As of New Year's Day, the sprawling hospitality empire that is the Intercontinental Hotels Group (IHG) began to roll out its Green Engage programme, an online tool that enables its 4,700-plus hotel bosses to measure and monitor their properties’ eco-friendly credentials.
Green Engage – not to be confused with the greengage, a variety of plum named after Sir William Gage who introduced the fruit to Britain from France in the 1720s – then feeds the resulting data direct to IHG’s corporate clients as part of the request for proposal (RFP) process. Richard Solomons, IHG’s chief executive, seems positively delighted.
“We know our guests care as much about sustainability as we do,” he says. “So making every one of our properties an IHG Green Engage hotel is a great step forward for our business and for the communities in which we operate.”
However, it’s worth noting that Solomons “guests” are a different kettle of fish to IHG’s corporate clients. Supporting prima facie evidence comes from an NGO called the Carbon Disclosure Project (CDP), which describes itself as “an international, not-for-profit organisation providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information”.
It claims to work with market forces to “motivate companies to disclose their impacts on the environment and natural resources, and take action to reduce them”.
CDP last October published its Climate Performance Leadership Index 2014, ranking companies on the basis of their approach to “climate change mitigation”.
Of the 1,971 organisations whose sustainability credentials were scrutinised, only 187 – fewer than 10 per cent – were awarded top marks. Lauding his A-listers’ performance, CDP chief executive Paul Simpson nevertheless warns:
“Global emissions continue to rise at an alarming rate. Businesses and governments must raise their climate ambition. The data shows that there is neither an excuse nor the time for lethargy.”
Taking the initiative
While industry and commerce at large drags its collective heels, the corporate travel community – at least in the case of suppliers and intermediaries – does appear to be getting a move on.
Hotel operators regularly roll out green initiatives while airlines are racing to produce viable biofuels from all manner of unlikely ingredients; ‘hybrid’ is the mot du jour in the car rental sector; and travel management companies have produced more carbon calculators than one can shake a responsibly-sourced stick at.
The big question – made bigger by CDP’s Index – is whether many corporates are taking a blind bit of notice of green issues. The suspicion that they may not be doing so appears to be borne out the Business Travel Show’s survey of UK and European buyers. In 2013, 62 per cent of respondents said their travel programme was “sustainable”; last year, that fell to 43 per cent. Of the nay-sayers, 20 per cent claim they focus on sustainability in other, non-travel activities; 17 per cent claim they have only got as far as planning more sustainable travel; 14 per cent say sustainability is not a priority; and 6 per cent say sustainable travel isn’t economical.
Of those polled, 52 per cent said they used more alternatives to travel in 2014 compared to 2013 (the figure was 60 per cent for 2013 v 2012), while 8 per cent – up from 4 per cent a year earlier – said they used fewer alternatives.
That latter figure will come as a disappointment to the Green Party, whose transport spokesman, Rupert Read, insists: “The smartest businesses are realising that much travel expenses are exactly that – an expense, which could be done without. That’s why, especially for long-distance/international travel, more of the firms looking to reduce costs and remain competitive, while also lightening their environmental footprint, are using information technology instead.”
He adds: “Video-conferencing, which is free or cheap, is frequently now a better bet – technologically, practically and economically, as well as environmentally – than sending fleshy human bodies from one end of the country or continent to the other and back.”
Increased demand
For the green lobby, there is some good news. An October 2014 study by California-based market analysis giant Frost and Sullivan suggests that European demand for “collaborative technologies” – audio-visual and web-conferencing kit – is booming. In 2013, the number-crunchers say the European market generated revenues of US$1.78 billion. By 2019, they estimate, those revenues will be around US$2.58 billion.
Every silver lining has a cloud, however. Another piece of research, this time from Cornell University’s Centre for Hospitality Research (CHR), suggests that hoteliers are beginning to try to make money, rather than simply contain or reduce costs, out of their environmentally-friendly initiatives. Although the study is confined to the US industry, it suggests that eco-friendly hoteliers are able – for the first time – to charge more than their less ‘green’ counterparts.
