Irish companies latch onto growing global drive to slash air miles post-Covid

The all-expenses-paid junket may never again the feature of the corporate world it once was

As companies around the world draw up tentative plans to get staff back into the workplace, ditching Zoom, while tempting, may be a step too far for once-high-flying executives.

A year and a half of back-to-back video calls from makeshift home offices may have caused people who normally travelled regularly for work to forget how draining it is to deal with crowded airports, delayed flights and living out of a suitcase.

But as airlines and hotel owners dream of a rebound in international business travel, the all-expenses-paid junket may never return to being the feature of the corporate world it once was.

Zurich Insurance Group generated headlines this week saying that it aims to cut air travel-related missions next year by 70 per cent compared to its pre-pandemic level as it unveiled plans to accelerate its drive to reduce carbon dioxide emissions.

"The experience of the global pandemic has shown us a pathway to improving many aspects of our daily and working lives, and there's no going back," said group chief executive Mario Greco.

It may, of course, be dismissed as vacuous virtue-signalling by another corporate keen to flag its green credentials to attract a wall of environmental, social and governance (ESG) money sloshing around looking for investments. But businesses can expect more questions from investors in future about their post-Covid travel policies as they peddle their sustainability reports.

Zurich is far from alone. Confectionary giant Mars – unlisted, but a regular issuer of bonds in the market – said in recent weeks that it plans to slash corporate travel by half and book 145,000 fewer flights each year – telling staff that they should only get on a plane for "purpose, rather than presence".

Elsewhere, UK lender Lloyds Banking Group has promised to cut carbon dioxide emissions from travel to less than 50 per cent of 2019 levels, while consultancy firms such as EY and Deloitte have sought to get one step ahead of many of their clients by publicly outlining plans to slash business trips.

Irish firms changing their ways

Irish public-limited companies are also changing their ways – even if most seem to be reluctant, for now, to give hard targets.

Bank of Ireland had already cut business travel costs by 20 per cent in the two years before the pandemic. "We anticipate further reductions in business travel for 2022 and beyond as we continue to embed technology and new ways of working," said a company spokesman. "Videoconferencing is also a key element of how we operate and will remain so into the future, reducing the need for business travel unless it is necessary."

Rival AIB said it had also had been working before Covid-19 on permanently reducing corporate travel. "This reduction has naturally been accelerated by Covid-19," said a spokesman. "We do not plan on returning to our previous levels of travel."

Smurfit Kappa chief executive Tony Smurfit, whose own international cardboard box-making business has been turbocharged lately by environmental concerns surrounding plastic, said earlier this year that the group's typical €50 million-a-year travel and entertainment bill will be cut in half post-pandemic.

“We spent about €50 million a year in Smurfit Kappa on travel and entertainment. You sit back and say ‘was that necessary, to go to Amsterdam for a one-hour meeting or a three-hour meeting?’” Smurfit said in an interview.

A compromise

Meanwhile, Dalata Hotel Group, holding out for a recovery in international travel to reboot its Dublin and London hotels as staycationers kept the show on the road for its regional locations over the summer, is looking to make tweaks without signalling something that would damage its own business.

The compromise? Fewer flights but more overnight stays. “The company continues to place great importance on conducting business face to face, in particular in visiting hotels and meeting people across the group,” a spokeswoman said. “Outside of hotel visits, Dalata will seek to establish stakeholder relationships with customers, suppliers, investors, etc through a combination of face-to-face and virtual meetings.”

CRH, which employs almost 77,000 people globally, is known to be planning to keep business travel in check following the pandemic by continuing to use online conferencing to interact with staff, customers and suppliers.

Of course, air travel emissions only matter at the margins for the building materials giant on its journey over the next three decades to “carbon neutrality” – a lesser target, it has to be said, than net-zero emissions as it can be achieved by offsets such as buying carbon credits from the likes of mature tree-planting projects or sophisticated carbon removal technology.

Kilkenny-based global nutrition group Glanbia, which has begun recently to reintroduce business travel on an essential-only basis, has already been using technology increasingly in the past number of years to cut work trips, according to a spokeswoman.

A reduction in carbon emissions from travel is part of the group’s wider target of reducing so-called Scope 3 emissions (essentially those generated from purchased goods and services) by 25 per cent by the end of the decade, she added.

Still, the impact of chief executive Siobhan Talbot and her team cutting down on the air miles will be tiny when you consider the bigger issue of belching cows in the group's supply chain.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times