The Current Landscape 

Climate change outlook: pushing Earth’s tipping points


In 2023, average global temperatures reached an all‑time high of 14.98°C. Close to 50% of days were more than 1.5°C warmer than the 1850‑1900 level. By June 2024, the global surface temperature has further increased by 1.2%, the 13th monthly increase in a row. In the Paris Agreement, the treaty affirms the goal to limit the increase in earth’s temperature to below 1.5°C
compared to pre-industrial levels. This temperature is established as the limit to reduce the worst impacts of global warming and avoid surpassing environmental tipping points.

9 CRUCIAL COMPONENTS OF OUR CLIMATE ECOSYSTEM ARE UNDER THREAT: →

1. Amazon rainforest

2. Arctic Sea ice

3. Atlantic circulation

4. Boreal forests

5. Coral reefs

6. Greenland ice sheet

7. Permafrost

8. West Antarctic ice sheet

9. Part of East Antarctica

The Covid-19 pandemic has taught us lessons on the consequences of pushing Earth’s boundaries too far. If any one of these components crosses the tipping point, we run the risk of the others subsequently collapsing in a domino effect. This presents an existential threat to civilization that we no longer can ignore.

Copernicus Climate Change Service reported, however, that temperatures between July 2023 and June 2024 were the highest on record, creating a year-long stretch in which the Earth was 1.64C hotter than in pre-industrial times.

The main culprit for this change in climate temperatures is increasing carbon emissions around the world. Human activities that lead to carbon emissions come primarily from energy production. When a business traveler stays in a hotel, this consumes energy which is by far the biggest contributor to the environmental footprint of the stay* in addition to water and waste consumption.

* Corporates that travel for business can find their carbon emissions exceeding 36 kg CO2 e for just one night’s stay, equivalent to driving a car 133 kms (or 83 miles), depending on their destination.

BUSINESS TRAVEL IS BACK, BUT WITH A FUNDAMENTAL SHIFT TO MORE PURPOSEFUL TRAVEL

With the earth heating, it’s no help that the global travel market has recovered faster than initial projections, with demand for travel already fully recovered to 2019 levels in most markets. According to the Global Business Travel Association (GBTA), business travel spending will be 6% higher than 2019 by the end of 2024 and 13% higher in 2025. With this in mind, corporate travel now has the urgent responsibility to find ways to reduce its impact. While cutting back on travel has an immediate impact, necessary travel is still an essential business activity.

The vast majority of business travel decision-makers say that their investment in business travel leads to increased company revenue (64%) and profitability (59%) so eliminating travel completely is not an option. However, rather than focusing purely on bottom line profit as a measure of the impact of a business trip, corporations need to shift their attention to another two P’s; People and Planet. Having these intertwined priorities ensures that companies implement eco-first practices into all areas of business – as much through people (including travelers, people in the supply chain, hotel and business partners) as through systems and policies. With hotels now accounting for 30% of the emissions of an average business trip due to the shift in travel patterns post pandemic, corporates can significantly reduce their emissions by selecting the right hotels with the most sustainable profile. However, unlike other categories like air and rail, hotels provide a much larger room for emissions reductions.

When booking a flight or train, travelers have limited choices in terms of aircraft models, schedules and routes, which also limits the capacity to select more efficient options. But when choosing a lodging option, travelers have a broader array of options to select from. This means the optimization potential in the lodging category is higher than air, rail and car. This means that to remain relevant in the corporate travel landscape and to continue to attract the high yield corporate traveler, hotels are faced with the responsibility to accelerate their implementation of environmental best practices and provide tangible evidence of this to their customers. Not only to ensure they can continue to grow their market share with travelers and travel managers who are increasingly seeking out sustainable lodging alternatives but also to comply with government legislation. 

