Opportunities

REDUCING EMISSIONS

Showing CO₂ emissions data during flight searches matters; that flight to New York on one carrier can be 900 kg of carbon dioxide, on a competitive carrier it is a thousand. This allows travel managers and executives to make choices based on sustainability, not just price.

By displaying business class travel, which can sometimes have around three times as many emissions as economy class, and fewer emissions for non-stop flights compared to connecting ones, travellers can now be more informed about the choices they make.

Making emissions more visible to the travel managers and executives’ booking is imperative, with league tables, dashboards on performance targets for emissions and cost-centre level reporting all in the mix. This allows travel managers to manage travel in different ways. Like cheap food, cheap travel can be more detrimental to the environment and create more emissions.

Data on emissions from managed travel can be used for mandatory reporting and approval systems, so the right choices are made. Trips also need to be fully justified. Flights are by far the biggest producer of corporate travel emissions, while taking trains can slash CO₂. Businesses are also looking at fewer, but longer, travel trips, involving multiple destinations, that results in less emissions.

Carbon offsets are also being used, as are carbon capture and storage credits. However, this is increasingly a less-travelled path since corporates want to be seen to be reducing their emissions directly.

We have to proactively educate, manage, support and guide our clients to understand and utilise the latest thinking in sustainability best practices, in order to keep travellers travelling.

Ian Ferguson, Reed & Mackay Partner, Advisory

DECARBONISE AIR TRAVEL

Sustainable aviation fuel (SAF) is in its early stages. However, the technology will only progress if there is funding and support for its development. More investment in SAF will reduce the overall cost of it which, in the medium to long term, will benefit all businesses who travel, because it will become cheaper for airlines.

Airlines, such as Virgin Atlantic, are taking SAF seriously. “As a founding member of Sustainable Aviation and the UK’s Jet Zero Council, and through the Clean Skies for Tomorrow coalition, we're helping to bring industry and government together to accelerate SAF development at scale,” Virgin Atlantic Head of Sustainability Luke Ervine says.

Reed & Mackay is one of the world’s first travel management companies to enable customers to purchase SAF directly from the world’s largest producer, Neste, and then supply it to the airlines on which they fly. This will help corporate sustainability efforts, such as the Science-Based Targets initiative (SBTi) guidance for the aviation sector¹. There are other initiatives evolving in this arena including green hydrogen fuels, while British Airways owner IAG is aiming to power 10% of its flights with biofuel by 2030². Regional aircraft are also looking at hybrid electric propulsion.

The use of Sustainable Aviation Fuel represents one of the greatest opportunities to reduce carbon emissions.

Luke Ervine, Virgin Atlantic, Head of Sustainability

LESS BUSINESS TRAVEL

Sending one executive instead of three to Hong Kong, or combining trips that involve, say, South Korea, China and Japan, into one long trip, can reduce emissions. There are many things that businesses can do to reduce their carbon footprint and the effects their travel has on the climate.

By relatively small and incremental percentage changes in behaviour across a business that employs thousands of people, you can yield significant benefits. Some businesses have banned indirect flights if a direct option exists, for instance.

Businesses are also looking to ROSI - Return on Sustainability Investment or ROSI, where ROI and sustainable business practices go hand in hand. This involves not only reducing emissions but also saving corporations money. Sensibly removing unnecessary travel is also worth considering. This can save money for businesses and is a good form of cost control. This is likely to come to the fore as the global economy potentially faces recession.

BUILDING RESILIENCE

Those businesses with integrated management systems, which account for business continuity, climate risks and corporate travel, are best placed to deal with disruption and build resilience. Business resilience is the ability to deal with adversity, withstand shocks and continuously adapt and accelerate as disruptions and crises arise over time.

Increasingly, there is talk of building resilient businesses able to withstand climate change events. Resilience has also been described as the ability to recover quickly, yet recovery alone is not the end goal here. Truly resilient organisations are agile, learn and bounce back better and even thrive.

ISO certifications can help in this process; evaluating risks on all levels is crucial. Businesses also need to go beyond their own operations and account for risks along their supply chain.

Travel management companies are in a good position to offer resilient travel programmes because they have many relationships with airlines, hotels and event spaces, much more than client companies or individual travellers. So, they are in a better position to mitigate risk due to travel disruption, including those from climatic events, as well as provide robust business continuity.

Business continuity and climate change affect how corporations manage business travel. It means a new strategy and partnerships are needed. Those conversations are only just starting to happen.

Ian Ferguson, Reed & Mackay Partner, Advisory