Driving for Better Business case study - Arval
Arval manages 623,000 vehicles across 39 different countries around the world. Arval´s commitment to quality has been based on 30 years experience which enables them to provide guidance and support to some of the largest FTSE 100 companies as well as to smaller businesses with just one or two vehicles.
Arval is a people led company which combines the leadership, skills and attention to detail to deliver the best support to its customers and their drivers. Arval offers the complete Fleet Management solution and by combining years of expertise with the latest technology it continually seeks to improve its services to maximise fleet efficiency.
Arval considers the impact of its activities upon the environment, the workplace, the marketplace and the communities in which it operates and wherever possible seeks to ensure that its impact is a positive one. Arval has an extensive CO2 reduction programme in place, incorporating its own site facilities, recycling and company cars. Where it is has been impossible completely to eliminate its emissions, Arval has offset its carbon. To do this Arval uses CER (Certified Emission Reductions) trading certificates which are administered through projects under the KYOTO Protocol's Clean Development Mechanism.
Nature of Operation and Driving Activities
Arval provides company cars to eligible employees as part of the remuneration package and/or in order to undertake business journeys for which Arval has a Duty of Care.
Arval draws on over 30 years' experience and provides advice and makes recommendations around its customers specific funding and fleet management requirements. Arval recognises that every company has different needs depending on its operational circumstances, financial structure and tax status. It is supported by the financial backing of BNP Paribas – one of Europe’s largest and most successful banks, giving Arval access to competitive funding and additional financial expertise.
Arval’s significant buying power allows it to negotiate discounts and offer more competitive deals to its customers, and their consultative approach means Arval will always tailor the solution to suit its customers’ organisations.
Arval offers a wide range of alternative funding options to meet specific requirements. This includes:
- Contract Hire
- Contract Purchase
- Finance Lease/Lease Purchase
- Sale and Leaseback
- Personal Motoring schemes
Organisational Structure
Arval is distinctive in its road safety policy because it is driven by the CEO, ensuring the Executive board involvement.
Arval’s CEO takes a personal interest in his company’s approach to Corporate Social Responsibility and the safety of his employees when they drive for work. He chairs a Road Safety Committee which meets in order to encourage safe driving by all Arval company car drivers and proactively to encourage best practice to all Arval employees, customers and the wider community.
"For Arval, road safety and the environment are essential in our proactive approach to corporate social responsibility.
"Arval manages a fleet of over 150,000 vehicles with access to over one million drivers. We therefore take our road safety responsibility very seriously. We believe as fleet providers it´s important to encourage and promote safe driving with our customers, staff and our local community many of whom share our views on the importance of road safety.
"I strongly believe education and awareness are essential factors in improving road safety and this must be done over time to build impact and create real outcomes. "We recognised that the industry as a whole needed to address road safety and risk management. For our part, we saw there was work to do and set about addressing this. As a result, we have developed and improved in this area and are continuing to build our internal and external road safety initiatives.
"As a ´Business Champion´ within the ´Driving for Better Business´ programme we are continually developing our practices for our own fleet, and strive to raise awareness of the issues affecting UK roads, working together with our customers, employees and governing bodies. We want to continue sharing and implementing best practice as well as developing new initiatives to ensure that improving road safety remains at the top of the business agenda." Jean-Marc Torre, Chief Executive, Arval.
Recognition of this proactive approach came in an independent audit by the AA who gave Arval a ´low´ occupational road risk exposure rating.
Work related Road Safety Policy and Procedures
For Arval, road safety is an essential and specific element of its proactive approach to Corporate Social Responsibility. Arval recognizes that its commitment to road safety provides a benefit to the morale of its staff. Over 650 of its employees and a number of Arval customers, have been trained within its ‘Drive4Life’ road safety training programme. As a result of its initial success, this training was extended to all employees rather than just company car drivers. On the back of this, there has been widespread positive feedback from staff showing that they feel more valued because of the training. They percieve Arval as a “company that cares about them” and which goes beyond the minimum legal requirements in support of their welfare. Arval believes it is also important to encourage and promote safe driving with its customers and within the local community. Arval has taken its road safety message into local schools in the form of a road safety quiz.
