Accenture's Neuenburg discusses:
- Which sustainability 'levers' can have the biggest impact
- The long journey with SAF
- What to watch in sustainability technology
The Global Business Travel Association Foundation this month published data from its Sustainability Acceleration Challenge, which benchmarked companies' sustainability policies and actions and which it plans to repeat annually. The benchmarking effort, co-developed with Accenture, showed most companies still are in the planning or just beginning stages of enacting their policies. Prior to its publication, Accenture global travel and aviation sustainability lead Jesko-Philipp Neuenburg spoke with BTN executive editor Michael B. Baker about his observations, internal and external, of the current status of corporate travel sustainability efforts. An edited transcript follows.
BTN: What are some of the leading practices you are seeing as far as sustainability?
Jesko-Philipp Neuenburg: There are a number of levers people in corporate travel have. One that was very heavily explored during Covid was, "do the meeting virtually," but we've also seen that corporate travel is important for businesses to grow and be successful, so it has come back to a large degree.
The next lever is, some of the short flights, you can shift them to rail. We've looked into this for Accenture. It's not a huge lever. In our assessment, it's maybe 0.5 percent of the footprint from aviation, because you're constrained [in that] it needs to be short distances, and you need to have a rail network that works as a replacement of the flight. Even if you're quite aggressive in terms of how much can go onto the train, that's basically the limit that you get.
Another thing we're applying is that we have our own aviation carbon calculator. With that, we identify the exact footprint of every commercial flight anywhere in the world. You can look at the flight you want to take, here are five six seven options, which of those flights have lower emissions? If you do that, you see on a lot of routes the delta might be as high as 20 percent between the lowest- and highest-emission flight, so there are some really big opportunities to save carbon emissions. We're rolling that out for our global travelers, and that will be about 5 percent of emissions we'll be able to save. It's also not necessarily more expensive to do so. Oftentimes they are within the existing travel policy you have in place.
BTN: We've seen some studies showing some disconnect between what travelers say regarding sustainability and what they do. How do we translate policy into action?
Neuenburg: There are two approaches you can take. One is more at the company level. People implement something called a carbon price. If you take a flight or any type of travel, that has a certain carbon footprint. Every ton of carbon, the price is a certain amount, and you take that money aside and reinvest in initiatives to decarbonize my business travel or operations more globally. That works reasonably well at the company level, but it doesn't work all that well to influence the individual traveler decision, because the actual surcharge, if you translate it on the individual flight, is not that big. Because it's corporate money, people don't tend to care much about it.
Therefore, the approach we prefer is giving them the transparency: If people have the knowledge that they could take Flight A or Flight B, and Flight B is 20 percent better and still works within my schedule and from a price perspective, let me make that. You can extend that approach and work with something like a dashboard at the individual employee level, and tell them compared to their peers whether they are better or equal or not as good in how much carbon the individual traveler causes by traveling.
BTN: By that same token, is there a push from employees for their employers to adopt sustainable travel policies?
Neuenburg: You see it most strongly in the younger generation, but by now, a larger part of the population believes in climate change and believes we should be doing something, and therefore ultimately also demands that from their employers. It is clearly something we see people using in their employer branding and being more outspoken about the things they do and don't do. If you are a company that should be doing something and isn't, there can also be employee backlash.
BTN: Is it becoming a reputational issue as well?
Neuenburg: There are different types of pressure. There's societal pressure from individuals—it could be the individuals as travelers or as employees. There's also the regulatory pressure, and that is increasing. We're seeing more and more environmental regulation coming in, with people needing to disclose more information and needing to achieve certain targets. That pressure is clearly there. It's probably more advanced and prevalent in Europe. In the U.S., it's more bifurcated. There are some people who have similar to views to what you find in Europe, and some who categorically don't agree as much, but by and large, in the U.S., we're seeing it.
The interesting thing is from a regulatory perspective the differences between European regulation, which tends to work more with the mandates and the stick methodology, and the U.S., [which] works a bit more with incentives, and that has led to the U.S. doing quite well when it comes to SAF production, for example. You could argue from a policy perspective that they're a bit ahead, and it's working slightly better than what it does in Europe at the moment.
BTN: How much progress has been made with sustainable aviation fuel?
Neuenburg: The SAF story is evolving, but it's evolving slowly. It's a huge infrastructure shift. The global industry uses something like a billion liters of fuel a day, and shifting all of that to sustainable fuel takes time. We are seeing new production coming online and the percentage, even though it is still very, very small, is picking up. Rightfully, you are getting the comments that it is quite small and quite expensive, which is true as well.
The overall transition will take 20 to 25 years. Last year, 2023, we had enough SAF to power the global industry for about 16 hours. This year, maybe we get the equivalent of something like 0.5 percent. Once you're there, you need to double about seven to eight times more to get close to 100 percent take-up. If you look at the solar industry, they've been able to do that relatively consistently every three years or so. It's a similar challenge. Costs are coming down significantly, and the price will be less of an issue.
