Understanding the True Impact of Business Travel
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Business travel often walks a fine line between being a necessary advantage and a logistical challenge. Our travel experiences offer new opportunities and strengthen connections. Critical face-to-face meetings —that we craved in times of pandemic—have a positive impact on business relations. But it also comes with its share of hidden pitfalls: Think of unexpected last-minute bookings, policy breaches, and the carbon footprint left behind by frequent flights. With the rising importance of Environmental, Social, and Governance (ESG) regulations, finance leaders find themselves balancing these complexities like never before.
Many companies overlook the combined financial and environmental impact of global business travel. The focus often stays on expense reports while emissions from transport and accommodation quietly grow, damaging the planet and possibly your reputation. Balancing travel expenses with sustainability goals and regulatory compliance has become a real challenge.
This article dives into the hidden costs of corporate travel, how more intelligent travel management can align with your sustainability initiatives, and how technology simplifies it all. From cutting emissions to optimising the bottom line — let’s see how to make your business trips smarter, not harder.
Understanding the full impact of business travel
Corporate travel is a powerful growth driver and a key to building strong relationships, but its true impact is often overlooked. Beneath the obvious expenses lie more profound financial and environmental challenges that many companies are only beginning to uncover. Climate change and ever-changing regulations are essential issues that modern companies have to align their travel strategies.
Financial impact
The financial toll of business trips often extends far beyond budgeted expenses.
Cancellations and last-minute changes: Unpredictable circumstances, from flight disruptions to meeting cancellations, can lead to sunk costs or expensive rescheduling. For example, last-minute bookings often come at a premium compared to pre-planned travel.
Expense policy violations: Employees who unintentionally or knowingly book outside the company’s travel policies, such as booking additional wellness treatments, can increase travel spending. Without robust controls, these violations are difficult to prevent.
Hidden costs in travel: Add-on expenses, such as baggage fees, airport transfers and ancillary services, often go unnoticed in the larger business travel scheme. Yet, they can significantly impact the bottom line if not properly tracked and managed.
Environmental impact
The environmental impact of global business travel is significant, with carbon emissions being a key concern today for companies meeting sustainability goals.
Carbon emissions from flights: Air travel significantly contributes to global CO₂ emissions. Long-haul flights, in particular, produce large quantities of greenhouse gases, making them one of the most environmentally damaging aspects of business travel.
Accommodation and ground transport: Hotels generate emissions through heating, cooling and lighting energy consumption. Similarly, ground transport options such as rental cars or taxis can contribute to the overall carbon footprint.
Indirect ESG challenges: Beyond the direct emissions, companies face increased stakeholder scrutiny regarding travel practices. Organisations that fail to address their environmental impact risk reputational harm and potential non-compliance with regulatory requirements.
Tracking financial and environmental costs
One measurement includes tracking financial and environmental costs together.
Financial tracking: Comprehensive tracking systems are essential to capture every aspect of travel spend. This includes airfare and lodging but also ancillary expenses and out-of-policy spending. Real-time visibility into these metrics even enables finance teams to enforce compliance and optimise travel budgets.
Carbon tracking: Accurate measurement of carbon emissions from flights, accommodation, and other travel-related activities is critical for companies aiming to meet ESG goals. This requires specialised tools capable of calculating emissions data and aligning it with sustainability targets.
The role of integrated solutions: Leveraging advanced platforms combining travel management, spend management and carbon tracking can offer a holistic view of financial and environmental impacts. These solutions empower organisations to identify inefficiencies, ensure compliance with ESG regulations, and make informed decisions about future travel.
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ESG regulations and their impact on travel management
Sustainability regulations like the Corporate Sustainability Reporting Directive (CSRD) reshape corporate travel management. Businesses must now integrate ESG metrics into their reporting to remain compliant and competitive.
CSRD (Corporate Sustainability Reporting Directive): The CSRD mandates detailed reporting on carbon emissions and other sustainability metrics, impacting both large organisations and small and medium-sized businesses (SMEs). For travel, this includes tracking emissions from flights, accommodation, and transport while adhering to European Sustainability Reporting Standards (ESRS).
Compliance challenges: Tracking financial and carbon metrics together can overwhelm finance teams. This can lead to challenging efforts to stay compliant with current regulations.
Non-compliance risks: Companies that fail to meet ESG reporting requirements risk fines, legal action, and reputational harm. Poor sustainability records can also deter stakeholders and risk new business opportunities.
Balancing cost control and sustainability goals
We cannot abandon sustainability goals, as they are growing in importance. That means businesses must adopt a holistic approach integrating financial oversight with environmental accountability.
Expense management
By implementing expense management best practices and embedding sustainability initiatives into their travel strategies, organisations can create a framework that reduces waste, meets ESG targets, is comfortable and supports long-term growth.
Travel and expense policies: Clear travel policies ensure employees understand acceptable spending limits and guidelines. Policies should define approved travel classes, preferred accommodation providers and reimbursement limits. Regular updates keep policies relevant as business needs evolve.
Pre-approval processes: Requiring pre-approval for travel expenses prevents unnecessary spending. Automated tools can further streamline this process, ensuring compliance without adding administrative burden.
Real-time expense tracking: Real-time tracking provides visibility into travel spend, helping finance teams identify trends, prevent policy violations, and adjust budgets proactively. Integration with corporate cards or booking tools ensures seamless expense capture.
