The key to ESG criteria in the tourism industry

13-02-23

ESG (environmental, social and governance) criteria are gaining in importance. Companies can no longer escape their application by taking refuge in greenwashing, given that last November the European Parliament approved the new directive on sustainability, obliging them to disclose information on the effect of their activity on people and the environment.

The race for sustainability has accelerated within companies, including those operating in the tourism industry. According to GlobalData, ESG criteria were the most frequently mentioned topic until June 2022 by this type of business, ranking as a more pressing issue than COVID-19 or the war in Ukraine.

According to Alba Rodríguez, a lawyer at the law firm Circulo Legal Madrid, "the commitment to sustainable tourism is a differentiating element that should be used to gain competitiveness". The expert admits that the design and application of a strategy focused on ESG criteria "allows not only to improve the corporate image in the eyes of the end customer, but also to increase the attractiveness of the company to investors".

Tourism and sustainability: an unstoppable alliance

Beyond the changes that must be made by companies that are already part of this industry, new entrants will have sustainability as a fundamental pillar. Mckinsey & Company's New Business Building survey reveals that 29% of the CEOs surveyed say that the companies they lead will create a green business line in the next five years. In travel, these green businesses will focus on intangible services or sustainable infrastructure.

The environmental perspective is probably the most urgent and the one that is receiving the most attention. Thus, the tourism business is strongly committed to a real threat such as climate change, a challenge whose response has attractive returns, such as the recognition of environmental activists and the general public, as well as investors and financial institutions: "The interest of investors in environmental issues has been increasing, both for the risk and for the business opportunity", acknowledges the lawyer from Circulo Legal Madrid.

Precisely, the latest edition of the International Tourism Trade Fair (FITUR), the sector's benchmark event held in Madrid from 18 to 22 January, through the Sustainability Observatory, has measured for the first time the carbon footprint generated by the event with the aim of reducing it next year.

Ecotourists seek excellence

The trend for tourists to travel more sustainably is growing stronger. "In recent years, consumers have more frequently opted for companies that have developed policies focused on improving sustainability and that demonstrate this with transparency," says Rodríguez.

The lawyer insists that "society's increasingly high level of awareness is pushing people to look for destinations, transport, hotels and leisure activities that stand out for having made green decisions when offering their services", encouraging tourism companies to "carry out a diagnosis as soon as possible in order to set themselves on the path to developing a sustainable and efficient business model".