In our FOCUS ON series we look at a topic and delve a little deeper. This time we are looking at the new report Inequitable Access to Sustainability Certification – by Xavier Font, Inmaculada Gallego and Juan Pedro Mellinas.
So what’s this report about? It’s an in-depth look at the “unintended consequences” on the hotel sector of the EU’s Empowering Consumers legislation for the Green Transition Directive (which has already been approved) and the Green Claims Directive (which at the moment has been paused). The idea being as a result of these directives hotels which then go ahead and gain sustainability certifications will have the upper hand both in the industry and with investors.
Back up a little, why has the Green Claims Directive been paused when it was just about to go through? It was pulled at the last moment at the beginning of the summer, as it was said to be insurmountable for small businesses to prove every claim. It is a bit of a setback because the Green Claims Directive was introduced after the European Commission looked at 150 environmental claims and found 40 per cent were misleading, vague and could not be backed up with any data.
So in the case of this report what does “unintended consequences” mean? The report is looking at how hotels will be impacted by the legislation and if the industry is a level playing field in terms of hotels needing to have equal access to sustainable certification. And of the 9.3 per cent of European hotels in this report which have a certification they are the large or chain affiliated high end hotels.
And? It isn’t a level playing field.
Because large hotels and chains have more resources? Well yes and other barriers for independent hotels like high cost and lack of support. The report found that there may be four different strategic responses the hotel industry employs in the face of this legislation. First there is wait and see – which is understandable as the legislation keeps changing, then there is partial investment so there isn’t a big risk and there are no formal claims made, then there is growth which favours the large hotels and chains whereby they push the assets ahead with certifications thereby managing the risk for investment and lastly there is greenhushing – or withdraw where smaller properties don’t even talk about what they are doing for fear of being burnt.
And does the report offer solutions for hotels? Well not just the hotels but across the industry including OTAs, certification schemes, destination management companies and the policy makers themselves. We asked co-author Xavier Font if he thinks the calls to action, if they are all played out, can solve the issues. Font said: “It’s a start, but it won’t be enough. The inequity between different types of organisations runs much deeper. The actions proposed are meant to alleviate this inequity, or at least see if certification does not make it worse.”
There are lots of small independent hotels already doing a lot of good, possibly equal to those with an actual certification aren’t there but no formal way to showcase their efforts? Yep so what the industry needs to work out is how to credit those with the knowledge and who are already making an impact and somehow access the resources to show and share this knowledge. Font puts it down to the why, not the what of sustainability, which is where we all need to be. We don’t need to show what we are doing, we need to show the result and why that’s important.
Font said: “Certification focuses on identifying that certain actions have occurred- e.g. do you have a policy, have you installed low flow showerheads. That’s the means to an end, not the end in itself- the end is whether the water or energy consumption has been reduced, whether the working conditions of your staff have improved.
“We keep measuring activities, not outcomes. If we managed to measure outcomes (and I do not say that’s easy, beyond using receipts to check energy and water), we would find that the consumption per head in many of these small firms is far better than for luxurious firms. The large and luxury businesses have the business case to put management systems in place – they have more to gain from doing so.”
There are around 300 sustainable hotel certifications around the world. How are hotels supposed to know which ones will be good ones to invest in now? The never ending question – in fact we wrote about this in 2023 here where certification for sustainable hotels was described as “as mess”. Guess what? It still is, and to achieve alignment the industry is coming up with all sorts of different ways to solve this issue. One of them is that third-party verified certifications will be a stronger option, rather than the mark-your-own-homework idea.
What will happen to those certifications which are not third-party audited? Let’s ask Xavier Font.
Font said: “The people that run them are aiming to do the right thing, and they have the skills to help businesses. They will need to evolve- either become suppliers to a larger certification (providing the advice to the businesses, while leaving the auditing to someone else). They might run a white label scheme, where locally they have a name that is recognisable but the suprastructure is run by a larger entity, which then means they have the economies of scale to be more thorough.”
What else does the report say about other certification options? The report talks about destinations having a sustainability standard rather than hotels on their own. The GSTC already has a sustainable destination certification process which uses GSTC accredited certification bodies like EarthCheck, you can see more about that here.
Font added: “Clusters are essential, for many reasons. Those businesses and government agencies are more likely to know each other, to be socially accountable to their peers. There may be destination-specific needs and solutions. Benchmarking is more meaningful. Any destination collaboration, whoever initiates it, is a good idea if it creates the momentum to get stakeholders to work in the same direction.”
Should OTAs take more responsibility in explaining to the consumer about the certifications they are promoting? Possibly. We know that when Booking.com dropped its Travel Sustainable programme in March 2024 (three years after launch) it was a pivotal moment. The OTA said it would introduce a new label “to acknowledge when a property has achieved a third-party sustainability certification coupled with the ability to filter searches accordingly”.
