per recent IPCC report which I’ll be publishing two articles on very shortly – so keep your eyes out!). T

he IPCC in 2020 stated that for a 67% chance of keeping heating at 1.5 ^o C then there was a ‘budget’ of 400 GT of CO ₂ remaining; and yes that’s a budget like the one at home or work. An amount to spend and once it’s gone it’s gone.

The Earth doesn’t do overdrafts…

So simply (and that’s the point of this site, so please don’t get too excited if you love forcings / aerosol impacts etc. I know it is complicated but we’re KISSing here OK :-) ) once the carbon budget runs out we will hit 1.5 ^o C shortly afterwards whatever we do from then on.

As the graph shows, either "Current Policies" added up or the "Current Rate of Change" mean this happens just before the end of 2030 (when the line crosses the X axis at 0 – no carbon left in the budget). So if we wait until 2030 (only 8 years away) – too late… by far…

But we had a pandemic and saw a huge drop in emissions.

It was over 5% in one year; surely if we could repeat that we’d be OK?

No . Even ignoring the fact emissions bounced straight back, a pandemic rate of reduction (5.2% each year) means we run out of budget in 2034, 7% per reduction per year we run out in 2037, 8% per year in 2040 and 9% in 2045.

So starting next year (2023) we need a 10% reduction each and every year to not hit 1.5 degrees (almost double the pandemic reduction).

And remember 1.5, 2.0 degrees etc. are not steps.

They are just points on a slope on the road to “arson of our only home” – the UN Secretary General’s words, not mine. Therefore every 0.001 of a degree makes a difference. So the more we can reduce and the quicker, the better.

We can’t delay . We must all do everything we can now to accelerate decarbonising.

And look out for another future article on why that means UK, US, EU etc. going much faster

We can all make a difference, but we have to act now, so keep KISSing Sustainability

Simon xx

People, Planet & Profit.

Tue, 01 Mar 2022 13:40:28 GMT

What's a subset of what?

So a quick reminder if, like me, maths at school happened a long time ago.

A subset is a group which is wholly part of another, larger group. So Cocker Spaniels are a subset of Dogs, which are a subset of Animals. It can’t be said that Dogs are a subset of Cocker Spaniels because there are Dogs which are different breeds.

So now that reminder is out of the way – People, Planet and Profit. What is a subset of what?

The traditional business / economics / capitalist viewpoint is that Planet is subset of People which is a subset of Profit. This is shown by the fact that we speak as if we (humans) exist within the economy and that the planet is a set of resources for us to use. The concepts of “Can we afford net zero?” or “Natural Resources" (as if there are any other kind…) show this, as do recent headlines about a group of MPs setting up the ‘Net Zero Scrutiny Group’ with the perspective that “the price of reaching net zero is too great” and a McKinsey report stating that “The transformation of the global economy needed to achieve net-zero emissions by 2050 would be universal and significant, requiring $9.2 trillion in average annual spending on assets, $3.5 trillion more than today… … equivalent to half of global corporate profits” – there are a series of issues with that report but let’s leave that for now. Looking after the planet is positioned as a factor of whether it delivers a good ROI.

We are all familiar with discussions and news articles about whether we can afford to lift people out of poverty (71% of the world spend <$10 a day, if you are reading this chances are you’re in the 1% who spend more than $100 a day).

We believe we (humans) are part of the economy.

However an easy way to check what is really a subset of what is a thought experiment. If all of Group X ceased to exist would all of its subset Group Y cease to exist? So if all Cocker Spaniels ceased to exist would all Dogs disappear? Clearly No.

If all Dogs ceased to exist would all Cocker Spaniels disappear? Yes.

So Cocker Spaniels is a sub-set of Dogs not vice-versa.

So for People, Planet and Profit.

If the economy (Profit) ceased to exist? Both Planet and People would survive.

If People ceased to exist, so would Profit but Planet would survive.

If Planet ceased to exist so would People and Profit.

Therefore People are a subset of Planet and Profit is a subset of People.

(Obvious when we consider money is a human construct).

So let’s ensure we always get our priorities in the right order.

Planet, People, Profit

Keep KISSing Sustainability. Simon xx.

Diversity? We’re all 99.5% the same…

Wed, 23 Feb 2022 12:07:32 GMT

But thank goodness we vary by up to 0.5%!

Genetically all humans are 99.5% the same (Ventner Institute) but those genes which do vary can have a huge impact on us and our appearance, preferences and characters. The exact impact of genes is very much still research in progress and views, as is normal in developing science, vary; but most agree that many aspects of ‘us’ are significantly impacted by our genetic makeup. This includes things like how risk adverse we are, how we react to stress and even things like IQ, personality and beliefs (Prof Tim Spector).

It is wonderful that we do vary. However much you might love your favourite breakfast cereal, quinoa salad lunch and sausage & mash for dinner you wouldn’t want to eat just one of them for every meal for the rest of your life or even the same three things every day. So the fact we look, act, think, feel and believe differently is a wonderful thing - it makes the world a glorious technicolour dreamcoat rather than a drab grey blanket.

