Challenges and Barriers

Can corporate travel reboot its sustainability drive?

As corporate travel continues its comeback post-Covid, sustainability performance is under scrutiny once more. But, with business poorly resourced and budgets feeling the pinch, can under-pressure decision-makers identify the barriers and prioritise improvements?

 

 

The majority of corporate travel decision-makers now acknowledge their programmes are returning closer to pre-pandemic levels. Domestic travel, in particular, is bouncing back for more than 8 out of 10 respondents (83%). The fact that its recovery is running significantly ahead of international corporate travel (63%) is hardly surprising, given the additional Covid-related requirements and restrictions associated with cross-border movement.

 

Forecasts from the Global Business Travel Association (GBTA) at the end of last year, also predicted a surge of activity in 2022 with full recovery due by 2024. Industry expectations were realistic, but positive, according to Suzanne Neufang, CEO of the GBTA:

“The business travel industry recognises there are factors, related to COVID-19 and beyond, that could impact the road ahead over the coming years. However, there is optimism overall as the industry, companies and travellers worldwide lean into recovery and the much-needed return to business travel.”

Sheer volumes, however, only tell us part of the travel story.

Driving the global agenda

Sustainability was already firmly on the to-do list for corporate travel before the world went into lockdown. Two years further down the line — as we head towards UN Sustainable Development Goals (SDGs) in 2030, then net-zero targets in 2050 — it ranks even higher.

The relative success of the UN Climate Change Conference (COP26), which took place in Glasgow at the end of 2021, has only served to raise the stakes worldwide.

The big issue for a resurgent corporate travel market, therefore, is not just whether it can respond to this global sustainability agenda, but how it might positively drive it forward.

Feeling pressure to perform

On the face of it, the economic context is challenging. Decision-makers in corporate travel appear to be under more pressure in the wake of the pandemic, than previously. Most agree that their budget has been impacted (64%) and that demonstrating a return-on-investment (ROI) is now more important than ever before (65%).

When it comes to sustainability, the feedback is somewhat mixed. Slightly over half the professionals surveyed admitted that, since the pandemic, sustainability has taken a bit of a back seat in corporate travel (55%). Nevertheless, it remains critical, with almost every one (99%) confirming sustainability is still an integral part of their travel policy.

The business case is essentially strong, but sometimes hidden in plain sight, argues Pierre-Emmanuel Tetaz, EMEA SVP and General Manager at SAP Concur:
 

“The link between sustainable policies, corporate stability and revenue may not be immediately obvious; but once you look under the surface, it becomes easier to see. Being a sustainable business is not only beneficial for the employer brand, but also for the overall health of the company, including employee retention and engagement.”

So, what are the barriers to progress and what solutions are needed?

Commitment issues for corporates

The long-term relationship that corporate travel enjoys with sustainability is currently compromised by what amounts to commitment issues. In other words, whilst the two look good together, things need to move to the next level, and soon.

Corporate travel knows it needs to change. More than 2 out of every 3 professionals surveyed (69%) said they were aware of the need for improvement around sustainability.

The problem is how: almost half are fundamentally unsure what to do (44%). Furthermore, whilst many corporate travel managers feel passionate about having a positive impact, more than a third are still finding it difficult to put into practice (35%). They need support.

So, what will help them close this gap between intention and implementation?

Closing the sustainability gap

There is no lack of awareness, for the most part, just a lack of education and leadership.

More than 1 in 3 respondents (35%) felt their organisation was not well placed to train employees on the topic of sustainable corporate travel. When ranking successful methods of employee engagement, formalised training and education programmes (43%) lagged behind internal communication campaigns (62%) and regular messaging on a trip (53%).
 

It is not just the individual employees that are missing out, but organisations as a whole, says Horst Bayer, Founder, TravelHorst – Sustainable Business Travel Consulting:

“It is vital that sustainability managers and travel managers speak the same language and cooperate. Therefore, training for a sustainable corporate travel programme, such as that offered by the GSTC Global Sustainable Tourism Council, is very important.”

