UK ban on airline ‘greenwashing’ ads: Implications for travel sellers and B2B distributors

Wednesday, December 13, 2023

Last week, the UK‘s advertising watchdog took action against Google ads from Air France, Lufthansa, and Etihad, citing a “misleading impression of the advertiser’s environmental impact.” This development, as reported by the Financial Times and global media outlets, followed earlier reports in September by Reuters and others, which detailed similar actions taken against Ryanair, Etihad, and Lufthansa. Even Dutch carrier KLM faced a civil suit.

In a world where “greenwashing” is a concern for both consumers and environmental advocacy groups, the risk extends beyond the airlines themselves to the B2B distributors and B2C intermediaries involved in selling flights. Could they face damage to their reputation or legal consequences? What challenges do they encounter in acting responsibly? We sought the insights of travel technology experts on how they should respond.

Eugene Ko, Marketing Director at Phocuswright, emphasizes that the travel industry stands at a critical juncture in terms of sustainability. He notes that the industry can choose to proactively embrace sustainability through innovation or risk being compelled to do so by crises and regulations. A token effort is no longer sufficient, and all stakeholders, including providers, sellers, and tech partners in the distribution chain, must creatively and pragmatically address sustainability while taking full responsibility for the entire travel value chain.

Morgann Lesné from investment banking firm Cambon Partners warns that sustainability claims must be substantiated by all actors in the travel ecosystem, including B2B tech partners and intermediaries. Failure to do so could deter investors, as sustainability is a significant consideration. Governance issues related to sustainability will now become part of the due diligence process for acquisitions and funding. Companies should adhere to standards and frameworks and be prepared for new reporting regulations, such as the EU’s Climate Resilience and Sustainable Development disclosure reporting, which will be introduced in the coming years. Companies entangled in legal proceedings, even if they are sellers rather than providers of travel services, may face obstacles in fundraising or potential sales.

Concerning potential damage, Sami Doyle from TMU Management suggests that more comprehensive insurance will become increasingly necessary for travel sellers and B2B intermediaries. While many have good intentions, court cases, especially class-action lawsuits, can be financially draining. The right insurance can protect travel companies if sued over a misguided claim about green credentials, even if they were merely relaying claims made by airlines or hotels.

Christian Sabbagh from B2B travel SaaS company Travelsoft acknowledges the challenges faced by airlines due to the absence of industry data reporting standards. Airlines struggle to provide travel buyers and consumers with reliable, easily understandable sustainability data, such as flight CO2 emissions. There is a need for universal, globally agreed-upon standards, endorsed by B2B distributors and B2C sellers, to calculate emissions accurately. Until then, airlines should maintain transparency in reporting results and acknowledge the long road ahead. Simultaneously, the industry should focus on preparing for sustainable travel solutions, such as sustainable fuels and newer aircraft.

In conclusion, Traxo, a leader in business travel location awareness, underscores the industry’s need for precise travel sustainability data reporting. Andres Fabris, Founder & CEO of Traxo, highlights the increasing corporate trend of evaluating and reducing the environmental impact of business travel. However, he notes a significant challenge in data extraction, hindering accurate sustainability reporting. Fabris emphasizes the industry’s urgent need to develop effective monitoring methods, stressing that without proper data capture, accurate measurement is impossible.

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