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Travel and Expense Management

The Carbon Footprint of Business Travel

On Saturday in Paris the 2015 United Nations Climate Change Conference came to a close. Delegates representing 195 nations announced a landmark accord that commits nearly every country in the world to lowering greenhouse gas emissions. For its part the United States has vowed to cut its emissions to 26% below 2005 levels by 2025, in no small part by reducing greenhouse gas pollution from transportation.

Transportation is the U.S.’s largest source of emissions other than electricity production. The amount of greenhouse gas produced by American cars, trucks, ships, trains, and planes is greater than emissions from all sources for all but six countries in the world.

Business travel is part of the problem. At Rocketrip we primarily help companies with a business travel problem that’s (arguably) less important than the fate of the planet - specifically, misaligned incentives that lead to overspending. But we also advise our clients on how to create a travel policy that fits their wider corporate objectives, including those related to sustainability. Increasingly, companies are beginning to take notice of pollution stemming from their employees’ travel, as well thinking of ways to reduce it.

The Environmental Impact of Travel

In its Corporate Social Responsibility Toolkit, the Global Business Travel Association (GBTA) notes that, “all means of travel and transport – from company car fleets, rail travel to aviation – have an impact on the environment, not only through greenhouse gas emissions but also through noise, waste and land occupancy.” However, the discussion of travel and its relationship to the environment is primarily focused on carbon dioxide emissions from air travel, and with good reason. Aviation is responsible for three percent of worldwide emissions, which is more than the United Kingdom, Mexico, or Indonesia.

Planes might not come to mind as a prime culprit behind global warming in the same way as does a gas-guzzling SUV, but air travel is extremely carbon intensive. The New York Times suggests that for many people it is their greatest “environmental sin,” noting that:

“One round-trip flight from New York to Europe or to San Francisco creates a warming effect equivalent to 2 or 3 tons of carbon dioxide per person. The average American generates about 19 tons of carbon dioxide a year; the average European, 10. So if you take five long flights a year, they may well account for three-quarters of the emissions you create.”

Flying might be an environmental sin, but is it one for which corporate travelers can occasionally be forgiven? After all, many business trips are unavoidable. A flight from Dallas to Miami emits the same amount of carbon dioxide whether you’re taking it for business or pleasure, but the guilt you feel might be greater in the case of the latter, where the trip was elective.

Still, there are good reasons not to ignore the environmental impact of your company’s travel.

Responsible Travel Management

Corporate travel management is a matter of balancing multiple objectives, from cost control and duty of care, to employee satisfaction and effective reporting. Incorporating environmental sustainability into your company’s travel policy can actually help achieve these objectives.

In addition to helping ensure that the Earth remains suitable for human inhabitants, traveling green can benefit your company by:

  • Cutting waste
  • Reducing uncertain regulatory exposure
  • Enhancing your brand's reputation

Regulatory Requirements

For the reasons covered above, your company should care about the environmental impact of its travel. On the basis of current regulations, however, it’s unlikely that your company has to care. Regulatory schemes across the globe focus on greenhouse gas emissions from the very largest producers, such as utilities and heavy industry.

The United Kingdom is the only country with greenhouse gas reporting requirements that might directly affect a company for which travel is a leading source of emissions. As of 2013, all companies incorporated in the UK and publicly listed on a major exchange are required to report on their greenhouse gas emissions in their Directors’ reports.

Many companies have chosen to voluntarily monitor their environmental impacts, even in the absence of governmental regulation. As part of its pledge to achieve zero net emissions, Microsoft established an internal carbon tax, which it uses to fund the purchase of carbon offsets and renewable energy certificates. Other companies that voluntarily monitor their carbon usage include Disney, PwC, General Motors, and even Exxon Mobil.

Carbon Tracking for Travel

The carbon footprint associated with a given trip primarily depends on its distance and the travel mode used. So as a starting point for calculating your company’s total travel emissions, you’ll need a comprehensive list of employees’ trip itineraries. This data can be aggregated from expense reports and entered into an online carbon footprint calculator. However, this highly manual process might not be feasible if you’re reviewing a large number of trips. Organizations such as the Carbon Trust can perform this analysis, as well as help arrange carbon offsets.

If you utilize a travel management company (TMC), it should be able to provide reporting on emissions. Many travel booking tools, such as Concur, can be configured to display emissions data at the time an employee is arranging his itinerary, or even to sort flight, train, and rental car options by emission level.

Ways to Reduce Your Carbon Footprint

Environmentally-friendly travel and cost-effective travel are often one and the same. These strategies can cut your company's carbon footprint, and its T&E costs.

  • Schedule Virtual Meetings - The greenest business trip is one that doesn't happen. Virtual meetings cut emissions, save time, and save money. Of course not every trip can be replaced with remote interaction, but we've seen Rocketrip clients slash their T&E costs by incorporating virtual meetings alongside smart travel budgeting and incentives for employees to save on the road.
  • Take Alternative Modes of Transportation - Travel by train or bus is up to 90% more carbon efficient than travel by plane. Driving your own car is also a greener option than flying in most cases, especially when you carpool.
  • Skip the Rental Car - Minimize the impact of getting around your destination by using taxis, ridesharing apps, airport shuttles, and public transportation.
  • Avoid First Class - Premium seating on flights comes with a higher price tag, and a higher carbon footprint. First and business class seats take up more space than economy seats, and bear a higher per passenger carbon footprint.

To learn more about incorporating sustainable practices into your company's travel policy, schedule a free demo with Rocketrip.

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All Tags: Travel and Expense Management, Travel Policy

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