Value Creation at leaseplan
As the world’s leading Car-as-a-Service company, we create value for each of our key stakeholders. We provide integrated mobility solutions for our diverse customer base, enabling them to fulfil their goals and ambitions. Our employees benefit from the growth and development they experience in their work for LeasePlan. We create value for society with the introduction of newer, cleaner vehicles in our fleet and by helping companies and consumers decrease their CO2 footprint. Our business also has unintended negative effects on society, as many of the vehicles in our fleet produce CO2 emissions and contribute to air pollution. We are working to minimise these environmental costs by transforming our business into a net zero tailpipe-emission company by 2030. Finally, investors and lenders receive financial benefits through their investments in us.
Our 8,000 employees bring deeply rooted Car-as-a-Service experience and digital knowledge that differentiates us in our markets. They drive our success and maintain our culture of service.
Social and relationship capital
We have a loyal customer base of Corporates, SMEs, Private individuals and Mobility providers who look to us to provide solutions that meet their needs. We also work closely with OEMs and suppliers to deliver better mobility propositions, and with policymakers and NGOs to promote sustainability.
Global bond investors and banks provide us with funding and capital in the form of secured and unsecured bonds and bank facilities. Retail depositors entrust LeasePlan Bank with their savings in the form of online savings accounts in the Netherlands and Germany. A consortium of responsible, long-term investors holds our equity.
Our most important manufactured asset is our serviced fleet of 1.9 million vehicles. These comprise a diverse mix of models, brands and drivetrains in more than 30 countries worldwide. In order to fuel this fleet, we purchase substantial amounts of fossil fuels and electricity.
We have 55 years of experience in the Car-as-a-Service market. We apply our institutional memory, leading fleet management capabilities, scale and international presence, and investments in digital and customer journeys to be a leading player in each of our markets.
Value creation process
Our mission is to provide What’s next in sustainable mobility – so our customers can focus on What’s next for them.
- Digital: Implementing Digital LeasePlan, delivering digital services at digital cost levels
- Car-as-a-Service: Growing our subscription-based mobility service
- CarNext.com: Growing our pan-European platform for high-quality used cars
- Purchasing and financing services
- Used car sales
- Fleet management, insurance and RMT
- Operational excellence: Leveraging our global scale and best practices
- Sustainability: Achieving net zero tailpipe emissions in our funded fleet by 2030
- Talent development: Developing skills and competencies for the digital era
Value creation process
- Empowered employees who take responsibility for their careers and their own development
- Re-skilled workforce capable of meeting the challenges of changing markets
- Highly effective leadership culture
Social and relationship capital
- Sustainable and safe mobility for our customers
- Strong partnerships with our network of 70,000 independent service providers
- Impact on the transition to zero-emission mobility through partnerships with global NGOs
- Gross profit of EUR 1.6 billion
- Retail deposits of EUR 7.7bn at year-end 2019
- Securitised notes (incl warehouse) of 2.5 billion at year-end 2019
- Bank lines (excl. warehouse) c.EUR 3.4bn
- Strong liquidity position and capital ratios
- Investment grade ratings (S&P: BBB-, Fitch: BBB+, Moody’s: Baa1)
- Highly diversified modern funded fleet
- Growing EV fleet 7.4% of new orders
- Sharply declining orders for diesel passenger vehicles
- Continued digital transformation with improved services and lower costs
- Enhanced development of EV expertise to support customers in their transitions to sustainable mobility
- Smart data enabling an array of extra services for customers and improved pricing capabilities
Outcomes by stakeholder
- Full package EV solutions in 12 countries
- Digital Car-a-as-Service tools for fleet managers
and drivers (customer onboarding tool, MyFleet solution, MyLeasePlan driver self-service app)
- Active Prevention programme for improved safety
- CarNext.com B2B and B2C online solutions
- Competitive remuneration and benefits for our 8,000 employees
- Enhanced skills and capabilities (LinkedIn Learning training 3,000 hours in six months)
- Safe and healthy work environment
- Job satisfaction (employee engagement score of 79.5%)
- Diverse and non-discriminatory workplace (27% of females in top three layers)
- Tax revenues of EUR 112 million
- 90% of suppliers covered by Supplier Code of Conduct
- Joined WEF’s Global Battery Alliance to contribute to production of sustainable batteries
- Helping to build EV infrastructure
- First Sustainability Report published in 2019
- EcoVadis score is 56 pts in 2019 compared to 50 pts in 2018
- Lower air pollution, with growing EV fleet
- Lower CO2 emissions through growing EV fleet
- Lower CO2 emissions through increased use of renewable energy in LP buildings
- Net result of EUR 403 million
- Underlying net result of EUR 557 million
- Serviced fleet growth of 2.4%
- EUR 57 million in additional strategic investments in CarNext.com operations
- CarNext.com B2C retail sales up 50% to 39,600
- Return on equity of 15.2%*
* RoE is based on equity excluding the Additional Tier1 instrument. Including the AT1, RoE is 14.6%.
