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Don’t wait to start building an ESG focused business travel program

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April Bridgeman

April Bridgeman, Managing Director and Senior Vice President, Hotel Solutions

If you’re looking to build a sustainable travel program today, there are two things to be aware of.

First, it’s not only about environmental sustainability anymore. Corporations are using the environmental, social and governance (ESG) framework to develop and measure their goals. Second, integrating new data sources, aside from the big three of agency, payment, and expense data is essential to help you build that program.

What ESG Means For Your Travel Program

ESG is a mindset shift for both travel managers and corporations. It means not just thinking about emissions and how sustainability can be built into the governance structure of your program. Here are some of the areas to consider:

Environment

You can’t escape the need to reduce emissions as a key part of the focus on environmental responsibility, and the main way to do this is by traveling less. Yes, business travel is still important, but now the focus is shifting to mindful, or purposeful, travel. Ask yourself, do you need to approve every one-day trip travelers are requesting? And if you are a traveler, really consider whether or not the trip is essential to the business and worth the emissions impact.

In order to reduce unnecessary travel and emissions, you need to collect and analyze data to predict and forecast demand. Understand why people travel within your business, know which trips have valuable business outcomes and which could be replaced by virtual conferencing.

The other part of the approach is to travel better, and this is about giving employees the information they need to make the right decisions. Do you know which of your top routes have air to rail shift opportunities? Or how many of the hotels in your top markets are LEED-certified? Having these insights will help travelers make more environmentally responsible choices when they travel for business, like understanding which aircraft types result in higher emissions, or what hotels have eco-certifications.

The common threads in both traveling less and traveling better are using data to know what’s happening in your program and engaging travelers to guide better decision-making.
 

Social

The “S” in ESG is also very important to a travel program. It’s important to understand the impact of travel on employee wellness. This is even more crucial in the current context for travel, with health and safety considerations continuing to evolve.

A good starting point is to ask the following questions:

  • How does business travel contribute to better employee wellness or detract from it?
  • How does business travel impact your talent retention strategy and results?
  • How does business travel impact overall your company’s view on diversity, equity, and inclusion (another aspect of wellness) and what you expect from your supplier base?

The answers will help you drive internal discussions AND choose suppliers whose goals align with yours.

Governance

As you’d expect, governance is mainly about travel policy and balancing financial goals with being a more responsible business. It’s a good time to look at it, and how, your travel policy needs to change to support the sustainability goals you have set out. Including sustainability in the governance structure of your policy can help drive a mindset shift or a business travel culture shift in your organization. And it’s also useful to see how these initiatives support other goals within your program, like traveler satisfaction, program savings, risk mitigation, traveler wellness, and more.
 

How Data Helps You Build a More Sustainable Program

Most of your emissions reductions should come from traveling less, and even more from traveling better. Having the right data is a key part of making this happen. Here are some examples.

  • You’ll save most emissions by managing your air program efficiently. This might mean choosing better routes or better aircraft, or replacing air with rail in cities where that’s an option.
  • Collect data on the purpose of air travel for business so you can truly understand demand. And realize that this data will evolve; mid-pandemic peoples’ reasons for traveling might be different from when there’s not a global health crisis.
  • Understand that there’s not always a conflict between sustainability goals and savings goals. For example, when selecting a hotel supplier, it’s worth knowing that luxury properties are often less sustainable. This is because they are typically larger, and offer more services (like spa, pools, and restaurants) that increase their emissions. Shifting from luxury to upscale properties can save on carbon emissions AND cost, without compromising traveler satisfaction.

As you collect and analyze more travel program data, and integrate relevant external data sources, make sure you’re not keeping your data in silos. The total cost of travel – including emissions – is going to become a crucial part of discussing budgets and structuring sustainability goals going forward.

For example, two routes on a flight from Munich to Tokyo might be similar in price and duration, but vastly different in carbon emissions. Prior to the closure of Russian airspace, routing through Dubai would generate more CO2 than routing through Helsinki. Eventually, those additional emissions will affect the bottom line. Carbon taxes are coming, and they’ll be costly, so it makes sense to understand your emissions impact now.

GATE4, our carbon emissions reporting methodology can give you the data you need, not just on emissions, but on overall sustainability for different aspects of travel – from meetings and events to traveler wellness.

Don’t wait to start building ESG goals into every aspect of your travel program so you’re ready as sustainability becomes even more important going forward.

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