STRICTER REPORTING REQUIREMENTS BRING FOCUS TO SUSTAINABILITY PRACTICES

Since January 1st 2024, the European Union has replaced the Non-Financial Reporting Directive (NRFD) with the Corporate Sustainability Reporting Directive (CSRD). This new initiative requires large and listed companies to disclose information on risks and opportunities related to their Environmental, Social, and Governance (ESG) practices, and with a particular focus on the impact of their activities on people and global supply chains within and beyond the EU.

With the CSRD set to raise the bar on sustainability reporting, covering categories beyond just carbon, including pollution, water, waste, and biodiversity, major businesses will need to expand their sustainability efforts in order to be seen as compliant. The CSRD will directly affect 50,000 companies. The US have yet to implement Federal legislation on sustainability, but the largest State in the US by population, California, has passed three laws that apply to both public and private US companies to improve the transparency and standardization of climate-related disclosures.

To comply with current and new legislation on carbon reporting, corporates must ensure that they are using science-based carbon assessments, calculations and metrics when reporting business travel. The practice of ‘greenwashing’ or using averages and assumptions in reporting Scope 3 emissions is not acceptable and will lead to financial penalties. HRS’ award-winning Green Stay Initiative is based on extensive and detailed data at an individual property level on their energy, water and waste consumption. Updated by the property each year, it allows corporates to have a deep understanding of their carbon footprint and where and how it can be reduced or compensated. 

PERSONAS ENGAGING WITH SUSTAINABILITY REPORTING:

  1. Chief Financial Officers (CFOs), Chief Procurement Officers/Head of Procurement (CPOs) and Chief Sustainability Officers (CSOs ) Pressured by new financial risks and government pressure to accurately report on Scope 3 emissions and achieve reduction targets.
  2. Procurement Managers/ Travel Managers and Sustainability Managers Pressured by new sustainability requirements, their work scope is complexifying in a strategic sense as they must now achieve savings that pass compliance and align with the corporate climate goals.
  3. Travelers Way more sensitive to sustainability and climate change, they are increasingly demanding options to book sustainable hotels and need better guidance to adhere to sustainable travel policies. 

WITH TRAVELERS ON BOARD, REDUCING EMISSIONS SEEMS SIMPLE ENOUGH, SO WHAT’S STANDING IN THE WAY?

The majority of buyers have integrated sustainability in their travel programs but despite best efforts, many companies (and hotels) are finding it difficult to find and implement effective, compliant management systems to get an auditable report of their travel carbon emissions and actionable insights on how to reduce them.

The reality is that gathering, tracking and reporting this data is complex, and requires resources, standards and an agreed-upon internal process. Buyers often use multiple methods to obtain and calculate emissions data related to travel by air and land, as well as that of the hotel stay, which only adds to the complexity of the task.

BARRIERS TO ESTABLISHING SCIENCE-BASED SUSTAINABILITY REPORTING FOR BUSINESS TRAVEL INCLUDE: 

Despite these barriers, pressure from the CSRD and the global trend towards sustainability pose massive risks to the longevity of companies, motivating them to make moves in the space.

RISKS OF NON-COMPLIANCE INCLUDE: →

SOME OF THE PENALTIES AND SANCTIONS THAT COMPANIES MAY FACE WITH THE CSRD INCLUDE: 

Exclusion from government contracts: Companies that fail to comply with the CSRD may also be excluded from participating in government contracts or other public procurement processes. This can have a significant impact on a company’s revenue and profitability.

Financial penalties: Financial penalties may be another consequence of failing to comply with the reporting requirements of the CSRD. The exact amount of the penalty will depend on the member state’s legislation, severity of the breach and the size of the company. For example, France (the first member state to implement the law) has introduced some serious penalties for non-compliance, including fines of up to €75,000 with the additional threat of five years’ imprisonment.

Legal action: In some cases, non-compliance with the CSRD may lead to legal action. This can include civil lawsuits driven by climate activists and criminal charges, depending on the nature and severity of the breach.

With all this in mind, it’s clear that there is an urgent need for standardized processes to come to the fore so companies can replicate these with ease and reliably measure and report on their emissions status. And that’s where the HRS Green Stay Initiative (GSI) comes in.