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  • Samantha Lees

Why Companies Should Travel Sustainably

Updated: Oct 15


The pandemic has thrust nearly all business interactions online and many now question the need for business travel to come back. Yet it is precisely at these disparate times that human interaction is all the more crucial, and face-to-face is still essential for business success. According to American Express Global Business Travel, after both 9/11 and the 2008 global financial crisis, business travel bounced back as CEOs and CFOs regarded it as an investment in a company’s employees, culture and competitiveness.


At the same time, sustainable business practice is increasingly demanded by customers, employees and investors. For companies, addressing the need for sustainable business development is no longer a nice-to-have, but a business imperative.


Why sustainability is a business priority

79% of consumers are changing their purchase preferences based on social responsibility, inclusiveness, or environmental impact, according to a report from the Capgemini Research Institute in July 2020.


Evidence shows that businesses recognized as sustainable increasingly outperform their peers financially. “Talking is not enough, it is critical that brands take action and demonstrate their commitment to making a difference,” shares Alan Jope, CEO of Unilever, where the company’s Sustainable Living Brands outperformed the rest of the business by 69%.


In addition to having positive reputational impacts, genuinely sustainable companies will attract and retain the top global talent, with over half of the UK’s workforce saying sustainability is an important factor in choosing a company to work for.


Investors and capital markets institutions are increasingly factoring ESG performance into investment decisions. Capital inflow into sustainability-themed exchange traded products in 1H 2021 ($63bil) is already close to FY 2020 level ($80bil), which was a record high at nearly 9 times compared to 2018 ($9bil), according to Bloomberg Intelligence.


Finally, there are increasing regulatory requirements for companies to disclose ESG (environmental, social and governance) - i.e. non-financial - information. For example, the EU’s proposal for a Corporate Sustainability Reporting Directive (CSRD) introduces more detailed reporting requirements of non-financial performance for a wider scope of companies.


What is sustainability and what does it have to do with business travel?


Sustainability is defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Travel essentially touches upon all aspects of the 17 UN Sustainable Development Goals (SDGs), and can be vital for driving positive change for sustainable development.


One of the most obvious impacts of travel is environmental - specifically carbon emissions and its direct effect on climate change, as well as biodiversity loss. Tourism, including corporate travel accounts for 8% of global greenhouse gas (GHG) emissions pre-pandemic, contributing to human-induced climate change. Food, energy and infrastructure - all closely linked to travel - are main drivers of man-made pressure on biodiversity.


Climate change and biodiversity loss - both accelerating at alarming rates - have enormous implications for business. A recent CDP Global Supply Chain Report noted that a total of $1.26 trillion in revenue losses is anticipated for suppliers within the next five years due to climate change, deforestation, and water insecurity. Biodiversity creates significant economic value in the form of food provisioning, carbon storage, and water and air filtration - which are worth more than $150 trillion annually according to BCG.


With tourism representing 10% of global employment, travel has significant social impacts. Human rights issues are a real risk in the hospitality industry, with recruitment fees, restricted freedom of movement and lack of overtime payment cited as common labour abuses of migrant hotel workers. Tourism can also have impacts on income inequality both positively and negatively, as well as on vulnerable local communities in rural areas.


Finally, traveling sustainably also often means cost-effective business travel. For example, rail travel is often cheaper than flying, while ride-shares are typically more economical and convenient than car rentals when you factor in fuel, parking fees, insurance and so on. On the other hand, a sustainably-minded business that cares for employee well-being and the environment drives higher employee productivity and engagement. A recent survey conducted by Booking.com showed that 61% of travelers (many of whom are employees themselves) state that the pandemic has made them want to travel more sustainably in the future.


So now that there’s a case for traveling sustainably, where does one start?


The first and foremost is to formulate a robust sustainable travel policy that incorporates responsible practices in terms of social, environmental and financial impacts. This involves effective communication to get buy-in from the C-suite and drive behavioural change from the bottom-up. Incentive programs that reward and commend the most carbon-conscious travelers have proven to drive adoption of greener and better travel practices. Another key part of the process is to measure, reduce, offset and report those impacts.


We’ll be exploring these in future articles, so stay tuned for more, or get in touch with us.