Tristan Smith, vice president commercial – SMEs, Egencia
After a period
of significant disruption, many industry commentators are rightly focused on
how quickly corporate travel will rebound. But we’re also seeing a lot of our
customers pause and reflect on how we want to recalibrate our sector once the
pandemic loosens its grip.
Traditionally,
the primary focus of travel programmes has been cost control. Gaining greater
visibility into spend across the organisation – as well as creating levers to
manage it effectively – enabled organisations to drive down the cost of corporate
travel.
Using analytics-fuelled insights for instance, allows travel managers to
negotiate more equitable deals with air, hotel and other transport providers.
However, in
recent years the business climate has shifted. Customers, investors and
employees have ratcheted up pressure on companies and their leadership teams to
address a growing list of environmental, social and governance (ESG) issues
such as their carbon impact, the diversity of their workforce and the welfare
of their employees.
These issues
were starting to manifest in corporate travel programmes before Covid-19. Duty
of care and sustainability were already at or near the top of most travel
managers’ list of priorities. Covid-19 has injected a new sense of urgency – and
C-level scrutiny.
A McKinsey study revealed that 83 per cent of C-suite
leaders and investment professionals believe ESG programmes will contribute
more shareholder value in five years than today, and that they would be willing
to pay a ten per cent premium to acquire a company with a positive ESG record.
In other words, value and ESG credentials are inextricably linked.
The question companies
must tackle now concerns the kind of travel programmes they want to build.
What’s the right balance between protecting the organisation’s bottom line and
creating a set of policies that better reflect the environmental and social
aims of a responsible business?
The
technologies required to support this transition already exist. Duty of care features,
which strengthen a company’s connection to its travelling employees, equip travel
managers with advisories and alerts, and enable the provision of on-demand
support in times of disruption.
Similarly,
sustainability tools exist that can help travellers compare the environmental cost
of their travel choices and enable travel managers to measure the overall
carbon cost.
Policymaking is
a bigger challenge. On a practical level, travellers need the freedom to make
travel choices based on criteria other than cost, such as carbon footprint or
their own personal welfare.
Employees
should be free to take taxis from the airport in order to minimise their contact
with others, or choose an eco-friendly train trip over a flight. Conversely,
spiralling travel costs can’t be the corollary to a more progressive,
empathetic travel programme.
A culture shift
is arguably the most critical and certainly the most challenging piece of the
puzzle. The message that travel costs can and should be weighed against other
ESG factors needs to start at the top in order to create real behaviour change.
More importantly, the
C-suite must be prepared to commit to this policy shift long-term, and resist
the urge to abandon it whenever the world transitions into the ‘next normal’.