Planting the Seeds for Green Travel

After two years of virtual meetings and webinars, corporate road warriors are making a comeback but some aspects of business travel strategy, policy and execution are changing.

A study released by the Global Business Travel Association in June found that sustainability has come into sharp focus for corporate travel stakeholders, with almost nine in 10 respondents reporting that sustainability is a priority for their company. But awareness doesn’t necessarily mean action. 

GBTA collectively surveyed 762 global industry professionals, comprising both corporate travel managers and suppliers, between January and March this year and found that despite an overarching consensus of 88 percent on the need to address climate change, only 56 percent of companies are reporting sustainable elements of travel and a mere 42 percent are integrating sustainability into travel policies. Among travel buyers, that figure was only 38 percent.

“Sustainability is a journey,” said Delphine Millot, GBTA’s senior vice president of sustainability, a newly created role within the association. 

But it’s a journey that’s running out of time in an epic way.

In an opinion piece penned last year in BTN on the occasion of the Intergovernmental Panel on Climate Change releasing its 2021 report, Thrust Carbon co-founder Kit Brennan put it this way:

The world has been talking of net-zero by 2050 to limit global warming to under 1.5C. Whenever someone talks about the Paris Agreement, they are referring to this 1.5C pledge. The new [IPCC] report shows that the greenhouse gases released by human activities already have resulted in 1.1C of warming since 1900. And that’s just the start. Over the next 20 years, global temperatures are expected to surge past 1.5C of warming in every likely mitigation scenario.

In the best-case scenario, Brennan wrote, global governments and industries would collaborate to achieve net zero emissions by 2050. Even that scenario would miss the stated target and push global warming to 1.6 degrees Celsius. At that rate, he added, 8 percent of plants would lose their geographic range, affecting agriculture systems and pushing hundreds of millions of people into food insecurity. Sea level would rise, threatening islands and coastal cities. And catastrophic weather patterns would become significantly more frequent. 

_{An Industry Taking Action}

Air travel, which is by far the most carbon intensive aspect of travel, currently represents about 2.1 percent of global carbon output. The type of emissions, combined with release of water vapors at high altitudes, however, may intensify their contribution to global warming to about 5 percent. Hotels, road vehicles and even trains—to a much smaller extent—contribute to the global warming effect of travel as well. 

So in the broader scheme, and with the consequences at stake as outlined by the IPCC, the travel industry does have a role in the collaborative and structural effort of government, corporations and individuals to contain its contribution to global warming. 

The aviation industry has made strides towards decarbonizing travel. Last October the International Air Transport Association released its Fly Net Zero plan, which combines sustainable aviation fuel, new aircraft technology, more efficient operations and carbon capture to achieve net zero emissions for aviation by 2050. 

SAF will fuel the majority of aviation’s global emissions mitigation, but production and price are hurdles to widespread adoption. IATA is advocating for more government intervention to incentivize SAF production and has called on the industry to participate in activities that stimulate volume demand that will increase production and bring prices down. IATA director general Willie Walsh has pointed to past clean energy initiatives that have succeeded in just that. As travel resumes post-pandemic, the good news is that more airline companies are forging agreements large and small with SAF producers, and committing to long-term purchases.

United Airlines was the first airline to introduce SAF into normal business operations back in 2016 and continues to lead the green transition. The airline recently announced multiple partnerships to develop alternative energy options and commercialize the production of SAF, both in the U.S. and abroad, to help achieve its net zero 2050 goal without relying on carbon offsets. The company also introduced its EcoSkies Alliance as a program for corporate travel partners, which now boasts more than 30 participants who have committed to SAF purchases in United’s network—a sign that more companies are taking stock of their own part in travel’s emissions and taking responsibility to use and manage travel sustainably. 

Lufthansa, the largest buyer of SAF in Europe, recently integrated ‘carbon neutral’ features into its flight booking process, which allow customers to choose flights with SAF, contribute to climate protection projects or a mixture of both options. The German airline group is also upgrading its fleet with more fuel-efficient aircraft. 

These are just two examples of many airlines that have invested in SAF as a primary emissions reduction strategy. American Airlines invested significantly in 2021 and Delta pushed in with a 75 million gallon commitment in March of this year. Just this month, smaller players like Finnair and Japan Airlines have made long-term commitments to purchase SAF. 

