Reliable metrics are key to understanding and managing the environmental impact of your travel program
By Mark Rowh
Throughout the corporate world, there seems to be widespread agreement on the overall importance of setting and achieving environmental, societal and governance, or ESG, goals. But for travel managers, a looming question is not only how to meet the desired aims, but also how best to measure and communicate progress.
In fact, tracking and reporting the impact of sustainability activities is essential to communicating the success of your green initiatives, says Nora Lovell-Marchant, VP global sustainability, American Express Global Business Travel. “Without this insight into your performance, you won’t be able to review your progress and work with your suppliers to drive improvements,” she says. “You can’t manage what you don’t measure."
Of course for measurements to be meaningful, accurate starting points must be established. “The most critical first step to driving and embedding sustainability initiatives within your business travel program is to establish a baseline,” says Kerry Douglas, head of program, Institute of Travel Management. Once that is in place, efforts can be focused on management, measurement and reporting.
Maksim Soshkin, research and analytics specialist, travel and tourism competitiveness for the World Economic Forum, notes that looking into metrics such as the carbon footprint of business travel is more than simply a framework for businesses to meet emissions targets and ESG goals. “It’s also a way for companies to signal that more sustainable travel options are becoming more important,” he says. In turn, this can help travel services justify investment into sustainability and drive the development of ESG and sustainability metrics for travel.
We’ll Always Have Paris For those focusing on travel, true success is based on decarbonization in line with the goals of the Paris Agreement, according to Lovell-Marchant, which means setting and achieving science-based and net-zero targets. “To do this, travel managers are positioned to become leaders within their organizations in procuring high-quality carbon offsets and sustainable aviation fuel as this market emerges," she says.
Certainly there is no shortage of organizations and initiatives aimed at promoting sustainability or measuring related progress. Among the most promising is the move by the IFRS Foundation, announced in late 2021, to form the International Sustainability Standards Board (ISSB) with the goal of developing a comprehensive global baseline of high-quality sustainability disclosure standards. Along with the consolidation of the previous Climate Disclosure Standards Board and the Value Reporting Foundation, this initiative includes the publication of prototype climate and general disclosure requirements.
Recently, the World Economic Forum has made sustainability a more important component of its Travel and Tourism Competitiveness Index to encourage linking sustainability with travel and tourism development. “We have looked into environmental factors, socioeconomic resilience and the positive and negative impact of travel and tourism on local communities,” Soshkin says. “Organizations like Travalyst have also partnered with firms like VISA and Booking.com to make sustainability metrics more available to consumers.”
Despite such initiatives, this is an area that requires more focus and development, according to Soshkin. “There is still a large gap in the ability to measure ESG and sustainability in the travel industry,” he says. “The hope is that digitalization, data sharing, and best practices and standards can help bridge this gap.”
Yardsticks for Success Part of the challenge is that a firm definition of what constitutes success – let along how to measure it – has yet to emerge.
“I believe the industry would agree that there’s no single way to measure success for advancing sustainability within a corporate travel program,” says Jeff Berk, chief executive officer for Tripkicks. Similarly, he adds, there isn’t one methodology, or even one best “data set” for measuring emissions – and the discussion around several new methodologies suggests that there may never be.
“That said, the industry may not need one single standard, because the end goal is the same,” Berk says. “Like with many things, companies need to use the resources they have, and those resources will look different depending on the size and maturity of programs.” He notes that TMCs are rapidly developing more robust sustainability offerings and will be a natural and “go-to” resource for many of their clients. Other companies may choose to leverage expertise that may exist within the organization (depending on the industry), or via third-party specialists.
Berk says that demand management has brought the most significant improvement to sustainability efforts over the past two years, and is an obvious strategy for companies to continue pursuing. Beyond that, and once an employee has made the decision to travel, the focus can be placed on influencing the individual decisions that travelers make, while also optimizing the environmental impact of each trip.
“This involves traveler engagement, traveler education, and the ability to communicate at the most appropriate times, often the time of purchase,” he says. “If companies can show that more of their spend is being directed toward suppliers that prioritize ESG and continue to reduce emissions by encouraging better trip decisions, they can continue to make progress on their initiatives.” He suggests that companies should first focus on improving the sustainability efforts as compared to their own historical program, before comparing themselves with industry peers.