Policy enforcement through technology: Using advanced tools to enforce policies automatically reduces human error and ensures that all travel choices align with budget constraints. Involving corporate cards can minimise out-of-policy expenses while providing a high-quality travel standard.
Sustainability integration
Integrating sustainability goals into travel strategies is no longer optional as organisations face increasing pressure to reduce their carbon footprint. Aligning travel spending with ESG initiatives ensures businesses meet their environmental commitments without compromising operational efficiency.
Carbon tracking: Businesses need tools to measure flight, hotel, and ground transport emissions. Accurate data allows organisations to calculate their environmental impact and incorporate this information into ESG reporting.
Sustainable travel choices: Encouraging employees to choose sustainable travel options, such as direct flights, public transport, or eco-certified hotels, reduces emissions. These choices should be incentivised through policies and supported by integrated booking tools.
Partnerships with sustainable providers: Partnering with providers prioritising sustainability— such as airlines using sustainable aviation fuel (SAF) or hotels with green certifications —aligns travel management with environmental goals.
Balancing Cost and Sustainability: While sustainable options may seem costlier upfront, long-term benefits like reduced regulatory risks, improved stakeholder trust, and compliance with ESG regulations make them worthwhile investments. Companies can also optimise costs by combining sustainable practices with bulk discounts or preferred supplier agreements.
How to reduce the impact of business travel
Reducing the impact of business travel is key for companies balancing operational needs with sustainability goals. These are some of the most impactful tasks for future business travel:
Set smart travel policies: Clear travel policies help employees make responsible choices. Encourage eco-certified hotels and use public transport to minimise the carbon footprint. Define spending limits for flights, accommodation and meals to keep costs in check. Use (virtual) corporate cards and include duty of care measures to ensure employees’ safety and comfort.
Use flexible booking tools: Flexible booking tools simplify travel planning while ensuring compliance with company policies. Real-time visibility allows managers or finance teams to monitor bookings. Dynamic rebooking options reduce penalties for cancellations or last-minute changes.
Track and offset carbon emissions: Tracking emissions is crucial for understanding the environmental impact of travel. Use carbon tracking tools to measure flight-, accommodation-, and transport emissions. Offset emissions by investing in projects like reforestation or renewable energy. You can also regularly report these results to stakeholders to demonstrate progress on sustainability goals.
Invest in sustainable travel: Investing in sustainable travel reduces long-term environmental impacts. Choose airlines using SAF and prioritise eco-friendly hotels. Promote electric rental cars and public transport to lower emissions from ground travel.
Consider video conferencing as an alternative: Video conferencing is an effective way to replace unnecessary travel. Remote working and virtual meetings can cut costs, save time and reduce emissions. They also improve work-life balance by reducing travel-related stress and time away from home.
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Leveraging technology to simplify travel and expense management
As soon as technology enters the picture, transforming travel and expense management is becoming streamlined. Modern tools make it easier to control costs, ensure compliance and meet sustainability goals — all simultaneously and without effort.
Platforms like Yokoy can automate processes and provide the insights you need to make smarter, more sustainable decisions about business travel.
Yokoy’s AI-powered platform
Yokoy automates the whole expense process, from receipt capture to reimbursement. Its AI-powered features handle your expense tracking instantly, reducing errors and saving time. The platform enforces travel policies in real time, flagging out-of-policy spending to keep expenses in check. With multi-entity compliance reporting, your finance team can generate reports that meet local and global regulatory requirements, including ESG standards.
Squake integration
Squake tracks real-time carbon emissions from flights, hotels, and transport, giving you full visibility into your environmental impact. The seamless integration into Yokoy’s platform offers carbon offset options through verified projects like reforestation and renewable energy. Integrating travel management tools like Travelperk and tracking carbon emissions into Yokoy’s expense management workflows makes compliance with regulations such as the CSRD much easier. At the same time, this reduces your administrative burden while supporting sustainability goals.
Unified data
Yokoy and Squake combine financial and environmental data in one platform, giving your finance team a complete view of travel spend and carbon footprint. This unified data enables smarter decisions, such as consolidating trips, choosing sustainable options, or encouraging virtual meetings. It also aligns financial control with ESG objectives, helping your business to reduce costs and emissions simultaneously.
Benefits of integrating expense and carbon management with Yokoy
Yokoy simplifies processes and provides actionable insights for managing both financial and environmental impacts.
Streamlined compliance across countries and entities: Yokoy makes compliance with financial and ESG regulations effortless across multiple jurisdictions. Its unified platform consolidates data, helps with reporting and flags out-of-policy actions in real time, reducing non-compliance risks while saving time and minimising errors.
Cost optimisation: With detailed visibility into travel spend, Yokoy helps identify savings opportunities like consolidating trips, using preferred travel management companies, and enforcing policies. By integrating financial and carbon data, your finance team can make smarter, more sustainable decisions to optimise budgets.
Sustainability insights: Carbon tracking tools integrated with Yokoy offer real-time data on emissions from flights, hotels, and transport. These insights allow companies to set reduction targets, offset emissions effectively and align with sustainability initiatives to meet growing ESG demands.
Transparency and accountability: Yokoy’s single platform tracks real-time financial and environmental metrics. Direct insights ensure accountability to stakeholders, build trust and establish the business as a responsible business travel management leader.
Next steps
Integrating expense and carbon management with Yokoy simplifies complex processes, enabling your businesses to reduce costs, enhance compliance, and make sustainable, impactful decisions.
Want to try it first hand? Book your demo now!
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