TTC launches carbon fund to reach net zero

With the validity of carbon offset schemes being questioned and consumers confused by the increasing number of sustainability certifications, badges and schemes, it’s hard for travel companies to know the right path to decarbonize their businesses.

One travel organization has decided to tackle the issue head on, moving away from offsetting, which it has been offering for some time and will still offer, and shifting its focus to reducing its carbon footprint.

After a year of reviewing possible routes towards achieving net zero by 2050, The Travel Corporation (TTC) - comprising 40 brands including Trafalgar Tours, Contiki Tours and Uniworld River Cruises - is introducing an internal carbon fund.

All brands within the company will contribute to the fund twice a year, creating a pot of money that will be used to address TTC’s sustainability goals and help it transition to net zero.

Shannon Guihan, TTC’s chief sustainability officer, says: “We’re an asset-heavy tour operator. We have many assets in Scope 1 and Scope 2 that we need to pay to transition. It’s [things like] more efficiency in Red Carnation and a new propulsion system on Uniworld River Cruise ships, although the technology is not there, and the fund will enable us to do that while not increasing prices so we will remain competitive but meet our net zero targets.”

Scope 1 refers to direct emissions from a company’s owned or controlled sources while Scope 2 covers indirect emissions from things like electricity purchased by a company.

The fund will also be made available for the company’s business leaders who can apply for monies to use for other ways to reduce energy usage as well as to employ more sustainable energy.

“The targets we have set are deliberately ambitious, a signal to our teams and partners that great change is needed. With ambition, however, must also come practical tools, and our carbon fund is our business solution to enable us to achieve our targets. One cannot ask business leaders to affect change within an organization without giving them the tools to do so,” says Brett Tollman, CEO of TTC.

“There are a great deal of climate solutions at hand, and it is our intention to assess and employ solutions that will work for us, while maintaining the same or better service levels and competitive pricing. This fund enables our business leaders to do just that."

Funding carbon removal

Contributions from each brand to the fund will come from profits, with the amount determined on an internally-set carbon price formulated on a per passenger basis.

Guihan says that not only does each brand have a different carbon footprint that needs to addressed differently, but also that Scope 3 - or other indirect emissions - also need to be taken into account, which in the case of TTC means reducing the carbon impact of its trips business.

“It’s primarily about resilience and competitiveness. This is a family run company and that puts us in a unique position where we are able to look long-term. It means that our executive is very in tune in what’s coming down the line in relation to pending regulations in the next 12 to 18 to 36 months, so it’s really future-proofing. That’s the way it’s viewed,” she says.

Part of the ongoing work, for example, is the introduction of a trip carbon calculator enabling teams across experience design, product and operations to build itineraries that reduce the carbon footprint using the tool.

Ulla Hefel Böhler, chief operating officer of TTC’s tour brands, says the calculator provides teams with a “different perspective and lens” through which to view its itineraries and devise how to reduce the related carbon.

“It’s a fantastic tools for our teams to say ‘if we took a train from A to B instead of a coach, our carbon emission on this itinerary would reduce by X’ - knowing that allows our team to have a very different perspective and having that transparency, that visiblity is absolutely key,” she says.

The thinking behind TTC’s approach is that for the company to achieve its net zero by 2050 target, it needed to rethink its whole strategy.

“Over the past two years the conversation and the science has shifted quite rapidly and the rhetoric plays a role in that,” Guihan says.

“When we took a look at our business and the fact that we own assets, offsets were not going to decarbonize. They might make certain consumers feel good, but they’re not going to get us to net zero. The only way to get to net zero is through investments and change.”

She adds that TTC’s strategy is a further layer in a long evolution that the company and its brands have undertaken.

“We take a business function approach to sustainability, which means every team member is responsible for some element, large or small, to ensure we meet our sustainability goals. It’s really baked in so that our sustainability goals and our business goals are shifting and driving together.”

She calls the company’s short-term targets - i.e. the goals it wants to achieve by 2030 - as “low-hanging fruit,” a term which many would take to mean easy.

They’re far from easy however.

“We’re going to focus on our own assets primarily, largely because they’re low hanging fruit - offices, building, hotels - because the technology and processes to draw down the footprint of those is all available to us.”

After that, and depending on the infrastructure and available technology in each country and region, TTC will look at its fleet of owned vehicles and coaches.

“The goal is 75% zero or low-emission vehicles by 2030, these are a part of our short-term targets,” she says.

“That one is a real challenge because we’re hearing mutterings in countries and in regions that potentially we will see the coaches available. At the minute there is not a long-haul coaching option available for us.”

TTC's Uniworld River Cruises is not being left behind but again represents a significant challenge when it comes to decarbonization.

To this end, TTC is part of PATH2ZERO, an effort led by the Delft University of Technology in the Netherlands that is working on ways to identify and scale a solution for net zero inland shipping.

Show me the science

Crucially, all the work being carried out is based on the Science Based Targets initiative , which is a partnership of CDP, the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature.

The company's net zero target of 2050 as well as its short-term targets have been validated by SBTi with Guihan stressing the importance of having those short-term goals in place because 2050 seems so far off.

“Our target is to reduce absolute Scope 1 and 2 emissions by 46.2% by 2030 and Scope 3 by 27.5% by 2030. Those are significant reductions, and it’s to encourage anyone who is working and has validated targets to get the lion’s share of the work done by 2030, which makes what’s left to reach net zero more achievable.”

She adds that once the short-term targets have been achieved, the company will need to go through the process again in 2030 to build “long-term pathways” to achieve its target of Scope 1, 2 and 3 emissions reduction of 90% by 2050.

While this body of work is laudable, a remaining question is why not educate consumers and drive them to change their behavior directly?

Guihan believes there is a disconnect between consumer sentiment and consumer purchasing patterns.

“I’m not sure they’re necessarily aligned with each other. That said, there is a growing percentage of consumers and trade partners who we believe just expect this of their providers, which is reasonable. It’s 2022, the conversation on the environment and carbon is unavoidable.”