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How to apply ESG best practices in the hotel industry

Attention to best ESG practices (acronym in English for Environmental, Social and Governance, i.e. environmental, social and governance premises) has grown exponentially in recent years. Today, consumers and investors look for companies concerned about their impacts on society and the environment, also increasing concern about these factors among companies.

To give you an idea, half of the global population claims to have ecological concerns in their purchasing decisions, according to a PwC survey this year. According to a 2021 survey, 83% of travelers believe that a sustainable model travel is vital for the environment, and 61% point out that the pandemic has motivated the search for more sustainable tourism in the coming years.

These are just a few examples of why hospitality should care about ESG. But there are others: one of them is that the sector is one of the few that operates 24 hours, 365 days a year, generating quite high water and electricity consumption – a report by the Urban Land Institute Hotel Sustainability, from 2019, showed that Hotels are the real estate products with the highest consumption per square meter of both.

What changes in practice

It is worth remembering that hospitality involves several fronts. Enterprises can, for example, implement measures to preserve local fauna and flora, provide better socioeconomic conditions for surrounding residents and adopt good governance practices – which involve a diverse team, a healthy work environment for employees and the financial health of the business, for example.

To better understand where to start, the hosting provider needs to have a 360° view of its operations. Creating a realistic plan, with short, medium and long-term goals is the next step. If previously the sustainable discourse was known to remain only on paper, today, the market demands clear policies and actions in the day-to-day activities of enterprises.

Below, we detail some of the measures that can be taken in each of the areas that make up ESG:

When the topic is the environment, it is common for hotels to encourage guests to avoid changing towels and bed linen daily, in order to save water and electricity. Other practices that have become common are the adoption of automation systems, such as motion and presence sensors in apartments, allowing lights and air conditioning to be activated only when necessary, and LED lamps, which consume less energy.

Establishments can also adopt water reuse systems – such as that dispensed by the washing machine –, rainwater capture – to water the garden, for example –, solar energy capture panels, selective collection, reduction of the volume of waste – exchanging disposable materials for durable products, such as replacing plastic cups with glass ones – and use of sustainable amenities.

In relation to new developments, there are several certificates that guarantee that the construction is sustainable, such as LEED (Leadership in Energy and Environmental Design), BREEAM (Building Research Establishment Environmental Assessment Method) and EDGE (Excellence in Design for Greater Efficiency). These titles, among other aspects, guarantee that the hotel's work has not harmed nature and that the business model is efficient in reducing the consumption of natural resources.

Good practices in social matters mainly concern the company's impacts on the surrounding community. Before building a hotel or inn, it is interesting to analyze how the emergence of an establishment in that location will affect commerce, culture or some economic activity in the region, especially when they are remote locations and off the tourist route – since a new development, in theory, it means attracting tourists.

It is also essential that the local population is included in hotel activities. For example: is it possible to hire local residents to build and operate the new facilities? Furthermore, it is interesting that the hotel is engaged in causes to improve the regional socioeconomic environment, such as donating part of the profits to a charitable organization or promoting fundraising campaigns.

Governance is one of the broadest aspects of ESG, as it involves both social and business management issues. Firstly, it is essential that the company adopts an anti-corruption stance and takes actions to ensure financial health. In relation to employees, the hotel needs to guarantee good working conditions, from the structure for carrying out activities to good remuneration and a career plan.

Diversity and inclusion also fit into – and are one of the main themes – in governance. Although some companies are reluctant to address these topics, companies with greater gender diversity have a greater financial performance of 25%, a difference that reaches 36% when ethnic diversity is considered, according to a 2020 McKinsey study.

Harus, leader in the national amenities market, offers a range of products that can help in this mission. The brand has vegan lines and natural inputs, in addition to adopting policies to reduce the use of plastic.

Consult us to find out more about our products and services! And, if you liked this content, share it with your contacts.


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