Like many Americans, Michael Steiner, executive vice president at Ovation Travel Group, feels the pull of today's environmental movement. He reads the papers; he's seen An Inconvenient Truth; he knows that a curb on greenhouse gases is needed to limit the scope of global warming. But it took a trip to Budapest last fall to finally get him to put climate change on his company's agenda.

In mid-November, about the time the New Oxford American Dictionary announced its choice of “carbon neutral” as the 2006 Word of the Year, Steiner traveled to Hungary to meet with leaders from a consortium of 80 international travel companies, of which Ovation is a member. Corporate social responsibility, including carbon-reduction initiatives, was among the dominant topics at the meeting, and U.S. companies, he noted, were clearly behind in their thinking. European companies especially he saw “leading the charge in terms of CSR.”

The eye-opening discussions led Ovation to two decisions that were announced in January: First, the company tallied its employees' 2006 business travel — about 800,000 flight miles in all — and purchased carbon offsets equal to the greenhouse gas emissions of those flights. Second, it set up a program called Ecovation to make it easier for its clients to do the same.

The Onset of Offsets

Ovation is part of a tide of organizations buying carbon offsets as a relatively easy and cost-effective way to join the fight against the increasingly urgent problem of global warming. In brief, offsetting is the process of balancing the greenhouse gases produced by flying, driving, heating and cooling buildings, and even flipping on the lights, by reducing an equal amount of atmospheric carbon dioxide elsewhere. The reductions are achieved by funding projects such as reforestation or renewable energy sources such as wind or solar power.

The voluntary carbon-offset industry is growing fast, with many celebrity clients raising its profile over the past year. For example, at the Academy Awards in February, presenters received offsets from TerraPass Inc., Menlo Park, Calif., in lieu of most of the usual swag. John Edwards' presidential campaign in March pledged to go carbon neutral, followed in April by a similar announcement by Hillary Clinton's campaign (both are offsetting through NativeEnergy, Charlotte, Vt.). And earlier this year a new British airline, Silverjet, launched as the first carbon-neutral airline. The London-to-New York carrier includes a mandatory carbon offset contribution in the ticket price, which is invested through The CarbonNeutral Co., London.

More than 30 organizations now work as middlemen between green projects that need funding and the people who want to run low-carbon or carbon-neutral homes and businesses. Ovation is offsetting its company travel through Carbonfund.org, Silver Spring, Md., whose customers also include Calvert Group Ltd., which specializes in socially responsible investing; WineCommune LLC, which is offsetting the carbon emissions caused by its shipping and receiving, travel, electricity, and employee commuting; Boston Trust & Investment Management Co.; Yakima; and many more.

While Ovation's offset is a modest effort to combat a massive problem, Steiner is optimistic. “If every business would make a decision to take some steps, it moves us in the right direction.”

Environmentalism in RFPs

It's also a good business decision. More and more, Steiner says, requests for proposals submitted to Ovation from multinational corporations make it clear that those companies want to work with vendors that have social responsibility programs, and carbon offsets can play a key role in those programs. Mixing social and environmental issues with procurement, he says, is a trend that's strong on RFPs coming in for Ovation's corporate travel services but isn't yet a factor on RFPs for the approximately 500 meetings and events the company handles each year. He suspects, however, that it's only a matter of time.

Marshall Calder, senior vice president of marketing at The Leading Hotels of the World, a New York-based hotel marketing organization, agrees. Calder's company represents 440 properties around the world, and in the latest contract season, 70 percent to 75 percent of the RFPs coming in from corporate travel managers included questions about properties' environmental policies. The unknown, he said, is how much weight a company puts on those answers, but clearly the topic is gaining importance.

For Leading Hotels and its properties, a new program launched in April is at least part of the answer they can provide to those RFP questions. Working with Sustainable Travel International, a nonprofit offset provider based in Boulder, Colo., Leading Hotels' new Leading Green Initiative pledges to offset the energy use of every stay at its properties. The company is spending 50 cents per guest room, per night, to offset the estimated 33.7 pounds of CO₂ generated by the electricity, heating, cooling, cleaning, kitchen use, and so on for an average hotel guest night. The program, Calder notes, is funded by Leading Hotels, and room rates are not inflated to pay for it.

Appropriately, the company meeting that kicked off the Leading Green Initiative was entirely offset. Leading Hotels worked with STI to calculate the carbon footprint of the three-day, 175-person meeting in Stockholm, Sweden, including the CO₂ produced by the flights, guest rooms, and meeting space, which came to almost 700,000 tons. That impact was offset by purchasing 152 emission-reduction credits and 239 green tags. (See next page.)