UNIVERSITEIT VAN AMSTERDAM
The accountability relationship between tour operators and carbon offsetting
organisations.
By: Frank Klaver 5908566
Supervisor: dr. Niamh A. O’Sullivan Second supervisor: dr. Georgios Georgakopoulos
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Abstract
Purpose: This study aims to gain knowledge of the accountability relationship between tour operators and carbon offsetting organizations.
Methodology: Eight interviews have been conducted with tour operators, a carbon offsetting organisation and a private person. The data resulting from these interviews have been analysed with a theoretical lens of legitimacy theory and a combination of principal agent/trust theory as designed by Swift (2002).
Findings: This study shows that tour operators participate in carbon offsetting from an intrinsic motivation rather as a reaction to societal demands. Their approach can still be recognized as legitimisation since they are maintaining legitimacy rather than repairing or gaining, which one does when demands are posed.
The relation between the tour operator and the carbon offsetting organisation is based on trust. The tour operators do not hold the carbon offsetting organisations accountable in a formal manner. They state that their need for assurance is limited. A preference is given for funds directly going into a project without assurance rather than spending these funds partly on assurance.
Research limitations: Eight interviews were conducted, focussed mostly on tour operators, therefore this research gives insights from the point of view from the tour operators. Less can be said from the point of view of carbon offsetting organisations since only one has been spoken to. Neither can this research provide a deep understanding from the customer points of view. Originality: This study appears to be the first to look at the relationship between tour operators and the carbon offsetting organisations that they cooperate with. Until now the field of voluntary carbon offsetting has not been studied through the theoretical lenses of legitimacy Key words: Carbon offsetting, tour operators, tourism, international travel, accountability, trust, legitimacy, principal-agent theory, The Netherlands
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Nederlandse samenvatting
Doel: Het verkrijgen van kennis over de verantwoording-relatie tussen reisorganisaties en CO2 compenserende organisaties.
Methodiek: Er zijn acht interviews uitgevoerd met reisorganisaties, een CO2 compenserende organisatie en een privé persoon. De resultaten van deze interviews zijn geanalyseerd aan de hand van legitimiteit theorie en een combinatie van principaal-agent en vertrouwens theorie zoals ontworpen door Swift (2002).
Resultaten: Deze studie toont aan dat reisorganisaties deelnemen aan CO2 compensatie vanuit een intrinsieke motivatie en niet als reactie op een maatschappelijke vraag. Hun aanpak kan desondanks als legitimatie aangemerkt worden aangezien zij hun legitimiteit behouden wat ook als legitimatiestrategie gezien wordt.
De relatie tussen de reisorganisatie en de CO2 compenserende organisatie is gebaseerd op vertrouwen. De CO2 compenserende organisaties worden door de reisagenten niet op formele wijze ter verantwoording geroepen. De reisorganisaties geven aan dat zij weinig behoefte hebben aan extra zekerheid (assurance) aangaande CO2 compensatie. Als hen een keuze voorgelegd wordt tussen gelden direct in projecten stoppen zonder zekerheden of een gedeelte hiervan uit te geven aan controlemechanismen, wordt een voorkeur gegeven aan het direct spenderen van gelden aan projecten.
Onderzoek beperkingen: De interviews vonden voornamelijk plaats met reisorganisaties, dit onderzoek biedt hierdoor voornamelijk inzicht in het perspectief van de reisorganisaties. Minder kan gezegd worden over de kijk van CO2 compenserende organisaties en van eindgebruikers op de verantwoording-relaties tussen de verschillende partijen.
Originaliteit: Deze studie kijkt als eerste naar de relatie tussen reisorganisaties en de CO2 compenserende organisaties waar zij mee samenwerken. Tot op heden is het vrijwillig compenseren van CO2 nog niet bestudeerd aan de hand van legitimiteit theorie.
Steekwoorden: CO2 compensatie, reisorganisaties, toerisme, internationale reizen, verantwoording, vertrouwen, legitimiteit, principaal-agent theorie, Nederland
4 TABLE OF C ONTENTS List of figures ... 6 1. Introduction ... 7 1.1 Introduction ... 7 1.2 Research objectives ... 8 1.3 Theory ... 8 1.4 Use of methods ... 9 1.5 Scientific contribution ... 9 1.6 thesis Structure ... 10 2. Literature review ... 11 2.1 Introduction ... 11
2.2 The effects of tourism and the need for accountability ... 11
2.3 Carbon emissions compensation ... 12
2.4 Accountability and reporting of an NGO... 15
2.5 Summary ... 16
3. Theory ... 17
3.1 Introduction ... 17
3.2 Legitimacy and stakeholder theory ... 17
3.3 Accountability and trust ... 20
3.4 Application of theory ... 23
4. Methodology ... 24
4.1 Introduction ... 24
4.2 Philosophy of research ... 24
4.3 Qualitative research ... 26
4.4 Qualitative research methods ... 28
4.5 Research design ... 29 4.5.1 Research setting ... 29 4.5.2 Interviewees ... 31 4.5.3 Interviews ... 32 4.6 Data analysis ... 32 4.7 Summary ... 33 5. Findings ... 34 5.1 Introduction ... 34
5.2 The reason for engaging in carbon offsetting ... 34
5.3 How the tour operator holds the carbon-offsetting organisation to account ... 37
5.4 Reaction from the carbon offsetting organisation: a proactive approach ... 41
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6. Discussion ... 44
6.1 Introduction ... 44
6.2 Legitimation by the tour operators ... 44
6.3 A relationship of accountability ... 47
6.4 Summary ... 49
7. Conclusion ... 50
Bibliography ... 52
Appendix I. Interview guide ... 56
Introduction ... 56
Sustainability ... 56
Carbon emission compensation... 56
Reporting and assurance ... 57
Appendix II ... 58
Appendix III ... 60
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LIS T OF FIGUR ES
Figure 1, Source: (Hamilton, Bayon, Turner, & Higgins, 2007), ... 13
Figure 2, source: (Mitchell, Agle, & Wood, 1997) ... 19
Figure 3, source: (Swift, 2002) ... 21
Figure 4, source: (Swift, 2002) ... 22
Figure 5, source: (Morgan & Smiricich, 1980) ... 25
Figure 6, the carbon offsetting cycle ... 29
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1. INTRODUC TION
- Travel agent: “I think being accountable by providing financial statements once a year is more than enough. Customers do not ask for more. It’s also a bit of a sentiment. The kind of feeling of: I am compensating carbon and by doing that I am doing something good for the world.”
- “So it does not need to be proven that something has actually been done with the funds?”
- Travel agent: ”No, I do not think it concerns them very much.”
