This article is written by Mike Barry, Strategic Advisor, speaker and commentator on Sustainable Business
The world is still emerging from the crippling health and economic crisis following the Pandemic and now it is waking up to an accelerating, existential climate crisis. In the last 12 months we’ve seen extreme weather across the world from flooding in South Africa, Western Canada, China and Central Europe to drought and wildfire in the Western USA and prolonged 120F (50C) Heat in Pakistan/India.
Governments gathered in Glasgow in November last year (COP26) to thrash out a deal to try and limit heating, but whilst some progress was made, its implementation in a world characterised by conflict and disharmony will be very difficult. Although average global temperatures have ‘only’ increased by 1℃ compared to pre-industrial levels, current predictions are that we will see a 2-3℃ heat increase by the end of the century. Weather extremes will only grow in intensity and frequency, impacting lives and livelihoods as temperatures climb.
Driven by regulation, investors, consumers, employees and civil society, many companies are setting bold goals to become Net Zero (i.e., reduce their current carbon footprint by, in most cases, around 95% compared to today) over the next couple of decades.
The world of business travel is now firmly in the crosshairs of this corporate climate action. Aviation is estimated to be responsible for 2-4% of today’s greenhouse gas (GHG) emissions and as other parts of the economy decarbonise at a quicker rate, aviation could contribute around 10% by 2050. With business travel accounting for about 15-20% of global aviation travel it is a significant and very visible contributor to the climate crisis.
It’s a key part of what’s known as the company’s Scope 3 carbon footprint (Scope 1 and 2 being the electricity they buy, and the energy used in the operations they own) – the emissions they don’t own but do influence.
Over the last 12 months, the number of companies setting (or committing to set) an official Science-Based Target (SBT) with firm, public goals to reduce their carbon footprint has doubled to over 2,000 companies, and 94% of these SBTs includes a Scope 3 target. These 2,000 companies will in turn cascade carbon reduction expectations across 100,000s of suppliers and business partners.
Whilst for many companies, Scope 3 is driven by the supply chains that make the products they sell and the consumers who use them, business travel is a very visible part of this footprint. Indeed, for many employees it is the main way they will ‘feel part’ of the somewhat ethereal carbon footprint of their employer.
Large corporates such as Bain, Mars, HSBC, Zurich Investments and PwC have already set goals to reduce the carbon footprint of their business travel, in the main caused by air travel, by 20-50% over the next few years, with many SMEs following suit.
But, as recent research by travel and expense (T&E) leader, SAP Concur, shows, many companies are confused about what to do. The research into the practices of 700 corporate decision makers of all business sizes in seven key European markets, revealed that 44% felt their sustainability efforts could be improved, and a further 24% had it on their ‘to do list’ but had yet to act.
We need to recognise that the Pandemic has had a huge impact on the corporate world, and it’s travel plans (55% of respondents said sustainability had to take a backseat whilst they ‘fought fires’ during the Pandemic). It has caused a massive and rapid downturn in business travel; the scaling of video conferencing; the slashing of travel budgets; but also, a rapid rebound across these seven markets to 83% of pre-Pandemic domestic travel and 63% of international travel. It also means corporate travel teams have an opportunity to reset well established policies and practices to deliver clear business value in a way that’s sustainable for the planet as well as employees’ work-life balance, safety, as well as physical and mental health.
So, what are corporate decision makers looking for as they recalibrate their business travel plans post-Pandemic?
Firstly, they need approaches that can efficiently integrate sustainability into their day-to-day work. Larger companies often have a dedicated sustainability team who can help the travel team champion greener travel – 84% of companies with a sustainability lead are seeing this synergy – but only 46% of the respondents had this specialist in place, leaving the teams who book and manage travel to fend for themselves.
Many businesses are looking for a ‘ask’ from their travelling colleagues when they book travel – a request for a sustainable approach. But like the ‘chicken and egg’ proverb, travellers don’t always know what to ask for! Just 43% of companies are offering education and training on the impact of travel and what sustainable options are available to reduce it.
Finally, businesses are being pulled in many different sustainability directions as they have to respond to questions from colleagues who want to travel. Finance, HR, travel and sustainability teams may all be involved in finding ways to assess the validity of offsetting schemes, reimbursing staff for electric vehicle (EV) charging (only 33% do today) and reviewing the green credentials of potential suppliers.
Yet for all this confusion, respondents are clear about what the solution is for them. Business travel decision makers are looking for leadership from the top. Executives who role model more sustainable travel choices. In 2020, 32% thought this was key, today’s it is 51%. Even more importantly, they are looking for digital tools (up from 38% in 2020 to 63% in 2022) to help them get their ‘arms around’ the challenge – tracking the financial, health/wellbeing and carbon cost/opportunities of the many options available at both a corporate and personal level; the performance of service providers; and the provision of performance data and trends to internal and external stakeholders.
The climate crisis and sustainable development goals will dominate discussions in the decades to come. Companies are making tackling it central to their strategies and plans. Business travel is a crucial part of this response, but it will only be addressed successfully through leadership and the use of the right digital tools to engage colleagues and measure how they are reducing emissions.
SAP Concur has always been about delivering 4Cs for their corporate customers (Cost, Convenience, Carbon and Care) but traditionally cost and convenience dominated decision making. The Pandemic and the emerging Climate Crisis feel like a watershed moment where, at last, we take a balanced, rounded view of these 4Cs to how companies travel.