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Developing environmentally sustainable and socially responsible travel procurement programs must start well before the request for proposals process, according to representatives from travel suppliers, academia and government, speaking here last week at an Association of Corporate Travel Executives conference. Organizations must first embed corporate social responsibility into their principles, policies and processes, they said, in order to link with suppliers' sustainability efforts and effectively apply green thinking to vendor selection.
"You see many companies sending out RFPs and asking suppliers, 'What is your green policy on these things?' But how many companies actually have an environmental policy of their own, specifically for business travel procurement?" asked Bernard Harrop, managing director of IG Management. "Very few decisions are made on the response to environmental issues in RFPs. If you are going to do it, do it the right way."
To do so, travel buyers must build commercially relevant questionnaires by understanding their organizations' requirements and suppliers' limited resources.
"I have seen a lot of invitations to tender that read like shopping lists of everything anyone could ever want on sustainable development and environmental management," said Barbara Morton, project manager for the Sustainable Procurement Task Force, within the United Kingdom's Department for the Environment, Food, & Rural Affairs (DEFRA). "One size is not going to fit all. Don’t indulge in questionnaire disease. Keep it real."
In DEFRA's case, that meant asking bidders to help the organization follow its CSR principles and pursue innovation. "In new business travel contracts, we are going to be relying on service providers to be clever with some of the management information they are providing to us," Morton explained. DEFRA, and several other U.K. government departments, in February selected Carlson Wagonlit Travel as a primary travel management service provider.
In terms of specific travel expense categories, air transport easily is the largest carbon emitter. Though there are no commercially viable alternatives to long-haul airline services (if remote conferencing won't suffice), buyers can still seek out differentiation.
"All airlines pollute, and all airlines know how much they pollute," said Richard Tams, British Airways general manager for U.K. and Ireland corporate sales. "The difference is in how willing they are to share that information with you and discuss the issues, and how many have clear systems in place for managing their carbon footprint and noise pollution. As procurement professionals, you will pay more for products that add value. In my view, this is part of that equation."
Tams suggested "differing approaches" between European and U.S. carriers, and between full-service and "no-frills" operators. Though he did not elaborate, U.S. carriers have a decidedly poor track record in promoting sustainability when compared with some of their European counterparts.
In assessing hotels, Jan Peter Bergkvist, director of environmental sustainability at Hilton International and Scandic, offered several pointers. For example, buyers should consider hoteliers that provide CSR training to employees, pursue renewable energy sources, phase out toxic and non-biodegradable chemicals, work toward social sustainability and carefully consider the local impact of new construction and renovation projects.
Importantly, they also should seek out hotel companies that measure and report their progress, share best practices and secure third-party certification, including such eco-labels as "the Nordic swan and European Union flower."
Key performance indicators include kilowatt hours, liters of water and waste (sorted and unsorted) per guest night. "Soon we will see a new KPI, which is kilos of CO2 per guest night," Bergkvist said, noting Scandic in January and Hilton in 2008 will begin reporting those numbers.
Some car rental companies also have initiated environmental programs. Jonathan Shopley, CEO of The CarbonNeutral Company, provided the example of London's Radio Taxi Group. "When they decided to take action on the environment, it wasn't about climate change, though they do a good job," he explained. "What they really wanted to do was gain more corporate accounts. They understood that their customers in the city were greening supply chains and procurement practices, and would favor, all things being equal, a more environmentally friendly company. They went carbon neutral and won £ 1.5 million in new business in the next six months, largely attributable to doing that."
But when all things are not equal, and there is an added cost, how far are corporate customers willing to? "I have been unable to convince any single corporate customer to offset their rentals by adding it to the cost of their rental," said Avis Europe sales manager Roger Evans. Though the company has seen a "gradual" increase in individuals offsetting their rentals, "it is still all about price" for business accounts, Evans said.
Nevertheless, panelists implored travel procurement professionals to apply their purchasing skills, diagnostic tools and any leverage their organizations can muster to affect change. "The reality is business travel is probably your single largest contribution to carbon emissions," said Tom Cannon, Dean at the University of Buckingham Business School. "There needs to be a revolution in the procurement of business travel."
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