Sustainable Travel

Operationalizing Sustainable Travel to Drive Business Performance

June 5, 2024

As we emerge from the shadow of COVID, business leaders are grappling with how to shape their companies in the face of mounting economic headwinds. In this post-pandemic world, organizations are reexamining, rethinking, and rewriting policies that factor in the new realities of employee expectations, sustainability goals, profit forecasts, and the technologies and budgets that support those choices. 

As we will see, business travel is at the nexus of these critical trends creating the need to change “business as usual” this year and beyond.  

Trends affecting business travel

For the past decade, as long as expenses stayed within a certain range there was little need for additional oversight on travel. But COVID created sweeping changes - it took travel-related decisions out of the travel department and elevated them to the C-Suite. While COVID concerns are diminished the executive-level focus on travel isn’t going away. Travel is now subject to three powerful macro trends:

  • Remote and hybrid work
  • Demands on efficiency and cost
  • Focus on sustainability

Each of these trends is poorly supported by the travel and expense software of the past. 

When first introduced, tools like Concur and Coupa (among many others) were revolutionary in helping employees self-service travel bookings that adhered to corporate policies, and tools like Expensify eased the burden and accuracy of expenses. Now these tools are commonplace and, as we enter a new travel paradigm, ready to be augmented by new tools that meet the challenges and trends of today. 

Remote and hybrid work

The rise of remote and hybrid work means employees are spread over larger geographic areas, leading to an increase in demand for internal travel. Employees that previously had a 30-minute commute by car, might have moved further away and require a hotel when they come to the office. Will the company pay for that? When and how often?

Likewise, remote work has increased demand for smaller, but frequent in-person meetings so that distributed teams are able to come together to build bonds and align on high-level decisions that are preferable to make in person. Who will manage that and how frequently should that happen? 

These are just a few of the scenarios that weren’t on the radar just a couple of years ago but are now critical to address and support. 

Demands on efficiency and cost

In the current business climate, expenses are being scrutinized in a way that they weren’t in the past. “Efficiency” is replacing “growth at all cost” as a corporate mantra. The pandemic showed that many in-person meetings could be replaced with video conferencing with benefits to expense and productivity. 

Against that backdrop, it’s not surprising that 70% of companies want to strategically evaluate and prioritize travel based on business impact. 

Focus on Sustainability

Business travel can be a leading source of an organization’s carbon emissions. For example, Microsoft’s FY20 emissions from travel were 392,556 metric tons of carbon dioxide equivalent. That’s roughly the same amount that 85,338 passenger vehicles produce in a year. In fact, business travel emissions were larger than Microsoft’s direct, or Scope 1, emissions.

For businesses that have a sustainability goal, the cost of carbon emissions should be accounted for and factored into the ROI for each trip. 

Given this fact, it’s no surprise that almost 1 in 3 US and European companies need to reduce travel emissions by >20% in order to achieve 2030 emissions reduction targets. In addition, 55% of companies are actively trying to reduce air travel as part of their sustainability strategies. 

Incorporating carbon costs into business travel decisions

The data is clear. At the same time that travel expenses are rising and employee demand is changing, there is increased scrutiny by the C-level on business travel. The teams, tools, and policies that support the travel ecosystem must change to meet these new requirements. 

We’re entering an era where separating “good” travel from “bad” travel and helping teams understand the difference is critical. Good travel creates a positive business impact. Bad travel is not only inefficient but it’s costly and creates tremendous risk to your ability to hit publicly defined sustainability goals. Once the difference is clear, teams can develop strategies to travel smarter by bundling trips, choosing the most critical moments to meet with clients or team members in person, and aligning on ways to do more with less.

While conceptually simple, companies are struggling to operationalize their travel strategies due to a lack of fit-for-purpose data, insights, and tools to enable the business to incorporate travel data into daily decisions. Simply reducing travel budgets will fail. Decisions need to be embedded directly into the business.

In this new era, the requirements for tools are:

  • Business leaders have access to the data they need to optimize their team’s productivity and efficiency while providing visibility into the fully loaded cost of travel.
  • Sustainability leaders have the data and tools to translate sustainability objectives into business insights that drive successful decision-making.
  • Finance and Corporate Travel leaders have the data they need to adjust policies and set budgets.  
  • Corporate Travel teams have the data they need to engage their business travel supply chains and partner with them to proactively reduce emissions.

All of this needs to be available in accessible, easy-to-understand dashboards that help managers track progress and course correct towards net zero targets year over year. 

At Clarasight we work with Sustainability, Business Travel and functional leaders to deliver on reduction goals.

  1. We enable companies to collect and unite disparate sources of data, including emissions targets, team drill-downs, real-time operational data and employee feedback.
  2. We provide automated, custom, easy-to-understand dashboards at the team level to drive and track team-wide performance all the way down to the individual.
  3. We embed the actionable information that drives desired behavior change into travel-related workflows that integrate with core business systems. 

Want to schedule a tour of our technology? Talk to an expert to find out more. 

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