Dan Kreibich is co-founder and chief product officer at Squake
It’s no secret that the past few years have been challenging for the travel industry. Rising inflation and increased interest rates have made it difficult for many businesses to stay profitable, especially as travel volumes have increased post-pandemic. Additionally, new sustainability targets are emerging, tying financial demands to a shifting landscape.
In the coming year, governments will introduce and update sustainability policies and regulations, such as the Corporate Sustainability Reporting Directive (CSRD), as the EU aims for net zero carbon by 2050. Research shows that costs are the biggest challenge for sustainability leaders looking to meet environmental commitments, with 40% citing it as their primary barrier. Nearly half of the leaders surveyed plan to invest more in sustainability in 2024.
However, decarbonizing industries like travel and logistics pose unique challenges. Despite setting ambitious climate goals, many companies are unsure about how to achieve them.
Balancing commercial concerns
Engaging senior stakeholders, navigating sustainability regulations, reporting, and data management, all while focusing on commercial projects, is a delicate balance. Companies often face a struggle between prioritizing projects that align with business goals and those that are more environmentally focused.
To future-proof companies, efforts must be redirected to connect sustainable initiatives with financial outcomes. This involves defining clear CO2 objectives, selecting economic KPIs derived from climate action, integrating sustainability projects into core business strategy, and showcasing successful industry examples.
Making sustainable efforts pay
In the aviation industry, companies can reduce Emission Trading System (ETS) costs by using sustainable fuels. By reducing emissions, companies need to buy fewer credits, leading to cost savings in the long run. Other sectors, like travel and logistics, can utilize book and claim systems to distribute carbon reductions among customers, making carbon reductions auditable and increasing customer interest and investments.
The cost of climate carelessness
Aside from cost savings, investing in sustainability can bring benefits in risk management and customer loyalty. Regulatory compliance plays a significant role in financial strategies, making preemptive investment in sustainability crucial for staying ahead of penalties and taking advantage of incentives for climate-conscious initiatives.
It’s clear that profit and climate targets are intertwined. Sustainability managers must find ways to align sustainability initiatives with company goals to drive success. Companies can benefit from both boosting sustainability and improving overall performance.
