Get Smart About Business Travel Reduction

Business travel isn’t expected to rebound to pre-pandemic levels for a couple of years, according to the Global Business Travel Association, and while some of the reasons are all too familiar—lingering health concerns about COVID-19, rising travel costs, increased utilization of virtual meeting technologies—there’s a wild card whose impact on overall business travel trends remains unclear: sustainability.

To keep global warming to no more than 1.5 degrees Celsius, as called for in the Paris Agreement, global carbon emissions need to be reduced by 45 percent by 2030 and reach net zero by 2050, according to the United Nations. “As long as we travel as much as we did in the past, we will not be able to do that,” said Horst Bayer, founder of TravelHorst Sustainable Business Travel Consulting.

The vast majority of business travel emissions stem from air travel, Bayer noted, while other forms of transport, as well as hotels, also contribute greenhouse gases.

“We can use technology to reduce emissions, but we can’t do it fast enough,” Bayer said. “People really need to talk about avoidance, especially on air travel.”

_{Current Thinking}

Three in 10 companies expect sustainability alone to result in a 11 percent to 25 percent reduction in travel budgets by 2025, according to the April 2022 “Reshaping the Landscape: Corporate Travel in 2022 and Beyond” report from Deloitte’s Transportation, Hospitality & Services practice. “Sustainability, still a priority, will push against future corporate travel spend,” Deloitte researchers wrote.

The 2022 The State of Sustainability in the Global Business Travel Sector report from GBTA found that 60 percent of industry representatives surveyed support reducing the frequency of business travel in order to cut emissions. 

Things may look a little different when it comes to making sweeping travel reductions in an individual company. For example, energy-intensive companies, like manufacturing or mining firms, or tech companies running huge server farms, may put business travel emissions on the back burner, because it only represents a tiny fraction of the company’s overall footprint. On the other hand some firms record business travel as the single largest source of carbon emissions driving more immediate mitigation. 

Consulting companies are a case in point. PwC, for one, is targeting a 40 percent reduction in carbon emissions by 2022 through a combination of replacing travel with virtual meetings and encouraging the use of internal systems to book travel, where senior managers must justify the case for travel. The company said such internal scrutiny was a contributing factor in reducing the PwC’s emissions from non-client related air travel by 90 percent between 2007 and 2017. 

_{More Surgical than Sweeping}

Bayer implied PwC had the right idea, and added that specific scrutiny around individual trip emissions would be the next step. “We need reason codes to explain why travel is necessary,” he said. “In the approval process, if there are too many CO2 emissions, then you can’t travel.”

Such reductions, when they come, are likely to be more surgical than sweeping

“Climate change is a top priority for organizations worldwide,” said BCG global head of travel Gehan Colliander. The firm has been has been a certified carbon-neutral company since 2018 and in 2020 committed to reaching net zero climate impact by 2030. “However, this will not necessarily mean uniquely reducing the volume of business travel, but [rather a] transition to less carbon-intensive modes of travel [and identifying] additional emissions reductions levers, including the use of sustainable aviation fuels, purchasing independently verified carbon credits, etc.”

TARGET AIR TRAVEL – BCG has revamped its online travel booking tool to promote more sustainable decisions, including prioritizing train travel over flights on certain routes. Some European companies now prohibit air travel in favor of train travel for trips under 500 km (310 miles): the carbon footprint of a Eurostar train is just 6 grams of carbon dioxide equivalents per passenger kilometer, compared to 255 grams for a domestic airline flight, according to calculations from the UK Department for Business, Energy & Industrial Strategy. Colliander cited a number of “less intensive” options including electric and hybrid vehicles that have gotten more play in the BCG program.

INFLUENCE DECISION-MAKING– Microsoft uses a self-imposed carbon tax as a lever to discourage unnecessary business travel: Initially set at $15 per metric ton of carbon dioxide equivalent, the tax was raised to $100 as of July 2022. That’s significantly higher than trying to assess the true cost of carbon to a trip, which would add an inconsequential cost that could be easily ignored by travel managers, according to Scott Gillespie, founder and CEO of tClara. “You make the trip significantly more expensive by adding a carbon tax,” said Gillespie. “It can force managers to think more carefully about trips as their cost goes up.”

FEWER BUT LONGER TRIPS – One travel-reduction strategy that’s already being adopted by companies is eschewing one- or two-night business trips in favor of longer trips that build in multiple client visits, which helps reduce the intensity of business travel. “Defining a next-generation way of traveling is key to meeting sustainability goals, and the extended-stay approach supports achieving that,” said Colliander. 

Client data from hotel program solutions provider HRS shows accommodation stays are 40 percent longer after the pandemic than they were prior to it, an indication that companies recognize hotel stays are less emissions intensive than initiating another roundtrip. 

MEETINGS AT YOUR FINGERTIPS – Technology also plays a powerful role in both reducing corporate travel as part of a sustainability strategy and deciding how to meet travel-reduction goals. Zoom, Skype, Cisco Webex and other videoconferencing tools were essential in maintaining client and interoffice communications when Covid-19 shut down travel and offices, and experts expect virtual meetings to permanently replace at least some meetings that previously would have taken place face-to-face. Gillespie calls it “low-value” business trips, and Colliander agrees it’s an X factor that companies had a hard time addressing prior to the pandemic. “My estimate… is that 10 percent to 15 percent of total forecasted travel could be replaced by virtual solutions,” she said, with a few caveats that would apply to industry sector and company needs.  

_{Reduction Must Be Guided by Metrics}

Colliander said BCG has assessed all work elements that can remain virtual going forward, reintroducing travel only when it is “key to client value creation and our employee value proposition.” The key to making those decisions, however, is metrics.  

“To include business travel in sustainability strategy, one must understand the impact of travel on the organization’s footprint,” added Colliander. “Then the organization needs to align around redefining normal, forging new paths, and introducing the notion of ‘meaningful travel.’ This starts by implementing a process of measuring, reducing, and mitigating.”

Gillespie said travel managers can utilize tools like tClara’s TripTester to assess the justification for business trips: Sustainable travel choices are one of five metrics used by TripTester, which also scores meetings based on their importance, results, possible payback, and well-being impact on the traveler—with customized weighting for each decision-making vector.

Which brings up an interesting point: Sustainable travel can have a number of meanings, not limited to carbon emissions. As companies reconfigure travel programs with sustainability in mind, they might do well to understand the role of employee well-being—and how travel figures into the picture, said Bayer. Some employees may be itching to get back on the road after two-plus years of Covid-19 related restrictions, but it wasn’t that long ago that the hot topic of conversation was the impact of excessive business travel on quality of life. 

“It’s equally important to take care of people as profit,” said Bayer, who argues that the pillars of any corporate sustainability strategy should be both social and environmental.