We want to build a future-proof company that balances the needs of people, planet and profit. Within this context, our sustainability strategy is based on three priority areas:
- Shaping the future of low-emission mobility
- Strengthening our contribution to societal wellbeing
- Reducing our own environmental impact
Each pillar of our strategy is supported by a dedicated workstream, which develops action plans, defines KPIs and monitors progress based on LeasePlan’s internal criteria. This process is underpinned by a clear governance structure, consistent reporting and an open dialogue with stakeholders to determine the topics that are most material to our business.
To read our full Sustainability Report, please visit www.leaseplan.com/corporate
Shaping the future of low-emission mobility
We are committed to taking a leadership role in the transition from internal combustion engines to alternative powertrains in support of the Paris Agreement and climate- related Sustainable Development Goals. This means promoting cleaner, low-emission vehicles and the infrastructure required to make them a viable option for our customers and employees.
Net zero tailpipe emissions from funded fleet by 2030
LeasePlan has set itself the ambitious goal of achieving net zero tailpipe emissions from its total fleet by 2030.
To drive the transition to zero emissions, we are targeting customers in ‘EV-ready’ countries with EV value propositions, including ‘full package’ solutions with charging options. Today, LeasePlan provides our ‘full package’ EV solution to customers in 12 countries, and has established the processes and IT platforms necessary to facilitate EV fleet management. Key features of our EV proposition include:
- Partnerships with automakers to offer EVs at attractive rates
- Products and services for workplace charging, home charging, charging in public areas and destination charging
- Consultancy services for business case impact, vehicle selection and transition planning
- A 24/7 helpdesk and answers to driver FAQs on EVs and charging
- Tutorials about all aspects of EV driving
- New digital products and services to support EV driving
LeasePlan has also launched a series of educational initiatives, including client events, visits and pilot programmes, and a wide range of published information about EVs through online and offline channels.
Transitioning employee fleet to Battery Electric Vehicles by 2021
We are committed to fully transitioning our own employee fleet to Battery Electric Vehicles (BEVs).
However, given the unprecedented global supply chain issues that we are now seeing with many car manufactures and dealerships, we may be unable to purchase new EVs in sufficient numbers. In addition, our latest assessments of EV readiness in Europe show that, while the growth in public charging points continues apace, a significant number of countries are unlikely to have the infrastructure, fiscal incentives or model availability in place to support us reaching this goal by 2021.
Based on our current estimates, we believe that between 50% and 60% of our total employee fleet will be BEVs by our original target date of 2021. Current industry forecasts suggest that by 2025 the availability of charging infrastructure and models in all price categories will be far more widespread.
Since 2017, LeasePlan has offset all emissions from its own employee fleet to net zero via the Land Life Company’s reforestation programme. This enables us to combat climate change as we make progress on our longer term transition goals.
Advocating change in our industry
Tackling climate- and air-quality related automotive emissions requires a cross-sector effort from government, NGOs and the private sector, acting together to address challenges in several areas. LeasePlan is therefore committed to using its scale, expertise and broad geographic presence to be at the heart of the discussion on the transition to zero emission mobility and to work with key stakeholder groups — automakers, policymakers, consumers and mobility companies — to advocate the implementation of long-term policies and incentives that support the adoption of low-emission vehicles.
Our global advocacy programmes and initiatives include:
- World Economic Forum (WEF)
- World Business Council for Sustainable Development
Driving sustainability through our business
Netherlands walks the talk in EV transition
Netherlands has made rapid progress in transitioning its entire employee fleet to electric vehicles.
As the country’s largest Car-as-a-Service company, LeasePlan Netherlands recognises that to help lead the transition to electric driving, it must first ‘walk the talk’ by transitioning its own employee fleet. By year end 2019, LeasePlan Netherlands had already switched more than 95% of its employee fleet of 205 vehicles to BEVs, which is well ahead of LeasePlan’s 2021 target.
Along the way, the team has overcome a number of challenges. The task involved rapidly phasing out orders for non-electric vehicles, making changes to its mobility policy, and ensuring that employees had access to green electricity to charge their Evs. The team also needed to take decisive action to extend the number of charging stations at offices, and install home chargers wherever possible.