1.1 INTRODUCTION
Climate change is now a widely accepted phenomenon. Many initiatives exist trying to counter climate change. One of these initiatives is the offsetting of carbon emissions. Companies and individuals can offset their emissions by buying carbon-credits or through donating to a NGO who compensates carbon emissions for them. The buying of credits is applicable to companies that are part of the EU scheme which places a so called cap on their CO2 emissions. For all emissions exceeding this cap, carbon credits have to be purchased at the compulsory market established by the EU.
An industry that is exempted from this scheme is the aviation- and travel industry. This is remarkable since Becken (2004) calls the tourism sector an active contributor to climate change. In 2008 the tourism industry in total contributed to 5% of global carbon dioxide emissions (Scott, et al., 2008). Aviation accounted for 2,5% of global GHG emissions, with an annual growth of approximately 3-4% annually, however not all aviation is used for tourism; cargo is also included in these numbers (Lee, et al., 2009). According to Gössling (2002) the leisure tourism industry will grow rapidly in the future, meaning that the already significant contribution of this industry to climate change will become even more substantial.
Since the travel industry does not have a cap on its emissions, a voluntary carbon market has been developed which enables parties to compensate their carbon-footprint. Individual travellers willing to compensate for the carbon emitted from their travels are offered an option to do this through organizations operating on this voluntary market for carbon credits. Several of such organizations exist, some for profit, others operate on a non-profit basis (Gössling, et al., 2007). As carbon offsetting is a service which mostly takes place in distant countries, it is
8 hard for a customer to ascertain that his carbon has indeed been offset. That is why tour operators have to use measures such as certificates and other means of accountability to make this service more tangible for their customers. Because accountability is an important factor in carbon offsetting and because tour operators have only recently engaged in offsetting carbon for their travellers; it is interesting to investigate how tour operators see their role as an intermediary between the traveller and the carbon offsetting organization and the responsibility that comes with this role.
1.2 RESEARCH OBJECTIVES
It is the aim of this thesis to acquire a better understanding of how tour operators see their responsibility towards their customers regarding carbon emissions. They can only live up to this responsibility by ensuring that the carbon offsetting organization performs its task well. This results in two streams of accountability: carbon offsetting organization to tour operator; and tour operator to customer. Therefore the research objective is stated in two questions: - How and why do tour operators ensure for their customers that carbon emissions have indeed been offset in a socially desirable manner?
- How and why do tour operators demand accountability from an organization that compensates their carbon emissions?
1.3 THEORY
In this research legitimacy theory is used as a theoretical lens to analyse and understand the findings. Legitimacy theory is chosen because it provides a high-quality explanation of why entities are held to account by society. It looks into the motivation of an entity, as to why an organization provides accountability to society, which is what tour operators are doing with regard to carbon emissions by offering carbon compensation. The reason that legitimacy theory was chosen instead of stakeholder theory, is that the number and diversity among stakeholders is limited, therefore legitimacy theory is more suited. In the theory section a further disquisition is provided on the nature of legitimacy theory and its merits for this research.
To answer the question how tour operators hold carbon offsetting organizations accountable, principal agent theory will be used combined with a model of trust theory as set up by Swift (2002). This theory uses five dimensions to characterize a trust relationship. Trust relationships can be a substitute of a regular principal agent relationship which formalizes accountability.
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1.4 USE OF METHODS
To gain a better understanding of the motivations of the different parties, interviews have been conducted. As stated before, this research focusses on the role of tour operators in an accountability chain: the intermediary between travellers and a carbon offsetting organization. That is why four tour operators were interviewed, to see if they see their role differs from other parties in the travel industry two business travel agencies have been interviewed. To provide a more complete picture, a carbon offsetting organization and a private person who has offset the carbon emissions from a flight he took were interviewed as well. The interviews all took place in the Netherlands, this country is chosen because of practicality for the researcher who lives in that country. The interviews were prepared by documentary analyses providing the researcher with relevant information for the interviews. The interviews were semi-structured, leaving room for the interviewees to place emphasis on the issues that they thought were important, while still being structured enough for comparability.
1.5 SCIENTIFIC CONTR IBUTION
An exploration of available literature regarding the travel industry and carbon accounting led to in two fields of study: one from an accounting point of view which focusses on large multinationals that are held accountable for their carbon emissions (Ascui & Lovell, 2011). These articles address issues such as accountability of these companies and the reporting that arises from their accountability, examples of such articles are: (Kolk, Levy, & Pinske, 2008); (Hoffman, 2007). Other papers have examined the functioning of carbon markets, articles such as: (Bebbington & Larringa-Gonzales, 2008). None of these articles have looked at carbon accountability of travel organisations using legitimacy theory as a theoretical lens.
The other field of study is the sustainable tourism research area, which has focussed on carbon offsetting schemes (Becken, 2004), (Gössling, et al., 2007), (McKercher, Prideaux, Cheung, & Law, 2010). However an extensive search conducted by the researcher showed that none of these studies uses legitimacy theory to give meaning to the findings.
The final and most fitting reason for focussing on this topic is due to Deegan’s (2002) remark: “an area that is full of rewarding research opportunities for those that care to be involved!”
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1.6 THESIS STRUCTURE
Following this introduction is a literature review which treats carbon offsetting schemes and provides an overview of literature on accountability. In chapter three the theoretical framework is provided, by explaining legitimacy theory for the first question and principal agent combined with trust theory to answer the second question of this thesis. The methodology is provided in chapter four, starting with the philosophical foundation of the type of research chosen, followed by a description of: qualitative research, the manner of conducting interviews and the role of documentary analysis in this research. Furthermore, the offsetting process is described here, introducing the different parties involved. Chapter five presents the findings of this research. This is followed by a discussion linking the findings to theory in chapter six. This thesis ends with chapter seven where the main conclusions are presented along with suggestions for further research.
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2. LITER ATURE R EVIEW
2.1 INTRODUCTION
As stated in the introduction, to the knowledge of this researcher nothing has been written on the specific topic presented in this thesis. However there is a substantial body of academic work done in related fields, such as: sustainable tourism research and
A report has been published by the WWF Germany. This chapter describes what prior research has added to knowledge so far. First an overview of NGO accountability is provided, since the research subject is an NGO. Then attention is paid to the field where the subject operates in: carbon offsetting. Because to the best of my knowledge no research has been done on accountability of carbon offsetting organizations in the travel industry, one has to look at a similar field. Carbon trading accounting is such a similar field; therefore this will be treated in quite some length. This chapter will conclude with a summary linking the different subchapters together.
