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Implementing an ESG plan in the Hotel Sector

By Vedika Jhunjhnuwala on 11/4/2024

words ESG on a wood block and Future environmental conservation and sustainable ESG modernization development by using the technology of renewable resources to reduce pollution and carbon emission.

Sustainability is not new but the impact of the COVID-19 pandemic and ongoing conflicts makes it hard to escape the implications of climate change and diversity & inclusion on our everyday lives.

Many organisations feel they need to do something to address their sustainability agenda, but where to start? The subject is very broad. To quote David Allen

“you can do anything, but not everything”.

Materiality Assessment
A useful tool to narrow priorities is a Materiality Assessment, where you consider who your key stakeholders are and what is most important to them. In the case of a hotel this includes guests, staff, local community, suppliers, lenders, and investors. Management could start by brainstorming a broad list of sustainability related issues (broken down into Environmental, Social & Governance) and scoring them in terms of their own view of priorities, based on strategic priorities. Through outreach, perspectives of different stakeholders can be captured. Sometimes it is not possible to engage directly therefore someone within the organisation who is able to represent stakeholder views can act as a proxy in the short term. The outcome is a 3 by 3 grid with high, medium and low priorities for the organisation and their stakeholders.

This simple tool does three things:

  1. It identifies the most important elements to focus on.
  2. It identifies the low priority items, giving permission to do nothing about these for now, to optimise resource allocation.
  3. It provides a simple yet effective mechanism to communicate why it is making specific choices to stakeholders.

Sharing this assessment can generate valuable debate with stakeholders and create transparency about why things are being done.

 

materiality assessment fig 1

Figure 1: Materiality Assessment 

 

Sustainability Strategic Planning
Having put the effort into producing a materiality assessment, the next stage is to step back and think ‘so what?’. This means identifying and agreeing a set of priority sustainability issues to address. This will vary between organisations and will depend on the pressure from specific stakeholders.  Typically, climate change is a key issue, but diversity & inclusion may be equally important. It is important to make choices and focus limited resources on making a difference in a few key areas.

Having identified a handful of areas to target, the next stage, (Figure 2) is to develop action plans for each area with practical steps and timelines including having discussions about how far to go. There will be trade-offs and sustainability plans will compete for resources with other priorities. In some ways, integration is the solution. Making sure that sustainability issues are being addressed within future core strategic plans.

Screenshot 2024 03 01 at 13.31.31

Figure 2: Typical Sustainability Strategy development

 

This will lead to debating the organisation’s level of ‘Ambition’ around sustainability. Typically, it is about aligning stakeholder views on why sustainability is important to the organisation, what the pressures are to improve and how quickly you need to move forward. This allows the wide-ranging action plan to be refined and calibrated to the agreed level of ambition.

This will lead to debating the organisation’s level of ‘Ambition’ around sustainability. Typically, it is about aligning stakeholder views on why sustainability is important to the organisation, what the pressures are to improve and how quickly you need to move forward. This allows the wide-ranging action plan to be refined and calibrated to the agreed level of ambition.

It can feel daunting to create a sustainability strategy and plan. Hopefully by following this structured process, you will have the information required to do so. The strategy needs to capture and explain what is most important regarding sustainability to the organisation and what it is being done about it. The trick is to keep it fairly concise and grounded in the practical steps that the organisation is committing to take.

words ESG on a wood block and Future environmental conservation and sustainable ESG modernization development by using the technology of renewable resources to reduce pollution and carbon emission.

About the author

Vedika Jhunjhnuwala