UK: The Energy and Environment Alliance held its Sustainability Symposium this week at the London Westin with a focus on ESG in hospitality.
The event, which was attended by 200 delegates, looked at how to consider ESG in the context of capital markets, hotel construction and circularity, hotels and ESG in practice, and measuring the social impact of hotels.
There was also a panel on sustainability data and another on the say-do, or attitude gap of consumers.
Dr Marc Lepere, lead in ESG & sustainability, King’s Business School moderated and summed up the conversations as the day progressed.
There was a general acknowledgement that Europe is leading the conversation and action on ESG with the US lagging far behind .
“If I mention ESG to the investors in the US then I might as well get my coat. It is not a phrase to help you win any business there,” said one panellist.
Key takeaways are at the bottom of this article but here is a summary of some key points across the day.
Insurance and stranded assets
The insurance sector is key to the whole process of ESG and hospitality with one panellist commenting. “It will change fundamentally as you won’t be able to re-insure stranded assets – you won’t get insurance for flooding, emissions etc. So the insurance won’t come and then you can’t get finance and planning – and that’s the immediate consequence.”
Dr Marc Lepere said: “The pursestring holders maybe don’t care that much but once you take away insurance that becomes a problem.”
Corey Walrod, International Sustainability Standards Board (ISSB), and Professor Dr Sven Bienert, Carbon Risk Real Estate Monitor (CRREM) talked about the risk of stranded assets.
ISSB was established in 2022 as part of the IFRS and aims to provide the standards for transparency in the marketplace for sustainability investments.
Walrod commented that at the moment ESG may not be at the top of the discussions in the boardroom because of the more complicated financial environment at the moment. However it was noted that big investors have increasingly high ESG requirements because of regulations or they in turn are driven by their own investors.
They talked about the use of the word “stranded” and that stranded assets may only be transition risks – it doesn’t mean a property is worthless.
CRREM’s Bienert explained that the SBTi pathway did not differentiate between hotels or office buildings in terms of decarbonisation. “We all agree it makes a difference what sort of use we are looking at – we acknowledge we need more granularity when you come to hospitality and hotels. We need to get to a higher degree of accuracy.”
Education checklist
Companies need to train their investment teams, as ESG related questions are coming up, and more recently investors are including premium discounts to reflect transition risks.
Bienert said collaboration was key: “We have to focus on education and harmonisation going forward so the EEA and CRREM are going to collaborate on more precise standards in the hospitality sector.”
Ioanna Paschalidou managing director Henderson Capital partners said when it came to hospitality and ESG they were looking at the next pathway for an asset rather than looking at sustainable certifications. “We are looking at the EU Taxonomy compliance, so even though we didn’t look at these things in such a focussed manner in the past, for hospitality this will be the case going forward.”
Caroline Tiveus SVP director of sustainable business, Pandox talked about the ESG acquisition check list citing the questions that matter.
“Does the property have oil and gas? Then we know we have to phase it out. What sort of EPC is it energy efficient? We have to give the cost needed to make it better. What ventilation or BMS system does it have? These are the biggest costs and the biggest risks.”
Data
In another panel on data Omnevue’s chief revenue officer, Aiden McNulty said the collection and reporting of sustainability data all goes back to financials and “it has to be of financial grade.”
CEO and founder of Beyond Apartments James Fry uses Omnevue to collect data for his portfolio but made the point there is no point having data unless you do something with it.
“What action points are going to be taken? We need to talk more about what we are going to do with the action points rather than just the collection of data,” he said.
David Kellett MD head of Alternative Investments Europe Invesco agreed: “As an investor we want to see people ‘doing’. How do we contextualise data? You have this rush to collect it without the understanding of what you are collecting it for. Then we ask people to validate it.”
Omnevue’s McNulty added that banks would be looking at top emitters and soon they will start withholding finance.
ESG and the attitude gap
In another session Joanna Kurowska managing director for UK and Ireland IHG Hotels and Resorts talked about the future for ESG in the hotel sector from the employee side rather than the consumers.
She explained that the first question is what are the new generations expecting of their employers? “What does the hotel sector need to do to attract these people? Second, the value of our assets is going to deplete if we don’t protect the sustainability agenda. Third, we need to have a starting point. Could you please collect data on your energy consumption so we know what we are responsible for and what the size of the challenge is.”
Kurowska continued noted on the G of ESG and regulation side of things “if consumers are not going to change the world, no matter what they say, then the only thing that will change it is regulations.”
She said everyone was learning and everyone has the opportunity to change behaviour and move forward: “We are on the cusp of a new revolution, like the industrial revolution, we are in the sustainable revolution.”
Circularity
Franck Bermond VP design and construction AccorInvest talked about a circularity project the team has worked on where “instead of an eco design bedroom we have circular bedrooms, so in a future renovation we can reuse and recycle.”
AccorInvest has calculated how much it can reuse from these circular bedrooms and it is around 83 per cent in an Ibis a bit less for Novotel.
Bermond works with HARP to create the market place to become 85 per cent reusing not recycling. “Let’s think circular and ten years forward – it’s common sense and even for a five star hotel this can be done.”
Travelodge’s COO, Claire Good talked about a tech refurbishment programme it is introducing where the hotel group is working with a partner to take away tech and reuse 80 per cent of the parts and get it back to the hotel “as good as new.”
Good said: “Lots of small improvements are going to add a big change.”
ESG Course
EHL Hospitality Business School, the Energy & Environment Alliance (EEA) and King’s Business School also announced plans to run an education programme focused on the practical aspects of delivering high ESG (Environmental, Social and Governance) standards across the hospitality sector.
The programme is designed specifically for hospitality managers, investors and asset owners and will give participants an overview of the science of climate change and a thorough grounding in its financial implications, including new regulatory requirements and accurate data collection.
Ufi Ibrahim, chief executive of the EEA, said: “ESG is rapidly becoming an extremely important issue for anyone involved in hospitality. So, I am delighted that two world class business schools are collaborating with the EEA to create what I am confident will be the go-to education on this subject.”
King’s Business School and the EEA operate an existing programme for hospitality sector leaders that covers strategic and financial aspects of ESG in the context of the sector’s specific requirements.
Key takeaways
🌱 We need to skill up – educate everyone on ESG, data collection, regulations, the new language of sustainability;
🌱 The whole of sustainability is not about the planet, it’s more about the risk and the investment.
🌱 It’s better to buy brown and make it green and then sell it, even if that has higher carbon emissions it is still doing a better thing than selling off stranded assets and saying you are doing it for carbon reduction reasons;
🌱It’s all about data and how to integrate it and only then will we have a chance to succeed. But also data is never going to be perfect;
🌱 You can’t do “approximate” in financial reporting so for sustainability disclosure and reporting there needs to be the same accuracy as we have when reporting financial data;
🌱 We need to know the cost savings of ESG but also the ROI;
🌱Start investing in carbon removal portfolios (more on that here)
🌱 Banks have a scope 3 to worry about too, so their lending will need to be “good” and open the door of opportunity. This year banks will have to report on what proportion of their loans are sustainable;
🌱 Reusing is better than recycling;
🌱Everyone is focused on E of ESG but the social side is coming. DEI is coming next;
🌱If food waste was a country it would be the third biggest emitter of waste;
🌱 Nudging consumers works – small changes make big results, like IHG changing the size of the plates at the breakfast buffet, resulting in much less food waste;
🌱Don’t let the fear of greenwashing accusation stop you from making authentic sustainable operational choices;
Image: Borneo Intercontinental Hotels and Resorts due to open 2027