2.2 THE EFFECTS OF T OURISM AND THE NEED FOR ACC OUNTABILITY
As mentioned in the introduction, tourism has a detrimental effect on the environment. The 5% of global carbon emissions that tourism1 contributes to climate change might not sound very significant, but what makes this number more important is the fact that only a small part of the world population is engaging in international travel activities, this is even more the case for air travel. In other words, a significant amount of GHGs is caused by only a few people. In addition, air travel cannot be considered a basic need, people can do without aviation, but cannot live without agriculture. Although agriculture contributes more to overall greenhouse gasses, it is less feasible to stop with agriculture than it is to stop with tourism. Since tourism is so carbon intensive and not a basic need, one could state that people who engage in these activities are acting in an unsustainable and undesirable manner with regard to their fellowman who does not engage in tourism. A next assertion is that parties operating in tourism should be held to account for such behaviour.
TUI (a major tour operator) makes the following statement on its website: “As a global player, we are aware that global climate is affected right along the value chain by what we do
1 Tourism is defined as all international transport (aviation, car, bus,train, etc) as well as
12 as a Group.” (TUI, sd). The TUI group is part of an initiative, started by several tour operators called: “Tour operators initiative for sustainable tourism development” on its website it posts a statement of commitment, including: “We will manage and monitor the environmental, cultural and social impacts of our activities.” (TOI, sd). As well as: “We will strive to pursue the best practices in reducing, minimizing and preventing pollution and waste (e.g. solid and liquid waste, emissions to air).” (TOI, sd). Both examples portray how tour operators are aware of their role in contributing to climate change and their response to this issue. Certain NGO’s have expressed their concern about tourisms effect on the environment as well, two of those are: WWF (Viner & Agnew, 1999) and Tourism concern (Tourism concern, sd).
The criticism from NGO’s and the responses/ initiatives by the tour operators show that there is a need for responsible handling of tourism and its effect on the environment. One of the initiatives set up to respond to this need is the offsetting of carbon emissions. In order for such an initiative to fulfil part of this need, it has to be accountable; society has to be able to observe its effectiveness. According to the newspaper the guardian socially responsible investment (SRI) investor should consider the carbon footprint of the tourism sector (Cabie, 2014), showing that the issue of carbon emissions in tourism receive broad attention.
2.3 CARBON EMISSIONS COMPENSATION
Ascui & Lovell (2011) have shown that carbon accounting is contested, meaning many different things to different people. “At its simplest, accounting for carbon requires the valuation of assets (such as granted pollution rights) and liabilities (if an organization is obliged to buy additional rights to cover their emissions).” (Bebbington & Larringa-Gonzales, 2008). This view is supported by the manner in which the IASB treats carbon accounting, the memo on carbon reporting from 2008 handles it as a financial obligation flowing from trading schemes (International Accounting Standards Board, 2008). The market for carbon emissions offsetting can be divided in two parallel separate markets: the compliance market called: Clean Development Mechanism (CDM) and the voluntary market called Voluntary Carbon Offsetting (VCO) (Bumpus & Liverman, 2008). The CDM is the market set up under the Kyoto Protocol, which caps the emissions of certain industries, companies emitting more than their cap are required to purchase carbon credits on this market. For companies which are exempted from this cap but still feel a need to reduce their carbon footprint, the voluntary market has been set up. Not only companies are active on this market but also NGO’s and private persons with a wish to reduce the levels of carbon dioxide in the atmosphere (Bumpus & Liverman, 2008).
13 As shown by figure 1 the voluntary market is significantly smaller than the CDM market. The voluntary market for carbon credits consisted for 80% of businesses in 2006, 68% of total customers were from the US (Hamilton, Bayon, Turner, & Higgins, 2007). In the US, firms are not obliged to compensate their carbon emissions; however some of them are still willing to do so, leading to a higher degree of participation on this market by firms. Various reasons lead organizations to compensate: sustainability reporting/internal goals, corporate responsibility/environmental ethics, public relations/branding, sales of carbon-neutral products, anticipation of regulation, “walking the talk”, climate change influences business models (For example, re- insurance agencies) and others (Hamilton, Bayon, Turner, & Higgins, 2007).
The Dutch market differs from the US market in the respect that several carbon intensive industries are obliged by the EU to buy carbon credits when their emissions surpass a cap, these credits are bought on a different market. Because many industries are involved in this European scheme, it leaves fewer customers on the voluntary market than it does in the US, where all companies that engage in carbon compensation are active on the voluntary market.
Quality of carbon offsetting in the voluntary market is not regulated. This has led to several standards, all with different degrees of strictness. According to Kolmuss et al. (2008) a standard must include: accounting standards; monitoring, verification and certification standards; and registration and enforcement systems.
14 Many standards attach great value to additionality (Kollmuss, Zink, & Polycarp, 2008). Additionality means that a project would not have been implemented if the carbon credits had not been sold. If a project is implemented regardless of the carbon credits sold, this project does not offset any carbon. This is why many standards and customers attach value to additionality; they want to ascertain carbon has indeed been offset, instead of sponsoring a project that would have been implemented regardless of their funding (Lovell, Bulkeley, & Liverman, 2009).
Some of the stricter standards such as the Gold Standard place emphasis at co-benefits. Co-benefits are benefits other than the carbon that has been offset due to the project, examples are: the creation of jobs, improved local air quality etc. (Kollmuss, Zink, & Polycarp, 2008). Carbon-credits that meet standards that require co-benefits are more expensive on average than credits not meeting these requirements (Gössling, et al., 2007).
The fact that the market is unregulated and the relatively large number of newcomers to this market, has led to different excesses which were covered by the media around the year 2007 (Davies, 2007), (Kennedy & O'Connor, 2007), (Harvey & Fidler, 2007). Critique focussed on several issues: some carbon credits that were sold have not offset any carbon, some projects financed with carbon credits would have been implemented regardless of this financing (additionality). One form of critique goes even further: “indeed, a more profound critique of offsets argues that paying someone else to reduce carbon is unethical and that all reductions should be made by the individual, company, or country through behavioural and technical changes that reduce consumption or shift to lower carbon technologies.” (Bumpus & Liverman, 2008).
This criticism and the fact that there are several different providers using different standards may cause uncertainty with customers. This uncertainty leads to a need for information; customers (who are both beneficiaries and donors) want to know what the carbon credit actually entails. The variety in choice and criticism are not the only reason for the need for information. The fact that a carbon credit is intangible and that the associated project is most often on the other side of the world also lead to customers wanting more information (Hamilton, Bayon, Turner, & Higgins, 2007).
Tour operators might need information on several issues. The first, being the manner in which the cooperating NGO measures the amount of carbon emissions that are caused by the travelling of the customers. Assurance is needed that the amount of carbon that is emitted is indeed being compensated. The other issue in need of assurance is the way the projects are run, here the tour operator will need prove that the project is indeed additional and that is provides
15 co-benefits if this is required by the standard that they use. Not only does a tour operator require this information, it needs it in a form that can be used to communicate to their own stakeholders.
