Call it irony, call it karma, but climate change, for which aviation is partly responsible, is now creating problems for aviation. Anyone caught up in severe air turbulence recently will have experienced one manifestation of this phenomenon for themselves.
For every one degree centigrade increase in global temperature, lightning strikes increase by 12 per cent, the BBC has reported, caused by a combination of the heat itself and greater moisture retention in warmer air. ※We can expect a doubling or tripling in the amount of severe turbulence in the next few decades,§ says Professor Paul Williams, an atmospheric scientist at the University of Reading, in the BBC article.
The aviation industry acknowledges it faces problems. ※Disruption is likely to become more extreme and more frequent as the impacts of climate change accelerate,§ Airport Councils International (ACI) and Eurocontrol warned in a recent report. Examples it cited include storms, wlidfires and flooded or melted runways.
The International Civil Aviation Organization (ICAO) defines four categories of risk for which the sector must prepare climate resilience plans: higher average and extreme temperatures, changing precipitation, increased intensity of storms, and rising sea levels.
Travel managers also need to understand how climate change is increasingly affecting travel ※because of potential implications for cost, disruption and risk to travel programmes§, is the view of Ami Taylor, CEO of Goodwork Sustainability UK, a sustainability consultancy for small and medium enterprises. ※We've done half the work in terms of understanding our impact on the world, but it's the other half that buyers need to better understand so they can plan correctly.§
PAYING THE PRICE OF CLIMATE CHANGE
One of the most likely consequence for travel programmes is higher costs. ※We're seeing an increase in adaptation?measures that airlines, airports and aircraft manufacturers need to put in place because of climate change and that will start to impact ticket prices,§ says Simon Morris, an airport and aviation sustainability specialist with the engineering consultancy Ricardo.
Examples that Morris cites include the need for additional fuel as aircraft are blown off course, or take more circuitous routes to avoid turbulence, or are forced by bad weather to circle their destination airport before landing. Higher temperatures also require more thrust for take off, meaning aircraft must either consume more fuel or limit payload to reduce weight.
Other items on the ballooning climate mitigation expense tab include increased insurance costs because of the risk of injury through turbulence; higher staff costs for managing delays; new working restrictions (already introduced in Japan and imminent in Spain) for employees in extreme heat or humidity; and better air conditioning systems for passengers waiting on the tarmac in hot conditions.
The rest of the travel sector faces higher costs too. Energy, water and food insecurity mean it will ※cost more to ensure secure supply and therefore that will impact hotel rates,§ says Taylor. ※I also spoke to one car rental company after the floods in Spain last year. They had a huge amount of their fleet wiped out, so that's going to increase their insurance costs and they've got to invest in new vehicles.§
RISK APPETITE
Taylor believes travel managers need to anticipate other climate-driven changes, including more planning with travel management companies for trip disruption and revision of insurance policies.
But don＊t buyers have enough to think about without having to play an educated guessing game of how business travel might, or might not, look in the future? ※It depends on your tolerance for risk,§ Taylor says. ※If you're an organisation that is quite risk-averse 每 maybe insurance or financial services 每 then this is something I suspect your organisation would be keen for you to prioritise because of the potential for increased costs, disruption and risk. If you're able to get visibility, then you can think about mitigation steps and how to partner strategically with suppliers to help reduce that risk and costs.§
Taylor recommends buyers start to include questions in their supplier requests for proposal about whether they have climate resliience and adaptation plans backed by senior management with allocated budgeting and personnel. Ask also for examples of resilience planning that have already been enacted, she advises.
※Until we start getting more information about these adaptation plans and the measures that are being implemented, we won't know the knock-on effect to our costs. And therefore we can't budget correctly within our organisations for the future of travel,§ says Taylor.?
DOUBLE MATERIALITY
The most recent (2024) non-financial and sustainability information statement from British Airways and Iberia parent International Airlines Group reels off a long list of potential risks posed to the company by climate change. They include:
? Days of lost revenue due to additional flight disruption and associated mitigation and passenger compensation costs;
? Inability to fly to ※high-risk destinations susceptible to the impacts of chronic climate and atmospheric changes§;
? ※Assessment of airports with greater exposure to rising sea levels that may affect our ability to operate there§;
? ※Perceptions of ESG [environmental, social and governance] progress in IAG or the aviation sector§ prompting customers to ※change frequency of flying, duration of trips or spend less relative to other carriers or other travel modes.§
There is more: shareholder activism, direct climate protests and ※pass-through of industry-wide costs§ affecting ticket prices jostle among the nightmare possibilities rampaging through IAG＊s worst-case planning.
These disclosures form part of IAG＊s double materiality reporting: stating not only how the company＊s operations and value chain could affect people and the environment, but conversely the risk posed by environmental and social issues to financial performance.
All large and publicly quoted companies in the EU and UK are already required to disclose how climate risks and opportunities affect their company. The EU＊s Corporate Sustainability Reporting Directive will extend the requirement to state the potential impact of climate change to many more companies based or trading in the EU 每 albeit that this number is set to be trimmed by the European Commission＊s Omnibus simplification proposals.
Climate risk to companies under double materiality reporting falls into two categories: physical risk (for example, unavailability of drinking water for a hotel company), and transitional risk, including the costs of climate adaptation, and potential regulatory sanctions or reputational damage for failing to make changes.
WHAT IT MEANS FOR TRAVEL MANAGEMENT
A question travel managers need to consider is whether their company will have to introduce business travel into its double materiality reporting. ※When we complete a double materiality assessment, we can be looking at anything up to 500 different risks. For those companies that that travel a lot, business travel could conceivably be one of them,§ says Ricardo＊s Morris.
While a need to declare climate-driven physical risk to travelling employees is unlikely at present, travel managers could be asked to state the risk of rising insurance and other travel costs as severe weather events increasingly disrupt journeys, says Tom Otley, sustainability director for the professional services firm Oury Clark.
But Nora Lovell Marchant, head of sustainability for American Express Global Business Travel, believes the risks companies would be more likely to need to disclose are transitional 每 and any such requirement could effectively oblige businesses to formulate and execute a travel sustainability strategy. ※Companies will need to state what they have to do to meet regulatory or voluntary targets and that means decarbonisation of their business travel programme, which is very hard to do,§ she says.
※Whether business travel will be material for your business depends on your industry vertical. For manufacturing companies probably not so much. They have other issues they should be addressing first. But for consulting and law firms and financial services companies, absolutely. Business travel will be a material component under the climate change analysis because it is such an outsized component of their entire carbon footprint.§
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