Scott Gillespie of tClara warned that his advice here would make “old-school” procurement folks gnash their teeth. “So be it,” he said.
The sustainability issue is rising quickly up the executive agenda. The problem is what to do about it from a business travel perspective. I see a boldly simple but controversial solution with broader benefits. First, some context.
Let’s be bold. Companies in travel-intensive industries are making significant commitments to reducing their travel-related emissions. If they can do it, so can everyone. Why not set a goal of capping your company’s 2022 travel-related emissions at 70 percent of 2019’s level, then reducing that amount by 15 percent each year?
Sure, each company should set its own travel emission goals. What companies should not do is kid themselves about how to make significant reductions in these emissions. Offsetting is not the answer, nor is a lowest logical emissions policy, such as choosing the greenest flight or hotel. These are marginally helpful.
Let’s be blunt. The only lever for quickly and significantly reducing travel-related emissions is demand management. That’s procurement talk for taking fewer trips.
Smaller travel budgets will be a way of corporate life for years to come. Will this be enough to put a sufficient dent in travel-related emissions? Not if we stick with our old-school focus on savings and price.
The old way of maximizing the impact of smaller travel budgets was to squeeze every nickel out of a trip’s cost. “If we save 20 percent on travel prices, we can take 20 percent more sales trips!” goes the old saw. Note this means no reduction in trips, so no reduction in emissions.
The key to significantly reducing business travel emissions is weeding out lower-value trips. Shunt these meetings from in-person to the virtual channel, and my guess is the average company could easily reduce its 2022 travel-related emissions by 30 percent over its 2019 level.
Let’s be effective. There are new tools being developed to help companies make better judgment calls about which trips are justified. But there is a remarkably effective no-tech solution for screening which trips should be approved.
Raise the price of a business trip by a lot, then let management judgment do the rest. The higher the price, the harder it is to justify a trip. Jack the price up high enough, and I guarantee a whole layer of lower-value trips will never be taken.
Some companies may already be adding a carbon tax or installing carbon budgets – it’s the same principle of increasing the cost of travel to suppress demand. But there is a far more effective approach that significantly reduces carbon emissions while delivering other important benefits. Ready?
Require travelers to book flights in premium cabins and to stay in premium hotels.
Seriously. Here’s why:
Higher travel prices will force a much closer evaluation of how justified every trip is. Only the more justifiable trips will survive this test, so trip volumes will be much lower. Suppose this type of travel policy is widely adopted. Suppliers will raise fares and rates for these higher-value and less price-sensitive trips, further suppressing demand for lower-value trips. Carbon emissions will fall significantly, though trip volumes will fall even faster. This reduction in emissions takes into account the higher emissions associated with sitting in first or business class.
Let’s be considerate. Trips deemed justifiable in this new light will be much more important, so there is much more need to help travelers be rested and prepared to succeed on their trip.
Frequent travelers believe better sleep before and during a trip is one of the most critical factors for achieving successful trip results. Giving travelers better cabins and better hotels makes sense if you want more successful trips, stronger recruiting and retention of those frequent travelers, and travelers with better health, safety and well-being.
Sure, these trips will cost more — as they should, in return for the higher quality of travel. But now, consider what these premium prices mean for your suppliers. Much more margin, right? Enough margin to justify making more investments in decarbonizing their own supply chains. Enough margin to justify investing in the locations, networks and schedules needed by business travelers. Enough margin to survive and hopefully thrive as premium business travel suppliers.
In today’s world, smaller travel budgets will be reserved for more justifiable trips — trips of greater importance taken by travelers under more pressure to show results for their use of time, money and carbon. Let’s redesign travel policies to ensure we have qualified travelers who are more willing to travel and more likely to succeed.
Let’s lean hard into achieving sustainable travel. Let’s help business travel suppliers to thrive by paying full value for a vital resource. The alternative, from a supply chain perspective, is not pretty.
Let’s be equitable. Premium travel policies already exist for gold-collar travelers, e.g., senior executives, consultants, lawyers, bankers, etc. These are entitled policies, literally based on a person’s role or title. These policies are saying, “If you are valuable enough to our business, we will justify your premium travel, regardless of the trip’s friction or potential payback.”
Premium travel policies already exist to reduce friction, e.g., business class for flights over eight hours or premium hotels in less-developed countries. These travel friction-based policies are more equitable, but they do not factor in the trip’s potential payback. We make Sarah fly in coach from New York to London to close a big sale and let Tony book business class from Seattle to Paris to speak on a panel.
It is far more equitable to say, “If this trip’s cost is justified by its potential payback, then the traveler should use premium travel services, regardless of the trip’s friction or the traveler’s title.” Under this policy, Sarah goes to London in business class, and Tony probably stays home – depending on how his manager judges the value of Tony being on that panel in person.
What’s new here is the premise of requiring justifiable business trips to be booked in premium cabins and at premium hotels. The key is making business travel a scarcer resource so that it is used much more judiciously and as a stronger enabler of business success.
I get that this approach to travel policy is not an easy sell. The optics alone are a big barrier. Still, when you look at the total benefits of significantly reducing carbon emissions, improving traveler well-being and retention, achieving more successful trips and supporting vital suppliers, all while staying within a smaller budget, this policy makes great sense for any company strongly committed to each of these goals.
The economics, expectations and responsibilities for traveling have changed. Business travelers are demanding higher-quality travel and more flexibility in their choices. Corporate travel policies need their own dose of innovation to catch up.
Requiring high-quality and, yes, expensive travel for justified trips is a boldly effective and equitable way to go.
• Op Ed: Scott Gillespie On The Folly Of Blanket Bans On Internal Corporate Travel
• Op Ed: Scott Gillespie On The Surprisingly Strong Case For Meeting In Person
• Big Companies Turn To Biofuel To Help Cut Business Travel Air Emissions
• Buyers, Intermediaries To ‘Hold Hotels Accountable’ For Environmental Protection
• Climate Activism On Corporate Travel Reaches New Heights
• Corporate Collaboration On Sustainable Aviation Fuels Accelerates
• The Climate-Equity Connection
• Some Suppliers Are Attending To Traveler Well-Being, But Corporate Policies Are Behind