Will cutting emissions cut into corporate travel?

Corporations have put their employees back on the road, and it’s just a matter of time before their travel spend catches up to 2019. But corporate travel looks very different today than it did four years ago.

That’s the big takeaway from a new Phocuswright report, “Green Dilemma: How Cutting Emissions Cuts into Corporate Travel.” The report, part of a larger content series, also finds IATA's new distribution capability (NDC) and airline direct bookings have put a strain on intermediaries, new players have taken center stage and technologies such as personalization and generative AI have raised the stakes for travel providers.

Another major change has been related to trip spend, including how much a corporation allocates to its air travel budget. Many large corporations have not spent anywhere near the percentage of revenue on travel that they have in the past.

One big impediment to the corporate travel recovery is sustainability. Most Fortune 1000 companies have been vocal about their commitment to cutting greenhouse gas (GHG) emissions and have cited pledges toward the science-based targets (SBT) initiative and limiting Scope 3 emissions. 

Scope 3 emissions are generated from sources outside of the company, such as throughout its supply chain and from customers’ use of its products, and include carbon emissions from business travel.

A confluence of factors has emboldened these corporate sustainability measures. It is becoming more acceptable, even commendable, to consider other modes of transportation or classes of travel or to consolidate several trips into one, while some trips don’t have to happen at all.

By replacing face-to-face meetings with video conferencing, many companies have shown they can accomplish their goals without missing a beat.

Cutting back on air miles is the easiest way for corporations to limit greenhouse gas emissions while also cutting costs by evaluating the necessity (and environmental impact) of each trip. Though not all sustainability actions lead to cost savings (e.g., flying direct and staying in “green” hotels can cost more), when combined they can lead to fewer trips overall.