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What is sustainability reporting
and why is it important?

Published 21 June 2024

Sustainability reporting is a vital way for businesses to openly share their environmental, social, and governance (ESG) efforts, going above and beyond the usual financial reports, to give a full picture of the sustainability of a company’s actions and impacts.

With growing concerns about climate change, social fairness, and ethical practices, sustainability reporting shows that a company is committed to responsible business practices. It helps build trust, improve performance, and show accountability, all contributing to a more sustainable global economy.

Measuring and communicating environmental and social impacts isn’t just a trend but a fundamental shift towards responsible business practices. Let’s delve into why sustainability reporting is important for independent businesses and hotels within the hospitality industry, what it entails, and the benefits associated with reporting.

 

What is sustainability reporting?

 

Sustainability reporting is how a company chooses to disclose and communicate its environmental, social and governance (ESG) goals, and the progress being made towards them.

For hotels and independent businesses, this typically includes tracking metrics such as carbon and water consumption, waste generation and recycling rates, greenhouse gas emissions, employee well-being, community engagement, and supply chain sustainability.

In some regions, sustainability reporting is now enforced by law. Europe, for example, has the CSRD (Corporate Sustainability Reporting Directive), which “requires all large companies and all listed companies (except listed micro-enterprises) to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment”.

The CRSD does not (currently) apply to non-listed SMEs and micro-enterprises, but they can opt to comply with the standards voluntarily until January 2027 when it is expected it will apply to SMEs.

In the U.S., greenhouse gas reporting is required in California for businesses that generate over $1 billion in annual revenue – and climate disclosure reporting for listed companies has been suggested, too. That doesn’t mean independent hotels are off the hook.

Even though it’s not necessarily a legal requirement for small to medium entities to report on their impacts, it should be part of general practice, to align with current attitudes towards travel and sustainability – and improve business outcomes.

 

Sustainability reporting benefits

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Sustainability reporting offers a variety of benefits to hotels and businesses within the hospitality industry:

  • Cost Savings and Operational Efficiency: Implementing sustainable practices -identified through reporting – can lead to cost savings and operational efficiencies. For example, reducing energy and water consumption, optimising waste management, and implementing green technologies can lower utility bills and operational expenses.
  • Enhance Reputation and Brand Image: Sustainability reporting helps hotels showcase their commitment to responsible practices, enhancing their reputation among environmentally conscious guests, investors, and other stakeholders.
  • Competitive Advantage: As sustainability becomes a more important factor in consumer decision-making, hotels that prioritise sustainability and report on their efforts, can gain a competitive edge. They can attract guests who prefer eco-friendly accommodations and are more likely to choose hotels that align with their values.
  • Community Engagement and Relationships: Engaging in sustainability reporting encourages positive relationships with local communities. Hotels can contribute to community development initiatives, support local businesses, and engage in philanthropic activities, helping local areas thrive.
  • Employee Satisfaction and Retention: Employees are increasingly attracted to and engaged by companies that prioritise sustainability. Hotels that demonstrate a commitment to sustainability through reporting can boost employee morale, satisfaction, and retention.
  • Guest Experience and Loyalty: Sustainability initiatives can enhance the overall guest experience. For example, offering eco-friendly amenities, providing sustainable dining options, and promoting local culture and heritage can create memorable experiences that lead to guest loyalty and positive reviews.
  • Meet Investor and Stakeholder Expectations: Investors and stakeholders are placing greater emphasis on ESG factors when evaluating businesses. Sustainability reporting helps hotels meet these expectations, improving investor confidence and attracting socially responsible investment.
  • Identify Emerging Regulations: By engaging in sustainability reporting, hotels can stay informed about emerging environmental, social, and governance (ESG) regulations. Monitoring trends in sustainability reporting frameworks helps hotels anticipate future legal requirements.

Not only does sustainability reporting benefit the environment and society but also impacts hotels on a wider business level. It’s a strategic approach that contributes to long-term success and resilience in the hospitality industry.

Read more about why sustainable practices matter for hotels with our guide.

 

The importance of sustainability reporting

 

The hospitality industry has a significant environmental footprint. Hotels, in particular, consume large amounts of water, energy, and produce substantial waste, making sustainability reporting crucial in helping hotels identify areas for improvement.

By regularly monitoring and reporting on sustainability metrics, hotels can set meaningful goals, measure progress over time, and implement targeted initiatives to reduce their environmental footprint. But sustainability reports go beyond just meeting legal requirements—they’re versatile tools that help hotels and businesses drive positive change and stay competitive.

These reports can boost a hotel’s reputation by showing its commitment to responsible practices, which attracts environmentally conscious guests and investors and builds loyalty.

Beyond compliance, sustainability reports provide valuable insights into environmental, social, and governance (ESG) risks and opportunities. Plus, the transparency of sustainability reporting engages guests, employees, investors, regulators, and local communities, turning into meaningful conversations and collaboration toward common sustainability goals.

Sustainability reports also encourage industry benchmarking and knowledge sharing, allowing hotels to learn from each other and adopt best practices. They can attract investment and funding from investors who care about ESG factors.

By using sustainability reports effectively, hotels can make a positive impact, engage stakeholders, and contribute to a more sustainable future for the hospitality industry.

 

How can data management platforms help with reporting?

 

With pre-defined templates, bespoke dashboards and platforms designed by sustainability experts, specifically for hotels, platforms like Weeva’s sustainability management tool take the guesswork out of reporting.

Whether you want to monitor climate-positive practices or record usage of different energy types, collating sustainability data and keeping it in one data management platform can simplify the process. Take a look at our case studies and success stories to find out how hotels around the world have used Weeva to manage their sustainability reporting.

Hotels, resorts, and travel lodgings of all types can build a more sustainable sector. It’s up to us to move the needle – and not just for a competitive advantage, but because we need to be accountable and share these findings to enact real-world change.

Monitoring our progress, sharing standards and setting benchmarks will provide the tools for the industry to assess if actions taken are indeed making progress and will provide greater transparency for impact efforts.

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Do you want to learn more about the benefits of a sustainable business?

Get in touch and chat to our team about sustainability reporting.

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