Sustainability has seen a sharp increase in focus since the start of the pandemic, with 76% of buyers in ITM’s latest Insights & Priorities survey saying it will increase in importance in 2021 and beyond, compared with 37% 12 months ago. But there is still a lot of work to be done – especially as three quarters of buyers are unaware of how business travel contributes to their company’s overall CO2 emissions. In this Q&A we talk to ITM CEO Scott Davies about the latest sustainable travel programme trends, the need for collaboration across the supply chain, and what best practices are emerging?
Why has sustainability moved up buyers’ agenda so rapidly, even though almost no one has travelled on business over the last year?
Business travel may only account for two per cent of all carbon emissions globally, but that is no reason to be complacent as it can still form a significant part of a company’s overall carbon footprint. Before Covid-19, some organisations were struggling to hit their emission reduction targets. The abrupt cessation of travel last year has meant that 2020 sustainability goals were achieved.
How easy or difficult is it to establish a sustainability programme? How are buyers going about it?
There are very few medium or large organisations that don’t have a well-established sustainability programme in place, and someone on the leadership team responsible for sustainability. But smaller organisations are still trying to make progress and often the responsibility can fall on the individual stakeholders like the travel manager. The pandemic has in most cases raised the profile of the travel manager function, and that has the effect of plugging them into the corporate priority of sustainable practice. Sustainability is not a competitive area among buyers. They are very keen to collaborate across their sectors and within their sectors. They are all looking for best practice that makes their programmes more sustainable.
There are various methods emerging to monitor sustainability in terms of travel policies ‘Virtual first’ business travel is a new term that we will hear more often in travel policies, and should watch out for. It will be part of the approval process. In other words, before booking a trip, travellers will need to consider firstly if the meeting can be done virtually – if the answer is yes, then the trip isn’t necessary. Carbon budgets is another tool that a small proportion of companies have in place. Alongside this method is smaller travel budgets, to force budget holders to sanction fewer trips. It sounds blunt and simplistic, but some large organisations are using this latter method. However, currently for the majority of buyers looking to build sustainability into their programme, supplier selection is the key consideration. At the start of 2021, 67% of our buyer members said that they would strongly favour sustainable practice suppliers compared with 39% the previous year.
An organisation’s performance relating to sustainability relies on the supply chain. Are there are enough sustainable suppliers to choose from, to satisfy the corporate community?
The airlines have been focussing on sustainable travel, calculating emissions, carbon offsetting and more efficient fuels, for some time. But another area where good progress has been made is the hotel sector. It’s historically been a challenge to measure sustainability when it relates to hotel usage, and it’s therefore been a challenge for buyers to demonstrate progress in the accommodation sector. It’s always been easier to measure air travel – a Dreamliner is more fuel-efficient than a 747 for example; travelling business class emits more carbon than flying in economy. But with hotels it’s been difficult to establish the sustainability of one hotel versus another, and even one hotel room compared with another in the same hotel. But hotels and hotel groups are now adopting ‘science-based targets’ which is very encouraging. This pause in business travel has given them chance to ramp up their efforts.
How do travel managers and suppliers ensure transparency, measurement and progress is achieved?
It’s about collaboration and buyers having honest discussions with suppliers to drive forwards as a partnership. Start conversations early to see what you can both come up with, for example how supplier can support your climate action targets; or partnering with the right TMC who will help support your sustainability objectives.
It’s also about making a difference at point of sale. Hotels need to explain their comparative sustainability performance when the traveller is selecting a property to book. But this is challenging. A number of different stakeholders are needed to pull this off. The hotels need to have programmes in place actively addressing sustainability; then somebody needs to provide transparent measurement criteria comparable across hotel groups; then OBTs need to be able to display that information in a meaningful way.
In terms of the airlines, for sustainable aviation fuel to physically get into the aircraft’s tanks, it needs to be encouraged along the line – in other words, travel policies should allow for booking a flight using sustainable fuel, even if the fare is more expensive. In 2020, 17% of buyers said this would be allowed. In 2021 this jumped to 30% of buyers. But it suggests that there is still a barrier to booking sustainable flights. Unless everyone is prepared to do it, then the airline is unlikely to put sustainable fuel in the tanks.
It’s a challenge as an industry that we need to take on. It’s not just down to the hotels and airlines to find the answer.
5. What does best practice look like? Offsetting and reduction in tandem? Booking tools that can drill down to granular data?
In the ITM Community, our buyers are talking regularly so that they can learn from each other. We are seeing a definite trend towards making sure both offsetting and reduction are present within programmes. Offsetting is no longer acceptable in most boardrooms on its own. Best practice is going to encompass everything from carbon reduction and offsetting to carbon budgets, identifying science-based targets, and using sustainable suppliers. Absolutely key will be ‘visual guilt’ at the point of sale. Sustainability is like any corporate priority relating to travel. It can be achieved by a combination of carrot and stick. You can reduce the budget (stick) or you can nudge good behaviour (carrot) and you do that by explaining the relative environmental impact of choice A versus choice B.
There will be easier buy-in at all levels – at traveller level because they have seen an alternative of doing business, and certainly at senior level because in most cases they have seen that their companies have been able to operate without any business travel.
The interesting aspect is whether it becomes a competitive differentiator in industry sectors. For example, professional services – the partner who isn’t prepared to travel to a meeting, might lose the business to a competitor who is prepared to travel.