2.4 ACCOUNTABILITY AND REPORTING OF AN NGO
While this research reviews the manner in which tour-operators require accountability from a NGO and not how a NGO organises its accountability. It is still essential to have certain prior knowledge of the other party (the NGO) and how accountability is arranged for and by the party. This is essential since the requirements of the tour operator might or might not fit a NGO; the following process is greatly influenced by this. Therefore this part of the literature review focusses on accountability of NGOs.
The two carbon offsetting organizations that the tour operators from this study cooperate with are both operating on a non-profit basis. Since these organizations do not aim to make profit and are also not government run, they are classified as Non-Governmental Organizations. However they differ from most other NGOs since their donors are simultaneously the beneficiaries, therefore credits are used instead of ordinary donations. A service (the compensation of emitted carbon) is bought. While normally money is donated for a charity.
NGOs occupy a space between public and private sector organizations. Like other organizations, NGOs have responsibilities towards their stakeholders. To ensure that an NGO is responsible for its actions all stakeholders need to be involved at every stage of the decision-making process (Unerman & O'Dwyer, 2006). Involving stakeholders in the decision decision-making process means that these responsibilities have led to a duty of accountability to these stakeholders, failure to be accountable can pose a threat to the legitimacy and viability of the NGO (Lloyd, 2005).
Until recently NGOs have been able to claim that their good intentions and sound values provided a sufficient basis for accountability however, increasingly such claims are being questioned (Lloyd, 2005). This means that accountability mechanisms have to be installed. However, regular mechanisms do not fit a NGO, or as Unerman and O’Dwyer (2006) say: “The accountability mechanisms of a NGO are different from other organizations.”
Not only do the mechanisms differ from other types of organizations, they also differ from NGO to NGO (Ebrahim, 2003). But in the case of a close relationship between the NGO and its stakeholders, flexible and informal accountability mechanisms do seem most suitable (Ebrahim, 2003).
16 It is most common for the lines of accountability to run in four different directions. Firstly, NGOs are upwardly accountable to donors. Secondly, NGOs are downwardly accountable to their beneficiaries. Thirdly, NGOs are inwardly accountability to themselves for their organisational mission, values and staff. And fourthly, NGOs are horizontally accountable to their peers (Edwards & Hulme, 1996). The case of the carbon offsetting organization is different; here the donor (upward) and the beneficiary (downward) are the same party. Although in the case of co-benefits there are also other beneficiaries, for example: the community where the project takes place. Generally beneficiaries lack the power to pose demands. But in this case the beneficiaries and donors are represented by the tour operators who are larger and more powerful stakeholders. The normal four lines of accountability therefore do not apply in this case.
2.5 SUMMARY
Tourism has several detrimental effects, one being contributing to climate change though the emitting of greenhouse gasses. Due to the rising awareness of the effects of tourism, which is partially raised by the critical tone of certain NGOs, tour operators have started different initiatives to become accountable for their actions. One of these initiatives is providing carbon offsetting for their customers. Carbon-offsetting has received criticism as well, mostly around the year 2007. As a result, several standards have come into existence to ensure donors/customers that their carbon is offset in an appropriate manner. These standards have led to a larger amount of reporting and assurance. NGOs most commonly organise their accountability along four lines: to donors; beneficiaries; other NGOs; and to themselves, their mission and staff. Tour operators assume two of these roles, of the beneficiary and of donor.
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3. THEOR Y
3.1 INTRODUCTION
This research is based legitimacy theory. First a comparison between legitimacy theory and stakeholder theory is made; the theories have a certain overlap as they are both perspectives of issues in political economy (Gray, Kouhy, & Lavers, 1995). Gray, Kouhy and Lavers (1995) have defined this as: “The different theoretical perspectives need not be seen as competitors for explanation but as sources of interpretation of different factors at different levels of resolution. In this sense, legitimacy theory and stakeholder theory enrich, rather than compete for, our understandings of corporate social disclosure practices.”
3.2 LEGITIMACY AND STAKEHOLDER THEORY
Legitimacy theory is based on a supposed social contract between an organization and the society in which it operates. As long as the organization abides the implicit rules of society it has a figurative license to operate. When the organization proves its use to society and shows that it contributes in a positive manner, it can be said that the organization is legitimate. Lindblom (1994) defines legitimacy as follows: “... a condition or status which exists when an entity’s value system is congruent with the value system of the larger social system of which the entity is a part. When a disparity, actual or potential, exists between the two value systems, there is a threat to the entity’s legitimacy.”
According to Suchman (1995) there are three forms of legitimacy: 1) moral legitimacy, society evaluates whether the organization does “the right thing”, 2) pragmatic legitimacy, society does not judge on “the right thing” but on whether it benefits society, 3) cognitive legitimacy is a form of legitimacy which can be described as taken-for-granted-ness. This can means that an organization has legitimacy because of tradition, or other passive reasons. An action which is intrinsically good but with no real benefits for society is classified as moral. An action that is intrinsically bad but has benefits, for example: Robin Hood, stealing for the poor, is classified as pragmatic. Suchman (1995) considers pragmatic and moral legitimacy as active forms, while cognitive is a passive form of legitimacy.
In order to obtain and maintain legitimacy Lindblom (1994) provides four strategies:
1. Educating and informing relevant audiences about changes in the organizations behaviour.
18 2. Changing the perceptions of relevant audiences, while the organization is not
changing actual behaviour.
3. Distracting attention from issues which might be of concern to audiences to more appealing issues.
4. Changing external expectations of the organizations actions and performance. These four strategies show that legitimacy is not merely about actual behaviour of organizations, but even more so about perceptions of this behaviour.
According to Dowling and Pfeffer (1975) the public disclosure of information in such places as annual reports can be used by an organization to implement each of the following three strategies: firstly by adapting its output, goals and methods of operations; secondly it can be used as an attempt to alter the definition of social legitimacy, in a way that it conforms to their practices; or thirdly by becoming identified with symbols, values or institutions that have a strong base of legitimacy. Since these strategies are important to understand the actions of the tour operators they are to be discussed in more detail. With the confirmation strategy, an organisation: adapts output, goals and methods of operations. When implementing this strategy the organisation adapts itself towards the needs of society. If in turn these changes are communicated this strategy can be linked to Lindblom’s (1994) first strategy: educating and informing audiences about organizational changes.
In the second and third strategy, the organisation will not change its behaviour; it tries to convince society that its current behaviour is appropriate. These strategies can be linked to Lindblom’s (1994) second and fourth strategy, changing the perception and changing external expectation.
