In an industry increasingly scrutinized for environmental impact, the practice of ‘greenwashing’ — conveying a misleading impression of eco-friendliness — is a significant concern for all stakeholders, including airlines, B2B distributors, and B2C intermediaries.
Last week the UK’s advertising watchdog banned Google adverts from Air France, Lufthansa and Etihad for giving “giving a misleading impression of the advertiser’s environmental impact”, as reported by the Financial Times and other media around the world.
This followed reports by Reuters and others media only in September of separate similar actions against Ryanair, Etihad and Lufthansa – and even that Dutch carrier KLM had a civil suit lodged against it.
In a world where ‘greenwashing’ is something consumers and environmental lobby groups are looking out for, this poses a risk not just to the airlines but to the B2B distributors and B2C intermediaries involved in selling flights too. Could they suffer reputational damage or even be sued? What are the challenges they face when it comes to acting responsibly? We asked a selection of travel technology experts how they should respond.
“As global tourism echoes the need to ‘build back better’, the industry is at a crossroads when it comes to sustainability: the market can either take action to become more sustainable via innovation – or be forced to do so via crises and regulation,” says Eugene Ko, marketing director at Phocuswright, which recently published its Beyond Greenwashing report, to help the travel industry find viable solutions. “While some travel players seem content to introduce a small initiative and consider the environmental action box checked, this approach is no longer sufficient. The industry’s future dictates that travel companies and stakeholders – including not just the providers of travel but also the sellers and tech partners involved in the distribution – must meet the sustainability challenge with pragmatic, creative and innovative answers and accept full responsibility for the whole travel value chain.”
Sustainability claims must always be backed up by all those in the travel ecosystem including B2B tech partners and intermediaries, otherwise companies risk losing investors, warns Morgann Lesné from investment banking firm, Cambon Partners. “Sustainability is a significant consideration for investors, and they will be looking for companies that can demonstrate a genuine commitment and a viable path to net zero. Governance issues therefore alarm investors, and this will now form part of the due diligence process for acquisitions and funding. Green claims need to be rigorously backed up, corporations should be following standards and frameworks; and they should also show that they are ready for new reporting regulations, for instance the EU’s Climate Resilience and Sustainable Development disclosure reporting, which are going to be introduced within the next couple of years. Companies that find themselves caught up in legal proceedings – even if they weren’t the actual provider of the travel services, merely the seller – are likely to end up being blocked from fundraising or potential sales.”
When it comes to potential damage Sami Doyle from TMU Management, the data-driven insurance intermediary that safeguards the travel value chain for travel companies, warns that more comprehensive insurance will become increasingly necessary: “Travel sellers and B2B intermediaries often have good intentions, and most will not have meant to ‘greenwash’ on purpose when selling someone else’s products such as a flight. Of course, meaningful green initiatives should be carried out in line with industry standards – such as the Science Based Targets Initiative – to ensure they are genuinely contributing to the Paris Agreement’s 1.5-degree global warming goal. But court cases, particularly class action ones, can be an enormously expensive distraction and the right insurance could protect a travel company if sued because of a misjudged claim about green credentials, even if they were just repeating the claims made by the airline or hotel.”
Christian Sabbagh from B2B travel SaaS company Travelsoft – owner of travel platforms such as Orchestra, Traffics and Travel Compositor – however empathises with the challenges faced by airlines, who struggle due to a lack of industry data reporting standards. “As an airline, it is difficult to offer travel buyers and consumers reliable, easy-to-grasp sustainability data. For example, there are various methods used to calculate estimated flight CO2 emissions, often leading to wildly different figures for the same flight. There needs to be universal, globally agreed standards – bought into by the B2B distributors and B2C sellers – for calculating emissions so that every traveller trusts and understands the impact of their journey. Before this happens, airlines should continue to communicate on results with transparency on the long way still to go and, in parallel, the whole industry should demonstrate that it is focused on preparing for longer-term solutions to sustainable travel – like sustainable fuels and newer aircraft.”
As a final thought Traxo, a leader in business travel location awareness, echoes the industry’s need for precise travel sustainability data reporting. Andres Fabris, Founder & CEO of Traxo, highlights the growing trend among corporations to evaluate and reduce their business travel’s environmental impact, driven by increasing shareholder demands for transparency. However, Fabris notes a significant challenge: “the current limitations in data extraction hinder accurate sustainability reporting, leading to potential targets based on flawed information. He emphasizes the urgency for the industry to develop effective monitoring methods, underscoring the principle that without proper capturing, accurate measurement is impossible.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
