Sustainable tourism is a pressing issue that requires organizations to adopt innovative technologies and data management practices. This article discusses the importance of standardized reporting, the Corporate Sustainability Reporting Directive (CSRD), and sustainability certifications in enhancing the credibility of the tourism industry. This article explores how new technologies can create a credible business case for sustainability while ensuring societal and environmental well-being.

Sustainable tourism has become a contentious topic in recent years, prompting the industry to adopt organizational dynamismby integrating big data analytics and verification into their regular reporting processes.
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The role of technology in sustainable tourism

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The 54th Annual Meeting of The World Economic Forum that was held in Davos-Klosters, Switzerland from 15th to 19th January 2024 focused on exploring the opportunities enabled by new technologies and their implications on decision-making and global partnership. In terms of sustainability, the forum highlighted the need for a credible business case for sustainability and a holistic approach to sustainability and data management, which would enable organizations to create value while ensuring the well-being of society and the environment. According to a report by the Capgemini Research Institute companies are truly developing in the right direction. For example, the number of executives globally who understand the business case for sustainability has tripled between 2022 and 2023! The report emphasizes that organizations can make a substantial impact by progressing on reporting emissions and implementing and leveraging sustainability management technology.  Read the full report here: The Future of Growth Report 2024 | World Economic Forum (weforum.org)  

The 54th Annual Meeting of The World Economic Forum highlighted opportunities enabled by new technologies. Key points include:

• Increased awareness: The number of executives understanding the business case for sustainability has tripled from 2022 to 2023.
• Impactful reporting: Organizations can significantly impact sustainability by improving emissions reporting and leveraging management technology.

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Importance of the Corporate Sustainability Reporting Directive (CSRD)

The CSRD is crucial for the hospitality and tourism industry, especially as it rebounds from recent challenges. Key insights include:

• Economic relevance: The global GDP contribution from tourism is expected to rise from $9.5 trillion in 2023 to $15.5 trillion by 2033.
• Alignment with SDGs: The tourism sector directly supports three out of the 17 Sustainable Development Goals:
  • Goal 8: Decent work and economic growth
  • Goal 12: Responsible consumption and production
  • Goal 14: Life below water

This underscores the significance of the CSRD, already making a substantial impact on the Hospitality and Tourism Industry. Despite challenges from international travel restrictions due to geopolitical crises and the effects of Covid-19, the sector, being a major contributor to the EU economy, is expected to rebound and fully recover in the coming years. Projections indicate the industry's economic relevance, with the global GDP contribution forecasted to increase from 9.5 trillion US dollars in 2023 to an impressive 15.5 trillion US dollars by 2033.

The tourism and hospitality sector plays a pivotal role in economic development and achieving Sustainable Development Goals (SDGs), directly aligned with three out of the 17 goals. Direct mentions of the industry are found within Goal 8 (Decent work and economic growth), Goal 12 (Responsible consumption and production), and Goal 14 (Life below water). Despite its criticism for adverse environmental and social effects, the industry must strike a balance.

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Balancing economic, environmental, and social impacts

To manage tourism's impacts effectively, data credibility is essential. Important considerations include:

• Granular data: Accurate spatio-temporal data helps monitor business entities.
• Indicator frameworks: The EU standardized framework under the CSRD measures sustainability across ESG factors.

To manage the economic, environmental, and social impacts of tourism and reach a balance between all 3 pillars, data credibility is crucial! Granular and accurate spatio-temporal data is essential to monitor and sustain various business entities. Indicator frameworks, including the EU standardized framework under the CSRD – European Sustainability Reporting Standards, aim to measure sustainability across environmental, social, and governance (ESG) factors. And we are talking not only about the large industry players, the CSRD will likewise significantly impact SMEs of the industry, which constitute about 99% of the +2 million tourism businesses in the EU. SMEs must comply with reporting requirements by January 1, 2026, covering a wide range of ESG factors.

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CSRD ‘s impact on Small and Medium Enterprises (SMEs)

The CSRD will significantly affect SMEs, which make up about 99% of EU tourism businesses. Key points include:

• Compliance deadline: SMEs must comply with reporting requirements by January 1, 2026.
• Industry-specific data analytics: Tailored frameworks assist SMEs in aligning with national sustainability strategies.

Besides the necessary application of the European Sustainability Reporting Standards (ESRS), studies also emphasize the role of industry specific data analytics in helping the tourism and hospitality industry outline data-related aspects in the tourism ecosystem, aiding informed decisions aligned with the SDGs and national sustainability strategies.  

Some of the industry-tailored frameworks worth mentioning are, for example, created by the SASB. The SASB sector-specific frameworks provide ESG data through specific indicators, representing a core element of development research and a central pillar of the SDGs. Alongside UN's SDGs, tourism-specific indicators from UN Tourism, Global Sustainable Tourism Council (GSTC), European Commission, and European Environmental Agency (EEA) enhance transparency and accountability.
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Role of sustainability certifications

Sustainability certifications are vital for transparency and accountability in the tourism sector. They provide:

• Trusted information: Certifications serve as reliable sources for consumers.
• Competitive advantage: Businesses can demonstrate leadership through recognized certifications

What is also great about using industry tailored frameworks is that the traceability of the collected data can be supported by various types of assurance tools, such as certifications. Sustainability certifications serve not only as a trusted source of information for consumers who are one of the most important stakeholders within the various types of industry businesses but additionally these certifications can be used to gather information about the status-quo of the business in question, and serve as a gap analysis and support data-based strategic decision making that further accelerates sustainable development. Certifications are regarded as a suitable means to facilitate ecological progress, especially about clean water and energy efficiency, sustainable consumption, and climate mitigation. They can also help businesses demonstrate their leadership and help gain a competitive advantage.  

Beyond institutional labels such as the EU Ecolabel, introduced by the European Commission to highlight resource and energy efficiency and other environmental, social and governance factors, non-profit organizations and private sector entities have additionally introduced green certifications of their own, guiding the hospitality industry towards more sustainable practices. Examples are Green Key, Green Globe, Biosphere or EarthCheck to name a few. On top of that, other tourism stakeholders such as marketplaces have created their own indicative labels, e.g., Booking.com’s Travel Sustainable Level.  

Types of sustainability certifications

Various certifications guide sustainable practices in hospitality. To mention a few:

• EU Ecolabel
• Green Key
• Green Globe
• Biosphere
• EarthCheck
• Booking.com’s Travel Sustainable Level

To summarize, the utilization of standardized frameworks for obtaining verified data is deemed crucial in enhancing corporate sustainability endeavors within the Tourism and Hospitality industry. These frameworks serve as valuable tools to clarify information, while also garnering support for strategic decision-making based on data. Certifications, whether from institutional or private sources, play a pivotal role in providing a comprehensive understanding of the current situation and optimal choices within the Tourism and Hospitality sector for all stakeholders. Undoubtedly, the industry is progressing in the right direction!

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Frequently Asked Questions (FAQs)

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Q: What is sustainable tourism?

A: Sustainable tourism focuses on minimizing environmental impact while maximizing social benefits.

‍Q: Why is the CSRD important?

A: The CSRD provides a framework for organizations to report on their sustainability efforts transparently.

‍Q: How do certifications benefit businesses?

A: Certifications enhance credibility, attract environmentally conscious consumers, and provide a competitive edge.

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