Evaluating Hotel Sustainability: A Guide for Procurement Teams

Sustainability has become a priority across all aspects of corporate travel, including transportation, accommodation, and amenities. 

Hotels face increasing scrutiny to adopt environmentally friendly practices as global carbon emissions continue to rise. Meeting international climate goals and adhering to emerging regulations necessitates a comprehensive Environmental, Social, and Governance (ESG) strategy within the hospitality sector.

Key elements of such a strategy include addressing carbon emissions and incorporating carbon offset initiatives to mitigate the environmental impact of hotel operations and development. 

Procurement's Role in Sustainable Hotel Partnerships 

Procurement teams increasingly favor hotels with strong sustainability credentials. Properties certified by eco-labels like LEED or Green Key or those actively pursuing eco-friendly initiatives align well with corporate sustainability goals. This approach strengthens the brand image and attracts travelers who prioritize environmental responsibility. 

The hospitality industry accounted for approximately 3% of global carbon emissions, with one-third stemming from hotel operations and the remaining from embodied carbon—emissions associated with construction and renovation. Tackling embodied carbon, which represents a significant portion of a hotel’s lifetime emissions, remains under-addressed but critical for a truly sustainable approach. 

To support procurement professionals in evaluating hotel sustainability, the Global Business Travel Association (GBTA) has developed a guide for selecting hotel suppliers. 

Key questions to ask during the RFP process include: 

• Does your hotel have a formal sustainability policy with measurable goals? 
• Is renewable energy a significant source of your hotel's energy consumption? 
• Are water reuse and food waste reduction initiatives implemented? 
• Does your hotel use eco-certified cleaning products? 
• Are investments made in local or community sustainability projects? 

Pathways to Hotel Sustainability 

1. Reducing Fossil Fuel Dependency 

Fossil fuels are responsible for more than 75% of global greenhouse gas emissions, positioning them as the leading drivers of climate change. Hotels can transition to renewable energy sources, such as solar panels or geothermal energy, to reduce their reliance on fossil fuels and lower CO2 emissions. 

2. Automating Energy Consumption 

Smart energy management systems can optimize energy use through real-time monitoring, while automated technologies, like motion-sensor lighting and temperature controls, further reduce energy wastage. 

3. Expanding EV Charging Infrastructure 

Leading hotel chains like IHG and Hilton are incorporating EV chargers into their properties, enhancing guest convenience and positioning themselves as eco-friendly establishments. For instance, Hilton has installed EV chargers at over 1,850 locations and plans to expand this infrastructure significantly across North America.

Additional Read: SHIFTING TO RENEWABLE ENERGY PROCUREMENT AND WHY IT MAKES PERFECT BUSINESS SENSE 

Moving Beyond Carbon Offsetting 

Carbon credits represent permits allowing organizations to emit a specific amount of CO₂, typically one ton. They are crucial for carbon offsetting, where unavoidable emissions are compensated by funding projects like reforestation or renewable energy. While internal sustainability measures can reduce emissions, the hospitality sector cannot eliminate embodied carbon from construction and renovation. Therefore, carbon offsetting remains essential for meeting short-term sustainability targets. 

To integrate carbon credits effectively, hotels should: 

1. Review Carbon Credit Use: Ensure carbon credits are appropriately applied to sustainability goals. 

2. Analyze Impact: Evaluate how carbon credit purchases affect ESG objectives, consumer perceptions, and financial performance. 

3. Report Transparently: Provide clear and accurate reporting on carbon credit usage. 

Conclusion: Embracing ESG for a Sustainable Future 

As the hospitality industry faces mounting environmental challenges, adopting an informed and ethical ESG approach will be critical for future success. Early movers in creating robust carbon offset strategies will not only align with regulatory shifts but also capture the loyalty of eco-conscious travelers. By investing in renewable energy, energy efficiency, and transparent reporting, hotels can enhance their reputation as environmentally responsible businesses while driving meaningful change toward sustainability. 

Author: Rohit Mutkiri