Following the above, some might have noticed that Lindblom’s (1994) third strategy: distracting attention, cannot be linked to any of the strategies that Dowling and Pfeffer (1975) provide. This researcher agrees with Lindblom that this is indeed a manner for an organisation to legitimise itself, however it is not a sustainable manner of maintaining legitimacy. Therefore, over a longer time period it is more suitable for an organization to execute another strategy.
As stated in the introduction of this section, stakeholder theory has an overlap with legitimacy theory (Gray, Kouhy, & Lavers, 1995). However it has certain attributes which are lacking in legitimacy theory and vice versa. There are different branches of stakeholder theory. First is the ethical or normative stakeholder theory. Hasnas (1998) states: “According to the normative stakeholder theory, management must give equal consideration to the interests of all stakeholders and, when these interests conflict, manage the business so as to attain the optimal
19 balance among them.” Every stakeholder has intrinsic rights which should not be violated, regardless of their use to the organization.
O’Dwyer (2005) takes this notion farther by suggesting that stakeholders have an information need that needs to be satisfied by information flows from the company. At the time of his paper, organizations provided most information to their shareholders prioritizing them over other stakeholders; this should be more balanced by providing more information to stakeholders.
The managerial branch of stakeholder theory is the second branch. Management looks at the relative importance that a stakeholder has towards the survival of the organization. The concerns of stakeholders with control over resources that are of importance to the organization will be addressed first. Concerns of stakeholders that are not important to the organization will be given less priority. Stakeholders’ priority is determined by three variables: power, legitimacy and urgency. The figure on the right
shows the relationship between the three variables.
Only stakeholders with two or three variables (circles) overlapping will gain attention of the organisation. Unerman and Bennett (2004) argue that organizations have to change their operations and reporting as relative importance of stakeholders and their expectations change.
“Unlike the ethical branch of stakeholder theory, such (organization-centred) theories can be, and are often, tested by way of empirical observation.” (Deegan & Unerman, 2006). In other words, the study of ethical stakeholder theory describes how practice should be according to some; managerial stakeholder theory describes actual practice and has been observed. Unerman and Bennett (2004) argue that organizations have to change their operations and reporting as relative importance of stakeholders and their expectations change.
Even though stakeholder theory and legitimacy theory both have its merits and are both appropriate lenses to analyse this research, the researcher has chosen to employ legitimacy theory. This research will first look at why and how a tour operator legitimises itself towards society, by analysing which of the four strategies of Lindblom (1994) and which of the three
20 strategies by Dowling and Pfeffer (1975) the tour operators employ. After finding an answer to this question it answers the question how and why a tour operator holds a carbon offsetting organisation accountable. To answer this question accountability and trust theory will be used.
3.3 ACCOUNTABILITY AND TRUST
As explained earlier in the introduction and the literature section, the tour operator has a cooperative relationship with the carbon offsetting organisation. Part of this relation is for the tour operator to ensure that the carbon offsetting organisation acts in its best interests. Swift (Swift, 2002) formulates two manners to achieve this: accountability and trust. The first is based on a principal agent relationship. The principal refers to the party who requires certain behaviour of the other party and therefore holds the other party to account. The agent is the party who is held to account since this is the party conforming to certain behaviour in exchange for a reward (Gray, Owen, & Maunders, 1988). In this study the tour operator takes the role of principal, since he is the one requiring certain actions/behaviour from the carbon offsetting agency. The agent role is fulfilled by the carbon offsetting organization, since he is the one providing a certain outcome (the offsetting of carbon) for the principal in return for a reward (funding).
The principal- agent framework assumes a contract between both parties which may be explicit or implicit. These contracts are set up to prevent adverse behaviour or the pursuit of self-interest by the other party. In order to enable the principal to use repercussions, most of these contracts are formalized (Swift, 2002).
Another manner to ensure the other party to act in your best interest is through a trust relationship. Many see this as an antidote to opportunism (Husted, 1989; Ring & Van de Ven, 1992; Swift, 2002). Accountability theory does not fit trust based relationships since it assumes distrust between parties, therefore implementing different mechanism to hold someone to account (Swift, 2002). The figure below describes the continuum between trust and a formal principal-agent relationship, with accountability being a proxy which measures the amount of trust (more trust requires less accountability).
21 Hosmer identifies five dimensions characterising trust relationships:
1. An optimistic expectation is expressed that the behaviour of the other party will be socially responsible.
2. Trust occurs when parties pose their vulnerability.
3. Both parties are willing to cooperate since mutual benefits are assumed.
4. Trust is more difficult to enforce in the case of a conflict, or when a breakdown of the relationship occurs. Therefore trust requires parties to position themselves in a vulnerable way.
5. Trust is generally supplemented by a belief that the trusted is morally bound to act in a favourable manner towards society.
As can be read in the five points both parties have to act vulnerable. The party which gives trust is vulnerable since he has no formal assurance that the other party will act as expected. This might seem as an uneven relationship. Frooman (1999) explains how the party giving trust can use two strategies in order to balance the uneven relationship. By withholding a resource, for example: employees who strike or shareholders who divest their shares. The other strategy is called usage, in this strategy, the party providing the resources can do this under certain conditions, thus lessening their vulnerability.
Swift (2002) has enhanced the above model which was based on a trust – distrust continuum, by distinguishing between distrust and lack of trust.
22 As can be seen in the model, the first continuum ranges from distrust to lack of distrust. Distrust means that the principal expects the agent to pursue self-interest with possible detrimental effects to the principal. Lack of distrust means the principal believes the agent will act in the best interest of the principal. This can be seen as the usual manner in which people tend to talk about trust. The other continuum describes it as a continuum of knowledge of the other party. If a party knows the other party well, it will be trusting towards the other party. If however the other party is unknown, has no references or track record there will be a lack of trust.
Both continuums have their own proxy; the distrust continuum has “true accountability” as a proxy, meaning the conventional manner of accountability where a principal holds an agent to account. The trust and lack of trust continuum has soft accountability as a continuum. In Swift’s (Swift, 2002) model soft accountability means the party demanding accountability has no leverage over the party providing accountability. The party providing accountability does this voluntary.
The above theories are based on corporate organisations being held to account by society or pressure groups. In the case of this research it is the other way around, a corporate organisation (the tour operator) holding a NGO (the carbon offsetting agency) to account. However the researcher expects the theory to still fit the relationship described in this research, since everyone can fall victim to self-interest, a NGO is no exception to this rule. Not every researcher agrees with this point of view. Unerman and O’Dwyer (2006) for example state: “The accountability mechanisms of a NGO are different from other organizations.” Not only do the mechanisms differ from other types of organizations, they also differ from NGO to NGO
23 (Ebrahim, 2003). But in the case of a close relationship between the NGO and its stakeholders, flexible and informal accountability mechanisms do seem most suitable (Ebrahim, 2003).