Shortcomings in education and training contribute to a business culture where only 37% of employees completely believe in the genuine impact of sustainable corporate travel.

Employee motivation is a challenge experienced by many organisations and considered a top barrier to developing more sustainable corporate travel programmes by over 4 out of 10 (41%). The other common weak spot revealed by the research is a lack of leadership.

Into the leadership void

When it comes to leadership, there appears to be a clear misalignment between the widely held opinion that those responsible for sustainability initiatives (66%) should be the ones driving the agenda, and the reality of the resource actually in place and available to them.

Just 36% of organisations have created a dedicated role on the management team — such as Head of Environmental Sustainability, Senior Sustainability Manager, or Chief Sustainability Officer, while only 10% have a whole team dedicated to the cause.

Management starts with the data, but then manifests in multiple ways and means throughout the company structure and operations, explains Pierre-Emmanuel Tetaz:

Data in and of itself is of little value; companies need strong data-management capabilities to ensure that they have an accurate picture of the situation so that they can make the necessary adjustments to their corporate travel policy.

This can take many forms: finding a C-level sponsor for a sustainability policy; reviewing the existing partner network to identify areas of improvement and new, greener candidates; employee education around government regulations; reducing time spent on the road for non-essential travel; or simply adopting tools to measure the impact of the corporate travel programme.”

All in all, therefore, inadequate management structures and insufficient resource allocation are sending out strong signals of the wrong sort, suggesting sustainability is not being taken seriously within the organisation. It is hardly surprising, then, that almost a third of respondents point to a lack of leadership buy-in being part of the problem (29%).

According to the survey feedback, companies are clearly missing an opportunity here, with senior leadership role-modelling regarded as the second-top internal means of achieving behaviour-change on sustainable corporate travel (51%). Appointing sustainable travel ambassadors was another method highlighted (36%).

Transparency, tech and tools

Whilst some responses highlight opportunity, others flag risk; and the way to mitigate risk is through reporting. Therefore, one of the big positives to come out of the research was the rise in the number of organisations recognising that the use of tools to assess the sustainability of travel and accommodation options was vital to boosting behaviour-change in their organisation.
 

The proportion favouring the use of tools has increased dramatically since the last SAP Concur research in 2020, up 42%, to 63%, in 2022. This approach now out-scores both leadership options — role-modelling (51%) and ambassador appointments (36%) — and also beats straightforward incentives (44%) and disincentives (26%), by some margin.

Therefore, the lack of professional tools cited by more than a third of respondents (36%) is both a cause for concern and a clear focus for remedial action.

Tools are not just enabling, but empowering, concludes Pierre-Emmanuel Tetaz:

Implementing greener best practices such as evaluating your own carbon footprint, adopting local distribution networks and selecting suppliers based on their sustainable credentials are all leaps in the right direction. Providing staff with the right tools to assess the sustainability of a hotel, carrier or catering company will help them make better, greener choices.”

In terms of implementing a relatively quick fix, an obvious starting point would be to address the fact that over half the companies surveyed (54%) did not even have travel and expenses management software in place. Almost 9 out of every 10 without such a tool (86%), would happily consider one.

Along with education and leadership, transparency of reporting is the third key action-point for sustainability, identified in the research. Equipping corporate travel personnel with the tools and skills to do the job will be a prime enabler of more sustainable decision-making — it is the engine that will drive the agenda. Visibility in terms of the process underpins robust and credible reporting on the sustainability outcomes. This, in turn, informs ongoing decision-making and shapes longer-term strategic directives coming out of the C-Suite.

“Redefining success to include sustainability requires measurements that capture this element of performance. For business leaders to make the appropriate decisions and set the strategy for a company’s long-term success, they need access to comprehensive data and metrics that go beyond financial measurements. This enables holistic steering and reporting, with the visibility required to mitigate negative ESG impact and increase positive ESG impact.“ (Source: Daniel Schmid)

Sustainability Journey: Inspire a Paradigm Shift | SAP News Center

 

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