Font said: “The current thinking is that you need to communicate at the point of purchase, because this is where it is more likely to influence the customer. We do not have evidence that certification, or the criteria that they measure, are meaningful to the customer experience, and until we have customer-centric (or at least experience-relevant) certifications, we might not see changes in purchasing choices. The latent interest is there, though.”
So does the report suggest which certifications should be used? No, not really but it does say that there should be a standard to help everyone involved. However this is complicated because there seems to be a few different organisations suggesting what they think are the best certifications. For example, this year in June The Global Sustainable Tourism Council (GSTC) published the GSTC-Certified Hotels Directory which was designed to help destinations, businesses, and consumers find accommodations that have been certified as sustainable by GSTC-accredited Certification Bodies. But then you also have Travalyst, which has its own list of certifications which it says meets its criteria. It hopes its partners like some OTAs will only present hotels as sustainable if they have been certified by those on the Travalyst list…
Is there an agreed industry list we will see emerging? Nope, not yet.
Font explains: “There isn’t an agreed list of certifications as such. The Travalyst coalition has created a list, and different OTAs have applied slightly different lists. Consolidation is key, and legislation is likely to drive up the standards that lead to that consolidated list.”
And within that consolidated list let’s hope there is some sort of consolidation around what is included in a certification? Exactly. Operational sustainable certifications are mostly based on the E of ESG with little on the S, so what is happening at the moment is hotels are buying into one, two or even three certifications. A hotel may be B Corp but will also showcase its Green Tourism certification.
Xavier Font adds: “This is the legacy of most of these certifications being Western-centric, where there is an assumption that key social issues are taken care of by the state. We could of course also assume that key environmental issues are also taken care by the state. These same ESG schemes have been promoted on the basis of eco-savings or risk-informed due diligence. The new legislation that will drive up standards is also environmental of course, and there is the chance that social aspects that are central to the tourism and hospitality sector, such as dignity in the workplace and labour rights, or the impacts of tourism on the local community, get further neglected.”
Do consumers even care about certifications? Good question. Most people walking through a hotel lobby are unlikely to stop and actually know the ins and outs of what each certification means. They are trusting in the system which actually is a bit flawed as we have talked about.
So have certifications just become a financial incentive for the future asset rather than a brand development and engagement process? Well yes but there should be a basic level of sustainability we expect all hotels to have now. For example WTTC’s Basics (with the science to show everyone). The real questions are should we even be talking about sustainable certifications? Should the burden of proof be on those who are doing something about it or on those who aren’t?
Font noted he will be launching a new study at World Travel Market in November on this very topic. “What I can say in advance is that any organisation, public or private, should always design a method to measure the success of any projects/interventions (like certification) when they create it, and they should be accountable for regularly evidencing the progress (particularly when using public funds).
“And success is not measured in activity or outputs, but in outcomes and impacts. You do not measure if certification is successful based on the number of certified businesses, but on real evidence of how much better a certified business is compared to a non-certified one in relation to each of the key performance indicators. Does it not concern you that none of the certification businesses seem to produce a report like this? The same rule applies to any other intervention.”
How is all of this going to be enforced and regulated? If, for example this report looked at 82,000 hotels – how will any claims made across the sector be investigated in the coming years? Hopefully in the coming years there will be the “best third party verified certification” but actually if a hotel or business has a claim somewhere on its website it is true we don’t know what is the process for reporting this, or how much time they will have to respond or prove it. And who is enforcing it?
Font also has some ideas on this: “That is not clear. It may be based on case law – and the larger organisations are more likely to be the target of such early challenges. The challenge for small firms is that they are often in the supply chain of these larger firms, and the sustainable supply chain requirements they may be subject to could be proportional to the risk faced by their distribution channel, but not to the risk that each individual small firm poses.”
Why have we got these directives and legislation – to ultimately fit with financial frameworks but also to reach net zero. But even if we reach net zero – where is the circularity, where is the actual meaning behind it all?
Font says: “That is a big question, that would require much more time. But the cynic in me would say that legislation tends to be reactive to the latest issue that has been raised, and that the negative unintended consequences of that legislation are not sufficiently considered but they are likely to then manifest in the next issue that raises. All too often we seem to be simply postponing or shifting issues from one place to the next.”
You can read the full report here.
Authors of the Inequitable Access to Sustainability Certification report are: Xavier Font, University of Surrey, Inmaculada Gallego, University of Malaga, Spain and Juan Pedro Mellinas, University of Murcia, Spain
Photo by Valentin Salja on Unsplash