How do buyers ensure TMCs and suppliers are running sustainability programmes?
Tom Stone has run independent travel consultancy Sirius Management since 2003, after a career of global travel procurement roles at Smith Kline Beecham, Seagram’s and Universal Music.
“For many companies, sustainability and corporate social responsibility [CSR] come far down the priority list after disaster recovery and crisis management, particularly in these straitened economic times,” says Stone. “Some organisations take it seriously because of their shareholders or the sector they are in, but they tend to be in the minority. Otherwise, it tends to be a tick-box exercise. In my experience, enquiries into airline and hotel policies can be less deep than into TMCs, but I have yet to see a supplier selected on the basis of a sustainability programme; hotels are chosen on location and price, and airlines on available seats on a route and price.”
1 Buyers can get carbon emissions reports from a TMC but they have to know what to do with them and to check whether suppliers offset emissions. Regarding TMCs and airlines, I’ve faced this dilemma with a couple of organisations that want to reduce their carbon footprint and want to save money, but there is a conflict of interest when companies are flying people via intermediate points. It is more cost effective to fly London to Singapore via Dubai than it is to fly direct, but most carbon emissions are generated on take-off and landing, so if you fly via Dubai, you are taking off and landing twice. The reality is that carbon emissions are less important than saving £1,000 on a long-haul trip. Any company that encourages travellers to go via intermediate points has to accept that compromises their green credentials.
2 There are ways around this. One company I worked with takes sustainability seriously to the point that its airline programme is not based on long-haul travel but regional travel. It has established hubs in the Middle East, Southeast Asia, Europe and North America and flies on a regional basis, so that top city pairs are within each region. For the same reason, it is also zealous about use of Skype. A lot of companies encourage that but few promote it not just as an alternative but as the first port of call. Certainly, it saves money but that is a beneficial knock-on effect after reducing its carbon footprint. With airlines, rather than simply trying to cut the number of miles needed to comply, a buyer’s primary concern in the RFP should be which carrier is more advanced with biofuel research and who has more environmentally friendly jets.
3 With the client’s TMC bid, the response to the CSR question was taken seriously, although I don’t think their ultimate decision was predicated on it. Instead of the obligatory one question that ticks the box, there were several searching questions on sustainability, CSR and a number of other areas that required detailed answers. These included policy and commitment to CSR, and how this cascades to the supply chain, how the TMC manages its own suppliers, what targets exist for CO2 emission reduction and how these are measured, method of offset and how the TMC provides assistance in CO2 measurement and reporting.
4 A buyer checking on CSR policy and sustainability of suppliers should get answers relatively easily and some of that information would be available through the TMC. Any buyer who has a relationship or potential relationship with airline suppliers of any note should be able to get their position on sustainability easily – but how that translates into something meaningful is a grey area. If I were a travel manager in an organisation that was taking this seriously, there would be an internal (or perhaps external) department focusing on sustainability and CSR, and I would involve them in testing claims made by suppliers.
5 Look at the big hitters such as airline emissions and car rental. If your company is going to select suppliers on how they rank in sustainability, pose searching questions that probe the supplier’s commitment to sustainability into an RFP. Test suppliers’ claims, possibly by taking up references that are specific to sustainability; this probably belongs in the remit of a sustainability expert. And ask for regular reports on how a supplier’s sustainability programme is performing so that you can monitor their performance.
If I were a travel buyer in an organisation that was really serious about sustainability, I would want the sustainability expert in the company to be involved in my selection process as a criterion examiner. Most travel people understand what sustainability is, but when you get into the finer details, an expert needs to be involved.