Accounting for the 'trilemma'

THE EFFECTS OF CLIMATE CHANGE

Global warming is happening; catastrophic hurricanes and typhoons, droughts and floods, intense cloudbursts and rising sea levels are affecting communities around the world. And, over the last few years, many events such as these have disrupted businesses and corporate travel.

Assessments from the International Panel on Climate Change (IPCC) clearly state that human-induced climate change is rapid, widespread and intensifying. It is now a threat to humanity’s well-being. Simultaneously, further delay in concerted global action will miss a rapidly closing window for us to secure a liveable future¹.

Travel managers must help prepare their executive travellers and their organisations for dealing with what’s yet to come. A growing body of research shows the climate impact of air travel is nearly twice as much as its CO2 emissions alone would suggest, closer to 5% of human-initiated global warming². Many business trips have a direct effect on our climate.

Inaction is not an option. Climate change could wipe off up to 18% of GDP off the worldwide economy by 2050 if global temperatures rise by up to 3.2°C above pre-industrial levels³. Business as usual, and the emissions it creates, is likely to have a significant effect on how businesses operate. This issue is often perceived as a long-term threat, not one that affects short-term business plans. However, a higher frequency of events is fast changing attitudes.

We already see the effects of climate change on the operations of some organisations and their travel programmes.

Myla McPhail, Reed & Mackay Sustainability Manager

BUSINESS CONTINUITY

Business continuity is primarily concerned with identifying, mitigating, reducing and preparing for the impacts associated with disruptive events. In the context of this report, it refers to climatic events, whether it’s those that continuously disrupt business travel or shut down offices and factories around the globe due to floods, hurricanes, typhoons, droughts or temperature extremes.

Climate change, by definition, means threats are evolving. Again, this is perceived to be a long-term issue, yet business continuity management has traditionally dealt with the short-term.

The ISO 22301 standard guidelines, ‘business continuity management’ (and ISO 22313) are helping businesses to increase their climate resilience. A business certified with this international standard shows customers they’re well prepared to continue providing their products and services, even in the event of disruptive climatic events.

The global pandemic turned business continuity planning on its head. It forced companies around the world to rethink how they operate and, in many cases, embrace new models of working. The speed and scale of change COVID-19 unleashed upon businesses globally was unprecedented.

What the pandemic showed is businesses can adapt and operate in new ways; they can reduce or adapt business travel plans, with working-from-home orders or hybrid working where necessary, while still communicating online with colleagues around the world.

Many global companies are now trying to be ‘forward-leaning.’ They increasingly are putting solid business continuity strategies in place and have a more robust understanding on what resilience constitutes, not just for the present, but for the future.

Practitioners in the business continuity role are also increasingly aware of the risks from climate change. The question is: how can practitioners raise it to the top of the C-suite agenda, increase awareness and prepare solutions?

As well as responding to short-term incidents, business continuity means ensuring an organisation's long-term survival. Climate change is likely to be one the most significant threats a business faces.

Andrew Milne, Reed & Mackay Risk, Quality and Compliance Manager

THE ROLE OF CORPORATE TRAVEL

Executives travelling around the world have a significant carbon footprint. Global travel and tourism already account for up to 11% of the world’s greenhouse gas emissions⁴, which exacerbates climate change. If no action is taken, the sector’s emissions will grow in the years ahead.

It’s difficult to break down corporate travel emissions versus those for leisure, globally. In Europe, corporate travellers make up 12% of customers but are responsible for 30% of emissions, according to European non-governmental organisation Transport & Environment⁵.

The organisation also ranked 230 of the world’s biggest companies and found 193 were failing to act with sufficient speed and ambition to tackle corporate travel emissions even though, in some industries, they’re the biggest part of a companies’ carbon footprint⁶.

Some corporate travel programmes still aren’t taking the effects of climate change seriously enough, while others are driving forwards with robust plans to reach net zero emissions. Some companies have signed up to the United Nations Global Compact, others the Science Based Targets initiative. Signatory firms are also proactive in their approach to reducing the emissions associated with corporate travel.

The need to generate new business or secure existing contracts justifies why corporate trips are taken. Businesses need to survive and thrive; corporate trips can fuel the bottom line. Yet this creates carbon emissions and there is no worldwide mandate to curb corporate travel or its carbon footprint. ‘If a global competitor will fly to seal a deal, why shouldn’t I', is an often-used response.

However, the global pandemic has made businesses rethink their travel programmes and the need to adjust to the new ways of working – their value is in question.

As a business we're trying to seriously reduce the impact we have on the planet. This also helps us manage the sustainability performance of the companies we serve.

Chris Truss, Reed & Mackay International Development & Sustainability Director