The 2020s are set to be the decade of climate regulations, and it begs the question: how do I stay compliant? This question has travel professionals taking an especially close look at travel methodologies—how they calculate their carbon emissions. In the first session of our Sustainability in Motion webinar series, Thrust Carbon Founder, Kit Aspen was joined by leading climate and travel experts Delphine Millot from GBTA Foundation and Benoit Gascoin from Partners Group to give their expert take on these new regulations that are shaping the travel industry.
View the original webinar recording
Temperatures are rising… and so is regulatory pressure
Buzz-worthy international climate agreements are shifting sustainability initiatives from their familiar territory of ‘nice to have’ into a much stricter realm of ‘must do in order to stay in business’. The general momentum around sustainability is building globally, but regional fragmentation still complicates things. All eyes are on the EU’s ambitious new legislation, the Corporate Sustainability Reporting Directive (CSRD), which mandates that companies report their Scope 3 emissions (which includes travel) and create a 1.5ºC net-zero-aligned business decarbonization strategy.
In the webinar, Delphine Millot, SVP or Advocacy and Sustainability at the GBTA Foundation laid out the current reality of regulatory uncertainty in this space. She explained, “One friction point we have is that there are even EU regulations that are not aligned (CountEmissionsEU and CSRD) and we are waiting for market convergence to harmonize on one standard.”
We asked our webinar audience how prepared they felt for incoming regulations, and only 25% were compliant or on the way to becoming compliant. The remaining 75% were either just now learning about CSRD or in the very early prep stages.
“Over the next few years, we will see a lot of experimenting, learning and readjusting as the market aligns.”
-Delphine Millot
What’s next for regulatory standards?
Naturally, when the regulations were proposed, they drew out critical questions that needed answering: How do we account for the non-CO2e effects of aviation? Does sustainable air fuel (SAF) affect reporting? How does the double standard in materiality work? How do we account for multimodal emissions?
Our expert panel assured us that there is no need to panic when it comes to these unanswered questions; compliance auditors are aware that it will take time to adjust to this new era of climate regulations. Our panel’s advice: show integrity, start taking the right steps, and know that this process will continue to evolve.
Reminder: CSRD will oblige companies to calculate and report on their business travel emissions, next year (2025) for large companies and smaller companies 3-4 years down the line. Use our free tools to calculate your reporting year.
Travel methodologies: how to start measuring carbon emissions
The differences between travel methodologies boil down to how they calculate CO2e, the commonly-accepted unit for carbon emissions. These methodologies can be grouped into three basic categories:
1. Spend calculations (least accurate) – using industry averages based only on the amount paid for travel.
2. Distance/nights calculations (more accurate) – using averages of fuel calculations from multiple suppliers that can be multiplied by a travel distance to determine CO2e.
3. Fuel or quantity-based calculations (most accurate) – using the actual or estimated quantity of fuel combusted based on complex calculations that take into account the minute characteristics of an aircraft, car, or property.
Thrust Carbon’s Founder, Kit Aspen explained, “You can start with a spend estimate but this is largely inaccurate, and is for when you only have spend data. Ideally, you want to get to more accurate calculations. You could use distance, as with the DEFRA methodology, but this will not capture the difference in how full the plane is and how much freight is onboard”. Kit went on to recommend, “What you want is the fuel-based methodology which typically has 10-12 data points. If you want to make intelligent decisions about your travel program, you need to be using this actuals data.”
Enter ISO 14083, for measuring business travel carbon emissions
Assurance is going to be a key part of responding to incoming regulations—it will be your best bet for guaranteeing that you are in compliance and protected against penalties. The uncertainty of the current regulatory environment makes it difficult to point to a single rulebook for assurance; this is the void that ISO 14083 fills.
Kit added, “ISO 14083 is the first standard for measuring and reporting emissions from travel. It is a global standard and already has backing from CountEmissionsEU. It is the first standard to harmonize methodologies and settle some long-standing disagreements between them”. Get up to speed on the basics of ISO 14083 and read about our journey toward assurance here.
We asked our webinar audience if they had started having conversations with assurers, and over 50% of the audience had not, which was expected given the early stage of these regulations. That said, now is the time to start!
How CSRD impacts travel managers
Under CSRD, companies must report on how their business actions impact climate change, and vice versa (termed as “double materiality”). Benoit Gascoin, Global Travel Manager at Partner’s Group specifically pointed out double materiality as one of the biggest question marks of CSRD.
“Now we’re having conversations with management about reduction targets. Not just for the sake of having targets, but what is really achievable and what impact it has on our business. We need to meet clients and go to our investments in person to help them create returns for investors.“ Benoit highlights. “We need to come up with realistic solutions we can put in place to work towards these targets."
How to get prepared
Our panel all agreed on a simple message for getting prepared: do not hesitate to educate yourself and reach out to your network to get more information. GBTA has published great resources on the topic that you can find here. You can also use our guides and tools here – including our Travel Manager’s Guide to EU Climate Regulation.
If you have read this far, you’ve already taken a big step in the right direction! Please reach out to us if you want to learn more about the incoming regulations and how Thrust Carbon can help you prepare.
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