Arval’s interface with its customers highlights the emphasis it gives to managing risks in preference to taking them. More importantly, Arval recognizes that to reduce this risk wherever possible, policies must be applied not only to company car drivers but also to those who drive their own cars on company business. Arval provides its customers, packages which reduce the complexity and time needed to ensure its customers meet their Duty of Care legal obligations. These are:
Arval has a complete range of risk solutions to ensure Duty of Care responsibilities are met. They cover:
• On line driver risk assessments.
• Driver Licence checking.
• Business Insurance checks ( also for non-company car drivers).
• MOT checks (also for non-company car drivers).
• Road risk seminars.
• Practical Driver training.
• Fleet Risk Assessment.
• Risk policy and documentation.
This product has been designed to offer customers a quick, easy and low-cost solution to meeting their minimum Duty of Care requirements and covers company car drivers as well as employees who drive their own car on business.
Work related Road Safety Guidance for drivers
Arval’s first priority is to ensure driver licence checks on the approximate 450 company car drivers, as well as casual car drivers and partners/ spouses are carried out. In total, Arval has carried out more than 1,000 checks with one employee leaving after failing to declare a conviction for driving without insurance. This exercise helped to building up a picture of the company’s drivers, one in six of whom had six or more points on their licence, mostly for speeding.
Second priority is to provide all those employees with six or more points on their licence with a one-to-one on the road driver training programme.
Finally, Arval issues a comprehensive Fleet Policy Document, which drivers sign for and acknowledge they have read. This is followed up with a Drivers’ Handbook containing practical ‘what to do’ and ‘how to do’ advice when certain incidents arise.
Specific examples of procedures
Arval’s Road Safey Committee has developed a “Watch List” for all drivers whose performance falls below the company’s standards. Being placed on the Watch List” in no way constitutes a disciplinary procedure in itself. Moreover, the purpose is to highlight to the driver the need for greater vigilance. The process identifies training requirements and addresses specific behavioural or attitudinal weaknesses. It agrees on a case by case basis on the corrective measures and improvement targets to be met over a specific time period by drivers in order to be removed from the “Watch List”.
Auditing and review
As part of Arval’s approach to CSR and to ensure the well being of its employees, Arval’s Road Safety Committee meets to encourage safe driving by all Arval company car drivers and proactively champions best practice to all Arval employees, customers and the wider community. The mechanism for supervising the performance of drivers is the Arval “Watch List”. Drivers whose performance falls below the company’s standards are placed on the list and their Line Managers are involved in developing with these individuals following identification of training needs. Arval also applies this process to any drivers hired in to the company.
Performance measures
Arval sets targets and monitors progress against the following key Performance Indicators as follows:
• Inicident ratio – as % of fleet to have an incident during the year.
• Miles per incident.
• Fault to Non-Fault ratio.
• Arval risk scores.
• Number of drivers on the “Watch List”.
• Driver performance measure (based on SMR and UFWT spend).
• One tactical measure based on the key issue for improvement during the period.
Accident reduction
Occupational road risk exposure at Arval is officially low, according to an independent audit by the AA in November 2007. But, that was not always the case. In late 2003, a similar independent audit by experts revealed that Arval had a ‘higher risk exposure’ and highlighted a number of areas that could further be improved upon.
Financial and other benefits
Managing a fleet of over 145,000 vehicles and with access to over 1.2 million drivers Arval take its road safety responsibility very seriously. For Arval the business case for adopting good practice is very clear. Working with Brake and Roadsafe, Arval implemented the ‘Drive4Life’ platform to educate and raise road safety awareness three years ago. As well as supporting compliance with duty of care requirements, this initiative has produced real tangible benefits. Arval’s third party claim costs have fallen by 40% over the three years and there has been a significant 50% reduction of in employee speeding offences.
As part of the improvement programme a number of wide-ranging safety initiatives were implemented internally and, crucially, taken out into the wider community, among its 38,000 customers and into schools. The company’s programme of initiatives has seen substantial financial savings in terms of crash and third party costs and improved employee morale with staff feeling valued.
