Category 6 Business Travel – The best calculation guidance

Category 6 Business Travel

Category description – Category 6 Business Travel includes emissions from the transportation of employees for business-related activities in vehicles owned or operated by third parties, such as aircraft, trains, buses, and passenger cars.

This guidance page for Category 6 Business Travel serves as a companion to the Scope 3 Standard to offer companies practical guidance on calculating their scope 3 emissions. It provides information not contained in the Scope 3 Standard, such as methods for calculating GHG emissions for each of the 15 scope 3 categories, data sources, and worked examples.

Overview  – Category 6 Business Travel

Category 6 Business Travel refers to a specific classification within greenhouse gas (GHG) emissions accounting, focusing on emissions resulting from travel activities undertaken by employees for business purposes. These emissions include both direct emissions from modes of transportation, such as air travel and road transport, as well as indirect emissions associated with travel-related activities, such as accommodation and meals. Here’s a comprehensive overview:

Definition and Classification:

  1. Scope 1, 2, and 3 Emissions: GHG emissions are categorized into three scopes by the Greenhouse Gas Protocol. Scope 1 emissions are direct emissions from sources owned or controlled by the company, while Scope 2 emissions are indirect emissions from purchased electricity, heat, or steam. Scope 3 emissions encompass all other indirect emissions, including those associated with business travel.
  2. Category 6 Emissions: Within Scope 3 emissions, Category 6 specifically focuses on business travel. These emissions include both direct emissions from transportation modes used for business travel and indirect emissions associated with travel-related activities, such as accommodation, meals, and commuting to and from travel hubs.

Characteristics:

  1. Variety of Travel Modes: Business travel can involve various modes of transportation, including air travel, road transport (e.g., car, bus), rail travel, and maritime transport, depending on the distance traveled and destination.
  2. Global Reach: Business travel activities often span multiple regions and countries, contributing to emissions from long-haul flights, intercity road trips, and international travel, which may have different environmental impacts based on distance and transportation mode.
  3. Emission Intensity: The carbon intensity of different travel modes varies significantly, with air travel generally having a higher emissions footprint per passenger-kilometer compared to road or rail transport, due to factors such as fuel efficiency and distance traveled.

Examples:Category 6 Business Travel

  1. Air Travel: Emissions resulting from flights taken for business purposes, including domestic and international travel for meetings, conferences, client visits, and training sessions.
  2. Road Transport: Emissions from road travel, including commuting to and from airports, train stations, or other travel hubs, as well as rental car or taxi services used during business trips.
  3. Rail and Public Transport: Emissions associated with rail travel, bus travel, and other forms of public transportation used for business purposes, particularly for shorter distances or within urban areas.
  4. Accommodation and Meals: Indirect emissions resulting from accommodation, meals, and other travel-related activities, including hotel stays, restaurant meals, and event catering during business trips.

Importance:

  1. Operational Efficiency: Managing Category 6 emissions is essential for optimizing business travel practices, reducing costs, and improving operational efficiency by minimizing unnecessary travel and promoting alternative communication methods, such as video conferencing and telecommuting.
  2. Environmental Impact: Business travel contributes to GHG emissions, air pollution, and resource consumption, highlighting the importance of implementing sustainable travel policies and practices to mitigate these impacts and promote environmental stewardship.
  3. Employee Well-being: Balancing the need for business travel with considerations for employee well-being, work-life balance, and health and safety during travel is essential for fostering a supportive and sustainable corporate culture.

Considerations:

  1. Travel Policies: Establishing clear and comprehensive travel policies, including guidelines for trip approval, travel booking, transportation mode selection, and reimbursement procedures, can help standardize travel practices and promote sustainability.
  2. Alternative Solutions: Promoting alternative solutions to in-person meetings, such as video conferencing, telecommuting, and virtual collaboration tools, can help reduce the need for business travel and lower associated emissions while maintaining productivity and communication.
  3. Carbon Offsetting: Implementing carbon offsetting initiatives, such as investing in renewable energy projects or reforestation efforts to mitigate the environmental impact of business travel emissions, can help companies achieve carbon neutrality and support sustainability goals.

