Why sustainable procurement is vital for corporate travel

With corporate travel undergoing a transformation, many travel managers are exploring the possibility of making their supply chains more efficient.

Now is the ideal time to make savings, but also engage with a more comprehensive sustainability policy – a holistic approach that addresses the triple bottom line: people, planet and profits. By choosing more eco-friendly options, businesses can streamline costs as well as preserving the environment.

The role of travel managers in affecting change

The need to reduce negative environmental impact now falls within the area of corporate social responsibility (CSR). However, research shows that many travel managers are unaware of their companies’ CSR policies. A study in 2017 by the Global Business Travel Association and AIG Travel found that 53% of travel managers’ businesses had a formal CSR policy, but one in five travel managers didn’t know of its existence.

The same study also found that only 16% of travel managers incentivized their business travelers to stay in sustainable hotels and just 4% required them to book travel with sustainable suppliers.

This reflects the fact that lodging is often ignored when it comes to making environmentally friendly choices. The travel industry is responsible for 9% of global emissions and air travel is still seen as the largest contributory factor – and yet the stay component of a business trip can easily produce similar emission levels.

The complete picture is further obscured by the fact that, according to HRS research from 2020, only 42% of hotels share sustainability compliance data whereas for air transport that information is available in 92% of cases.

In fact, hotels create 25% of the travel industry’s CO2 emissions. This means that failing to choose sustainable lodging is a missed opportunity for travel managers to take a leadership role within their organizations and affect positive change.

By taking an active part in evaluating corporate supply chains for travel and lodging, you can contribute to companies’ overall CSR obligations while also improving traveler relations.

Below are suggestions on how to implement a sustainable procurement policy that benefits the business as well as those travelling on its behalf.

Why do businesses need a more sustainable procurement policy?

Consumers and travelers are becoming increasingly aware of the need for sustainability, as well as the values and policies of the companies they engage with. A company’s reputation can be bolstered by having a publicized eco-friendly policy.

Not only that, but many companies are now being rewarded by their respective governments for committing to green practices. In the UK, for example, there are governmental grants and tax breaks available, such as a Climate Change Levy reduction of up to 90%.

Choosing greener practices also encourages employees to be more effective. A study by UCLA and the University of Paris-Dauphine in 2012 found that staff employed by eco-friendly companies are 16% more productive than the average worker.

All indications point to a greener future, where a business’s value will be contingent on its commitment to sustainability. Given the ambitious goals made globally by countries and businesses to reduce impact on the environment – such as the Paris Agreement and commitments made at the 2018 and 2019 Global Climate Action Summits – a review of corporate practices is necessary for the future of the planet.

This makes creating a sustainable procurement policy vital for the future success of a business, and the wellbeing of its corporate travelers.

Which areas should travel managers focus on?

The five areas in which companies can improve their procurement practices are outlined in case studies by UN Environment.

To improve resource efficiency and lower their greenhouse gas emissions, it recommends that organizations should:

Though the nature of a business’s corporate travel and hospitality needs may not change, there are many ways in which travel managers can still encourage better practice.

How to ensure your sustainable procurement policy is efficient

For procurement policies that are better for the business and the environment, focus on:

Evaluating your supply chain for sustainability?

If you’re considering re-evaluating your supply chain in light of new sustainability policies, HRS can help. Our hotel and service partners can provide a clearer picture of the practices in place to help you make an informed decision about your supply chain.

Find out more about sourcing sustainable travel partners and services through
the HRS platform.