Expect Climate Change to Finally Drive More Corp Travel Decisions Post-Pandemic

Climate change, rather than the pandemic, will drive the latest business travel trend tipped for next year — the cluster meeting.

These are meetings that will have the lowest carbon emissions possible at their core, rather than restrictions dictated by coronavirus, and they’ll mostly avoid flying. For an international company planning a large gathering, for example, employees will head to regional points (ideally by train) in their respective countries, with virtual technology joining them up globally.

Two travel technology companies, Troop and Thrust Carbon, are at the vanguard of this movement. The latter, in particular, is forging ahead with new corporate travel agencies tie-ups, Skift has learned, helping them to calculate detailed carbon impacts. Troop is continuing its efforts to alter traditional booking behavior at the planning stage, rather than point of booking, as the wider industry becomes engulfed in hype following symbolic events like World Environment Day and the G7 summit.

Offset Versus Avoid

Companies are already becoming more tactical when they organize get-togethers, according to Troop, which in April said it had tripled its customer base and revenue over the past 12 months.

In a recent case study for a planned 300-person event for a Fortune 10 customer, it calculated that a cluster meeting generated 84 percent cost savings, a 73 percent reduction in carbon emissions and a 72 percent reduction in time. It claimed the cut in emissions was equivalent to the same amount of carbon that 35 people living in the UK would produce over the course of one year, while the time saved was equivalent to six months’ worth of working days.

“The most transformative thing you can do in your travel policy is meet in clusters,” said Spencer Brace, Troop’s head of growth strategy. “Behavior hasn’t been like that ever in business travel, that’s the change that’s going to come.”

He also argued that while travel booking tools calculate carbon emissions, this was a case of lag, not lead, data. “It’s a way to cause discontent in your employee base, as they realize how dreadful the policy of the company is, as they see how many emissions they’re creating,” he said.

To highlight this, Brace pointed to how millions of Booking Holdings shareholders argued carbon offsets alone were insufficient to become a carbon neutral company. “That was incredible,” Brace said. “Avoidance is the only way we’re going to save the planet is the general consensus. You can’t keep planting trees.”

Hacking Away

Troop has now partnered with Thrust Carbon, a “green tech” startup that specializes in calculating emissions and offset schemes, for this latest cluster meeting push.

Thrust Carbon emerged from an International Air Transport Association hackathon in October 2019, where it won a challenge around carbon offsetting, using data from platforms like Duffel and Cloverly.

“Airlines were saying you can offset your flight for $20. But you don’t know what you’re offsetting, how, where, or why am I even doing it,” said Glenn Thorsen, its director of partnerships. “Thrust Carbon wanted transparency, and to drive engagement at that stage of the journey.”

Thrust Carbon at an IATA hackathon in 2019. Picture: IATA

During the hack-a-thon, founders Kit Brennan and Mark Corbett explored what the airlines were actually making available to consumers. Thorsen said they found very little.

Today, the startup offers a carbon calculator that considers the individual carrier, type of aircraft, the trip’s load factor, cabin class and adjusted distance practices. “Global distribution systems, online booking tools and travel agencies can’t do that level of detail,” he added.

Thrust Carbon also plugs into a global exchange of offset projects. It has several enterprise customers, but is increasingly working with other travel agencies, and more recently with UK consortium Advantage Travel Partnership.

Last month it expanded beyond aviation with a meeting and event calculator. Thorsen said hotel data gets even more granular — even down to the level of the food served, and how it’s displayed. In some cases, 40 to 60 percent of carbon emissions for a hotel stay are attributed to food mileage, with buffets involving vast amounts, shipping, flight miles and ultimately lots of wastage.

The PR Machine

Many multinational corporations are now pledging a reduction in their emissions, with corporate travel falling under scope 3 of emission reporting. A reduction of 30 percent by the year 2030 is a common target, as well as goals of becoming carbon neutral by 2050.

World Environment Day, which took place on June 5, generated a lot of publicity, with travel businesses weighing in with their new tools and partnerships based around sustainability.

FCM, the corporate travel agency arm of Flight Centre, announced a tie-up with South Pole to launch a global carbon offsetting program, for clients as well as its own staff. It said clients can set up “a net zero solution” to naturalise the carbon impact of their business travel, by offsetting against global flights, hotel accommodation, rail bookings and car rental.

“Sustainability has moved higher up our customer’s business travel agenda, despite the impact of Covid-19,” said Marcus Eklund, global managing director at FCM. In fact, after the travel bans of 2020 enabled companies to reduce their carbon footprint from travel significantly, many are not only re-emphasising their overall environmental objectives post-Covid, they’re making them an integral part of travel policies.”

However, one consultant has likened carbon offsetting to paying somebody else to diet for you. “It’s definitively a valuable tool. But what isn’t a good idea is to rely on it as your primary way of reducing your carbon footprint,” said Andrew Perolls, CEO of Greengage Travel & Event Solutions. “That would be dangerous to do. For what you can’t reduce, you then use offsetting.”

Fuel for Thought

There was a lot of noise about sustainable aviation fuel too. This has the potential to cut lifecycle emissions from aviation by up to 80 percent. However, today it represents less than 0.1 percent of aviation fuel used.

CWT has now partnered with Delta, where it will purchase enough of the fuel to cover the projected fuel usage from all of its travelers on Delta. CWT said this “underscored its commitment to environmental stewardship, a core part of its strategy, culture and consulting activities as a UN Global Compact signatory since 2012.”

American Express Global Business Travel, meanwhile, formed an alliance with Shell to help increase the supply of sustainable aviation fuel. “Our approach with Shell could provide a turnkey solution for corporations working towards net-zero emissions,” said Amex GBT’s CEO Paul Abbott, and both Shell and the travel agency giant have set their own individual targets to become net-zero emissions businesses by 2050.

And United Airlines this week launched a new fund, United Airlines Ventures, that will focus on sustainability concepts to complement the carrier’s goal of net zero emissions by 2050, without relying on traditional carbon offsets.

The travel industry’s talking a good game — but there’s nothing wrong with that, argued Thrust Carbon’s Thorsen. “PR is good if it helps drive engagement and motivation for travelers to do the right thing. If it helps get buy-in and resource allocation to then next year go beyond offsetting, it’s not always a bad thing,” he said.

FCM, for example, was playing a smart business move by partnering with South Pole. “They’re re a big name, they have decades of experience,” he said. Thrust Carbon is in talks with FCM too over a partnership, as well as BCD Travel, and poised to announce a collaboration with a global online booking tool.

Carbon Budget Future?

Looking further ahead, as sustainability climbs the boardroom agenda, companies may soon be calculating their travel not by financial cost, but carbon cost, using a carbon budget.

Dennis Vilovic, Troop’s founder, said its customers tend to pay for its platform out of their sustainability budget, giving some an idea of where things are heading.

His vision is for Troop to evolve from planning software to an end-to end booking platform, where it can connect with corporate travel agencies on the fulfilment side, and other suppliers, and also bring in expense reporting.

It’s not too dissimilar from a previous trend — expense platform Concur reportedly grew in popularity as a company’s default travel booking tool because finance chiefs liked the way it blended expenses with travel, so it could be viewed in a unified way.

Booking platforms that calculate the cost of travel and meetings in carbon emissions, rather than dollars, won’t be too far off.