Lufthansa, the largest buyer of SAF in Europe, recently integrated ‘carbon neutral’ features into its flight booking process, which allow customers to choose flights with SAF, contribute to climate protection projects or a mixture of both options. The German airline group is also upgrading its fleet with more fuel-efficient aircraft.
These are just two examples of many airlines that have invested in SAF as a primary emissions reduction strategy. American Airlines invested significantly in 2021 and Delta pushed in with a 75 million gallon commitment in March of this year. Just this month, smaller players like Finnair and Japan Airlines have made long-term commitments to purchase SAF.
On the lodging front, a number of initiatives led by the World Travel & Tourism Council, the Global Sustainable Tourism Council and others have worked to wrap sustainability standards around the accommodations industry. The structure of the industry, with independent hotels and franchises comprising so much of the volume, has made it challenging to find the right standards to apply and to get buy-in from owners and management companies.
The WTTC introduced its Sustainability Basics criteria in April as a ramp up program for any hotel owner or operator to align their operations with efficiency-, emissions- and community-based criteria that will put them on a path to a sustainable future. The program was designed for all types of lodging, but with a particular focus on properties that may not have had access in the past to a cohesive plan.
“Sustainability is non-negotiable but not every small hotel has access to the science on how to make a difference,” said CEO Julia Simpson. “This gives everyone access to a global standard.”
That’s the same struggle hotel solution specialist HRS was looking to solve. While global chains have the resources and infrastructure needed to measure and report carbon emissions, HRS chief product officer, Martin Biermann, said gathering and auditing data from the myriad of independent hotels remains troublesome for the industry and for travel managers.
Hence, the company launched its Green Stay Initiative in March 2021, which uses a proprietary formula, based on industry methodologies such as the Hotel Carbon Measurement Initiative and the Greenhouse Gas Protocol, to score a hotel’s energy consumption, water use and waste disposal.
“The traditional means of [corporate travel] RFPs and procurement processes are by no means sufficient to cater to future needs of environmental protection,” Biermann said, explaining that Green Stay allows travel and procurement managers to compare apples with apples and ensure sustainability ratings are in line with global standards.
Hotels in more than 75 countries have joined the initiative, including chains like Marriott and Accor, and Biermann said interest is growing. So much so that an updated version of Green Stay will be released in the next few months. This will include new levels of assessment for hotels and allow travel managers to customize hotel scorecards according to their own areas of focus and corporate goals.
On the ground transportation front, many companies particularly in Europe are pushing short-haul travel to rail options, which have long been an emissions leader. The U.S. clearly lags with fewer viable rail options outside the Northeast Corridor linking Boston, New York, Philadelphia and Washington D.C.
That said, car rental players are digging deeper into their green strategies. Hertz made major headlines last fall with its announcement to buy 100,000 Tesla electric vehicles by the end of 2023. The company also inked a related deal with Uber to rent the EVs to rideshare drivers at a special rates that will be lowered as more EVs come into the fleet. The car rental company entered a similar partnership with Swedish EV manufacturer Polestar in April for delivery of 65,000 vehicles over the next five years.
Hertz CEO Stephen Scherr singled out corporate customers and rideshare partners as key targets for the company’s growing electric fleet, though Siemens’ North America travel managers Randall Achterberg told CNBC this month there were limits to how much volume Hertz could provide at this stage. “We’re not pushing as heavily as we’d like to, because they’re not ready,” he said.
Hertz wasn’t the only company making waves with EV announcements. After the former’s Tesla announcement, Avis Budget Group CEO Joe Ferraro and CFO Brian Choi mentioned incorporating electric vehicles “at scale” in the company’s November earnings call, sending stocks soaring. As of June, the company had not yet released strategy details, but Deutche Bank analyst Chris Woronka told CNBC he takes the company “at its word” when it comes to an imminent rollout. Enterprise has been experimenting in the space since 2014 with a pilot it began in Orlando that continues to inform its nascent rollout.
Travel Management Partnerships Forge Path to Better Outcomes
Marriott International’s vice president of sustainability and supplier diversity, Denise Naguib, said there is a “heightened awareness” of sustainable hotel operations among corporate clients who want to understand how sustainable practices are embedded throughout operations.
“While we have been providing sustainability reports to corporate customers for many years, we now have twice the number requesting sustainability information since the pandemic began,” she said, adding that the group is working to drive new sustainable practices throughout its portfolio and is “keenly aware” that effective carbon reduction requires access to data and greater collaboration.
United Airlines’ senior manager, environmental sustainability and climate, Rohini Senguta, agreed with that assessment, commenting on the number of corporate customers demanding consistency and transparency when it comes to emissions reporting. But, like Naguib, she said, the real progress comes from partnerships.
“Power of coalition is what’s really going to move this market,” she said, referring to the airline’s EcoSkies Alliance, which was created to ‘accelerate solutions that decarbonize aviation’ and counts Salesforce, Microsoft and DHL among its members. “Partnerships are critical to demonstrate leadership and action, especially when it comes to SAF or sustainable technology,” she said.
Festive Road client solutions lead Katie Virtue sees that kind of commitment to emissions reductions and partnership developing at more companies than prior to the pandemic, and it’s going beyond dialog.
“The conversation is shifting away from awareness to implementation. Companies are moving from having objectives around people, planet and purpose in mind to now adjusting policy, approval processes and messaging… and automating the decision-making process with technology.”