Environmental, social and governance requirements will remain a boardroom issue in 2023, as the world transitions to a more sustainable position.

This is no mean feat for the property industry in the European Union, which is responsible for an estimated 38% of energy consumption and 29% of all greenhouse gas emissions.

Our industry must improve how hotel assets are built and operated.

Industry stakeholders are making seismic shifts to reduce emissions and improve ESG performance. Research reveals common themes, summarized below as five mutually reinforcing actions. Together, they generate traction to drive systemic change and embed ESG principles.

Invest in relevant education.

Knowledge is the first step to understanding the operating environment over the next decade. Bring in experts, subscribe to courses, self-educate.

I studied with the Cambridge Institute of Sustainability Leadership, where I am now an assessor, but shop for what your organization needs.

Whoever you are — hotel real estate owner, operator, investor, lender, franchisor or online travel agency — learn from other industries.

Look at faster-moving industries such as consumer goods and fashion. “Net Positive,” a book co-written by Paul Polman, the former CEO of Unilever, and Andrew Winston, a leading author on sustainable business, provides transferable knowledge from businesses on ambitious sustainability journeys.

Measure impact, not just economic outcomes.

This next chapter of global development is about creating a more equitable relationship between people, planet and profit.

As a result, new measurement tools are emerging. These are skewed towards achieving carbon dioxide reduction as the world strives to avoid climate tipping points and biodiversity breakdown, but this will change.

Current/pending tools for the sector include:

• Carbon Risk Real Estate Monitor (CRREM) — designed for financial reporting and the measuring of carbon emissions from property assets.
  
• Hotel Carbon Measurement Initiative (HCMI) — calculates carbon footprint of hotel stays and meetings for a hotel.
  
• Uniform System of Accounts for the Lodging Industry (USALI) — The 12th edition is due at the end of 2023 or in early 2024 and will feature updated waste, water and energy definitions and metrics.

Tools are still evolving, particularly for measuring impact on people and biodiversity, but this will change as legislation increases.

If none work for your organization, collaborate with others or develop your own. Look out also for smart apps that use gamification to motivate employee action.

As management consultant and educator Peter Drucker said, “what you measure, you improve.”

Companies deliver impact when company purpose, people and processes are aligned.

This idea is not new. Since the 1970s, companies have been structured to deliver for shareholders: a singular internal goal for one stakeholder.

Today, a multi-stakeholder approach is needed, with internal and external objectives and a clearly defined purpose, that is, a vision or mission statement.

This last point is important. According to the latest Edelman Trust Barometer (2022), 60% of workers choose a place to work based on their beliefs and values.

This alignment is evident in a growing number of hospitality businesses, including Slow; Habitas; Artiem, and Zoku (both B corps); Six Senses (one percent of hotel revenues allocated to local sustainability initiatives), and U.K.-based Lamington Group and Zeal Hotels (both creating net-zero hotels).

Adopt an “open source” mentality.

Sharing successes and problems with your community fuels innovation.

For example, a client’s employee identified a solution to reduce supply-chain uncertainty, costs and scope 1 and scope 2 carbon emissions on ice cubes by buying from a neighboring competitor who owns an on-site, state-of-the-art production facility.

That is a win-win for a space-constrained operator, and a CapEx-heavy one.

On an industrywide level, organizations and conferences provide platforms for unified action.

In the EU, the Energy & Environment Alliance, Sustainable Hospitality Alliance and International Hotel Investment Forum are all harnessing industry collaboration.

This is not a one-organization or a one-team endeavor.

Be transparent and tell your story, both internally and externally.

Changing systems is hard work, so use all channels available to share evidence of progress and motivate the people who are critical to success.

At The Social Hub, on-property welcome screens share specifics on environmental and social performance in a simple, engaging format.

Inspire guests, colleagues, suppliers and other stakeholders with the commitment behind the scenes.

It also builds that most precious of assets: trust.

Sustainable hotel operations and reporting is being accelerated by three drivers: legislation; industry investors and operators; and hotel guests, 58% of whom buy or advocate for brands based on their beliefs and values, according to research in 2022 by public relations and marketing firm Edelman.

The climate crisis will remain a significant global business risk, so if ESG has not been a priority for you, elevate it in 2023.

We have an industry and a planet to protect.

Katharine Le Quesne is managing director of business advisers HoCoSo and a Lecturer at Glion Institute of Higher Education. She focuses on bespoke solutions for hospitality assets, brands and operators and has a particular interest in regeneration and sustainability.

The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.

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