By: Julien Etchanchu, Senior Director, Sustainability Consulting
When it comes to financial planning, few would question the importance of having detailed forecasts and budgets. So why should it be any different for carbon emissions?
More than 50% of global GDP is directly dependent on natural resources, which are increasingly undermined by climate change. As companies face increasing pressure to reduce their environmental impact, it’s crucial to look ahead, set clear reduction targets, and manage progress along the way. Today, carbon forecasting and budgeting are becoming essential tools—not just for sustainability teams, but for business leaders looking to future-proof their operations. That’s why we developed the Carbon Strategy Planner, a comprehensive carbon forecasting and budgeting tool, designed specifically for corporate travel, to help you move beyond simply tracking travel emissions to building actionable strategies.
Understanding the basics
Just like financial planning, carbon management needs both a forecast and a budget. While closely related, these concepts must be clearly differentiated:
- A carbon forecast is more strategic. It’s typically updated once or twice a year to look ahead. For example, we forecast our emissions up to 2030.
- A carbon budget is more operational. Like a financial budget, it’s managed regularly to ensure you stay aligned with your goals.
How our tool works: Forecasting
Our tool focuses on business travel and includes two components: carbon forecasting and carbon budgeting.
The forecasting module allows us to answer two different questions:
1. I have a target; how can I achieve it?
Most of our clients already have a business travel target, for example, a 50% reduction in emissions by 2030 compared to 2019. But how do you reach that goal? By traveling less? Traveling better? Investing in SAF? Our tool lets you activate all potential decarbonization levers to project which actions will help you achieve your targets. For example:
- What happens if we reduce long-haul flights by 20%?
- What if 50% of my travelers shift to the latest generation of aircraft?
- What if we require rail for trips under 4 hours?
- What if we make electric car rentals mandatory?
- Or reduce overnight stays in 5-star hotels by 30%?
- Will investing €500,000 per year in SAF make a real impact?
Altogether, the Carbon Strategy Planner has a total of 12 decarbonization levers that can be used to establish a clear roadmap.
2. I don’t have a target yet, what would be a realistic one?
On the other hand, clients without a defined target can also “play” with the same levers, to explore what’s realistic for their business. Maybe you want to test the impact of reducing travel by a certain percentage, requiring rail on specific routes, or avoiding SAF investments. The tool will run simulations based on those inputs and display the potential emissions target based on your proposed strategy.
How our tool works: Carbon budgeting
With your forecast in place, defining a carbon budget becomes relatively simple. The annual carbon budget is directly linked to the forecast.
However, what’s more complex is managing this carbon budget over time. This second module helps answer two key questions:
- Am I on track with my carbon budget? The tool provides a simple overview including: Initial Budget, Budget Used to Date, and Remaining Budget, with an alert if you are too far ahead of your budget
- What impact will future trips have on my carbon budget? The tool offers a simulation of future trips. For example, do you want to organize a team meeting in San Francisco at the end of the year? The simulator will tell you if you can “afford” it while staying within your carbon budget
What about individual carbon budgets?
The Carbon Strategy Planner can be used at the company level or broken down by business unit or department. Theoretically, it could also be used at the individual level. However, this isn’t necessarily what we recommend for two main reasons:
- Defining an individual budget for each employee is very complicated in practice, and even harder to track.
- It can also unintentionally create guilt. For instance, a standard budget might be 5 tons of carbon per year, but if an employee absolutely needs to travel to Australia, they will have burned through their entire budget in a single trip. Employees who are very environmentally conscious can easily find themselves stuck with an individual budget.
Instead, we focus on personalized information for each traveler. Displaying historical emissions, the projected impact of future trips, and associating emissions with orders of magnitude can be extremely effective. This is what we do in collaboration with our partner, Tripkicks. The key is to inform travelers, without tying it to rigid individual targets. Instead, we find that setting budgets at a collective level, like a business unit, can be much more effective.
Whether you have ambitious reduction targets in place or are just beginning to explore your options, Carbon Strategy Planner helps you define a clear path to reduce emissions without the guesswork. Get in touch to learn more.