Corporate travel is a trillion-dollar industry.
And while all the indicators in our post-COVID world initially pointed to a slow return to pre-pandemic corporate travel, newly released forecasts from the Global Business Travel Association (GBTA) reveal the opposite is now true. Business travel has bounced back faster than expected, and spending is anticipated to surpass the pre-pandemic spending level of $1.4 trillion next year to grow to an estimated $1.8 trillion by 2027.
Business travel spend is enormously impactful to climate change because:
Given this reality, if business travel spending will soon reach unprecedented levels, how do companies prioritize sustainability and stay on track to achieve their net zero goals while navigating the challenges presented by the role travel plays in a business’ bottom-line success?
Business travel has always been a vital part of corporate business. Whether for new market launches, fostering client or partner relationships, exploring new business opportunities, attending events, or conducting research and development, corporate travel is driven by various business objectives and operational needs across industries, organizations, and departments.
In our post-COVID world, corporate travel has also taken on a new definition that includes navigating the remote and hybrid work environments that have blurred the lines between business travel and commuting. It's not uncommon to see corporate travel teams tasked with developing commuter programs and partnering with HR, transportation, and real estate teams to shape employee mobility strategies. With this shift in the corporate travel ecosystem, reducing emissions from corporate air travel (which makes up 90% of business travel emissions) without reducing external and internal business objectives can feel like walking a tightrope.
While we see Sustainable Aviation Fuel (SAF) as a critical part of the long-term solution to decarbonization, most recognize that the limited supply, high costs and lack of immediately available infrastructure to support SAF means we’ll likely need to be patient for SAF to scale to support the market holistically.
So, how will companies deliver key business outcomes while hitting their emissions goals, especially those committed to science-based targets?
In acknowledging that business travel spending will soon reach unprecedented levels, we can also assume that corporate travel will continue to be part of business ahead. However, there is a huge opportunity to be more thoughtful and strategic in how you travel.
Since co-founding Climate Club in 2021, I've had the opportunity to work with some of the world's leading enterprises on their decarbonization efforts, and it has given our team a unique view into what best-in-class businesses are doing to balance sustainability initiatives with business outcomes.
At Climate Club, we provide companies with a comprehensive software platform that enables companies to rapidly and successfully deploy all three of the critical capabilities outlined above. Within any business where travel is a significant driver of costs, emissions or culture, it is critical that you have the tools to forge a partnership between your travel, sustainability and core business teams.
By defining and quantifying what good travel looks like, surfacing progress to targets for team leaders and modeling in-year scenarios to drive decisions, companies can strategically plan and manage travel so that every employee can focus on delivering business outcomes while achieving sustainability goals.
A 2022 report by Accenture revealed 93% of companies will miss their emissions targets unless they accelerate progress on reduction. Whether motivated by public commitments, brand reputation or cost reductions, moving the needle requires a new breed of sustainability intelligence that is truly actionable.
It is clear that the pathway to net zero now requires every company to activate its most valuable asset - its people. To truly reduce emissions and reach net zero targets, companies must close the gap between climate-related intentions and actions across all levels of the organization.
By removing data silos, setting clear emission reduction targets specific to teams, and consistently tracking the business value and sustainability impact created from each trip, companies can better understand the true implications of business travel to build real-time intelligence that will allow them to thrive in achieving goals for their customers, partners, people and planet.
This article was originally published in the MCJ Collective Newsletter on September 12, 2023.