On the lodging front, a number of initiatives led by the World Travel & Tourism Council, the Global Sustainable Tourism Council and others have worked to wrap sustainability standards around the accommodations industry. The structure of the industry, with independent hotels and franchises comprising so much of the volume, has made it challenging to find the right standards to apply and to get buy-in from owners and management companies.  

The WTTC introduced its Sustainability Basics criteria in April as a ramp up program for any hotel owner or operator to align their operations with efficiency-, emissions- and community-based criteria that will put them on a path to a sustainable future. The program was designed for all types of lodging, but with a particular focus on properties that may not have had access in the past to a cohesive plan.

“Sustainability is non-negotiable but not every small hotel has access to the science on how to make a difference,” said CEO Julia Simpson. “This gives everyone access to a global standard.”

That’s the same struggle hotel solution specialist HRS was looking to solve. While global chains have the resources and infrastructure needed to measure and report carbon emissions, HRS chief product officer, Martin Biermann, said gathering and auditing data from the myriad of independent hotels remains troublesome for the industry and for travel managers. 

Hence, the company launched its Green Stay Initiative in March 2021, which uses a proprietary formula, based on industry methodologies such as the Hotel Carbon Measurement Initiative and the Greenhouse Gas Protocol, to score a hotel’s energy consumption, water use and waste disposal. 

“The traditional means of [corporate travel] RFPs and procurement processes are by no means sufficient to cater to future needs of environmental protection,” Biermann said, explaining that Green Stay allows travel and procurement managers to compare apples with apples and ensure sustainability ratings are in line with global standards.

Hotels in more than 75 countries have joined the initiative, including chains like Marriott and Accor, and Biermann said interest is growing. So much so that an updated version of Green Stay will be released in the next few months. This will include new levels of assessment for hotels and allow travel managers to customize hotel scorecards according to their own areas of focus and corporate goals. 

On the ground transportation front, many companies particularly in Europe are pushing short-haul travel to rail options, which have long been an emissions leader. The U.S. clearly lags with fewer viable rail options outside the Northeast Corridor linking Boston, New York, Philadelphia and Washington D.C.

That said, car rental players are digging deeper into their green strategies. Hertz made major headlines last fall with its announcement to buy 100,000 Tesla electric vehicles by the end of 2023. The company also inked a related deal with Uber to rent the EVs to rideshare drivers at a special rates that will be lowered as more EVs come into the fleet. The car rental company entered a similar partnership with Swedish EV manufacturer Polestar in April for delivery of 65,000 vehicles over the next five years.

Hertz CEO Stephen Scherr singled out corporate customers and rideshare partners as key targets for the company's growing electric fleet, though Siemens' North America travel managers Randall Achterberg told CNBC this month there were limits to how much volume Hertz could provide at this stage. “We’re not pushing as heavily as we’d like to, because they’re not ready,” he said.

Hertz wasn't the only company making waves with EV announcements. After the former's Tesla announcement, Avis Budget Group CEO Joe Ferraro and CFO Brian Choi mentioned incorporating electric vehicles "at scale" in the company's November earnings call, sending stocks soaring. As of June, the company had not yet released strategy details, but Deutche Bank analyst Chris Woronka told CNBC he takes the company "at its word" when it comes to an imminent rollout. Enterprise has been experimenting in the space since 2014 with a pilot it began in Orlando that continues to inform its nascent rollout.

_{Travel Management Partnerships Forge Path to Better Outcomes}

Marriott International’s vice president of sustainability and supplier diversity, Denise Naguib, said there is a “heightened awareness” of sustainable hotel operations among corporate clients who want to understand how sustainable practices are embedded throughout operations. 

“While we have been providing sustainability reports to corporate customers for many years, we now have twice the number requesting sustainability information since the pandemic began,” she said, adding that the group is working to drive new sustainable practices throughout its portfolio and is “keenly aware” that effective carbon reduction requires access to data and greater collaboration.

United Airlines’ senior manager, environmental sustainability and climate, Rohini Senguta, agreed with that assessment, commenting on the number of corporate customers demanding consistency and transparency when it comes to emissions reporting. But, like Naguib, she said, the real progress comes from partnerships. 

“Power of coalition is what’s really going to move this market,” she said, referring to the airline’s EcoSkies Alliance, which was created to ‘accelerate solutions that decarbonize aviation’ and counts Salesforce, Microsoft and DHL among its members. “Partnerships are critical to demonstrate leadership and action, especially when it comes to SAF or sustainable technology,” she said.

