Industry leaders weigh in on top ESG challenges

The Future Hospitality Summit (FHS) 2023 kicked off in Abu Dhabi with ESG and sustainability-related discussions high up on the agenda

With 2023 being the UAE Year of Sustainability, COP 28 taking place in Dubai this winter and ESG becoming more and more important to investors and customers, The Future Hospitality Summit (FHS) 2023 kicked off in Abu Dhabi with ESG and sustainability-related discussions high up on the agenda.

Top industry leaders weigh in on the main challenges the sector faces when it comes to the development and execution of ESG strategy in the hospitality sector.

Haitham Mattar, Managing Director, IMEA, IHG Hotels & Resorts, says a challenge that the hospitality sector faces when developing and executing an ESG strategy is the lack of standardisation. “For governments to set ESG targets, industry level standards are pivotal to mandate across different areas of sustainability. As an industry, standardisation is a recurring topic of importance that appears in virtually every conversation, as well as across customer forums. It is the need of the hour for governments, businesses and trade bodies to harmonise efforts and as a result, maintain effective tourism and hospitality ESG standards. 

“Additionally, through sustainability policies and regulations, we will be better able to enable quicker adoption of new technologies and renovations that allow carbon monitoring and reporting, and other active and passive measures. As an industry, our standardisation efforts yield a two-fold benefit – supporting our customers in assessing hotels with relevant good data and supporting our hotels by providing clarity into what customers consider most important, with the opportunity to elevate offering,” says Mattar. 

Richard Williamson, COO of Considerate Group, points out that hotels are complex environments: they incorporate accommodation, restaurants, bars, laundry and more elements. Ownership is also often multi-layered, with owners (private equity, family offices, asset managers, pension funds), brands (e.g., Accor, Hilton, Marriott, Hoxton), operators (e.g., Kerten, Oetker, B&B) as well as management contracts adding to the intricacies.

“This complexity means that often no one party has absolute control of the asset and implementing an ESG strategy across diverse portfolios of hotels with multiple stakeholders – with conflicting interests and priorities – can be extremely challenging. An important part of Considerate Group’s work is aligning these diverse stakeholder interests to develop a single, unified ESG strategy, that can be followed by the entire hotel portfolio. Using our direct experience of the complexities of the hospitality industry, we then ensure suitable support to implement the strategy at asset-level. General ESG advisors can only offer so much – the industry needs specialist advisors. As a collaborative sector-partner, Considerate Group identifies and works with best of breed advisors, with our ESG data platform, Con-Serve™, tailored to the needs of the hospitality industry but based on Deepki’s proven real estate data platform. We work with a specialist food waste provider, Foodprint as well as a specialist EU taxonomy platform, Celsia. We also work with a number of energy audit partners in jurisdictions where local partners are required,” says Williamson. 

For Paul Stevans, COO, Premium, Midscale & Economy Division, Middle East, Africa and Türkiye at Accor, striking a balance between providing an unwavering guest experience and implementing sustainable practices is a key challenge, which necessitates innovative solutions, he says. “Initiatives like these not only minimise the environmental impact but reduce costs while meeting increasing customer demand for sustainability and hotel environmental data.  

“Nevertheless, the strategies are not one-size-fits-all solutions, each destination possesses its own unique challenges and opportunities, demanding a customised approach. We ensure our hotels are designed with sustainability in mind from the outset and we transform and optimise the operations through activities such as waste management, energy and water consumption, eliminating single-use plastics and ensure that our hotels are sourcing food responsibly to preserve biodiversity. 43 per cent of our hotels in the UAE in the premium, midscale & economy division, have obtained independent third-party sustainability certifications for their sustainable operations with partners such as Green Key and Green Globe, with a global aim of achieving 100 per cent of our hotels being certified by 2026. 

“As a leader in the field of positive hospitality and a long-term advocate of sustainable development, Accor also places Corporate Social Responsibility at the heart of its overall strategy. The launch of “School For Change”, is an ambitious training program designed to increase employee awareness into sustainable development challenges,” says Stevans.

Elie Milky, VP Business Development, Radisson Hotel Group, concludes that the vastness and diversity of the hospitality industry make universal solutions difficult, as practices must cater to different regions, cultures, and regulations. “There’s often a substantial upfront cost for sustainable technologies, making it challenging for smaller properties or those in constrained areas. Changing the behaviour patterns of both staff and guests to align with sustainability goals can be complex. Furthermore, accurate data collection for assessing impact needs to be more standardized, complicating progress measurement. Finally, balancing guest expectations for luxury with sustainable practices and ensuring ethical operations throughout our extensive supply chain remain pressing concerns.”