In the literature section it was described how the accountability lines of a NGO run in four directions: upward to the donor, downward, to the beneficiary, horizontally to its peers and inwardly to staff and their mission. (Edwards & Hulme, 1996). As can be seen, this differs from the principal agent- and trust relationships that were described earlier. However since the relationship between a tour operator and a NGO differs from regular donor – NGO relations the researcher thinks that principal - agent theory and the trust model by Swift (Swift, 2002) does fit. Therefore the researcher has decided to use these two theories as a lens to analyse the data to answer the question how a tour operator holds a carbon offsetting organization to account.
3.4 APPLICATION OF THEORY
Legitimacy theory has been chosen as the conceptual lens with which the first question of this research will be conducted. Cognitive legitimacy will probably not provide a good fit, since tour operators do not have the function of providing order in society, nor do they diminish chaos. Moral and pragmatic legitimacy is what this research looks at.
As stated earlier, a researcher should not only look at actual behaviour but also at perception of behaviour. This is done by comparing the interviews of the stakeholders with the interview of the NGO. In the analysis the research looks at which of the strategies provided by Dowling and Pfeffer (1975) and later by Lindblom (1994) can be applied to how and why the tour operator legitimises itself.
In addition to the theory of legitimacy to answer how and why tour operators try to ensure for their customers that carbon emissions have indeed been offset in a socially desirable manner, the research will also use principal agent theory and trust theory to answer how a tour operator holds a carbon offsetting organization to account. These theories have a great explanative power with this situation since it looks at how formalized (use of control mechanism) or trusting, the relationship between the two parties is. The interviews of all concerned parties give an inviting chance to do so.
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4. METHODO LOGY
4.1 INTRODUCTION
This research is conducted in a qualitative manner, rather than the quantitative method which most researchers use in the field of accountancy. This approach has been chosen because it can provide a deeper understanding of the research object. This section of the thesis starts off with explaining the philosophical basis on which this research stands. Then an explanation of qualitative research and the reason for using this approach is given. Followed by a description of the research methods used in this research. The scene of the research is described in the next section, explaining how carbon accountability mechanism between tour operators and carbon offsetting agencies function. Afterwards an explanation is provided on the manner in which the interviewees were chosen and the method of interviewing. The subject of data analysis follows with a depiction of transcribing and coding in this research. The section is finalized by a short summary.
4.2 PHILOSOPHY OF RES EARCH
The manner in which a research is conducted, depends on the researchers world view (ontology), his or her belief in the method of the gathering of knowledge (epistemology), or as O’Sullivan words it: “the knowledge about reality or a particular phenomenon” (O'Sullivan, 2010) and finally the approach the researcher takes to put these views into practice (research method). These three concepts are highly interdependent. The manner in which someone conducts research depends on how someone beliefs knowledge is attained. This in turn depends on how someone views reality.
One’s view of reality can be placed on a continuum, this continuum ranges from subjective to objective. An overview of this continuum and the corresponding characteristics is provided below; the arrow indicates where this research should be placed.
25 This research is placed on the subjective side of the spectrum of this continuum. The study makes inquiries into how tour operators perceive their responsibility towards their customers and society. This leads to the main aim of this study: to gain understanding of how tour operators hold a carbon offsetting organization accountable in order for their own organisation to legitimise itself. This first step: how tour operators perceive their role, can be placed on the subjective side of the above continuum since it focusses on perception. Therefore this study takes a qualitative research approach. The next section discusses the characteristics of qualitative research.
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4.3 QUALITATIVE RESEARCH
As explained earlier, qualitative research fits the more subjective side of the spectrum. Much has been written on the differences and merits of quantitative- and qualitative research, Bryman explains the differences with three features that distinguish it from quantitative research (Bryman, 2008):
1) The ontological position of qualitative research is constructionist. This means that social properties are the outcomes of interactions between individuals. Whereas in quantitative research the belief is that there is an objective reality independent of how people interact.
2) The epistemological position of qualitative research is interpretivist. Research tries to find understanding of the social world through an examination of the interpretation of that world by its participants.
3) The last distinct feature is that qualitative research uses an inductive view of the relationship between theory and research, whereby theory is generated out of research.
This last feature might be true for qualitative research in general, but is less fitting for this research. Since the aim of this research it is to understand the role that accountability plays for a tour operators, rather than using this setting to generate or enhance theory.
According to LeCompte and Goetz (1982) research (both qualitative and quantitative) can be evaluated based on: external reliability, internal reliability, internal validity and external validity. Both external reliability and external validity are weaker in qualitative research than in quantitative research. This is due to the fact that perceptions and settings of the subject under investigation are ever changing; leading to differing outcomes every time a research takes place. The issue of weaker external reliability can partly be solved by the researcher by using an audit trail (Lincoln & Guba, 1985), documenting every taken step and every source used. If this is properly done, replication becomes easier leading to higher external reliability.
The fact that external reliability and validity are weaker does not mean that qualitative research is less scientific or valuable. It has different merits. Therefore Guba and Lincoln (Guba & Lincoln, 1994) have suggested that qualitative research should be evaluated on other criteria, namely trustworthiness and authenticity. Authenticity focusses on the outcomes of a research, the effect it has on society and actors. It addresses questions as: does the research help members to arrive at a better understanding of their social milieu? Has it empowered members, or acted as an impetus to change the member’s circumstances? As can be understood from the above
27 questions, authenticity can be seen as the effect a research has on the members of the subject it researches, in this case several organisations.
Trustworthiness consists of four criteria: credibility (how truthful are the findings?), transferability (how applicable are the findings to other settings?), dependability (how consistent are the findings?) and conformability (how objective or neutral are the findings?).
Yardley (2000) has added several other criteria that according to her research should satisfy:
- Sensitivity to context: sensitivity not just to the context of the social setting in which the research is conducted but also to potentially relevant theoretical positions and ethical issues.
- Commitment and rigour: substantial engagement with the subject matter, having the necessary skills, and thorough data collection and analysis.
- Transparency and coherence: research methods clearly specified, clearly articulated argument, and a reflective stance.
- Impact and importance: importance of having an impact on and significance for theory, the community on which the research is conducted and for practitioners.
Of the above criteria all will be adhered to by this research, except for authenticity and impact. However, the researcher does not consider this a problem since he does not agree with the view (Yardley, 2000) (Guba & Lincoln, 1994) that this is necessary for good research. He agrees that it is desirable, since everything that has a positive impact on society is desirable. But he thinks that helping to attain greater knowledge and understanding is a noble enterprise in itself, which is deserving of the name good research.
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4.4 QUALITATIVE RESEARCH METHODS
The main method used in this research has been interviewing. Some documentary analysis was done to validate results from the interviews and as a preparation for the interviews, but all findings and conclusions come from the conversations that were held with the interviewees.
