^_ETHICS
PROFIT AND
PRINCIPLES

When Greta Thunberg cancelled her planned appearance at the Edinburgh International Book Festival in August it was a story for our age. The young environmental activist pulled out after learning the event’s main sponsor, fund manager Baillie Gifford, invests in companies connected with fossil fuels.

While her decision not to speak, in protest of so-called ‘greenwashing’, was completely on-brand for Thunberg, the consequence was that hundreds of fans would miss out on hearing her speak. Having principles – and sticking to them – is rarely easy.

In the world of corporate travel, taking action and making compromises to meet green targets is a well-documented issue. The sector is built on the high consumption of resources and barely a week goes by without one company or another trumpeting its latest eco-initiatives, be it offsetting projects, investment in SAF, the hosting of low-carbon events or the latest app-based tech – all in the name of environmental sustainability.

But what about the ‘S’ (Social) and ‘G’ (Governance) elements of ESG? Just how far are companies prepared to stick out their necks in the name of doing the right thing morally when the industry celebrates profit and the winning and retaining of clients above all else?

Martin Warner, principal at MW Travel Consultancy and former executive vice president, market strategy and segmentation at CWT, says: “You could argue that TMCs have taken strides when it comes to the issue of gender balance, diversity and equality in their own organisations, but when it comes to human rights down the supply chain, I don’t think people are really looking. And you can forget about the majority of TMCs taking the moral high ground about a potential client that does business in a controversial area like animal testing or fossil fuels – how many are going to turn down a big contract?”

There seems to be something in Walker’s observation. According to a survey by Business Travel Show Europe, just 31 per cent of travel managers said they actively consider the human rights impact of their travel programmes to make positive choices. Meanwhile, only 5 per cent claimed acting in an ethical and socially responsible way was their top priority. 

Of course, travel buyers are often in a bind – they have little influence on who their employer does business with or where in the world those transactions take place. If, for example, your company is selling widgets to Saudi Arabia, organising travel there is just part of the job no matter what your concerns about women’s rights, capital punishment or LGBT freedoms.

Siemens UK travel commodity manager Emma Eaton is among a small but growing band looking to make a difference by using her purchasing power to drive change. But she admits progress is relatively slow. “For example, we added Hilton to our programme after I saw the amazing work it was doing to educate front-of-house staff on the issue of people trafficking,” she says.

While Eaton can influence which UK suppliers Siemens uses, it is up to her country-manager counterparts around the world to act in a similar fashion – essentially creating a like-minded network that sources as ethically as possible for the benefit of the whole business. 

“We use HRS for our global hotel programme, using its Green Stay initiative as a starting point since those included are likely the most ethically minded in all areas, and have a huge RFP programme. Our contracting is based on a huge number of things, with business factors such as location, quality, traveller safety and rate caps all in the mix.

“Obviously, Siemens has its stated ESG policy and this is in the equation, and as time goes on we are able to look at the social values of individual properties. It is happening country by country and is still a work in progress, but ultimately we are buyers, not detectives.” 

Eaton continues: “All of our suppliers sign up to a rigid code of conduct, but essentially, when we send travellers away we are relying on HRS and the expertise of my peers in other countries to have made sound decisions. If ever we have any moral or ethical concerns about any supplier, there is a very quick process to get them removed from the programme.”

Elsewhere, TMCs are more guarded on the subject of the ‘S’ and ‘G’ – particularly when it comes to how their stated ambitions to act responsibly rub up against the realities of (some) client operations. BTN Europe approached a number of Europe’s leading TMCs to contribute to this article but none were willing to talk.

This reluctance is understandable in the current ‘culture war’ climate. Recently, ESG goals have been criticised as ‘woke’, with politicians and some sections of the media insisting businesses should not be attempting to impose ‘worthy, left-wing’ causes on customers.

“The irony is that many TMCs are trying to make a difference internally,” says Paula Cullen, associate for growth and sustainability at consultancy Black Box Partnerships. “Many have adopted the UN Sustainable Development goals to shape change and this has been transformative in the way they look after staff. It is filtering down and forcing them to focus on societal issues.”

Cullen continues: “TMCs are still frightened to talk positively about the sector and we have to change the narrative. It’s not about stuffy men in suits having expensive trips, but more about vital industries – charities, NGOs, firms developing cancer treatments – and travelling with purpose.”

With corporate reputations in the spotlight, Business Travel Association chief executive Clive Wratten says TMCs are attempting to help clients make sustainable supplier choices via RFPs. But he insisted firms should not be held responsible for working in sectors that harm the environment or are morally questionable.

“TMCs provide great employment to many people, and they are supplying a service to businesses that operate legally,” he says. “It’s up to them to decide who to work for, but we can’t get into a culture that stops the world turning.”

Interestingly, shifting attitudes among investors and the wider population are coming to the fore. A study by KPMG at the start of 2023 highlighted how social and environmental factors are becoming increasingly important for workers, particularly among the younger generation.

It found that almost half of people want the company they work for to demonstrate a commitment to ESG, while more than 80 per cent placed importance on being able to link values and purpose with the organisation they work for. 

American Express Global Business Travel, for example, is addressing the challenge with a comprehensive approach to 2015’s Modern Slavery Act, which ensures potential partners are rigorously vetted before making it onto an approved supplier list. Procurement decisions are overseen by external organisations including sustainability ratings provider EcoVardis, the Science-Based Targets initiative and the Carbon Disclosure Project.

“Most people want to know they’re working for a responsible, sustainable and inclusive organisation,” says American Express Global Business Travel vice-president of public affairs Martin Ferguson. “We have a sourcing team driven by sustainability and diversity goals. Vendors sign our Supply Chain Shared Values agreement and are subject to a comprehensive ESG assessment. All contracts include ESG clauses.

“Our target was to have at least 10 per cent diverse organisations – certified women- or minority-owned businesses – across our indirect spend portfolio by 2030. We’ve already reached 10.9 per cent. Our customers can request quarterly reports on diversity within their Tier II supplier spend – their indirect supplier spend. We also help customers analyse their supplier and spend data to proactively improve diversity in their strategic sourcing programmes,” adds Ferguson.

On a smaller scale, UK-based independent sports and entertainment specialist Travel Places is one of a handful of TMCs to have made the leap to become B-Corp certified, meaning it hits the highest ethical standards. Ultimately, this means it will reject approaches from potential clients it feels are unsuitable.

As well as focusing on staff wellbeing, pay and training, the business audits all suppliers to assess their ESG compliance. Travel Places’ head of marketing, Lucy Brooks, says the move has made it more attractive to new recruits and was driving change among existing clients.

“Our ethics policy has formalised our commitment to not engage in any business practice that does not comply with our own company ethics. Ethical behaviour will have different meanings for different businesses and people, but for us it is centred on openness, trust and integrity. Our own company values are based on these principles. They have been developed together with our staff and are embedded through every aspect of our business.”

Brooks continues: “We’ve developed our onboarding process and will review a prospective clients’ ethical policies – for instance around modern-day slavery – as part of our decision-making. But as a family-run business with a long heritage in our specialist industries, the personal approach continues to work best for us in determining our ethical alignment with future clients.” 

She adds: “Our managing directors have ultimate responsibility for new client acquisition and will spend time understanding a business and its values and meeting key contacts before determining, in collaboration with the relevant team, whether a client is the ‘right fit’ for us.”

The pursuit of profit means that principles are sometimes cast aside, but that doesn’t have to be the case as a growing number of companies are proud to demonstrate.