While the concept of responsible business has been around for some time now, it is only since the turn of the century that it has evolved into a benchmark—the environmental, social and governance (ESG) performance—against which companies are being constantly scrutinised for their commitment towards the environment and the people they work with. The tourism industry is no exception.
“Given the direct interactions between tourism industry operators, the environment, and communities the importance of ESG in tourism cannot be overstated,” states the United Nations World Tourism Organisation (UNWTO) in an article titled ESG Framework for Tourism Business. It explains sustainable tourism as making optimal use of environmental resources and conserving natural resources and biodiversity, respecting the socio-cultural authenticity of host communities and ensuring viable, long-term economic operations, including stable employment and contributions to reducing poverty.
The value of ESG reporting for businesses in the tourism sector has been observed in areas like attracting and retaining customers, risk and regulation management, acquiring access to sustainable finance or investor relations management, the UNWTO article says. The ESG metrics relevant for the hospitality industry include climate change mitigation and adaptation; diversity and inclusion, which is measured as the percentage of racial, ethnic and gender diversity at executive and middle level management; waste management and governance, it adds. The Global Hotel Decarbonisation Report 2017 states that the hotel industry will have to reduce its carbon emissions by 66% by 2030 and by 90% by 2050, taking 2010 as the baseline.
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