Three Cornell researchers have studied the impact of the US’s LEED programme – which stands for Leadership in Energy and Environmental Design – and discovered that hotels with LEED certification can achieve higher room rates and revenues.
The LEED programme is not restricted to hotels, but has been adopted by some hoteliers. “The hotel industry has embraced environmental sustainability and several hotels have registered for or earned ‘green’ certification under the programme,” says Rohit Verma, a professor at the university’s School of Hotel Administration.
“But LEED is really aimed at controlling costs by limiting resource use. So the question was whether there is also a revenue benefit from LEED. We found that the answer is absolutely ‘yes’.”
Sweeping change
That may not be good news for travel buyers, but they may be inclined to get used to it. Bernard Harrop, head of sustainability at the GBTA’s Project Icarus, says change – for the better – is sweeping through the corporate sector. A new survey from the Global Business Travel Association’s research arm, the GBTA Foundation, suggests that 57 per cent of European travel buyers include at least one sustainability initiative in their travel policy.
“We prefer to talk about ‘responsible business travel’, because it incorporates demand management, safety and security, and traveller wellbeing, as well as green issues – but even so, that’s a very different picture from what we were seeing just a few years ago,” he says. “One of the main drivers is employers’ duty-of-care for their staff, but there is also the question of cost savings. Travel buyers are seeing a direct correlation between sustainability and long-term cost savings.”
And it’s no longer just a question of switching from air to rail, or using public transport instead of company cars. Major UK companies, which have to publish their ‘green’ data, are finding new ways to reduce their carbon footprint – and to trumpet their sustainability credentials. “The role of the travel management company [TMC] in all of this is changing,” says Harrop. “Companies are asking their TMCs to provide the raw data, but then they are acting upon it themselves, building sustainability into their travel programmes.”
The achievements vary from sector-to-sector and, to an extent, from country to country, but Harrop has no doubt that companies are increasingly aware of the obligations – and the opportunities.
“Sustainability is a journey – it’s not something you can do overnight, and there is always more that can be done – but it’s heading in the right direction. We are making progress, and we’re making it quickly.” Over at Intercontinental Hotels, Richard Solomons must be rubbing his hands with anticipatory glee.
Waste not want not
Virgin Atlantic this year expects to operatea ‘proving flight’ using a low-carbon fuel derived from the waste gases generated by steel mills.
The result of three years’ research and development by Virgin’s partner Lanzatech, the fuel has now captured imaginations at mega-bank HSBC, whose backing will now allow production to move from ‘sample scale’ to ‘demo scale’ – enough to carry out at least one test flight.
Lanzatech captures the waste gases from industrial steel production, which are then ‘fermented’ and chemically converted for use as a jet fuel that is said to halve aircraft carbon footprints.
Lanzatech estimates that its process can be applied to 65 per cent of the world’s steel mills, which means the fuel could be produced in sufficient quantities to be available for use worldwide.
Sir Richard Branson claims Virgin was the first airline to demonstrate the potential of a biofuel flight, back in 2008, but other carriers are fast gaining ground, producing and using fuels from any number of weird and wonderful sources.
Last September, Lufthansa operated a flight from Frankfurt to Berlin Tegel using a mix of traditional fuel and farnesan, a bio-kerosene based on sugar. That same month Finnair operated a flight from Helsinki to New York using a fuel whose ingredients include recycled cooking oil collected from restaurants.
Other potential sources include corn, soybeans, an obscure oil-rich but inedible plant called jatropha, algae, and grasses known as halophytes, which grow in saltwater marshes.
The trouble with plant-based fuels is that the crops take up space which could in many cases be better used for food production. And, impressive though Finnair’s feat may have been, the airline itself concedes that its cooking-oil fuel currently costs twice as much as traditional fuel. Waste gases from steel mills, on the other hand, are in plentiful supply.