Delphine Millot is senior vice president for advocacy and sustainability at the Global Business Travel Association
Mounting
pressure around sustainability disclosures have led travel managers to add emissions
management to their (already long) list of priorities. But now that dynamics are
changing on both sides of the Atlantic, will this remain top of mind?
I believe
the answer is ‘yes’, because beyond the regulatory or moral imperative,
sustainable business is good business. Finding ways to travel more sustainably
– in a way that’s efficient, safe and affordable – is critical to our
industry’s long-term competitiveness.
Responsible
travel helps to future-proof organisations, making them more resilient. However,
we have seen the environment both in the US and Europe change over the last few
months when it comes to climate action.
Changing dynamics
in Europe and the US
Europe has
historically relied on a stringent regulatory approach to decarbonise its
economy, but recent months have seen a rollback of ambitious policy
frameworks. Similarly, where the US leveraged economic incentives to channel
investments towards clean tech, this is not expected to continue in the
medium-term.
Since the
new administrations took office in Europe early December, and in the US at
the end of January, they’ve been clear about their intention to focus on boosting
their respective competitive position on a global scale, as well as their
energy independence. This directly challenged climate legislations passed under
previous mandates.
In the EU,
well-intentioned ESG requirements resulted in concerns around Europe’s ability
to compete in a world where regional approaches diverge. Most recently, these
concerns led to significant roll backs of regulations such as the Corporate
Sustainability Reporting Directive (CSRD). While the decision to delay its rollout and
exempt smaller companies was criticised by some organisations, many also
welcome the simplification efforts, that will allow companies to shift their
efforts from reporting to action.
Meanwhile, in the
US, despite a radical U-turn on the country’s climate commitments, including
the Paris Agreement, there is some cautious optimism that some of the tax
incentives and funding granted through the Inflation Reduction Act may not
disappear totally – as long as they lead to the creation of new domestic
jobs. That’s the case for the tax credits granted for sustainable aviation fuel (SAF)
production. Some state regulations like the Climate Accountability Package in
California are also staying in place. Past efforts to build similar
mandates at Federal level are however indefinitely stalled.
If the
fragmentation in mandates and standards across regions was always an issue, the
level of uncertainty is now adding additional complexity for organisations
operating globally.
Corporates embedding sustainability
Despite
these setbacks, evidence shows that companies that have embedded sustainability
in their operating models will continue to push forward.
Our research found that almost half of global
supplier and TMC respondents surveyed at the start of this year (48 per cent) expect their
company will increase their support of sustainability efforts in 2025, while only 4 per cent
expect to see a decrease. On the buyer side, a third of the travel managers surveyed
(33 per cent) say that investment in sustainability will increase.
However, we continue to see drastic differences
between the EU and the US in the way companies integrate sustainable
practices in their programmes. For instance, while 50 per cent of European travel
buyers expect to implement a sustainable practice element within their programmes
this year, that figure is only 21 per cent for North American travel buyers.
We see a similar gap when we asked buyers if they were
planning on implementing a new sustainability technology or service. While 34 per cent
of European travel buyers said it is something they will pursue in 2025, that figure is
only 15 per cent for North American travel buyers. Interestingly, that figure was 56 per cent
for buyers in Asia Pacific, showing the region could outpace Europe as a leader
in sustainability investments for corporate travel programmes.
Despite differing regional approaches, one thing is clear. Momentum
around corporate climate action and carbon reduction strategies can only be
achieved if it is fully embedded across an organisation, and it is recognised
that a sustainable and responsible approach makes good commercial sense.
As an industry, we can demonstrate that business travel that is more
productive, more personal and more responsible makes for good business. As an
industry, we need to strengthen metrics and KPIs around more responsible
travel. This way we can ensure it becomes embedded in organisational processes
in a more systemic way.
Cross-industry partnerships can deliver value. The GBTA Sustainability
Acceleration Global Benchmark provided in-depth analysis for the
first time last year, highlighting exactly where the industry stands on its
progress with sustainability.
The Benchmark figure was a wake-up call, revealing there is a long way to
go and more urgent action is needed. The industry average score of corporates was 1.3, with
‘0’ being 'no action' and ‘5’ representing 'leading practice' on action to mitigate
business travel emissions. However, action is happening.
Even as the market environment for climate action appears to be more
challenging, I am optimistic – there is lots of momentum across the
business travel industry.
However, the challenge to all of us in the industry
is clear. We need to be able to measure ROI more clearly. We need to show how
sustainability efforts contribute to better business. And we need to work
together, to drive best practice. We must step up to this challenge. The continued
success and prosperity of the business travel industry is dependent on it.