Although corporate travel departments may have fallen behind with implementing sustainability and carbon emission reduction measures, the Climate Change Bill, signed by SA President Cyril Ramaphosa on April 25, could push corporates into overdrive to catch up or risk losing business.
Greg O’Neil, President of Asia Pacific, Middle East, Africa & Global Network at BCD Travel, told Travel News that while corporates were challenged by the cost of implementing sustainable policies for their travellers, governments throughout the world were introducing legislation forcing corporates to report on their emissions and reduce their carbon footprint to meet carbon budgets.
South Africa’s Climate Change Bill legislation tightens the reins on greenhouse gas emissions in South Africa, including those emanating from corporate travel.
“This legislation marks a turning point for business travel in South Africa. Companies must now consider their travel practices as part of their broader environmental, social, and governance strategies,” says Bonnie Smith, GM of Corporate Traveller.
Understanding the Bill
The Bill requires corporates to track and publish reports on their carbon emissions. Companies, especially large ones, will face stricter reporting requirements.
Maureen Masuku, Rand Merchant Bank’s head of Travel & Marketing Sourcing, points out that there are ongoing debates among corporates regarding how to report on emissions from a corporate point of view, as the reports are currently a compilation of generic data received from suppliers such as airlines, hotels and chauffeur-service companies.
“The travel industry is the highest contributor to carbon emissions. Most large companies are registering travel carbon emissions without really understanding how to collect the data and how the results should be implemented to reduce emissions. With this new Bill, I think we are going to see very strict reporting requirements,” says Masuku.
“The Bill will really shake up businesses in South Africa, by pushing them to establish their own internal frameworks for managing and reporting on emissions.”
The government will use the data to set emission targets across different sectors.
Big emitters will be assigned carbon budget caps on how much greenhouse gas they can emit over five-year periods. This could directly impact business operations, including travel practices, and this will require the implementation of additional internal policies to further reduce carbon emission caused by business travel.
“Those who act early to go green may gain a competitive edge as these new regulations take hold,” says Smith.
Beating the carbon budget
Aspirations such as ‘Nett-Zero by 2030’ have put corporates under pressure to reduce their carbon emissions. However, due to a lack of education, governance and internal policy on the matter, many businesses feel the only way forward is to reduce the number of travellers.
However, Masuku feels that corporates can implement other internal policies to reduce their emissions and should put more effort into procuring travel supplier partners with sustainability tools and certifications.
For example, if a business partners with an airline, they should check that the airline offers carbon emission tracking tools, and valid offsetting projects such as contributions to the production of Sustainable Aviation Fuel. Additionally, internal travel policies should encourage employees to pack light luggage and hand luggage on flights to reduce the weight of the aircraft and thus the fuel consumption for their business travellers.
Masuku feels that corporates, along with their TMCs, should be vetting their travel suppliers with sustainability certifications and capabilities in mind, and creating lasting partnerships to reduce emissions in the long term.
She says for accommodation suppliers, sustainability certifications are difficult to validate. It then comes down to corporates’ internal policies to ensure that their employees are demanding paperless check-ins, and limiting the electricity they use in their hotel room when they are absent from the room.
Masuku says as many travellers do not understand what carbon emissions are, it will require extensive education and strict compliance with reformed travel management policies.
“I think this Bill is really going to help corporates to be more practical and realistic, because I strongly believe that they have been reporting inaccurate numbers.”
She also believes that corporates will be able to meet their new carbon budgets if they implement practical policies to reduce emissions and educate their travellers on how to travel smarter. All this means they can reduce their footprint without compromising their business goals.
Compliance with the Bill
The Bill allows corporates to appeal their carbon budgets, depending on their performance over five-year periods, and requires three successive five-year periods to confirm adherence to their budget.
However, in the event a budget is appealed and extended, corporates must submit carbon emission mitigation strategies for review to ensure they remain on track to reduce their emissions.
Although the South African carbon budget legislation is lenient compared with European carbon caps (seen in its EU Emissions Trading System), Masuku says corporates will want to comply with the new Bill and avoid submitting appeals for their carbon budgets, because compliance with governance has a large impact on a company’s reputation with a view to future potential procurement and partnerships.
“I already see procurement and partnerships putting adherence to the new legislation on their criteria when they do evaluations for suppliers and potential partners,” says Masuku.