The race to net zero is one of humanity’s greatest challenges, and corporates are dedicated to cutting greenhouse gas emissions to as close to zero as possible. In fact, thousands of companies are targeting 2050 as their deadline for reaching net zero, with many committing to an emission reduction target in 2030. The race, however, is tight, and perhaps too close for comfort. According to the United Nations, the earth is already 1.1°C warmer than it was over 100 years ago. To keep global warming to no more than 1.5°C – as called for in the Paris Agreement – we collectively have to act now.
Will new sustainability laws help save us? “The sustainability regulations that are currently going into effect have been a long time coming and companies that took a proactive approach to monitoring sustainability will have a leg up as these laws continue to evolve,” states Chris Truss, global sustainability director of the Navan Group in London.
“And this is just the beginning,” Truss continues. “Organizations across the globe should expect new (and stricter) sustainability regulations to continue to roll in. The pace of change will vary depending on a company's jurisdiction.
For instance, within the EU, stringent regulations are already in place, and they are expected to become even more rigorous. In contrast, in the developing world, the impact of such regulations and the pace of change is likely to be less pronounced.”
Laws & Orders
What are these new laws, where are they being enacted, and what will the practical outcome for business travel programs be? According to Glenn Thorsen, global sustainability lead at FCM Consulting in Denmark, “The biggest new law that is coming and having an immediate impact is the Corporate Sustainability Reporting Directive (CSRD) in the EU. This new law is set to expand the areas where climate reporting will be mandatory for companies (in the past only scopes one and two were required, whereas the new CSRD will also include scope three and within that, business travel), and is also expanding the criteria of which companies will be required to submit annual reports in line with this directive,” Thorsen says.
“One of the more notable impacts is also the fact that international organizations with EU based subsidiaries and revenues (companies with more than €150 million in revenues and subsidiaries with more than €40 million net turnover) will also be impacted and required to report in line with the directive,” he continues. “On a separate note, California has just passed their SB253 state law in its initial stage, which will be a similar legal requirement for California-based companies to start reporting more broadly on their emissions, although this law will only impact companies with revenues exceeding $1 billion and will not be finalized until 2025, so the full extent of its impact is still unclear.”
Other examples of sustainability laws include The Supply Chain Due Diligence Act (LkSG) and the Corporate Sustainability Due Diligence Directive (CSDDD) which is new proposed legislation on corporate reporting in Australia, the UK and from the US Securities and Exchange Commission.
Keep On Trackin’
These new regulations and developments are strong indicators that sustainability will continue to become increasingly regulated in the future – and perhaps this is where the rubber meets the road. Verifiable standards for hotels, airlines, meetings and events, ground transportation and rental cars, etc., are already hard to measure – but demands for these standards keep increasing.
On the bright side, legislative requirements and regulations should better enable companies to measure, track and accurately report on a travel program's emissions. “Better data, more consistent methodologies, and transparency as to how emissions figures are generated will continue to drive more successful application of ‘greener choice’/‘lowest logical emissions’ in line with other policy and strategic focus areas,” notes FCM’s Thorsen.
In addition, explains Olivia Ruggles-Brise, VP Sustainability at BCD Travel in the UK, “This will help them be ready for data requests from their sustainability teams and means they can contribute to their company's carbon reduction plans. Having this data will also be key to spotting opportunities for carbon reduction and how to make their travel program more sustainable.”
On the flip side, unpacking this process is tedious. Tracking emissions can be overwhelming (according to the EU’s CSRD new requirements, there are more than 1,100 data points to report). “There is a lot of noise around the different methodologies for calculating the carbon emission of flights, and it is true that there are several different options. What is important is that travel managers understand the strengths and weaknesses of the different approaches and consistently use the one most appropriate to their needs,” says Ruggles-Brise, who provides a snapshot of some current alternatives:
•The most used methodology for reporting currently is from the UK Government (the DEFRA or BEIS emission factors). It is simple to apply but crude in its estimation and does not consider the nuances of different airlines, aircraft, configurations, etc.
•The industry-agreed methodology for measuring carbon emissions in hospitality is the Hotel Carbon Measurement Initiative (HCMI). Travel managers should make sure they ask for a hotel’s HCMI metric in RFPs.
•They can also benchmark a particular hotel’s performance against the industry averages in the Cornell Hotel Sustainability Benchmarking Index (CHSB). Currently all the major hotel chains, as well as many owner and operator groups, participate in this Index.
