Supporting sustainability is not only the right thing to do for the planet and society, but it also yields tangible benefits for organizations.
Global climate change is one of the main issues with worldwide industrialisation and economic growth and travel has a significant impact on environmental issues because it is a major source of GHG and other pollutants. Considering the pace India is growing, until 2027, the country is anticipated to surpass the UK economic growth by a wide margin, as per the latest figures from the International Monetary Fund.
On the other hand, sustainability is becoming an integral part of the broader ESG (Environmental, Social, and Governance) framework and organizations are prioritizing sustainability while encountering various challenges in achieving their goals, given the complex and interconnected nature of environmental, social, and governance factors.
Problems faced by companies in achieving their ESG goals
• Companies face several challenges when trying to meet their sustainability goals. One of the primary difficulties is the complex and interconnected nature of sustainability issues. Environmental, social, and governance (ESG) factors are often intertwined, making it challenging for companies to address them in isolation. For example, a company’s efforts to reduce its carbon emissions may have social implications for local communities or require changes in governance and supply chain practices.
• Another hurdle is the lack of a standardized framework for measuring and reporting sustainability performance. Different industries and regions may have varying guidelines and metrics, leading to inconsistencies in reporting and difficulty in comparing performance across companies. Additionally, collecting reliable data on sustainability metrics can be cumbersome, especially for companies with complex global supply chains.
• Regulatory uncertainty and evolving policies present further challenges. Companies operating in multiple jurisdictions must navigate diverse and sometimes conflicting regulations, making it difficult to create cohesive sustainability strategies. Frequent changes in policies can also disrupt long-term planning and investment decisions. For example:
o The travel and tourism industry in the United States has experienced regulatory uncertainties and evolving ESG policies. Different states and localities within the U.S. have varying regulations and priorities related to sustainability and responsible tourism practices.
o The travel and tourism industry in the EU faces the challenges of navigating evolving ESG regulations and policies across multiple member states. The EU has been actively pushing for more sustainable tourism practices, including reducing carbon emissions from travel and promoting responsible tourism.
Solving by adopting an integrated approach
As companies face various challenges while trying to meet their sustainability goals, integrating environmental, social, and governance aspects can help the organizations in overcoming challenges:
Starting with a baseline for measuring success
Before starting sustainability initiatives, companies must assess how well they’re doing in various ESG areas and pinpoint where they can make the biggest difference. As the saying goes “You can’t manage what you can’t measure”, organizations must have a clear understanding of what matters to them and how they can support the business and the company with some real impactful KPIs that show exactly what an organization is doing. There are a lot of different metrics across environmental, social, and governance, but if we’re talking about climate specifically, carbon emissions are going to be the starting point. Companies can focus on automating tracking. For example, with flights and hotel stays, there are already established methodologies for estimating an organization’s carbon emissions impact. This data helps identify which actions impact their carbon footprint the most, making it actionable.
Sustainability: A Powerful Tool for Employee Recruitment and Engagement
One of the compelling facets that make sustainability and climate action particularly intriguing within the business travel domain is the critical role played by the concept of “carbon footprint reduction” in modern corporate travel practices. Many companies that we speak to really see what they are doing as it relates to embedding sustainability into their business travel programs and policies as a form of employee engagement. As per the SAP Concur survey in 2022, 96 percent of Indian businesses are focusing on sustainable travel.
Having a baseline and measuring key performance indicators (KPIs) enables organizations to make informed decisions and identify areas for both cost and carbon savings. Sustainability programs, especially when integrated into business travel programs and policies, can also significantly impact employee recruitment and engagement.
An organization’s business travel program and policies can also have a positive impact on employee recruitment and engagement. Climate justice is one of the top categories for that age group that’s coming into the marketplace now and many organizations are even leveraging this fact to gain internal support for taking sustainability actions. Employee engagement is also crucial to any organization because of the impact it has on specific areas like innovation, productivity, efficiency, and overall business costs,. It keeps employees genuinely interested in the success of their work and company and keeps them involved with the company’s values, mission, and reputation.
Conclusion
Supporting sustainability is not only the right thing to do for the planet and society, but it also yields tangible benefits for organizations. By establishing a baseline, automating tracking, and integrating sustainability into travel policies, companies can drive positive change, attract talent, and enhance their reputation as responsible corporate citizens. Embracing sustainability today is not only a moral imperative but also a strategic decision that can lead to a brighter and more sustainable future for all.
(This article is authored by Mark Wilfred, Director, Solutions Consulting, SAP Concur (SEA and India)