Conclusion:

Category 6 Business Travel represents a significant aspect of a company’s environmental impact, reflecting emissions associated with travel activities undertaken for business purposes. By addressing these emissions and implementing sustainable travel policies and practices, companies can minimize their environmental footprint, reduce costs, and promote employee well-being, contributing to a more sustainable and responsible approach to business travel.

Emissions from transportation in vehicles owned or controlled by the reporting company are accounted for in either scope 1 (for fuel use), or in the case of electric vehicles, scope 2 (for electricity use). Emissions from leased vehicles operated by the reporting company not included in scope 1 or scope 2 are accounted for in scope 3, category 8 (Upstream leased assets). Emissions from transportation of employees to and from work are accounted for in scope 3, category 7 (Employee commuting). See table 6.1.

Something else -   Related party transaction

Category 6 Business Travel

Emissions from business travel may arise from:

Companies may optionally include emissions from business travelers staying in hotels.

A reporting company’s scope 3 emissions from business travel include the scope 1 and scope 2 emissions of transportation companies (e.g., airlines).

Calculating emissions from business travel

Figure 6.1 gives a decision tree for selecting a calculation method for emissions from business travel. Companies may use one of the following methods to calculate scope 3 emissions from business travel:

  • Fuel-based method, which involves determining the amount of fuel consumed during business travel (i.e., scope 1 and scope 2 emissions of transport providers) and applying the appropriate emission factor for that fuel
  • Distance-based method, which involves determining the distance and mode of business trips, then applying the appropriate emission factor for the mode used
  • Spend-based method, which involves determining the amount of money spent on each mode of business travel transport and applying secondary (EEIO) emission factors.

Category 6 Business Travel

Category 6 Business Travel – Fuel-based method

The calculation methodology for the fuel-based method does not differ from the fuel-based method in category 4 (Upstream transport and distribution). For guidance on calculating emissions using this method, refer to the guidance for category 4 (Upstream transport and distribution). Companies may optionally collect data on the number of hotel nights incurred during business travel by hotel type. Under this method, they add the number of hotel nights and the emissions factor of the hotel (as shown in the distance-based method below) to the fuel-based method in category 4 (Upstream transport and distribution).

Something else -   Right of return - How 2 best account it

Category 6 Business Travel – Distance-based method

If data on fuel use is unavailable, companies may use the distance-based method.

The distance-based method involves multiplying activity data (i.e., vehicle-kilometers or person-kilometers travelled by vehicle type) by emission factors (typically default national emission factors by vehicle type). Vehicle types include all categories of aircraft, rail, subway, bus, automobile, etc.

Activity data needed

Companies should collect data on: Category 6 Business Travel Category 6 Business Travel

  • Total distance travelled by each mode of transport (air, train, bus, car, etc.) for employees in the reporting year.

Where possible, companies should also collect data on:

  • Countries of travel (since transportation emission factors vary by country)
  • Specific types of vehicles used for travel (since transportation emission factors vary by vehicle types) from transport providers
  • The specific passenger vehicle type and the relevant emission factor.

Companies may optionally collect data on the number of hotel nights incurred during business travel by hotel type.

Activity data should be expressed as the number of kilometers travelled or kilometers travelled per person for a particular vehicle type (e.g., passenger-kilometer). The activity data should be summed to obtain total annual kilometers or person-kilometers travelled by each vehicle type used by the company.

Emission factors needed

Companies should collect: Category 6 Business Travel Category 6 Business Travel

  • Emission factors for each mode of transport (e.g., aircraft, rail, metro, bus, taxi, bus), expressed in units of greenhouse gas (CO2, CH4, N2O, HFC, or CO2e) emitted per kilometer or per passenger-kilometer travelled.

Companies may optionally use emission factors for hotel stays by hotel type (e.g., kilograms of CO2e emitted per hotel night).

