Why Firms Should Embed Carbon Pricing into Business Travel

Businesses should follow the example of the likes of Microsoft, McKinsey, KPMG and Zurich by embedding carbon pricing into business travel, an expert argues.
American Express Global Business Travel CEO Paul Abbott says business travel represents up to 75% of profit on some flights and could “reinvent” carbon pricing.
In a blog written for the World Economic Forum to coincide with its Annual Meeting in Davos, Paul says businesses linking the two will “help accelerate the transition towards sustainable aviation fuel”.
Overdue for an overhaul
Paul says: “Whether your company is advanced or in the preliminary stages of its carbon pricing journey, business travel is an easy place to start.
“By embedding the cost of carbon into business travel, investment in low-carbon tech like SAF can become more attainable for any business.”
He says carbon pricing is “overdue for an overhaul”, adding that organisations can integrate carbon pricing into their business strategy to make economic growth compatible with climate action.
Carbon pricing incentivises emitting less by placing a fee on emissions.
But Paul argues that pricing carbon is “only half the equation”, adding: “Coupling carbon pricing with decarbonisation is how the world can achieve net zero.”
Carbon pricing for business travel
According to the World Bank, 24% of global emissions are now covered by some form of carbon pricing with revenues exceeding US$100bn.
Paul says funds must go into sustainability to address the source of these emissions and their climate impact.
He says: “In the case of business travel, carbon pricing puts a price on the emissions associated with flying.
“This fee can then get invested back into low-carbon technologies for more sustainable business travel.”
Amex GBT is helping businesses calculate and apply a carbon fee to air travel, then invest the funds generated into decarbonisation projects such as SAF.
How it works
Paul gives a three-stage explanation of how embedding carbon pricing into business travel works:
- “Apply a fee to air transactions. A flat fee (e.g. $10 per flight), a categorical fee based on distance or class or an emission-based fee that aligns with a company’s preferred carbon calculation methodology
- “The fund then scales in line with the environmental impact of a company's business travel
- “Funds can be invested into initiatives that can help decarbonise the business travel programme such as SAF, electric vehicles, research & development and more.”
Companies pioneering carbon pricing via their business travel function include Sanofi, Swiss Re, Microsoft, Bank of America, McKinsey, KPMG and Zurich.
Any company can do it
Lucian Alexandru, Global Procurement Category Head, Sanofi, is quoted in the blog and strongly backs Paul’s arguments.
He says: “Emissions-based carbon pricing enables us to combine economics, sustainability and technology to strengthen our business travel programme and boost funding to invest in decarbonisation initiatives such as SAF.
“With support from Amex GBT, we are closely aligning our business travel programme with company-wide efforts to reduce emissions, while also helping accelerate and prepare for a low-carbon future.”
Paul says “any company can do this”, adding that global multinationals are leading the way in carbon pricing adoption – but SMEs have good reasons to follow their lead.
“For SMEs, carbon pricing could prove even more valuable in that it can help a company build a sustainability budget where one does not exist.
“Travel is imperative for growth, especially for SMEs. Instead of weighing sustainability against the rising cost of doing business and competing budget priorities, SMEs can use carbon pricing via business travel to create a self-sustaining fund for sustainability as they grow.”
He says: “Using business travel to implement carbon pricing could help unlock the private capital needed to decarbonise aviation at the speed and scale required to hit industry net-zero targets.”
Explore the latest edition of Sustainability Magazine and be part of the conversation at our global conference series, Sustainability LIVE.
Discover all our upcoming events and secure your tickets today.
Sustainability Magazine is a BizClik brand
- How DHL Helped AstraZeneca Decarbonise Air Freight With SAFRenewable Energy
- How AI’s Rise Changed Microsoft’s Sustainability StrategyTech & AI
- Amex GBT: How Will the UK SAF Mandate Impact Business?Renewable Energy
- Neste & DHL Group: Decarbonising Deliveries with SAFSupply Chain Sustainability