BTN: What about the increased scrutiny we are seeing around SAF?
Neuenburg: It still doesn’t have a footprint of zero, even though it's significantly better than jet fuel. Alternative aviation fuel was the other term that was proposed, and this is in the context, especially in Europe, of the green claims directive and that there is a lot more scrutiny on any type of environmental claim you're making. For me, it's not necessarily helpful. You can rename the thing now, but the term has been out for a while, and we should be focused more on how we can drive more supply, demand and uptake faster.
BTN: Will corporate travel continue to lead the way in promoting its expansion?
Neuenburg: It is an early catalyst in this whole journey. There are a number of corporates willing to come on board with corporate SAF programs that the airlines are having, and that's providing some funding to offset the extra costs for SAF. Also, corporate travel, volume-wise, is the smaller part of the industry. That whole logic of getting corporates to finance the extra that needs to be paid on SAF, that only goes up to a certain point. Eventually, you need to make it part of your core product, and that's something we're already seeing, with carriers like Air France-KLM and Lufthansa, they've brought in essentially a SAF surcharge. Part of their fare is a certain percentage of SAF that has been assumed as part of their product, and that is essentially for everyone. That ultimately will be the mechanism we will transition to.
For now, there is more focus on these corporate programs, and rightfully so, because the corporates can take a leading role, and some are. That's a good opportunity to drive some of the early momentum that we need.
BTN: Now that we're getting in closer to the dates in targets set, are we going to see any adjustment, or are they on track to meet them?
Neuenburg: The majority of people who are setting these targets have an intention of achieving them. The amount of work that has been put into developing these targets would suggest that it isn't some labeling exercise, and that they want to achieve this, and they've done their due diligence and analysis of how they would do it.
The complication we're now seeing is that some of the things that need to be true for them to achieve those targets are at risk. They bet on having newer, more fuel-efficient aircraft. Some of those aircraft are now delayed. The SAF ramp-up may have been a little bit slower than people originally, optimistically assumed. If you put these things together, it's going to be really challenging to achieve these targets in some cases, and that is putting pressure on people, both from wanting to achieve the target but also what might be the backlash if they don't.
BTN: What about some of the other technology under development, such as electric aircraft or carbon capture?
Neuenburg: All of the technology will have their contribution. Electric aircraft and also hydrogen aircraft will come in a little bit later. When they come in, they come in at the margin, small aircraft and shorter distances for electric and for hydrogen. Even once they work, you might have very few aircraft initially available. You then need to build out the airport infrastructure so they can even fly different planes around the world.
If we look at the 2050 targets, which is what [the International Air Transport Association] and other roadmaps would say, it's going to be two-thirds SAF and all the other things combined is the other third. Carbon capture technology, I personally find that very interesting. The general case for negative emissions technology is quite strong. We're likely overshooting against the one-and-a-half-degree target, and as a result, we need to take out more carbon from the atmosphere, so we will need these technologies at scale.
Of course, there's the link from that technology to SAF, because even if we could scale the current SAF pathways, which are mostly biofuel based, eventually we run out of feedstock for those, and the solution for that is also carbon capture. We need to find a new source of carbon, which is essentially captured carbon, which we can then translate into what's called e-fuels or synthetic fuels, which gives you the ability to scale beyond 10 to 12 percent.
BTN: What trends are you seeing in categories besides air?
Neuenburg: [With hotels,] the main story is renewable electricity, and the question is, how do I get more renewable electricity in my hotel? In theory, it's not a super difficult problem, because there the technology does exist and is already scaled. You can buy large quantities of renewable electricity. The challenge is the ownership structure of these hotel groups. They do not own the properties, so they can't centrally mandate that they use renewables. Another emerging story is the link between hospitality and the food industry. More and more hotels are offering lower-carbon menu options, more plant-based, alternative dairy products, those types of things.
BTN: Is measurement still a challenge?
Neuenburg: In most of those subindustries, they have agreed on methodology. In the case of aviation, IATA has a recommended practice on how you calculate carbon emissions for a flight. The more credible calculators on the market have also adopted that methodology. As long as those kinds of calculators are the one that win in the market, then that shouldn't be as much as a problem. In the early days, there were a lot more people who built these calculators, some maybe simplified or not as accurate, but over time, people understand what are the factors that really matter, and that leads to a standardization.
In hospitality, there's also a methodology that the hotel companies have agreed on, and they try to follow that methodology as well. Is it 100 percent perfect? Probably not. Is it good enough for people to make decisions on? I think the answer is yes. People shouldn't be waiting on looking at this type of data and waiting to make these decisions for better data, because the data is actually quite good.