April 26, 2007 - More travel managers are showing an interest in proactively accounting for environmental impact, but a general lack of consensus and standardization continues to plague an already complicated problem. Measuring carbon emissions from airline flights, hotel stays, car rentals and other components requires credible, auditable processes that allow conversions into dollars and validation that any carbon-offset programs are effective.
Addressing the need for information in the travel management sector, key industry associations and related groups have added environmental issues to their agendas.
"People who study this have seen a wide, almost scattogram of results on these issues," said TRX executive vice president Susan Hopley during a recent TRX-sponsored webinar. "We need to work together to come up with standards. Otherwise, we are blowing in the wind and won't know which direction to go in."
Hopley leads the executive committee of the new
Association of Corporate Travel Executives Global Centre for Research, which first will explore climate change. The National Business Travel Association currently is seeking volunteers for a Corporate Social Responsibility Committee that will address such topics as "green issues, environmental impact, philanthropy, etc.," and the organization's local New Jersey chapter is dedicating a May educational seminar to climate change.
In the United Kingdom, the Institute of Travel Management is looking to take the next steps in
Project Icarus. "There is so much different discussion and so many different interpretations, but now we have the opportunity to really push forward to find standards," said
Caroline Strachan, international travel manager for Yahoo and ITM's chair-elect. "ITM's place is not to say, 'You should all be managing your carbon footprint in this particular way. You should all be traveling more by train than plane.' It is our place to present people with the facts. That is what is missing at the moment."
Using facts to develop industry standards is one challenge. Applying them to travel and meetings management processes is another.
"IDB has started a carbon-neutral initiative and the last couple of meetings we have had, which were fairly large meetings, have been carbon neutral," said Carol Griffith, chief of the travel management section at the InterAmerican Development Bank, speaking during the TRX webinar. "We have purchased offsets, but it has been difficult from my perspective because I am asked to provide the information used to determine these offsets. I am giving them estimates at best. It would be much better if there were tools at the point of sale, so that what I am giving them is accurate."
Such tools have not been easy to develop, given the variables that impact carbon calculations for a given trip. Airlines, for example, use different types of planes and engines, report different load factors and use different flight routings. "Our analysis shows that, even within a citypair ... fuel efficiencies do vary," said Scott Gillespie, TRX vice president and general manager of Travel Analytics, suggesting differentials as high as 10 to 15 percent. TRX recently began offering a CO2 emissions reporting tool that uses "companies' historical data."
"Step one for most corporations is to establish a baseline and create a 'carbon inventory,' " Gillespie added. "Some companies now are publishing their carbon emissions inventory. And when companies do that in a public fashion, particularly publicly traded companies, they need to be pretty darn accurate."
Gillespie acknowledged that some companies have asked TRX how it validates its carbon emissions reporting model. "As a consequence, we are pursuing validation of our model with a well-respected, environmental consulting firm. That's clearly what the CSR folks within large corporations are expecting." Because "airlines really are the only ones that know with great confidence what their emissions are," Gillespie continued, "there is an excellent opportunity for some collaboration between the airlines and the technology providers."
By understanding the environmental impact at each point in the travel process, organizations can begin to orient toward "carbon literacy, carbon intensity and carbon as currency," said Jonathan Porritt, program director of Forum for the Future and chairman of the U.K. Sustainable Development Commission, speaking last month in Edinburgh during an ITM conference. Porritt said he now works with "15 or 20" companies that detail their CO2 measurements down to the hotel room night. "That is quite cutting edge and the higher level measurements are more standard," he explained.
After calculating emissions associated with business travel, corporations must then determine how to put a price tag on them. "That is not terribly clear," Gillespie said. "Both the travel buyers and the airlines probably have some leeway in determining that pricing mechanism."
According to TRX, "a lot" of carbon-offset programs use prices between $5 and $10 per ton of CO2, while recent spot prices used for emissions trading purposes in Europe have ranged from $15 to $40 per ton. Based on $10 per ton calculations, TRX said "early analysis show CO2 costing roughly 1 to 2 percent of a company's air spend."
Partly driving the need for more industry dialogue is the ever-growing number of travel suppliers embarking on environmental initiatives. Delta Air Lines last week said it became "the first U.S. airline" to support a carbon-offset program, but customer involvement is limited to direct bookings through its Web site. Effective June 1, travelers making those bookings will have the option to offset emissions from their flights through donations to The Conservation Fund--$5.50 for a domestic roundtrip flight and $11 for an international roundtrip.
"From a technology perspective, this was the fastest way of getting [a carbon-offset program] out there," according to a Delta spokesperson, who added that the airline "certainly" will look at other channels. When asked if that would include bookings through travel management companies and corporate online booking systems, the spokesperson said, "I am sure that it would."
Asked how Delta would measure the effectiveness of its offset program, the spokesperson cited the airline's partner, The Conservation Fund, and said, "They're the experts, so we defer to them."
By all accounts, The Conservation Fund is a credible organization. But many travel management professionals--whose companies increasingly are taking the next step of offsetting carbon emissions through one of a growing number of firms claiming to participate in and manage such activities--are unlikely to let offset claims go unchecked.
"There is evidence that some of these carbon offset programs are not as effective," said HRG research manager Richard Charman, speaking during the TRX webinar and noting how such programs often are executed in third-world countries. "There needs to be more detail of what is being sold to corporates. There needs to be adequate oversight to ensure investments are being done on a sustainable basis that will actually deliver to the client what is promised."
Such issues may achieve a higher profile in the United States as carbon awareness and green travel management gain momentum. "My hunch is the next American president will take America into a cap-and-trade [carbon emissions] scheme within nine months of being elected," said Forum for the Future's Porritt. "And that will transform global carbon markets in ways that very few people understand today."
Related resources:
The Conservation Fund 
