ESG in Corporate Travel: Navigating Environmental, Social, and Governance Risks

In today’s boardrooms, environmental, social, and governance (ESG) considerations are taking the lead, urging businesses to develop concrete strategies and objectives. Interestingly, one often-overlooked avenue for advancing ESG goals lies within corporate travel programs. When it comes to business travel, companies are now venturing into new territories, from curbing carbon footprints to placing a premium on the safety and well-being of employees – an approach seamlessly integrated with ESG in corporate travel.

Sustainability in corporate travel

Thus, it gets strategic as risk managers emerge as pivotal architects, translating those high-level ESG objectives into practical strategies.

Think policies, procedures, meticulous tracking mechanisms, and precise communications. It’s about aligning the grand vision with the day-to-day operations, ensuring ESG principles permeate every aspect of the corporate journey.

Social and environmental components of ESG in corporate travel

Most ESG considerations in business travel revolve around social and environmental factors. Social factors delve into how businesses treat and value individuals, with a recent emphasis on employee well-being and safety dominating discussions within travel departments.

Beyond this, social factors extend to relationships between the company and external entities, prompting a closer examination of third-party suppliers used during travel. The environmental impact of business travel is the final and, perhaps, the most obvious tie to ESG.

Addressing social and environmental factors of ESG in corporate travel

1. Safety and well-being

While businesses have always prioritised the safety and well-being of travellers, the emergence of COVID-19 has elevated this concern to a more immediate focus for all companies.

Historically, enterprises managed this risk through measures like pre-trip approvals and advocating for the use of corporate travel management companies to maintain records of trip details.

Nowadays, it has become customary to integrate additional specialised technology and services that can deliver crucial information for travellers before their journey for enhanced safety, monitor and maintain communication with travellers throughout their trip, and offer expert assistance when required.

By incorporating these services, travel managers contribute their industry knowledge, while risk managers play a vital role in evaluating how these emerging technologies or services can most effectively mitigate risks to individuals and organisations.

Vigilant monitoring is essential for any successful mitigation strategy, and in the context of traveller safety and well-being, the capability to promptly identify and assist a traveller in need is of utmost importance.

2. Management of suppliers

The ultimate decisions regarding travel arrangements, accommodation choices, and the selection of suppliers receiving company funds are often made by business travellers themselves.

However, business travel departments aim to influence traveller decisions by designating and promoting preferred suppliers that align with the goals of both the business and the traveller. Traditionally, the selection of these suppliers followed a Request for Proposal (RFP) process that prioritised the “best value,” often defined as meeting the minimum service-level requirements at the most competitive price.

This is now changing. Companies today are placing a greater emphasis on examining the specific suppliers they endorse. Questions such as who governs the supplier, what principles they uphold, and how they address ESG considerations are now integral to the supplier selection process.

Hence, this shift requires enterprises to weigh these new priorities against traditional notions of “best value.” For instance, are companies prepared to invest more in a supplier that shows a heightened commitment to workplace satisfaction or environmental responsibility? The decision should be aligned with the organisation’s top-level objectives.

Risk managers once again play a crucial role in bridging the gap between organisational goals or commitments and strategies employed by companies to uphold them. With a clear comprehension of the company’s objectives, it becomes more straightforward to assess which aspects might be non-negotiable in the selection process and which are considered desirable but not essential.

After the identification of preferred suppliers, the emphasis shifts to evaluating traveller compliance with these selected suppliers. Given that businesses cannot exert full control over the suppliers chosen, it is essential to devise innovative methods for communication and promotion to enhance compliance.

3. Environmental footprint

Organisations can employ two approaches to reduce the environmental impact of their business travel; decrease the frequency of travel and make more informed decisions regarding travel methods.

Although many companies aim to achieve both, it is crucial to establish a starting point before implementing any changes. A travel management company can assist by furnishing data on travel frequency and volumes, and numerous resources are available to estimate the carbon footprint.

ESG in corporate travelThe future travel volume of an organisation is influenced by various factors, primarily under the control of executive management and significantly shaped by business requirements. Despite this, organisations frequently rely on their employees to make informed decisions regarding travel details. Consequently, those responsible for shaping relevant policies often redirect their focus towards ensuring that the travel that does take place aligns with environmentally friendly practices.

To encourage sustainability, some companies actively fund sustainable aviation fuel (SAF) initiatives, reducing emissions by nearly 80%. Notable members of the United Airlines Eco-Skies Alliance like Deloitte, DHL Global, and HP have implemented SAF for their employees’ business travel.

Collaboration between risk managers and their counterparts in travel management is vital for devising effective strategies that align with their organisation’s ESG goals. The success of these strategies plays a big role in influencing travel behaviour and the organisation’s capacity to shape employee decisions.

Therefore, establishing robust communication channels, providing education, and exerting influence are crucial elements for evolving ESG objectives, which are becoming increasingly important for both corporations and their employees.

ESG and corporate travel

When dealing with your corporate travel program, adopting an ESG perspective necessitates a shift in mindset towards considering the social, governance, and environmental impact and structure of the program.

An effective approach involves gathering data that enables a comprehensive assessment of this impact. For instance, utilising travel data can aid in predicting demand, identifying trips with meaningful business outcomes, monitoring emissions, promoting employee well-being, and more.

Gain deeper insights into the implications for your corporate travel program by talking to one of our experts’ at Holiday Tours. Additionally, discover how our expertise in corporate travel management can assist you in effectively communicating ESG initiatives to gain support from your employees.


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