Has global financial turbulence done away with business travel’s environmental agenda? Dave Richardson finds out if green policies can make sense
WHEN THE GLOBAL ECONOMIC slowdown became entrenched in 2008, there was no shortage of cynics warning that the corporate focus on reducing carbon would go into reverse. Despite a growing chorus of voices preaching eco-nomics – that going green could save you money – it was widely predicted that cost cutting would ride roughshod over all other considerations.
The doubters have been proved wrong to some extent, although it is larger organisations that continue to drive the green agenda. Cutting carbon has become entrenched in many travel policies, delivering quantifiable cost reductions.
The switch from air to rail on many short-haul routes is a prime example, although reducing the cost of travel and improved rail services on many routes are also factors. Many business travellers would no longer consider flying from London to Manchester, Paris and Brussels, and rail operators are now eating into airlines’ share of Newcastle, Edinburgh and Glasgow traffic too.
Alternatives to travel, including teleconferencing and webinars, are also playing a growing role, but there remain many hurdles for business travellers wanting to go green.
Coming up with reliable carbon data on hotels and meetings venues is still the biggest challenge.
on the agenda
The accommodation and meetings sectors will be a key area with the relaunch of Project ICARUS this year. This education and recognition programme for businesses taking an environmental approach to travel was launched by the Institute of Travel & Meetings (ITM) in 2007, and has been adopted by the Global Business Travel Association (GBTA).
Project ICARUS is now gaining far greater resources, says GBTA Europe managing director Paul Tilstone. He is optimistic that the green agenda has survived many companies’ clamp-down on costs, with many questioning the need to travel at all.
“If companies were serious about cutting carbon before the recession started, then they have seen that cost cutting goes hand-in-hand,” he says. “But for companies who were just tinkering around the edges, carbon saving has gone down the agenda in the fight for survival. In 2011 it seemed to be coming back up the list of priorities, but I don’t know if this will still be the case in 2012.
“With Project ICARUS, we reached the point where there were limitations in what we could provide in the UK. Now it has been licensed to the GBTA, which has the resources to take it to the next stage and is putting together advisory boards all over the world.”
A GBTA research poll on whether new technologies are reducing the need to travel shows 37 per cent of respondents saying teleconferencing is having that effect, 44 per cent saying webinars are reducing travel, and an impressive 55 per cent saying the highly specified telepresence is replacing the need to travel.
“These technologies are now well developed, and as reliable as getting on a plane when it comes to possible faults and delays,” says Tilstone.
“Virtual worlds are also having an impact on meetings and exhibitions, but not changing the behaviour of the individual traveller.”
buying policies
Despite his generally upbeat assessment of the green agenda, a survey of 252 buyers by the Business Travel Show finds that 68 per cent do not have a green buying policy in place. Of the buyers who don’t have a policy, only 19 per cent were planning to introduce one, with 12 per cent feeling it is not economically viable, and 37 per cent saying it is just not a priority.
London’s Business Travel Show is staging a masterclass for buyers called Sustainability – where to now? on February 8. Event director David Chapple says: “Whether you are five years into the ‘greening’ of your travel programme or set to introduce an environmental dimension for the first time, travel managers need a lot of help on this challenging journey.”
Tilstone adds: “The fact that one third have a policy is higher than I would have expected, as companies were really just getting to grips with the subject as the economic crisis hit. I am not surprised that the results show the environment is not a priority when survival is the name of the game, but clever companies realise that the two go hand-in-hand.”
Many corporate buyers have imposed a carbon-cutting agenda, but the nature of some businesses means that individuals don’t necessarily buy into it.
Pricewaterhouse Coopers (PwC), for example, pushes people towards rail travel on trips of up to three hours.
PwC’s business travel manager, Will Hasler, says: “We continue to take our carbon agenda very seriously, as we have to offset any carbon we cannot mitigate. For Paris and Brussels, more than three quarters of trips are by train, and Manchester is similar. We just make people aware they have a choice and explain the options. It’s all about the end-to-end journey.
“Hotel carbon emissions are still a challenge although we are always looking at a viable solution to measure them effectively, and since 2009 our hotel bookings have not increased at the same rate as transport. But as the latest financial crisis descends upon us, all travel and accommodation needs to be challenged again.”
The Medical and Dental Defence Union of Scotland (MDDUS), a legal defence organisation, has seen a switch to rail even on London- Glasgow/Edinburgh routes where the typical journey time is four hours. But facilities and central purchasing officer Peter Macey accepts that the recession has had an effect.
“I have always attempted to raise awareness of green issues but this has often fallen flat, due to costs, convenience or, more often than not, the exigencies of the company’s business,” he explains. “The switch to rail was primarily to do with carbon reduction, and since I rewrote the travel policy a year ago I included a piece specifically to consider this when travelling. When I am negotiating deals with hotels, airlines and the like, carbon reduction is an issue that I do raise, if only to get a feel of how important the service provider sees this as.”
supplying data
Travel management companies have seen no reduction in the carbon data their customers ask them to provide. CWT senior director Sandy Moring says: “Our MI [management information] can pull together data on areas where businesses can make changes, like switching from air to rail. Some airlines use newer, more fuel-efficient aircraft and that may motivate them, but not if it incurs extra expense. We are not yet at the stage where the green agenda is leading, and that may never happen.
But legislation will increasingly encourage best practice, and we have got our own house in order by gaining ISO 14001 environmental accreditation. That helps because accredited companies want to do business with each other.”
Trevor Elswood, managing director of Capita Business Travel (CBT) and accommodation and meetings booking agency BSI, predicts there will be “no knee-jerk reaction” to abandon the green agenda, even if 2012 brings bleaker economic times.
“Every customer of both CBT and BSI has carbon reporting as the third or fourth item on their agenda as part of the tendering process,” he says. “Teleconferencing has certainly grown, and is coming down in price. Our own organisation has seen the cost of it halved over the last 18 months.
“The hotel industry has not yet come up with reliable carbon reporting, but BSI has combined various data and produced its own. We have some major customers who are very comfortable with our methodology.
“An individual does not choose to stay in one hotel rather than another because of lower carbon emissions. But when organisations create their hotel programmes, they put more weight on chains reducing their CO2, or ones which started out with a very credible CO2 level.
APD – the green tax that isn’t
THERE IS STILL a widespread assumption that the UK’s air passenger duty (APD) goes towards green projects, when it is simply a revenue earner for the Treasury.
An industry-wide campaign to stop further increases in APD has fallen on deaf ears, and long-haul premium travellers, in particular, face above-inflation increases from April this year.
Economy travellers to the US will see APD increase from £60 to £66 from April, while premium travellers will pay £132 (currently £124). For the most distant countries, including Australia, tax rates will increase to £93.50 in economy and an eye-watering £187 in premium.
Travellers on private jets will have to start paying APD from April 2013.
With the EU Emissions Trading Scheme (ETS) due to introduce a genuine ‘green tax’ this year, ABTA – The Travel Association is lobbying for the cost of this to be offset against APD. ETS is expected to raise £2 billion in taxes each year by 2015/16.