Last week the UK’s advertising watchdog banned Google adverts from Air France, Lufthansa and Etihad for giving a misleading impression of the airlines’ environmental impact, as reported by ARGS.
This followed reports in September of separate similar actions against Ryanair, Etihad and Lufthansa – and Dutch carrier KLM had a civil suit lodged against it.
In a world where ‘greenwashing’ is something consumers and environmental lobby groups are looking out for, this poses a risk not just to the airlines but to the B2B distributors and B2C intermediaries involved in selling flights too.
Could they suffer reputational damage or even be sued? And what are the challenges they face when it comes to acting responsibly?
Eugene Ko, marketing director at Phocuswright, says: “As global tourism echoes the need to ‘build back better’, the industry is at a crossroads when it comes to sustainability.
“The market can either take action to become more sustainable via innovation – or be forced to do so via crises and regulation. While some travel players seem content to introduce a small initiative and consider the environmental action box checked, this approach is no longer sufficient.
“The industry’s future dictates that travel companies and stakeholders – including not just the providers of travel but also the sellers and tech partners involved in the distribution – must meet the sustainability challenge with pragmatic, creative and innovative answers and accept full responsibility for the whole travel value chain.”
Sustainability claims must always be “rigorously” backed up by all those in the travel ecosystem, including B2B technology partners and intermediaries – otherwise companies risk losing investors, warns Morgann Lesné from investment banking firm, Cambon Partners.
He explains: “Sustainability is a significant consideration for investors, and they will be looking for companies that can demonstrate a genuine commitment and a viable path to net zero [carbon emissions].
“Governance issues therefore alarm investors, and this will now form part of the due diligence process for acquisitions and funding. Green claims need to be rigorously backed up, corporations should be following standards and frameworks, and they should also show that they are ready for new reporting regulations, for instance the EU’s Climate Resilience and Sustainable Development disclosure reporting, which are going to be introduced within the next couple of years.
“Companies that find themselves caught up in legal proceedings – even if they weren’t the actual provider of the travel services, merely the seller – are likely to end up being blocked from fundraising or potential sales.”
The UK’s Advertising Standards Authority (ASA) last week announced a ban on airlines’ adverts that were deemed to mislead consumers over how sustainable it was to fly with them, respectively.
The Google ads, all seen in July, stated that Air France was “committed to protecting the environment” and urged consumers to “travel better and sustainably”, while Lufthansa suggested that its customers would “fly more sustainably”. Etihad’s ad claimed its service included “environmental advocacy”.
One consumer watchdog criticised the airlines’ “deceptive claims”, arguing that this can make it “impossible” for passengers to make informed decisions based on their environmental consciousness before booking flights.
When it comes to the potential damage of these ads, Sami Doyle from TMU Management, the data-driven insurance intermediary that safeguards the travel value chain for travel companies, warns that more comprehensive insurance will become increasingly necessary.
“Travel sellers and B2B intermediaries often have good intentions, and most will not have meant to ‘greenwash’ on purpose when selling someone else’s products such as a flight,” he explains.
“Of course, meaningful green initiatives should be carried out in line with industry standards, such as the Science Based Targets Initiative, to ensure they are genuinely contributing to the Paris Agreement’s 1.5-degree global warming goal.
“But court cases, particularly class action ones, can be an enormously expensive distraction and the right insurance could protect a travel company if sued because of a misjudged claim about green credentials, even if they were just repeating the claims made by the airline or hotel.”
Christian Sabbagh, from B2B travel SaaS company Travelsoft, however, empathises with the challenges faced by airlines, who struggle due to a lack of industry data reporting standards.
He says: “As an airline, it is difficult to offer travel buyers and consumers reliable, easy-to-grasp sustainability data. For example, there are various methods used to calculate estimated flight CO2 emissions, often leading to wildly different figures for the same flight.
“There needs to be universal, globally agreed standards, bought into by the B2B distributors and B2C sellers, for calculating emissions so that every traveller trusts and understands the impact of their journey.”
But, he adds: “Before this happens, airlines should continue to communicate on results with transparency on the long way still to go and, in parallel, the whole industry should demonstrate that it is focused on preparing for longer-term solutions to sustainable travel, like sustainable fuels and newer aircraft.”