LeasePlan Netherlands went to great lengths to make sure employees would be happy with their new vehicles, which meant adjusting categories and terms to offer the widest selection of EV models. Initially, not all employees were eager to make the transition, because of range anxiety and attachment to their older models. To overcome this, each person was consulted on a case-by-case basis so that the right EVs could be matched to their individual circumstances and needs.
“Now, without exception, if you talk to our employees, they are proud to drive an EV,” says Erik Henstra, Managing Director of LeasePlan Netherlands. “EVs are easy to get used to and it’s a pleasant driving experience. By overcoming hurdles to make this transition, we’ve ended up with satisfied employees who are pleased to be part of a company that’s working effectively to tackle climate change.”
LeasePlan Netherlands is now advising customers about making their own transition to EVs, and also plans to bring leased e-bikes to the Dutch market in 2020.
“Without exception, if you talk to our employees, they are proud to drive an EV.”
Strengthening our contribution to societal wellbeing
We are committed to strengthening our contribution to societal wellbeing. Within this context, we focus on the following objectives:
- 1. Making sure we offer our employees a safe, healthy and non-discriminatory environment where they can develop their talents
- 2. Helping improve driver safety in customer and employee fleets
- 3. Ensuring our suppliers and customers act in accordance with our high ethical standards and all applicable laws
- 4. Engaging with the communities in which we operate and having a positive impact
Values and ethics
As one of the world’s largest Car-as-a-Service companies and an employer of around 8,000 people, we have a responsibility to apply high standards in our personal conduct and day-to-day business decisions. We therefore work to ensure our values and ethics are embedded in our behaviour, processes and actions. Our values and ethics are defined by the LeasePlan Code of Conduct (www.leaseplan.com/corporate/site-services/code-of-conduct), which also explains the way we deal with each other, customers, suppliers, society at large, government authorities, regulators, investors and business partners. The core values we uphold are Commitment, Expertise, Passion and Respect, which we apply to everything we do.
We recognise that human rights are fundamental and universal. We aim to respect human rights, in the workplace and in our supply chain, as described in the United Nations’ Universal Declaration of Human Rights and the principles of the International Labour Organisation. We therefore avoid being complicit in human rights abuses of any kind, and condemn the use of forced labour, compulsory labour and child labour. Respect for human rights is also a key feature of both the LeasePlan and Supplier Code of Conduct (www.leaseplan.com/corporate/news-and-media/download-centre). Respect for human rights is also embedded in our Code of Conduct which all employees are required to review and confirm annually. Furthermore, a whistleblower mechanism is in place for all employees.
At LeasePlan, we believe ‘you cannot grow a business; you can only grow people who can grow the business'. We drive success by giving our people opportunities to develop their potential and creating a tolerant and inclusive environment in which they can thrive.
The LeasePlan People Strategy helps us achieve this by focusing on the following four pillars:
1. Strengthen our leadership: developing a highly effective leadership culture, with a pipeline of great people to meet our future needs.
2. Personal growth: building the digital skills and competencies we will need across the organisation in the years ahead.
3. Effective compensation and benefits: creating a high degree of ownership and responsibility by recognising and rewarding excellent performance.
4. Talent management: helping our people reach their full potential by offering them the opportunities and support to reach the next level in their careers.
5. Diversity and Engagement: building a diverse, highly engaged workforce that supports the delivery of LeasePlan’s strategy.
Our global employee base totalled 8,051 at 31 December 2019. Of this number, approximately 52% were male and 48% were female. For the top three layers the gender distribution is approximately 70% and 30% for men and women respectively. While LeasePlan has a relatively strong balance of gender diversity, we recognise there is still considerable room for us to improve. We are determined to take strong steps to improve our diversity and inclusion in the years ahead and have developed a comprehensive strategy that will help us achieve this (see Diversity & inclusion section below).
LeasePlan has a culture of service and care towards our customers and each other, which has endured for over 55 years. These same values help us tackle the challenges and opportunities of the digital age. Employee engagement has therefore been a constant and important focus throughout our transformation process.
In June 2019, we commissioned a third party to conduct our annual Global Engagement and Integrity Survey. Our overall global ‘engagement plus’ score, which is determined through a weighted average of 50 questions, was up to 79.5%, compared to 66% in 2018. We believe this increase is the result of a profound and clear action plan and follow-up by all local coordinators and the joint effort HR and leadership teams. More LeasePlan employees also took the time to share their views in the year, with the response rate increasing by seven percentage points to 87% in the year.
