The push for greener business travel is now supported by the new Climate Change Act signed into law by President Cyril Ramaphosa in April. This legislation tightens the reins on greenhouse gas emissions including those from corporate travel.
Bonnie Smith, GM of Corporate Traveller, offers insight on its impact: "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".
Understanding the Climate Change Act
The Climate Change Act establishes a framework for managing climate change nationwide with climate forums at provincial and local levels. If a business operates in multiple regions, engaging with these forums could become necessary.
Next, and critically for businesses, the Act tightens how South Africa tracks and reports greenhouse gas emissions. Companies, especially large businesses, face stricter reporting requirements. Government will use reported data to set emission targets across different sectors.
Big emitters will be assigned carbon budgets – essentially caps on how much greenhouse gas they can release. This could directly impact operations, including travel practices.
In short, businesses need to start thinking about their carbon footprint now. “Evaluate every aspect of your operations, including business travel, and look for ways to cut emissions. Those who act early to go green may gain a competitive edge as these new regulations take hold,” says Smith.
Business trips aren’t disappearing; they’re becoming smarter and more sustainable, she points out. "We’re witnessing a paradigm shift. Companies are now asking not only about travel costs but also about its environmental impact. They want to know how to reduce their carbon footprint without compromising business goals.”
How travel management companies are adapting
As businesses navigate the new regulations, travel management companies (TMCs) are stepping up to meet evolving client needs. "We’re no longer just booking flights and hotels," says Smith. "TMCs are now strategic partners helping companies fine-tune their travel plans to cut emissions and stay compliant with the new laws."
TMCs are rolling out a range of tools and services to promote sustainable travel. For instance, FCM has introduced carbon reporting, which enables companies to track their travel-related carbon footprint. This kind of transparency is vital for businesses aiming to manage their environmental impacts.
“These reports give a detailed look at the emissions generated by corporate travel, tracking everything from flights to accommodation. With this data, companies can pinpoint where they can cut back on emissions. It helps businesses make smarter travel decisions, set and track sustainability goals and align with CSR initiatives,” says Smith.
TMCs are also assisting clients by identifying and promoting greener travel options such as lower-emission transportation and eco-friendly accommodation. "By clearly presenting these choices during the booking process, we empower travellers to make informed decisions," Smith notes.
Another key area of support is carbon offsetting. While offsetting doesn’t directly cut emissions, it’s a valuable piece of a broader strategy to manage travel-related carbon footprints.
"We've partnered with South Pole, a leading expert in climate action, to offer carbon offsetting to our clients," explains Smith. "We calculate travel emissions then clients can choose from 12 global projects to offset their impact. These range from forest conservation to renewable energy initiatives. It's a straightforward way for companies to support environmental projects and meet their sustainability goals while still conducting necessary business travel."
Perhaps the most impactful support TMCs provide is in policy development. "We’re helping companies draft travel policies that align with the new regulations," Smith states. "This could mean setting criteria when travel is necessary, prioritising lower-emission options or incorporating carbon budgets into travel planning."
The business case for sustainable travel
While the new regulations might seem overwhelming, there’s a silver lining for businesses. "Sustainable travel practices often lead to cost savings," Smith points out. "By optimising travel routes, cutting unnecessary trips and choosing more efficient transportation, companies can reduce their carbon footprints and travel expenses."
Additionally, adopting sustainable travel can boost a company’s reputation, opening doors to new opportunities in an increasingly eco-conscious market. This aligns perfectly with the Act’s goal to capitalise on the global shift towards a green economy.
However, the Act’s success hinges on overcoming significant challenges. Government will need to implement strong enforcement mechanisms, including meaningful penalties for companies that exceed their carbon budgets.
The era of unrestricted business travel with little regard for environmental impact is over. What is emerging instead is a more thoughtful, efficient and sustainable approach to corporate travel.
"This law is just the start," says Smith. "We anticipate more regulations and incentives promoting sustainable business practices in the coming years. Companies that adapt now will be ahead of the curve."