(Bryman, 2008) Qualitative interviews are less structured than interviews used in quantitative research. It is more flexible in the way that the interviewer has greater interest in the point of view of the interviewee. Therefore these interviews tend to go more off topic, this way the interviewee can show what is important to him, giving greater insight in his or her point of view. Interviewees can be interviewed several times, but this has not been the case in this research.
The interviews are semi-structured. This means that an interview guide with specific topics was used, but the interviewee was free in his way of replying. When the interviewer felt that certain topics were deserving of more attention, further questions were asked in that direction without them being part of the interview guide. So although the topics are planned in advance, the process of interviewing is flexible. A structure for the interviews is used in this research because several interviews will be conducted across different organizations, in order to ensure comparability between interviews a structure is used. But in order to get the most information and insight from an interview the structure should not be too rugged. That is why interviews are conducted in a semi-structured form.
Interviews have been conducted among 9 different parties: 1 carbon offsetting organization, 5 recreational tour operators, 2 business travel offices and 1 private person who has used offsetting in the past. All of these parties are situated in the Netherlands. The interviews were conducted in a timeframe of 3 weeks.
As stated before, documents were used as a basis of preparation for the interviews. The following documents were used: excel sheets with numbers of travellers (absolute and proportional) opting for carbon offsetting, financial statements (mostly used for their director’s report) and reports from the NGO’s providing carbon offsetting. The excel sheets provided by one of the tour operators showed the popularity of carbon offsetting among a group of travellers. Also it showed how calculations were made. More of this will be discussed in the findings section.
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4.5 RESEARCH DESIGN
This section is divided in three sections. First the research site is presented giving a brief view of how the process of carbon offsetting in the tourism industry functions. In the second section a list and short description of all interviewees is given. The last section elaborates on how the interviews were conducted.
4.5.1 RESEARCH SETTING
The following figure shows all the parties that are involved in the process of carbon offsetting in the tourism industry:
FIGURE 6, THE CARBON OFFSETTING CYCLE
The explanation will start at the traveller, the traveller gets offered the option by the travel agency whether he or she wishes to compensate the carbon emissions from the purchased
Customer/traveller Travel agency Carbon off-setting organization Certification Orders compensation
Reports to the organization how much someone has travelled.
Reports to stakeholders Assurance provided
by: VCS and the Gold Standard Project that reduces carbon emissions Funding VER (Verified Emissions Reductions)
30 holiday, in most cases this is not compulsory2. If a consumer choses to compensate this order is received by the tour operator and forwarded to the NGO that the tour operator cooperates with. When the order is received by the NGO it sends out a confirmation email to the customer. This way both the customer and the NGO ensure that the tour operator orders the NGO to compensate and it does not keep the order and the money itself. Through the money that the NGO receives it can fund their projects which are in general in developing countries south of the equator.
There are two sorts of carbon credits: a credit where carbon has already been compensated earlier in the project, the customer purchases an actual credit. The second option is similar to a future. With the money provided by the customer the project is financed in order for it to compensate carbon in the future. Certain standards prohibit these futures; these state that a credit can only be sold when carbon has already been compensated. Other standards do permit futures, if the NGO can guarantee that a certain amount of carbon will indeed be compensated in the future.
The two NGO’s that this researcher has knowledge of (being the two foremost carbon offsetting organisations in the Netherlands) do not run the projects themselves. The projects are locally run by local NGOs. The Dutch NGO does travel to the project in order to check progress and discuss issues with the local NGO. Moreover they require reports and other assurance from the local NGO.
At a certain point the Dutch NGO will hire a certifier. This certifier visits the project and computes the amount of carbon it has offset/will offset (dependent on the kind of credit). At completion of this process credits are ready to be sold.
Several reporting/information streams can be identified in figure 6. The tour operator informs the customer about the offsetting project. The tour operator is informed by the carbon offsetting organization (the NGO). The NGO also informs its other stakeholders, being: other NGOs, the media, direct customers (who purchase credits directly from the organization without interference of a tour operator). In its turn the NGO receives information from the local NGO who runs the project.
2 In the interviews conducted one tour operator indicated that carbon compensation is included
31 4.5.2 INTERVIEWEES
Interviews with the following people have been conducted: Interview
code type of organisation
function of
interviewee date length
A Leisure tour operator owner of organisation 10-6-2013 38:42
B Leisure tour operator director 12-6-2013 56:29
C Leisure tour operator
sustainability
manager 13-6-2013 35:41
D Leisure tour operator
sustainability
manager 14-6-2013 55:10
E business travel agent director 17-6-2013 37:25
F business travel agent director 19-6-2013 38:14
G private person - 7-6-2013 11:44
H
carbon offsetting organisation
(NGO) director 21-6-2013 1:23:55
At the time of the interviews the researcher was working in the tourism industry. Through his contacts he managed to get access to several people responsible for sustainability within their organization.
Two types of tourism businesses were interviewed: leisure tour operators and business travel agents. It was expected that the two types of businesses would require different kinds of assurance from the carbon offsetting agency they cooperate with. Leisure tour operators have private persons as customers, who according to the researcher would want to know that everything is arranged properly but do not want to know any of the details regarding the offsetting. Businesses however would use the carbon offsetting for their CSR reporting and to strengthen their legitimacy, thus requiring more information from their travel agent, since they might run into liabilities. To test this expectation interviews were conducted with parties in both groups.
Some leisure tour operators have a specific sustainability manager, at these organizations the researcher spoke with the sustainability manager. At other organizations sustainability is a topic everyone is responsible for, it is handled as a team effort. At these organisations the researcher spoke with the director. In both business travel agencies the responsibility for sustainability was held by the director.
To provide a more holistic view one private person and a carbon offsetting organisation were interviewed as well. The private person was interviewed in order to see what information he requires from his tour operator or carbon offsetting agency. The carbon offsetting
32 organisation was interviewed to obtain information about how they experience the demands and requirements of tour operators.
4.5.3 INTERVIEWS
Interviews have been conducted in a semi-structured manner. All the interviews were conducted in Dutch, so are the transcriptions. The interviews took place at the office of the organisation that was interviewed, except for the two private persons who were interviewed at their home. For all interviewees the same interview guide was used which can be found in appendix 1. The interview guide has a very general set up which makes it applicable to all parties that were interviewed, with a different focus per group that was interviewed. To the researcher an interview guide was important because it gives structure to an interview, preventing it from wandering off topic. It also helps the interviewee to understand what is expected from him or her, making the subject and purpose of the interview clear. However the interview guide has not been used rigorously, in order to get the most information out of an interviewee, he or she could elaborate on a topic of importance to him or her.