Beyond the overall ‘engagement plus’ figure, other areas showed improvement:
- Leader performance (77%)
- Support our organisational goals (86.9%)
- Feel their opinions matter (71.7%)
- Feel goals are clear (78.4%)
- Feel they are a good fit for the organisation (83.1%)
In addition, we identified areas that require more attention:
- Opportunities to grow and develop professionally (57.1%)
- Actions taken quickly after decisions have been made (47.4%)
- Feel positive about direct managers (82.3%)
Following the survey’s publication, managers across LeasePlan have arranged meetings with their teams to discuss the results, identify opportunities for improving engagement and developing an action plan.
Diversity & inclusion
We aim to build a non-discriminatory culture in which everyone can be themselves and where everyone has an equal chance to make their journey count, regardless of race, nationality, gender, age or sexual orientation. We also believe that a diverse workforce, including one that is gender diverse, contributes to a well-balanced decision-making process and the proper functioning of our organisation. Fresh ideas, different perspectives and valuable experiences help us make better decisions and meet our customers’ demand for innovative services.
Our new strategy for Diversity & Inclusion (D&I) aims to facilitate the recruitment of employees from diverse backgrounds, encourage feedback training for non-biased behaviour, and promote communication. The strategy is based on three pillars, with defined actions and targets:
In March 2019, we joined the Talent to the Top (‘Talent naar de Top’) initiative, a non-profit foundation that provides advice and training on gender and cultural diversity, including cross-company mentoring. By signing their Charter, we have joined a network of companies and committed to actively working to reach D&I targets. These targets were set in collaboration with Talent to the Top. Furthermore, our progress will be monitored and reported on an annual basis by the Talent to the Top organisation.
Performance management and ongoing learning and development
We have established a new global performance management process based on clear ownership and transparency. This process, which is entirely cloud-based, enables us to have ongoing and meaningful discussions with our employees, and to better align their goals with those of our overall business.
Using our performance management system as a foundation, we are also helping our people develop the skills and competencies they need to thrive in today’s highly competitive and disruptive digital environment. This includes decisive steps to accelerate re-skilling and upskilling across our organisation globally – for example, through LinkedIn Learning, which we introduced in 2019 and offers access to 13,000 online courses. In its first six months, over 1,000 employees spent over 3,000 hours using this tool. At the same time, we continue to expand our ‘Leadership Journeys’ programme, which has now reached around 2,000 employees worldwide. Leadership Journeys help our people gain a thorough understanding of strengths and priorities and support their alignment with LeasePlan’s priorities.
In the year, we continued to implement our People Strategy and achieved the following highlights:
- LeasePlan’s Talent Management programme enables us to have the right people in place in the right positions at the right time. We use the Korn Ferry methodology to identify our talent and develop them for future opportunities. In 2019 we have completed our first Talent Management Cycle in Workday. This enables us to build Talent Management data dashboards, including collective capability on strengths and risks, talent pipeline requirements, etc.
Global people platform including Learning
- In 2019, LeasePlan made investments in its Workday-based Global People Platform, adding modules such as Recruitment, Absence, Compensation and Learning. In addition, we also offer LinkedIn Learning, which provides employees with access to more than 13,000 high- quality online courses, including certified courses taught by industry experts in a wide variety of relevant areas.
- LeasePlan’s ‘Leadership journeys’ offers participants an environment where they can reflect on who they are and what events have shaped them, enabling them to grow as people and leaders. All LeasePlan countries have now organised their own leadership journeys. In 2019, we piloted a new element of the Leadership journey programme that focuses on the capabilities required for successful leadership in the digital era.
The United Nation’s 2030 Agenda for Sustainable Development has set a target (goal 3.6) to halve the global number of deaths and injuries from road traffic accidents. A further target (goal 11.2) includes a focus on safe, sustainable transport systems to improve road safety, with special attention on children and vulnerable groups.
Our aim is to contribute to these goals by helping to make our customer and employee fleets among the safest in the industry. To achieve this, we are monitoring the portion of vehicle accidents that result in bodily injuries to our drivers or to third parties. In 2019, the Bodily Injury Rate (BIR) was 1% based on data from 17 European countries. In 2020, we intend to capture this data from at least 20 countries.
All vehicle accidents, from minor scratches all the way to severe damage, are reported as ‘damage events’ to LeasePlan from its insured fleet. Of the global serviced fleet, 47.5% is insured via LeasePlan. The portion of insured vehicles that report a ‘damage event’ is expressed as the Accident Frequency Rate (AFR). In 2019, the AFR averaged 69% for the customer fleet.
