Helen Hodgkinson is co-founder of climate action group for corporate travel, CACTUS
For as long as I’ve been in the travel sector, payment has typically been a bit of an after-thought – an expected hygiene factor. So much effort goes in to curating the best possible technical components of a travel programme and creating a policy that provides traveller convenience and efficiency, coupled with compliance and duty of care... and then what? The payment programme is tagged on at the end, yet it can play a vital role in optimising a travel programme, as well as shining a light on corporates’ environmental impact from travel and expense.
Everything has to be paid for one way or another, and therefore, just as your payment strategy will give you a financial footprint of everything that you do, it also has the potential to provide visibility of your carbon footprint too.
Scope 3 emissions are the indirect emissions that occur in a company’s supply chain. Business travel sits in this category and can form a significant percentage of a company’s carbon footprint. Of all the activities that sit in this category, it can be one of the easier to measure for a company and is, therefore, often a focus of attention.
Measurement is critical in order to create a baseline and whilst payment may not seem the obvious starting point, maybe it should be? What if you could take all of your T&E spend data and run it through a calculator to convert it to a carbon number to create a baseline?
The beauty of payment is that it allows you to obtain a holistic view of your travel and ancillary spend – not just the core elements of air, hotel and rail. The very infrastructure on which the payment authorisation and settlement process is built allows you to apply spend controls and capture many data points.
Your payment provider can see who is spending, the merchant category group and code (MCG/C), the supplier name, and the location of the transaction, amongst other data points.
Carbon calculators are becoming a popular tool to track the impact of spending. Whilst they are currently more common in the consumer space, they are starting to enter the corporate sector too.
Essentially, spend data is shared with the carbon calculator – a bit like passing your T&E spend into your chosen expense management system (EMS) – and then converted into a carbon number, based on the transaction types. It is possible to obtain a carbon number on the raw transactional data alone but, naturally, the more detail there is the more accurate the carbon number will be.
Take, for example, the additional data that is available on payment solutions such as virtual, digital and lodge accounts. Already you’re able to capture booking data and bespoke client references that will refine the output. If you overlay this with additional data sources from your booking intermediaries or HR file, you start to create a tapestry of information that can be refined and get you closer to a more accurate number.
Carbon calculators serve to raise awareness of your carbon activity, provide suggestions about how to reduce your impact and can ultimately provide options for offsetting the emissions that are unavoidable. At this point, let’s just remember where offsetting sits in the carbon hierarchy… it’s the last resort, after all other actions have been taken to reduce our impact!
I think it is fair to say that in corporate travel the greatest carbon reduction impact will be achieved through planet-centric policy design that will really drive the behaviour you’d like to see and will ensure you achieve your corporate goals.
But don’t underestimate the employee movement of those who want to accelerate good behaviour and have visibility of their own impact so that they can make the right decisions too. Using a carbon calculator, you could even turn it in to a challenge and pitch teams against each other to have the lightest touch on our planet. The race is on and never has there been a greater need for creative approaches to achieving fast, positive change.
In its simplest, raw, transactional form, payment data could give you a starting carbon baseline for measurement and action. And for those companies who are feeling a bit overwhelmed about where to begin it could be a great entry point.
For those who are more advanced in their sustainability journey, then payment should be seen as an additional layer of data and insight that can contribute to a complete view of your carbon impact via your T&E programme and help you make informed decisions about the action that you choose to take.
Remember, don’t wait for perfection in order to make progress. We’ve got seven years until we hit our first critical milestone to halve carbon emissions by 2030 if we are to stand a chance of getting to Net Zero by 2050. Maybe part of the solution is hiding in plain sight, tucked away in your general ledger?