•The other key metric to ask properties for is the percentage of their electricity which comes from renewable sources. For hotel certifications, the Global Sustainable Tourism Council (GSTC) has a list of recognized certification bodies (e.g., Accor’s properties will be certified by Green Key or Green Globe – both of which are GSTC recognized – and IHG by Green Key).
•The ‘Hotel Sustainability Basics’ initiative provides a first step for hotels wanting to get started on sustainability – including measuring their HCMI and having robust sustainability plans in place, as well as eliminating single-use plastics.
•In 2024, the EU Count Emissions initiative is expected to clarify the requirements for reporting in the EU.
Earth Needs Another Chance
Decision making around business travel’s impact on sustainability is becoming more intentional, more thoughtful and more cost-related, as indeed it must, if we are to have a chance at success. The world has begun to play as a team, with more than 70 countries, including the biggest polluters – China, the United States, and the European Union – now setting a net-zero target, covering about 76 percent of global emissions.
According to the UN, the top seven emitters (China, the US, India, the European Union, Indonesia, the Russian Federation, Brazil) accounted for about half of global greenhouse gas emissions in 2020, with the Group of 20 (which, in addition includes Argentina, Australia, Canada, Japan, Republic of Korea, Mexico, Saudi Arabia, South Africa, Turkey and the United Kingdom) are responsible for about 75 percent of global greenhouse gas emissions.
According to Deloitte, climate concerns will definitely affect corporate travel, with 4 in 10 European companies and a third of US companies needing to reduce travel per employee by more than 20 percent to meet their 2030 sustainability targets. For the business travel industry, the important takeaway is to start where you are, and then build up. Common endeavors in this space now and into 2024 are focusing on a diverse set of actionable items, including:
•sustainable aviation fuel
•electric vehicles
•“bio-fares”
•renewable energy
•emerging technology such as electrification and hydrogen-fueled planes
•better ways to keep travelers informed of their trip’s impact
•elimination of plastics
•carbon emissions budgeting including new emissions calculators
•carbon offset tools
•alternative travel choices (such as rail over air)
•sustainable dining choices and food waste initiatives
•working with suppliers that offer more sustainable choices
•water reduction
• investing in employee education about sustainability
Certainly, there is lots to do. Some hotel chains and airlines are moving the needle, and Hilton is a case in point. “We are proactively tracking the complexities associated with consistent emissions tracking and the establishment of sustainability standards that are emerging across the world. To date, we’re proud that we’ve reduced our emissions intensity by 44 percent across all our hotels,” explains Jean Garris Hand, VP, global ESG at Hilton. “To measure its carbon impact across its over 7,200 properties, Hilton employs its award-winning ESG management system, LightStay, which not only measures the carbon impact of our operations, guest stays, and meetings and events, but is also recognized by the UN-founded Global Sustainable Tourism Council (GSTC),” Garris Hand says.
“We are constantly looking for ways to empower guests to make informed decisions about their carbon footprint. Recently, we became the first hotel company in the United Kingdom to introduce carbon labeling at-scale.
Developed in partnership with sustainability experts Klimato, the new menu aims to inspire guests to consider the environmental impact of their choices when dining at participating restaurants with a simple labelling system. Since the launch of the program in May, hotels have seen a shift in guest behavior, with low and medium-carbon-footprint dishes proving particularly popular.”
Travel Can Do Good
According to Fortune magazine, although business travelers only “make up 12 percent of airline passengers – [they comprise] an impressive 75 percent of revenue on certain flights.” This puts the business travel industry in a unique position to help accelerate the race to net zero.
“I believe business travel provides a big opportunity for companies addressing their carbon reduction targets,” notes BCD’s Ruggles-Brise. “A managed travel program engages so much with a global workforce, so there's a real opportunity to communicate your sustainability objectives in a way that excites and inspires people to have a positive impact on their company's commitments. Travel managers have an opportunity to create a movement for sustainable travel within their company, collaborate with their peers and drive industry progress.”
The growing demand for sustainable travel experiences is evident with travelers increasingly seeking brands that contribute positively to the planet, its people and resources, both in the short term and long term. “Businesses now need a travel program that provides real-time visibility into its environmental impact,” Truss says. “Tracking and reporting on CO2 emissions is no longer a nice-to-have, but a key requirement of any travel program. Emissions and environmental impact methodologies that are compliant with legislation will be the norm. It is also now necessary for businesses to integrate modern technology that allows them to monitor progress towards sustainability goals and gives them real-time tracking of emissions data, giving leaders the control to adjust as needed.”
