While corporations are beginning to insert environmental concerns into their travel procurement programs, learning how to do so remains challenging. For procurement professionals and other negotiators who want to factor in vendor use of energy and materials, some clear steps are emerging.
Vendor evaluation is one actionable area--complementing travel reduction, increased travel efficiency (i.e., using nonstops over stopovers) and carbon offsetting. The most obvious change in supplier selection is switching to lower-impact alternatives, such as rail over air, while minding the potential impact on productivity.
Source: ACTE/KDS Jan.2007 poll of more than 200 business travelers and travel managers
The first step is to ask suppliers informally about their environmental impact and what they are doing to reduce it. Following this information-gathering stage, professionals can include "green initiatives" sections in requests for proposals. Buyers may venture into the complicated but feasible practice of comparing supplier assets, factoring in variables on energy and water use depending on aircraft and configuration types, hotel property-based facilities and car rental classes.
"In the classic mode, procurement professionals are having to reshape RFPs to solicit better information about the carbon management practices of suppliers," said TRX Travel Analytics vice president and general manager Scott Gillespie, who has made presentations on sustainable procurement in various venues. "The challenge is to do it in a thoughtful and constructive manner that gives them actionable information. It might be something like, 'How has your airline reduced its carbon intensity?' or 'What progress have you made in the last 12 months to improve fuel efficiency?' For hotels, 'What are you doing to bring down the cost of your utilities?' It's hard to get apples to apples, but directionally you can see where procurement managers will be wanting to ask more intelligent questions."
Gillespie said the next step--doing something with the information--is even trickier. Considerations include determining how important efficiency is relative to price and service levels, whether and how such information is incorporated into contracts, and how traveler behavior might impact the fulfillment of agreements as frequent flyers gain more information at the point of sale about vendors' energy efficiency.
Ultimately, successful corporate programs involve suppliers in a collaborative effort to achieve reduction targets, including both random and regular auditing to verify results.
Auditing and verification also are vital to carbon offsetting programs, which should be pursued only after travel avoidance and should be sourced just like any other purchase. According to Gillespie, "Carbon offset providers are [part of] a fragmented, immature and largely unregulated industry. Buyers should apply rigorous procurement principles--just as in other spend categories--where they establish criteria, use RFPs and evaluate carefully."
HSBC is among the pioneers in sustainable corporate travel (see Case Study, page 42). Other firms also have assessed business travel's impact on overall carbon emissions footprints. For example, British bank Barclays indicated in its 2006 corporate social responsibility report that 11.9 percent of carbon emissions from U.K. operations are caused by business air travel, with rail and car business travel together accounting for 5.4 percent.
In a broader sense, buyers are advised to go green as part of a comprehensive strategy that begins with measuring the organization's overall environmental impact and creating a baseline, and continues with maintaining that auditable measurement as a standard. Travel procurement managers also are working within the context of overall corporate social responsibility efforts, whether that's something they manage or something in which they participate. An increasing number of companies are employing CSR officers focused on the treatment of employees and communities, as well as Mother Nature.