How to Create a Carbon Budget for Business Travel

Business travel can be a significant proportion of a company’s carbon footprint. An effective strategy for managing carbon emissions in line with your company’s Net Zero strategy is to create a business travel carbon budget for employees.

What is a carbon budget?

A carbon budget is much like a financial budget. Each employee gets an allowance to use up each year on business travel, but instead of a financial limit, it’s a CO2e limit.

Here is a snapshot:

Every year each employee is given a business travel carbon budget of say 2,000kg of CO2e.

Samia makes a return trip from New York to London: 1638kg CO2e

She spends 3 nights in a London hotel: 32kg CO2e 

Total emissions: 1670kg CO2e

This trip would be within budget.

But if Samia wanted to do this trip twice in a year or perhaps fly business class, she would be over budget. 

Each year hotel and aviation emissions will reduce a little but so will your carbon budget per employee. The idea is that setting a budget will make employees think twice about whether they need to travel and if they do, how best they can travel to keep their emissions as low as possible. 

How do I calculate the budget amount?

First, take a benchmark year (the last year would be the obvious choice, but if it was disrupted for any reason, you may want to choose a different year). You would then calculate (or get ecollective to calculate) the carbon emissions linked to your business travel that year.

Much like financial budgets, carbon budgets do not have to be equally allocated amongst all employees. Not everyone needs to travel for work and some employees travel much more than others. We therefore recommend you set budgets in a way that makes sense for your business depending on travel requirements. You could work them out according to pay grade, role type, and/or department.

What budget should I set?

Once you have a baseline year, we recommend that for year one, you implement a budget in line with that year. Then year after year, reduce it, typically by around 8% each year. 

Samia’s yearly carbon budget would look like this: 

Year 1: 2,000kg of CO2e

Year 2: 1840kg of CO2e

Year 3: 1680kg of CO2e etc

Education is important

It might be obvious to you, but it would help your employees make lower carbon choices if they understood the differences between the carbon emitted from the various travel options available. Here are some examples: 

 All of the calculations below are based on return trips:

*Flight emissions include radiative forcing (RF)

Other elements to consider

You will need to be clear about what is included / not included in business travel (i.e. meals, commuting). You may want to decide if the budget is mandatory and if there are any incentives for staying within it and what happens if someone exceeds their budget. 

Unintended consequences

If your team travels less, will that have a knock-on effect on business/morale/competitiveness? Could there be positive outcomes to your team travelling less? Reduced travel could mean employees have more energy, are happier and/or healthier for example. Another unintended consequence could be if people feel the need to use up their budget for no particular benefit. That would be a carbon disaster, so ensure your team understands that not needing to travel is the biggest win.

We hope we have inspired and helped you understand how to implement a carbon budget for business travel. Let us know if you have any questions or need help calculating your base year.