Hotel guests, investors, owners, employees, and brands worldwide are increasingly prioritizing responsible environmental practices, sustainable tourism, social welfare, corporate governance, and transparency. As customer and employee expectations rise, the hotel industry is under greater pressure to focus on decarbonization initiatives, sound environmental stewardship, and responsible social policies. This shift towards sustainability is no longer just a trend but a business necessity that is reshaping the way hotels operate globally.
ESG practices in the Hotel Industry
The focus on environmental, social, and governance (ESG) practices is evident across several areas, including energy efficiency, carbon emissions reduction, water conservation, and waste management. Many hospitality brands are working to standardize their reporting on these key metrics. However, consistency remains a challenge, which is why companies are turning to established frameworks such as the Global Reporting Initiative (GRI) and standards like the European Financial Reporting Advisory Group (EFRAG) and the International Sustainability Standards Board (ISSB). These reporting tools are aiding industry stakeholders in benchmarking performance and setting achievable targets related to ESG goals.
As various countries implement different ESG rules and regulations, the hotel industry must adapt to varying legislative environments.
Collaborative efforts in sustainable hotel practices
One of the significant drivers in the hotel industry’s sustainability efforts is the growing emphasis on environmental, social, and governance (ESG) practices across all regions. Notable trends include a surge in companies focused on tracking and quantifying key ESG metrics. There is also a strong commitment to science-based reduction, pushing hotel brands to set measurable and actionable sustainability goals.
In addition, many hotel companies are adopting ESG considerations as a crucial investment criterion. This reflects a broader shift in the industry, where employees and guests alike are increasingly drawn to hotel brands that are committed to the environment. The rise of green financing options is also helping improve the return on investment (ROI) for environmentally sustainable initiatives.
Hotel industry stakeholders are increasingly collaborating to reduce carbon emissions and meet sustainability targets. CBRE predicts that more independent hotel owners will partner with these organizations to leverage energy-efficient technologies, minimize food waste, and renovate properties for better environmental performance. This collaboration is pivotal to achieving long-term sustainability goals.
ESG implementation delays
Despite the growing commitment to sustainability in the hotel industry, several challenges could slow progress toward meeting ESG goals. Additionally, persistent inflation, high interest rates, and geopolitical uncertainties could place financial constraints on hotel companies, prompting them to push back the timeline for implementing their sustainability strategies.
Even with these potential setbacks, the global hotel industry remains committed to ESG principles.
Gus McConnell,
Associate Director, Research, Asia Pacific of CBRE,
cbre.com
@cbre