Festive Road client solutions lead Katie Virtue sees that kind of commitment to emissions reductions and partnership developing at more companies than prior to the pandemic, and it’s going beyond dialog. 

“The conversation is shifting away from awareness to implementation. Companies are moving from having objectives around people, planet and purpose in mind to now adjusting policy, approval processes and messaging… and automating the decision-making process with technology.”

Virtue pointed to ‘new tech players’ like Thrust Carbon and Unlocked Data that are helping travel managers measure and consolidate data for more thorough sustainability reporting. Some are partnering with TMCs and other suppliers to create integrations and programs that will move such practices from the margins solidly into the mainstream.  

She said RFPs are becoming increasingly discerning regarding sustainability metrics and clients are “actively looking” at how they come back differently. 

_{Accelerating the Trend}

In companies where sustainability is a top-down initiative, travel managers can feel empowered to drive positive change. This was the case for S&P Global’s director of global travel and meetings, Ann Dery, who said the company’s net zero initiative challenged her to create a plan to reach its science-based targets.

“[Sustainability] adds a whole other level of strategy and complexity to the travel program because we don’t want to slash and burn and not let anyone travel—that’s not realistic,” she said. Dery conducted a deep dive into S&P’s 2019 data to better understand how travel behavior was driving the company’s carbon footprint, and the changes that needed to be made.

This resulted in an updated business class policy and adding a new rail section to the program as an alternative to short-duration flights.

Dery told BTN she is currently working on more comprehensive reporting on S&P’s carbon footprint at an enterprise level, business division level, and traveler level. She’s also pushing to introduce carbon budgets by 2024.

“Once we get all the reporting going, this will be a real eye-opener not only for our rank-and-file travelers but also our leadership,” she said. 

The trend may not be an entirely organic development, said Corporate Travel Management head of ESG and sustainability, John Nicholls. He believes the acceleration of climate policy, including legislation to tighten emissions disclosure standards, is pushing businesses to ‘improve and validate’ their Scope 3 greenhouse gas emissions, which include business travel “With further mandated improvements to sustainability reporting, there will be an increase in demand for reporting validations,” he said. 

_{Investment Required}

“Companies know sustainability is important, yet many struggle to find the staff and time necessary to push things forward,” said Kathy Jackson, vice president and executive chair of sustainability at BCD Travel, especially when it’s not a top-down mandate.

“Another challenge is that for many companies, budget still ranks higher than sustainability, meaning people aren’t (yet) making decisions based solely on environmental concerns. Not all companies are comfortable with travel that’s greener but more expensive,” she said.

That’s the case for FLSmidth group category manager Meret Minnet. She said her KPIs are still driven by cost savings.  

Based in Copenhagen, the company has signed on to science-based targets to reduce GHG emissions and created a MissionZero initiative to enable customers to move towards zero emissions by 2030. Business travel accounts for 0.1 percent of the company’s carbon emissions and is therefore not currently an area of concern.

Nevertheless, carbon-conscious travelers are requesting more sustainable options, so Minnet is working to integrate features like emissions calculators and carbon budgets into her Egencia booking tool. 

And for markets with less awareness, she is working with Thrust Carbon to create sustainable hotel and flight packages that illustrate carbon metrics in a more relatable, user-friendly manner.

“The sustainability team [does not] have resources for travel, so I’m working behind the scenes to be ready because if we want to achieve net zero by 2030 we’ll need to go the extra mile at the end,” she said. Until then, Minnet’s sourcing priorities are price and convenience, especially since routing options post pandemic remain limited. 

All the TMCs BTN spoke to said there is a sliding scale of maturity among clients, largely influenced by geography and cultural differences. Travelers in Europe are the most environmentally conscious and therefore sustainable travel policies there are more advanced (also due to regulation such as the EU’s emissions trading scheme). Travel managers in North America are playing catch up.

“There needs to be more education,” S&P’s Dery insisted. “A lot of buyers don’t understand what a sustainable travel program looks like and what it actually means. We’re still getting our sea legs when it comes to sustainability.”

That said, GBTA’s Millot believes the race to net zero is ‘in motion’ and points to the Science Based Targets initiative, where around 100 of the 3,000-plus corporations who’ve made commitments have unveiled targets specific to business travel. And according to the organization’s recent survey, 67 percent of travel buyers believe the industry should commit to a collective climate target.

Ultimately, traveling sustainably is everyone’s business.