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For Business, Corporate Travel & Meeting Buyers & Arrangers

Analysis: green due diligence

TURN THE CLOCK BACK TEN YEARS, and the environment was at the top of the agenda for travel buyers in many large firms. Along came the global financial crisis and suddenly corporate survival and cost-cutting were far more important.

Now that the global economy has recovered to some extent, both travellers and travel managers are saying that being green is again rising up their agendas. The Airplus International Travel Management Survey 2016 showed that 48 per cent of travel managers and 45 per cent of business travellers saw eco-friendly travel as a growing trend.

Research for the GBTA Foundation also found that 57 per cent of European companies had sustainability initiatives written into their travel policies, up from 39 per cent in 2012.

Mark Britton Jones is commercial director of Considerate Hoteliers, a consultancy that helps hoteliers reduce their environmental impact, and a member of the GBTA’s Project Icarus sustainability committee. He says: “When it comes to building sustainability into travel programmes, the importance of evaluating existing and potential suppliers from a sustainability standpoint cannot be overlooked.

Travel management professionals already take into account a myriad of factors including price, traveller preference and convenience. Contracting with sustainability-focused suppliers signals an organisation’s concern and commitment to reducing and counteracting the harmful impact of business travel on the environment.”

SUSTAINING SUSTAINABILITY

Britton Jones also believes some hoteliers did not take their eye off the environmental ball during the crisis. Britton Jones says: “There are companies that did look at suppliers and services during the financial crisis of 2008/09 and assessed those they needed to keep to maintain their businesses moving forward.

From this there were many hotel companies that concluded that sustainability isn’t just about a company’s environmental impact – it’s much broader. Companies that run responsible businesses understand there is a clear business case for doing the right thing by stakeholders and the planet.” He argues that stakeholders in the hotel sector are no longer happy to settle for ‘greenwashing’, and that true sustainability can earn customer loyalty.

For those companies that did push their environmental impact down the corporate agenda, there are some factors making it more pressing now. In the UK at least, this has partly been inspired by legislation in 2013, which requires quoted companies to report on their carbon emissions, including those as a result of business travel.

The EU Non-Financial Reporting Directive, which came into force this year, also establishes new mandatory environmental, social and governance reporting requirements for organisations with more than 500 employees.

It is not just the activities of the companies that are under the microscope; the environmental footprint of the supply chain is also covered by the legislation.

WIDER ISSUES

The designation of 2017 as the UN’s International Year of Sustainable Tourism for Development has also focused attention on not just environmental impact but wider sustainability issues. As a result of the better tools and more pressure from both governments and stakeholders, sustainability is appearing more frequently in RFPs. Some suppliers feel that these sustainability questions are just a figleaf to cover buyers’ need to address the issue for their paymasters.

Yet a GBTA spokesman says: “It’s not just a tick box anymore – companies are looking for robust data. It’s worth taking a closer look at RFPs to understand how CSR data is weighted within their organisation. 

He adds: “It is true there can be a weak link in the process. This often sits with the hotel sales team who are unsure how to manage these questions during the RFP process, and this leaves a disconnect. Hotel managers should ensure their sales team know how to manage questions relating to CO2, CSR and sustainability, and how to source the correct data needed by the corporate travel buyers.”

He cites the non-profit charity CDP, formerly known as the Carbon Disclosure Project, which works with corporations to disclose greenhouse gas emissions. Its Global

Supply Chain 2017 report states: “The 89 members of CDP’s supply chain programme, which includes BMW, Johnson & Johnson, Microsoft, KPMG UK and Hewlett-Packard, have a combined spend of US$2.7 trillion. They are using this power to engage suppliers and asking them to disclose environmental data. This data shows disclosing companies have reduced their CO2 emissions by 434 million tonnes this year, which is more than France’s annual global greenhouse gas (GHG) emissions.”

Minna Torppa, travel manager at the Ministry of Defence in Finland, also says sustainability is more than a tick-box exercise. “For my organisation, sustainability is important and we keep a track on our environmental footprint and our employees’ wellbeing. Safety and security always come first.”