Complete and accurate carbon reporting is the number one tool for measuring sustainability progress and promoting best practices, says Jaclynn Kidd, manager CWT Solutions Group. "Travel is an industry with unique factors to climate impact that must be considered in emissions calculations," she says. "Partnering with a TMC or third party that has a carbon emission calculation methodology developed specifically for travel is best practice.”
People, Profit, Planet Once organizations have an accurate CO2 data source and full understanding of their current travel related carbon footprint, they are then able to venture into more advanced levels of sustainability engagement, Kidd notes. Rebounding from COVID, organizations are beginning to resume travel with the added pressure of reducing their carbon impact. “Because year over year comparison data can’t be used to track progress and travel volumes will be on the rise this next year, companies will need to get creative on how they track sustainability success focusing more on carbon per trip than the overall carbon footprint,” she says.
At CWT, Kidd explains, the recommended approach is remembering a triple bottom line of people, profit, and planet. The “people” part of this is a key, she says, noting that while cost and carbon footprints may be emphasized, people can often get left behind in sustainability reporting and decision making. With this in mind, CWT has created a Traveller Wellbeing Index to numerically evaluate the impacts travel can have on an employee. “This ensures that every recommendation or strategic change made to reduce climate impact will not have significant negative impacts on employee wellbeing,” she says. “We feel is critical in measuring sustainable success.”
A comprehensive approach might include more than just one organization, as Berk points out. In addition to focusing on emissions calculations, companies can begin to take better stock of their preferred suppliers and incorporate areas beyond price and service into their selection criteria and RFP questions. This might include more heavily weighting areas such as investments in energy conservation, efficient water use, reducing waste, supporting the local community, managing indoor air quality, and advanced building practices. "Since corporate travel managers aren’t necessarily experts in these areas, we have come to rely on third party accreditations like Green Key Global, who are in the lodging industry," Berk notes.
Douglas says it’s all about collaboration and having honest discussions with suppliers to drive forward as a partnership. “Start conversations early to see what you can both come up with,” she says. “For example, consider how suppliers can support your climate action targets, or partnering with the right TMC who will help support your sustainability objectives.”
In addition to the focus on carbon footprint and related topics, Soshkin suggests that travel managers also consider the impact of travel on local communities. “This can include doing more business with locally-based service providers and even looking at ways to make it easier for their travelers to mix business and leisure travel,” he says. “This can extend the length of stay and spending, which is typically considered more beneficial to local communities.”
Internal communications can also be important. Berk points out that it’s not only senior management who wants to see progress, results and general trends. “ESG is equally as important to employees, who want to know that their company shares their values and priorities,” he says.
A Carbon-Free Future Looking forward, there seems to be no doubt that there will be a continuing focus on sustainability in travel. This will become more critical in the future, Soshkin says, as consumers demand more sustainable options and governments start to put more effort into aligning the development of the travel and tourism sector with the environmental, climate and socioeconomic needs of destinations.
Horst Bayer, founder of TravelHorst, a German consulting firm, looks forward to a post-pandemic world and a new look at sustainability best practices in business travel. “What can we take from the pandemic into the post-virus era?” he asks. “What can a healthy and sustainable future look like in a broad sense and what consequences does this have for our present?”
Bayer says that travel activities in companies will increase again and travel decisions will be put to the test in the future for considerations of health, for cost factors and not least for climate protection reasons. “A comprehensive accounting of real costs, the carbon footprint and other environmental parameters will become the basis for future decisions.” The benefits for employees and companies are obvious, Horst adds. They include stress reduction for traveling employees, improved climate balance, positive influence on operating profit and, last but not least, making a company more attractive to potential employees.
All factors considered, efforts to control emissions promise to gain the most traction in the immediate future. Kidd predicts that carbon budgets will be the most popular and effective action to reduce carbon emissions across an organization. “Viewing carbon emissions in the same way we view cost will make the metric much easier for everyone in an organization to understand,” she says. “Within the next two to three years, most companies should be looking to implement carbon budgets in their travel programs.”