But unfortunately far too many of us, indeed sub-consciously probably all of us, focus significantly more attention on these variations. Why do we worry so much about the 0.5%, rather than loving and connecting with the 99.5% similarity?

Diversity of thinking and opinions is proven to make teams operate better and businesses deliver improved returns, e.g. the McKinsey 2019 report which demonstrated top quartile gender diversity companies performed 25% better than bottom quartile and in ethnic diversity the difference was even greater at 36%. This makes sense when you consider that a wide range of opinions and experience make it both more likely that you’ll identify the optimum solution as well as meet you customers’ needs.

So the 0.5% difference is important, really important. But the moment we start not recruiting, promoting, considering the opinions of or communicating openly with another person because of their appearance, age, gender, sexuality, beliefs, disability, ethnicity, background or experience we are putting the 0.5% ahead of the 99.5%. That makes no sense, and given diversity improves outcomes it is worse than that - it actually harms us and our organisations.

Therefore we should all do three things:

1. Remember everyone we ever engage with is 99.5% the same as us and treat them as such

2. Consider what we can do to make sure our organisations not only value but encourage diversity

3. Challenge ourselves on where we see difference and miss the overwhelming similarity

Sustainability is all about people as well as planet (and profit in a business context), hope you’ve found this interesting and remember…

Keep Kissing Sustainability Simon xx

Carbon Intensity v GDP Growth...

Fri, 18 Feb 2022 13:41:17 GMT

Saving our way to Carbon Reduction?

Over recent years huge amounts of effort has been put in by government, companies and individuals to reduce the energy and carbon intensity of their activities. In other words they have tried to produce less carbon dioxide for each activity they undertake.

This might have been by reducing the actual amount of energy used, a good example would be the improvement in miles per gallon of cars over the years, or by reducing the amount of carbon dioxide emitted for a given amount of energy. A great case study of this second point has been the reduction in carbon intensity of the electricity grid in the UK, where moving away from coal power stations (62.9% of the generation in 1990 with only 21% zero carbon), through 2009 where coal was down to about 32% of generation with an average carbon intensity of around 480 gCO ₂ /kWh to a renewables focused generation capacity in 2020 where the year ended with only 2% coal and 47% zero carbon generation at an intensity of 185 gCO ₂ /kWh.

So we could all be forgiven for thinking that given this great work on reducing carbon intensity that total carbon emissions would be going down – right? Unfortunately no, wrong.

Why? Well intensity per £ of GDP (it is actually typically reported in dollars and purchase price parity in a given year, called kg per 2017 PPP $ of GDP – not very KISS) is indeed improving. As the graph shows in 1990 it was 0.40kg/$ and by 2018 this had fallen to 0.27kg/$, so great news. This represents an average 1.42% annual improvement increasing to 1.86% for the 2010’s.

But, and it’s a big but, GDP grows each year (unless there’s a global recession). And as you’ll see in the other graph the growth rate of GDP averages about 3% per year (it was actually 3.24% per year in the 2010’s). So whilst carbon intensity per dollar is going down by 1.86% the number of dollars is going up by 3.24%, meaning that total carbon emitted increases overall.

In fact in order just to stand still with average GDP growth rates as they have been carbon intensity reduction would have to increase by 75%.

So to actually start meaningfully reducing the amount of carbon emitted in line with all the various government commitments that have been made globally, carbon intensity reduction efforts will have to double or more if GDP growth stays the same.

Of course another alternative is to reduce GDP growth – but that would be a whole other article of its own as if you think carbon reduction is contentious the discussion about Growth v No Growth v Degrowth makes it look like a lovely chat over afternoon tea and cake between good friends.

So if we want business and economies to keep growing we have to massively increase our efforts to both use less energy and make sure the energy we do use is low (or ideally zero) carbon

Hope this was interesting. Would love your feedback and questions.

Use one of the contact buttons and drop me an email. Or add a comment if you’ve seen this on LinkedIn or elsewhere

Thanks and keep KISSing Sustainability

Simon xx

Why should you KISS sustainability?

Fri, 18 Feb 2022 12:37:25 GMT

Keep it Simple Stupid & KISS = Love

I was always taught then when explaining anything to "Keep it Simple Stupid". Or if you prefer "Keep it short and sweet".

Sustainability is a massive, wide, complex topic, so all too often articles and discussion descend into loads of detail and most people just switch off. "It all sounds so hard, I'll just ignore it and leave it to someone else". A completely understandable reaction if faced with thousands of acronyms, forcing, ESG, D&I and executive summaries that run to 32 pages (as the IPCC report does!).

So given most people can read about 200 words per minute and are happy to spend 2 or 3 minutes reading an article,

KISSing Sustainability is dedicated to covering a variety of sustainability topics in between 400 and 600 words.

In addition for me Kiss = Love. And I LOVE sustainability. I hope these short articles will help you to love it as well

So let's get going with KISSing Sustainability.

So why do I love (kiss) sustainability? First and foremost because I love my children. "Well so does everyone" I hear you say. Great! Then let's consider why they're the same.