Note: For air travel emission factors, multipliers or other corrections to account for radiative forcing may be applied to the GWP of emissions arising from aircraft transport. If applied, companies should disclose the specific factor used.

Data collection guidance

Methods of data collection include: Category 6 Business Travel Category 6 Business Travel

  • Automatic tracking of distance travelled by mode through a travel agency or other travel providers
  • Automatic tracking of distance travelled by mode through internal expense and reimbursement systems, which may require adding new questions on distance travelled and mode of transport to travel or expense forms submitted by employees
  • Annual surveys/questionnaires of employees
  • Working with travel providers (e.g., transportation companies, hotels) to obtain GHG emissions data.

Collecting travel data from all employees may not be feasible. In such a case, companies may extrapolate from a representative sample of employees to the total business travel of all employees. For example, a company may have 4,000 employees, each of whom has different travel profiles. The company may extrapolate from a representative sample of 400 employees to approximate the total business travel of all employees. Companies may also choose to group or combine data from business travellers with similar travel profiles. See Appendix A for more information on sampling methods.

Something else -   Category 2 Capital Goods Scope 3 emissions - The best calculation guidance

Calculation resources include: Category 6 Business Travel Category 6 Business Travel

Once the company has determined total annual distance travelled by each mode of transport (aggregated across all employees), apply the formula below to calculate emissions.

Calculation formula [6.1] Distance-based method

CO2e emissions from business travel =

sum across vehicle types:

(distance travelled by vehicle type (vehicle-km or passenger-km)

× vehicle specific emission factor (kg CO2e/vehicle-km or kg CO2e/passenger-km))

+

(optional)

(annual number of hotel nights (nights) × hotel emission factor (kg CO2e/night))

Category 6 Business Travel

.

Example [6.1] Calculating emissions from business travel using the distance-based method

Company A is a financial services company. Every year, it sends groups of professionals to industry conferences in the United Kingdom, Australia, and the United States. For each group, the company has collected activity data on the typical distances travelled and modes of transport.

Data was collected via employee questionnaires and information provided by travel agencies and transportation companies. It is assumed that each member of the group travelled the same amount in the same business trip.

Category 6 Business Travel

Three types of flights are identified for calculating emission factors. Short-haul flights have higher emission factors due to strong influence of the landing/take off cycle on emissions, whereas long-haul flights have slightly higher emissions than medium-haul flights due to the additional weight of fuel. Many countries have specific definitions of types of flights. Below is an indicative description:

  • Short haul – flights less than 3 hours in length
  • Medium haul – flights 3-6 hours in length
  • Long haul – journeys made by wide-bodied aircrafts that fly long distance, typically more than 6.5 hours.

total business travel emissions of Company A can be calculated as follows:

emissions from road travel = ∑ (distance travelled by vehicle type (vehicle-km or passenger-km)

× vehicle specific emission factor (kg CO2e/vehicle-km or kg CO2e/passenger-km))

= (10/2 × 50 × 1) + (20/2 × 200 × 2) + (100/3 × 100 × 4)

= 17,583.33 kg CO2e

emissions from air travel = ∑ (distance travelled by vehicle type (vehicle-km or passenger-km)

× vehicle specific emission factor (kg CO2e/vehicle-km or kg CO2e/passenger-km))

= (10 × 10,000 × 5) + (20 × 15,000 × 6) + (100 × 12,000 × 5)

= 8,300,000 kg CO2e

total emissions from employee travel = emissions from road travel + emissions from air travel

= 17,583.33 + 8,300,000

= 8,317,583.33 kg CO2e

Category 6 Business Travel – Spend-based method

If it is not possible to use either the fuel- or distance-based methods, companies may use the spend-based method.

The calculation method is same as the spend-based method described in Category 4: Upstream Transportation and Distribution, with the difference that the activity data is the amount spent on business travel by type/mode of transport. Refer to the spend-based method in Category 4 for a description of this method.

Companies may optionally collect data on the number of hotel nights incurred during business travel by hotel type. Category 6 Business Travel  Category 6 Business Travel

Category 6 Business Travel

Leave a comment