 “We take sustainability into consideration when our RFPs are issued, and we prefer sustainable suppliers. Our travellers also like to choose more sustainable suppliers when they have the opportunity to do so.”

Torppa says that suppliers may feel sustainability questions add to the complexity of responding to RFPs. “I do feel the frustration of suppliers when RFPs include sustainability questions that seem to be added just to perform a ‘tick-box’ exercise without making any real difference,” she says.

She believes that large-scale sustainability initiatives in business travel have never taken off, but there have been a small number of comprehensive programmes within companies in a few countries – notably Scandinavia, Germany, the US and the UK. Sustainability always tends to take a back seat, she believes.

“If it’s not the economic crisis then it is something else. For example, organisations are now more concerned about safety and security issues as we experience terrorist attacks in Europe. The other issue taking precedence is the new EU Data Protection Regulation and what organisations need to do to adopt it.”

She adds: “Change is happening so slowly. If organisations felt pressure from their customers demanding more sustainable services and products, they would change their ways.”

Those travel buyers who are including sustainability in their RFPs are doing it with the best intention but there are challenges. “Sustainability issues are not easy to follow. There’s a huge amount of information, and sometimes the facts are hard to understand – it’s not always easy to know if your actions are good or bad,” says Torppa.

MAKING A DIFFERENCE 

Where sustainability questions in RFPs do exist, they are becoming more complex and cover a wider range of areas, including groups and meetings. This has led to the growth of different tools to help hoteliers report on their activities, such as the ConServe data management system, which generates CO2 reports at the click of button and is aligned to the World Travel and Tourism Council’s Hotel Carbon Measurement Initiative (HCMI). This gives those hotels a competitive advantage in answering the RFP.

One of the most recent developments in this area is the extension by ABTA of its Travelife sustainability management scheme to hotels in the corporate sector, beyond its traditional tour operator base.

The scheme has three goals – to help hotels become more sustainable, to give corporates a risk management tool and to engage and educate business travellers. It currently offers accreditation for 1,500 hotels, which pay to take part in the scheme. Each hotel completes a 150-question survey covering the environment, human rights (including adherence to legislation, such as the Modern Slavery Act) in their supply chains, as well as guest engagement on these issues. In addition, independent auditors spend 6-8 hours in each hotel, inspecting guest rooms and interviewing staff members.

Hotels need to update their accreditation every two years. Ian Allan Travel was the first TMC to sign up to the Travelife scheme. “TMCs see this as an opportunity to drive change down their supply chain,” says the scheme’s commercial director, Soren Stober. Currently, the information is not available through the GDS.

TMCs instead gain access to all the information about the hotels in the Travelife database, and they can use it to map the hotels in their own programmes to promote the most sustainable. “One of the challenges we see is to have a critical mass in the big-business hubs,” says Stober. “We are working with the industry to drive more hotels into certification.”

INFORMATION IS POWER

This is a challenge in the sector: access to accurate sustainability information at the point of purchase. The information in online booking tools is still led by price and schedules rather than sustainability. Placing this information in front of the traveller, particularly as business travel becomes more traveller-centric, would help with its acceptance. Minna Torppa says more standardisation should be welcome. “It would help if methodologies like the WTTC’s Hotel

Carbon Measurement Initiative could gain ground and make the comparison of the various suppliers’ efforts towards offering sustainable services and products easier. Something like HCMI would also be welcomed by the airlines.” “We need wider co-operation and  experts from various sustainability organisations to contribute their know-how to make faster progress,” she adds.

The GBTA, for its part, has created RFP Toolkits and also held education sessions for buyers, more of which are happening this year.

The organisation has also updated its Sustainability Self-Assessment Tool to help buyers understand their own organisation’s level of sustainable travel management and readiness to create a sustainable travel management programme.

The tool helps organisations to measure themselves across ten different categories in order to identify strengths and gaps within their travel programme as it relates to sustainability. One concern for those wanting to drive sustainable travel initiatives is the election of a less than environmentally-friendly president to head the world’s biggest economy.

Minna Torppa says: “I do worry as Trump seems to be less interested in the environmental issues. But somehow I trust the US to be a strong democracy where one person is not able to dictate and change direction fast and furiously towards a general loss of interest in the environment.” 

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