Business travel: Green-sky thinking

Many European firms are putting in place green travel policies to reduce business air travel to cut their carbon impact. The current economic downturn has also made cutting executive air miles a priority for many firms.

Airlines are reporting falling growth in both premium and overall travel in the first half of 2008. British Airways announced in August that its quarterly profits had fallen by 80%. Tumbles in the airline industry may be evidence of a growing trend for companies to abandon the plane in favour of other forms of transport, or even virtual meetings.

Figures from the International Air Travel Association (IATA) show that growth in passenger numbers has begun to slow through the economic downturn. In June the airline industry body reported that premium travel fell by an average of 10% over March and April compared with a year earlier. Growth in total international revenue per passenger for the first five months of the year slowed to 5.5%, compared to 6.5% growth the year before.

IATA spokesman Quentin Browell says: “Traffic growth has definitely started to slow in line with weakening economies around the world.” Although corporate environmental and travel policies are factors, the looming recession is the main reason for slowing growth numbers, he adds.

Findings from WWF’s Travelling Light report, published in May, show that 41% of FTSE 350 companies already have green business travel policies, while 32% are developing one. Seeing the financial benefits of cutting down on air travel, firms are increasingly turning to technologies such as video conferencing to reduce the cost of doing business globally.

Of the companies that already had or were developing a green travel policy, all said they were encouraging the use of audio conference calls; 90% said they were looking into video conferencing; and 84% said they were hoping to reduce the number of meetings they made that required air travel. Of the whole FTSE 350, 45% of companies said they strongly felt video conferencing had the potential to reduce flights.

Lights, camera, action

Royal Bank of Scotland and Man Group are two companies embracing video conferencing. Since 2004, RBS has almost doubled its video conferencing facilities from 430 to 800. The bank says it is using the facilities to reduce its reliance on flights, saving about 140kg of carbon dioxide per person on a commute between Edinburgh and London.

Investment firm Man Group’s head of corporate responsibility, Rob Challis, says video conferencing has helped the company cut 20 long-haul flights and 15 European flights a month. He says, in his contribution to the WWF report, that the technology is useful for attracting other interested parties to meetings who otherwise would not be able to attend if travel was an obligation.

HSBC launched a $90m global environmental efficiency programme last year. Measures include cuts to business travel. As part of its overall carbon footprint management, the bank hopes to reduce business travel by making staff consider whether their journeys are completely necessary. It is also looking to roll out video collaboration technologies across the group. A one-month trial of the use of rooms equipped with the technology at the group’s head office in London demonstrated a reduction of 523,000 miles of air travel – a saving of 185 tonnes of carbon dioxide.

Still flying

Despite the growing use of video conferencing, HSBC, RBS and Man Group all recorded an increase in the use of flights in their recent corporate social responsibility reports. HSBC’s sustainability report for 2007 showed business air kilometres increased from 831 million to 883 million between 2006 and 2007, although the use of domestic air travel fell. It claimed, however, that emissions per employee for business travel fell from 0.62 tonnes in 2006 to 0.57 tonnes in 2007. RBS’s use of air travel rose from 198 million to 214 million km in the same period. Man Group also saw its long-haul air miles rise, although its use of medium- and short-haul flights fell.

Video conferencing is allowing some companies to realise ways of reducing their business travel footprint, but it seems that HSBC and other global firms still view a degree of air travel as essential. A spokesman for HSBC says that, amid growth of the business in emerging markets and elsewhere, “it would be impossible to do business without face-to-face meetings taking place”.

British Airways chairman, Martin Broughton, said at the airline’s AGM in July: “Business travel is not a luxury. In many cases, it is a necessity.” As has happened in previous downturns, the carrier expects demand for long-haul flights to hold up much better than demand for short-haul.

Economic pressures on companies may be reducing demand for air travel, but even after the Stern report on climate change, and the credit crunch, and with increasing acceptance of video conferencing, some executives will always have a need to fly.

Travelling light

According to a survey from environmental group WWF:
· 74% of FTSE 350 firms have or are developing green travel policies.
· Of those firms, all expect to encourage audio conferencing.
· 90% of the same group looking to encourage video conferencing.
· 49% said video conferencing could increase productivity.
· 45% said video conferencing had potential to reduce flights.
· 43% of FTSE 350 firms already routinely use video conferencing.

Aiming high

· 84% of FTSE 350 companies that have or are developing a green travel policy want to reduce meetings requiring air travel.
· 29% of firms expect number of flights to decrease over 2008-09.

Take the train

Business travellers in Europe are set to switch from plane to train for short-distance journeys on the continent. By 2010, 25 million passengers a year are expected to travel on Europe’s high-speed rail network, according to Railteam, an alliance of high-speed train operators that launched the network in 2007.

High-speed rail operator Eurostar, which runs services including the London to Paris channel tunnel route, saw passenger numbers rise by 18.3% in the first half of 2008, compared with the same period in 2007.


This article was first published in the September 2008 issue of Ethical Corporation magazine.