One of the most effective ways in which LeasePlan helps to improve safety among its customer and employee fleets is by implementing a dedicated programme called ‘Active Prevention’ that helps improve driver behaviour and reduce AFR. This programme is part of our 3D Coverage insurance proposition, which is available across all countries, and is based on a five-step approach that is tailored to the circumstances of each customer.
A LeasePlan customer pilot study demonstrated that accident frequency rates fell on average by 42% between 2015-2017 following the implementation of the Active Prevention programme. Active Prevention is currently being promoted among large international customers.
A significant portion of car accidents are linked to phone use behind the wheel. A number of LeasePlan countries are therefore launching driver safety campaigns among customers and employees to discourage drivers from using their mobile phones while driving.
In-vehicle telematics enables the analysis of certain data relating to mileage, fuel use and maintenance. This can help reduce fuel use and manage maintenance costs in our fleet more efficiently. In 2019, LeasePlan had over 204,600 vehicles equipped with telematic devices.
Suppliers and customers
Conducting our business according to high ethical standards is vital to retaining the trust placed in us by our stakeholders. We expect our suppliers to reflect the values and behaviours that apply within our organisation by conducting their own business activities in an ethical manner. Within this context, the LeasePlan Supplier Code of Conduct (SCoC) establishes the minimum standards we expect our suppliers to adhere to when working with, for, or on behalf of LeasePlan. Our Supplier Code of Conduct is focused on the following specific areas:
- Honesty and trust
- Respect for the law
- Human rights
- Responsibility to employees
- Environmental sustainability
- Confidentiality and intellectual property
- Privacy of individuals and data protection
- Fair competition
- Conflicts of interest
- Bribery prevention
The Supplier Code of Conduct is embedded in our contractual agreements, covering currently 90% of our spend. We are targeting a 100% implementation over time.
Supplier screening and monitoring
In addition to the Supplier Code of Conduct, we aim to establish ongoing dialogues with our key suppliers in order to help drive our sustainability agenda and identify areas of collaboration. In late 2019, we began screening the top 20 suppliers on Environmental, Social Governance (ESG) performance to gain deeper insights into their activities, assess their level of ESG maturity and shape our next steps accordingly. Furthermore, we asked suppliers to share their sustainability scorecard and provide information on their environmental, labour, ethics and sustainable procurement activities. This will allow for an ongoing dialogue on topics relevant to the industry. The process and results of this initial screening will be reviewed in Q1 2020.
Customer and driver satisfaction is one of our key objectives and as such is a main focus for all LeasePlan employees. Satisfaction is measured through a variety of tools, including the Net Promoter Score. For drivers, we have also have regular surveys in place that allow us to understand how service is delivered on an individual basis. We also analyse satisfaction trends to get a more in-depth view of company performance and areas of improvement. In addition, we recently invested in our ability to monitor and respond to feedback on social media. To further support our customer satisfaction levels, in 2019 we established a new Voice of the Customer programme with the target of increasing response levels from customers and drivers. All customer feedback is aggregated at a global level, enabling us to establish annual improvement plans across the company.
Every year, LeasePlan and its employees across 32 countries actively support a wide range of local social and community initiatives, including volunteering, staff donations and fundraisings in support of multiple social causes. These range from teaching children how to manage money, to supporting cancer research and children in need. These activities are normally carried out in partnership with established charities.
Reducing our own environmental impact
We understand that the resources we use across our operations have an impact on the environment. We are therefore developing policies, plans and targets to reduce our environmental impact.
We have developed clear guidelines to help us standardise our sustainability activities across the company.
- New buildings & office refurbishment: Make sustainability part of the decision-making criteria.
- Energy supply: Record usage and select renewable alternatives.
- Appliances: Choose more energy-efficient options, and ensure their proper use and disposal.
- Lighting: Replace with LED or T5 tubes and ensure lights are only used when needed.Lighting: Replace
- Heating & air conditioning: Select more energy efficient options and take greater care in their use.
- Waste: Reduce the use of disposable products and recycle and reuse waste where possible.
- Procuring products & services: Make sustainability part of the decision making process.
We have also begun to globally assess our energy consumption with a view to establishing accurate baseline metrics and transitioning to suppliers of renewable energy wherever possible.
We have established the following group-wide targets:
- Reduce average energy usage in LP buildings by 10% between 2019 and 2022 compared to 2018 levels
- Increase the share of renewable energy used by 10% between 2019 and 2022 compared to 2018 levels
To achieve these targets, we have begun monitoring and assessing our electricity use in kwh per annum relative to our building space in square metres, and the overall share of energy consumption that comes from renewable sources. We are still in the process of completing this picture and aim to have full insight for our next CDP submission in 2020.