In 2003/4 Arval’s crash ratio was about 40%, Bent metal costs alone amounted to almost £150,000 and third party claims £70,000. With the company self-insuring, these figures had an immediate impact on the company’s bottom line. An analysis of incidents revealed that low speed crashes at 28% of all incidents, were the most prevalent.
By the end of 2005, following the introduction of its work related road safety policy, Arval’s crash repair costs had dropped to below £100,000. However, although the incident ratio remained at 40%, the types of incidents which occurred were less serious and so costly to the company.
Arval ‘reconstructed’ elements of a Brake work related road safety course and during 2006 rolled it out to all company car drivers with attendance mandatory. The course consisted, among other things, of interactive discussions around the issues of attitude, beliefs and behaviour when on the road. For most Arval drivers, it was the first time they had really thought about their driving since they passed their test. The discussions about behaviour and what individual staff members thought about what was happening on the roads, have helped to change employee attitudes. Emotionally, the courses challenged them because they were hard-hitting. But for the first time, many Arval employees realised that driving was a life skill and that the issue which confronted them was not just about driving for work. The courses have since been followed up with a multi-media safety focused communications programme providing employees with advice on safe driving and updates on the law.
Once again the impact could be measured financially and by the end of 2006 Arval had sliced a further £25,000 off its crash repair bill taking it to 50% of the level it was in 2003/4. Arval completed its formal internal programme of putting itself on a best practice occupational road risk management footing in late 2006 with the introduction of DriveTech’s online risk assessments.
About 30% of drivers were identified as ‘high risk’ and they immediately underwent a one-day driver training course, which was subsequently extended to any business driver irrespective of their risk profile. About 380 company car drivers completed the programme. Additionally, about 100 ‘medium risk’ drivers attended a safety workshop.
The number of employees committing speed-related offences highlights one example of the progress made. In 2003, offences numbered 159. By 2007, the figure had dropped to 32, despite the increasing number of cameras on the roads. By mid-2007, Arval had completed its objectives and Ms Young said:
“We are having far fewer serious incidents. Because our policy and procedures encourage the reporting of all incidents, we are having the smallest paint chips reported. Last year’s incident rate was 38% but the cost of repair and third party claims is significantly reduced from the 2003/4 level.”
Lessons learned
The comprehensive programme of change has led to Arval, which now has about 350 company car drivers, on a ‘zero to hero’ journey. The deciding factor was the personal commitment of Chief Executive Jean-Marc Torre and Corporate Service Director Marc Biggs.
The risk assessment findings in 2003 were the catalyst for the appointment of a full-time fleet manager and the subsequent compilation of an action plan, and all the initiatives that have gained “Champion” status for Arval
Current and future developments
In 2007, Arval launched ‘Drive4Life’ - a platform that has enabled it to take the road safety message to all its 1,000 employees at offices in Swindon and Birmingham. To-date more than 650 employees have voluntarily attended classroom interactive forums; tyre safety checks have been extended from drivers of company cars to privately-owned cars; and vehicle maintenance workshops are available to Arval employees.
To coincide with last autumn’s Road Safety Week, Arval highlighted the potentially fatal results of common errors behind the wheel, with a dramatic re-enactment of a road traffic crash. The company has also taken the road safety message into schools in Swindon with a road safety quiz, which is set to become an annual event.
Arval is in the process of forming its own road safety forum involving customers and road safety partners, such as RoadSafe, as well as extending advice to other users such as motorcyclists and cyclists.
“We are establishing the forum because we want to share best practice. We have gone through a lot in bringing the business to this point but the journey is not complete and we still have much to learn. As we continue to put initiatives in place and further reduce the risk exposure of our staff and others in the wider community, we want to involve as many people as possible.”
Additional information
Arval has recently decided that all new company cars supplied from 01 June 2008 must have ESC fitted as standard or, if not, it will be fitted as an additional extra. Arval recognises the significance of this life-saving technology.
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