After the researcher had asked his questions, interviewees were asked if they had anything to add to their interview. None of the interviewees used this possibility, some stating that they felt that the interview gave a complete picture and that it did not need further additions. During none of the interviews did any of the interviewees proclaim a subject off-limits, or did anyone decline to answer a question. In the experience of the researcher the interviews were held in a pleasant and open manner.
4.6 DATA ANALYSIS
All interviews were transcribed by the researcher. In the end of every interview the interviewee was asked if he agreed with the conducted interview and if he or she had anything to add. Every interviewee stated that they were content with the interview and most of them added that they looked forward to the final thesis. Therefore the researcher did not feel the need to send the transcripts for verification to the interviewees.
After transcribing, coding was performed in Microsoft Word, using the remarks function. Nine code were used subdivided in forty-two sub codes. Of the nine codes used, the three main codes are: uncritical, no priority and trust. These codes helped to form a coherent story. The codes made clear whether there were connections or contradictions between interviewees within a group, of which more information is provided in the findings section.
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4.7 SUMMARY
This study is based on qualitative research, this choice of research flows from the researcher’s stance in ontology and epistemology which is on the subjective side of the spectrum. Even though the study is considered subjective, this does not mean that it cannot contribute to knowledge. Much can be learned from the perspectives of the participants of this study.
The study was done primarily by conducting interviews; interviews were prepared with an interview guide and by documentary analysis. Interviewees consisted of 5 leisure tour operators, 2 business travel agents, 2 private persons and a carbon offsetting agency. Interviews were semi-structured, which left room for interviewees to elaborate on topics of importance to them. Afterwards the interviews were transcribed and coding has been used to analyse the data.
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5. F INDINGS
“It’s not that I do not want to investigate, but I just do not have the time, it’s a different sort of game. That is why you go after reputation and the fact that a party is certified; then you assume that everything is in order.”
5.1 INTRODUCTION
The findings that came forward from the interviews will be split up in three sections. The first section answers how and why tour operators ensure for their customers that carbon emissions have indeed been offset in a socially desirable manner. In the second section an answer is given on the question: how and why do tour operators demand accountability from an organization that compensates their carbon emissions?
5.2 THE REASON FOR ENGAGING IN CARBON OFFSETTING
To understand why the different tour operators engage in carbon offsetting, it is best to first look at what kind of organisations they are. All leisure tour operators that were interviewed were active in that part of the tourism market that focuses on active holidays which go to exotic destinations. In general it can be said that it is on the more expensive side of the market. Not because of luxury, but because destinations are far (price of tickets) and because of the different excursions and planning that go into these kind of holidays.
These kinds of holidays attract a certain customer. Off course it is hard to make generalisations, but in general the people fit a certain profile. They are not people of affluence, but with enough money to go on a holiday which costs on average 2000 euro per person3. They want their holiday to be an experience; they want to come back with stories. Moreover they want to learn something. A lot of people are well prepared when they go on such a trip, having read a lot of information about their destination, its history, culture and nature beforehand. This means that people can afford carbon offsetting and that their holiday and the manner in which it takes place is important to them.
Carbon offsetting is not the only initiative that these tour operators undertake. They all promote several charities, some having to do with nature preservation, others with supporting local communities in the countries they travel to. When asked why they partake in these initiatives they replied that employees of these companies are mostly travellers themselves and concerned about the environment. As one manager put it:
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“It is in our genes. We do our grocery shopping in a sustainable manner. When someone goes to the supermarket they pay attention to what they buy. It is a part of our market segment, you cannot untwine that.” (Interview C)
This is a statement that many parties voiced. It suggests that the offsetting of carbon is an initiative that comes from the organisation itself, from its employees. At another tour operator that was interviewed the initiative came from the owner who is committed to sustainability.
When asked about whether customers ever ask about how carbon offsetting works exactly, or if customers are ever critical, they replied:
Researcher: ”Are there customers that ask critical questions?” Interviewee: ”I have not heard of any.” (Interview A)
Besides customers not being critical, only a small part of the travellers opt for the option to offset the carbon for their holiday, although this differs greatly among the different tour operators. In 2012 4%4 of the customers from one tour operator and 31%5 of another have offset their carbon. As can be seen from these percentages a minority of travellers decides to offset their carbon emissions.
Nevertheless, even though the wish to compensate for carbon emissions comes more from within tour operators themselves rather than from their customers, carbon offsetting is still a part of marketing. One tour operator saw it as a chance to distinguish itself from competitors. While others disagreed with this point of view:
“I think we are in a phase of development in which marketing contains more and more societal elements. Ultimately it is very much me-too.“ (Interview C)
Most interviewees agreed with the above statement rather than seeing it as a unique selling point. They knew that they were unique in offering carbon offsetting. Therefore it was not a feature to distinguish oneself, more something where one could not stay behind.
All tour operators, except for one made carbon offsetting optional. This is mainly due to price concerns, they are afraid that if they include carbon offsetting, they will price themselves out of the market. The one tour operator who serves as the exception said it concerned a pilot for one year.
4 Source: the interview.
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“So I asked our customers during their trip: do you know that the emissions of your flights have been offset? They all said: no. Apparently it does not get across while it is stated in several sections of our website and it also appears on the booking form. They did not have a clue, I found that remarkable.”(Interview C)
In the industry there exist several awards and certifications for sustainability. In order for a tour operator to attain a high listing on a sustainability index, to achieve an award or to receive a certification it has to engage in carbon offsetting. The goal might therefore not be to achieve a business that operates carbon neutral. But rather the goal might be to acquire a certain reputation, or to get a higher listing than competitors.
During the interviews it became apparent that it is a responsibility that tour operators feel themselves, and the pressure from their peer group. They did not need to legitimize themselves towards certain stakeholder groups or society at large.
It becomes clear that customers do not ask for accountability, they are not interested in how the carbon has exactly been offset, nor whether there are any issues. This might be for two reasons. First, they do not care. Secondly, they trust that their tour operator checks this for them so they do not have to. When asked whether they feel this responsibility tour operators replied in different manners:
Researcher: “But you do not feel any responsibility as a middle man?” Interviewee: “No.”
Researcher: “None?”
Interviewee: “No, none.” (Interview F)
The interviewee above concerns a business travel agent, in addition to the statement above, the following was added:
“For us it’s just a business model, nothing less, nothing more. Our customers ask for carbon offsetting and we deliver.” (Interview F)
The other business travel agent that the researcher spoke to disagreed on this point. Only a few off his customers engaged in carbon offsetting and he was disappointed in this. He actively promoted carbon offsetting.
“We started to offer carbon offsetting to our customers three years ago. From our role and responsibility we feel we have to offer this to our customers. The final choice however lies with the customer, since they pay.”(Interview E)