My eldest son hit a milestone recently, he turned 18. The average age of a father in the UK (ONS 2020) is 33. So assuming he has a child when he’s that age that will be 2037.

So my first grandchild will be 18 in 2055 and my son will still only be 51.

And if my son works until he’s 68 he will retire in 2072 and my grandchild will still only be 35.

So what the world is like in 50 years from now matters, it really matters. Not just to far-off people in another land (although it does massively to them as well), but to those I love the most.

In the last 50 years (1971 to 2021) Carbon Dioxide concentrations have increased over 27% (90ppm from 326 to 416 if you want the detail). CO ₂ causes global heating. If the same absolute increase happens in the next 50 years we’ll hit 506ppm.

That will mean at least a three degree centigrade hotter planet on average (Yale Edu 2017).

But “surely everyone is reducing their CO ₂ emissions” you say….. well….. No

The rate of growth of CO ₂ concentration is actually still increasing and global CO ₂ emissions in 2021 were higher than any year in history (except 2018 & 2019 which they were broadly the same as) despite a global pandemic.

There’s lots of great targets, far fewer plans and even less action.

In a 3 ^o C hotter world (Economist) one quarter of the world’s population will experience extreme drought for at least one month each year, 35 ^o C wet-bulb temperatures (the temperature at which the human body can’t cool itself and so without air con you die) will spread from UAE and Pakistan today to include the Tropics, the Gulf, Mexico and South-East USA, Tens of millions of climate migrants will head for the “developed” world (aka Rich Countries like the UK) and rising sea levels and storm surges will severely threaten the lives of the 10% of the global population who live less than 10m above sea level, including cities like New York.

So because I love my children and want them and my grandchildren to live in a world without this chaos, I love sustainability and want us all to go further, faster.

Across climate change, biodiversity, just transition, social impact and how we govern all of this.

So if you love your children and grandchildren keep KISSing sustainability.

Simon xx

Car Allowance or Electric Company Car. Huge Savings!

Wed, 16 Feb 2022 12:38:31 GMT

Are you a 40% tax payer with a car allowance?

Some quick maths I did on 16 February 2022 for a contact who wanted to understand more about whether a car allowance or company electric car was better. So I thought a wider audience may well find this interesting. Figures are based on a leading personal lease website and AA for fuel costs.

(Caveat - I’m not a tax advisor or an accountant so this is just my personal view! Please do your own maths / speak to a financial expert). Hopefully having rolled out the largest pure electric fleet in the UK I do have some knowledge and credibility in this space however.

Car Allowance

£8k car allowance at 40% tax leaves £4,800 p.a. which is £400 per month

A BMW 320d SE Pro on 48 month lease and 10k miles p.a. Including maintenance is £545 per month plus £4,905 upfront, so £647 per month over 48 months

Insurance approx £40 per month

Fuel at 60 mpg (claimed by BMW but likely not in real world) would be 166 gallons for 10k miles or 755 litres which at £1.49 per litre is £1,125 per year or £94 per month

Therefore total cost of £781 per month

Which leaves you £381 nett out of pocket per month. At 40% tax rate you have to earn £635 per month to take home £381 or £7,620 per year. (For interest 320d OTR price is £38,700 with 0-60 in 6.8 secs)

Electric Company Car

On a Tesla Model 3 as a company car you would pay 2% Benefit in Kind for tax year 2022/23 (fixed for next 3 years).

Clearly lots of other EVs available which may be better suited to you than a Tesla but Tesla Model 3 v BMW320d is my go to simple comparison.

The OTR price is £42,990 therefore annual tax cost is 2% * 40% * 42,990 = £344 p.a. Or £29 per month.

Electricity is around 5p per mile (although can be as low as 1.5p per mile if you have a smart meter and charge overnight on something like Octopus Go). So fuel is £500 a year.

Therefore total cost to you is £844 (insurance covered by company if company car), or £1,406 gross.

Benefits

Therefore you end up with an effective £6,213 pay rise or £3,728 p.a. more take home and a Tesla Model 3 rather than a BMW - saving the plant, your pocket and keeping people (your children especially!) happy.

There will be significant emissions redeuctions (especially if you use a 100% renewable energy tariff) and clean air benefits as well.

(For interest Tesla Model 3 is £42,990 OTR with 0-60 in 5.8 seconds and WLTP range of 305 miles)

For the Employer

The cost to the company would be less as well (rather than them paying you £8k per annum the annual lease cost including upfront payment is £7,389) and basically no NI to pay. They would have to pay insurance but overall cost will be flat if not a saving and clearly they could choose cars other than Tesla which would likely save them money

Any company not running 100% electric company cars is costing themselves and their employees money.

Clearly there is also an option to run a salary sacrifice scheme instead if they don’t want the hassle of a company car fleet.

Moving to EVs could also be a way of increasing total package value without a cost to the company and increasing engagement.

Summary

Remember you don’t have to care about sustainability, you only have to care about it if you love your children and grandchildren!

Keep KISSing Sustainability. Simon xx