BTN Group’s 2023 Sustainable Travel Program Finalist
CASE STUDY: BANK OF AMERICA
Sustainable aviation fuel in recent years has emerged as a key tentpole of the aviation industry’s efforts to reduce the carbon footprint of air travel. Major airlines around the world have committed millions of dollars to the purchase and production of the fuel, which can be made from a number of natural and synthetic sources including plants, other biomasses and waste oil and fats. The International Air Transport Association believes SAF use could contribute about 65 percent of the emissions reduction necessary for the airline industry to reach net zero by 2050, and the European Union is moving toward a new mandate that carriers increase their use of SAF for flights departing from EU airports (see story, page 5).
But the drive to increase SAF use has expanded past airlines and governments to some consumers, including some of the largest corporate buyers of air travel, who are looking to SAF to help reduce their own carbon footprints. Among them is Bank of America, which in 2022 announced it would support the production and use of one billion gallons of SAF by 2023, calling itself the “first global financial institution to set a SAF usage and capital deployment goal.”
The company committed to “the mobilization of $2 billion in sustainable finance for the production of SAF and other low-carbon aviation solutions,” and said it would commit to utilizing SAF for at least 20 percent of its jet fuel use, including all its corporate jet fuel.
To help reach that goal for its commercial air travel, Bank of America has partnered with American Airlines to support the purchase of one million gallons of SAF from 2021 through 2023, a deal that the bank said is “the largest publicly announced SAF agreement by volume between an airline and a corporate customer for reducing emissions for employee travel.”
Bank of America also has signed a 10-year deal with SAF supplier SkyNRG to support the production of 1.2 million gallons of SAF per year beginning in 2025, and also participates in United Airlines’ Eco-Skies Alliance program, launched in 2021, which allows corporate clients to collectively contribute to the purchase of SAF.
The SAF commitments are part of a broader sustainability initiative for Bank of America, which counts itself as a member of several international corporate sustainability purchasing and development initiatives.
Travel’s Downstream Impact
Bank of America’s embrace of SAF as its carbon-reduction weapon of choice is a result of a top-down decision to look for high-impact sustainability approaches, said head of global corporate and executive travel Beth Sullivan.
Sullivan said the push for SAF originated with Bank of America CEO Brian Moynihan, whom she called “super involved and well-versed” in the issue.
“It really came from the top down,” Sullivan said. “The good news was that I didn’t have to build a business case. But it was the right thing to do because when you look at travel, if you’re going to make a dent in anything, the biggest chunk is going to be air. Air is always the biggest chunk of any travel budget, and SAF is going to make the most difference in terms of not producing the kind of CO2 that we have traditionally produced.”
For now, there haven’t been many downstream effects on Bank of America business travelers from the SAF deals. The company does not yet include the SAF purchased for American Airlines flights in its own emissions-reduction calculations, nor is the acquired SAF dedicated to a specific airport or flights on a particular city pair.
“We’re basically doing it so they can start injecting [SAF] into their system,” Sullivan said of American. “We’re helping them pay the premium for [what is] obviously more expensive fuel.”
Bank of America is testing book-and-claim solutions that would ensure the emissions reductions generated by the company’s acquired SAF would be claimed only once.
The company is exploring the possibility of assessing an internal fee on commercial air tickets to help pay for SAF acquisition, Sullivan said. While current Bank of America SAF is centrally purchased, such a premium on individual air tickets, if implemented, could help spread awareness of the environmental effects of business travel, she said.
Influence and Persuasion
With travel volume ramping up as Covid-19 shutdowns recede further in the rear-view mirror, Bank of America has not notably tightened its travel policy, nor has it particularly discouraged air travel, Sullivan said. Yes, the company would like travelers to consider virtual meetings as a replacement for in-person and it preferences rail over air when practical. That said, the company sees value in resuming business travel for in-person interaction.
“We are an in-office culture. We think people work best when they’re together, and travel lends itself to that as well,” Sullivan said. “Regarding business class, we’ve not changed our travel policy on that, because we are trying to also balance health and wellness, and if someone shows up for a meeting after a red-eye and can’t function, that’s not great either.”
As such, mandates aren’t going to be part of the company’s quiver in leading travelers to more sustainable options, which means persuasion will lead the way. Sullivan said she plans to introduce more sustainability data to travelers to help make that case.
“We have not taken those drastic means [in tightening policy], and I know some companies have,” Sullivan said. “But for us, I think it’s going to be more about influencing.” She said she’d like to establish dashboards that would allow business units to analyze their emissions-reduction efforts over time.
Supplier Strategy
Beyond the incorporation of SAF, Bank of America is considering would-be suppliers’ sustainability initiatives in considering whether to work with them, to a point, Sullivan said.
“Certainly, we look at suppliers from a partnership perspective,” Sullivan said. “When you think about a hotel, what’s the chain’s commitment to sustainability? Some do it better than others. Some airlines do it better than others. There are different levels of commitment. We certainly want to partner with those who share our culture, so that every time I stay at a hotel, I know they have a commitment to sustainability. I know I’m not going to get a plastic water bottle because they’ve got water bottles in the room that I can fill up.”
Still, formal evaluation of hotels in a request-for-proposals process still mostly focuses on location and proximity, but sustainability issues are taking a larger role in in-person meeting site selection, Sullivan said. “When we’re going out to bid for events, we’re interested in what they can do to help cut emissions on meetings, and it’s becoming a qualifier for us,” she said. “We’re really focused on how to quantify our emissions from meetings.”
Sullivan said she’s seen a willingness on the part of her company’s travel suppliers to share information on sustainability initiatives, and she’s also seen Bank of America’s business travelers open to exploring greener options.
“I think because we haven’t forced anything, we haven’t heard anything negative from them. They all know that we as a company have a huge commitment to all things sustainable, and it is just part of our culture,” Sullivan said. “As we start rolling out other initiatives, it’ll be a nice connection for them. We can show them all the things that we’re doing that will really help accelerate the decarbonization of travel.”
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