Companies in the hospitality industry are becoming increasingly aware of the importance of adopting sustainable and responsible practices, not only to enhance their reputation but also to positively contribute to the well-being of the environment and the society in which they operate.
What does ESG have to do with all of this?
ESG stands for Environmental, Social, and Governance. It’s a set of criteria used by investors, organizations, and businesses to evaluate the performance of a company or investment in these three interconnected areas. When we talk about sustainability, or specifically sustainable hospitality, we need to broaden our perspective to include aspects beyond merely reducing CO2 emissions, and consider all the ways in which the company interacts within the social and financial ecosystem – from supplier selection to social inclusivity practices and the policies regulating the well-being of human resources at every level.
ESG Criteria for Hospitality
Like many other industrial sectors, companies in the hospitality industry can be evaluated, and evaluate themselves, based on ESG criteria by considering the impact of their activities on the environment, society, and governance.
Environmental Criterion
This refers to corporate practices and policies related to the environment, such as natural resource management, greenhouse gas emission reduction, energy efficiency, waste management, and biodiversity conservation.
Examples of good practices in this regard include:
- Reducing greenhouse gas emissions: promoting energy efficiency, the use of renewable energy sources, and sustainable waste management.
- Water and energy savings: implementing technologies and practices to reduce water and energy consumption, such as installing low-energy systems, thermal insulation, and water recycling.
Social Criterion
This concerns how a company manages relationships with its employees, suppliers, customers, and communities. It includes aspects such as workplace relations management, diversity and inclusion, employee health and safety, and the social impact on the area where the company operates.
For example:
- Ethical employment and workers’ rights: promoting ethical workplace policies and conditions, respecting workers’ rights, ensuring safe and healthy working conditions, and fostering diversity and inclusion.
- Engagement and benefits for local communities: actively collaborating with local communities to understand and mitigate negative impacts, fostering a positive relationship with the territory, and promoting overall well-being.
Governance Criterion
This refers to how a company is managed. It includes transparency of information, board independence, corporate ethics, anti-corruption efforts, and executive accountability.
How can you activate this?
- Transparency and accountability: implement transparent and responsible governance practices, ensuring proper disclosure of financial and operational information, compliance with regulations, and good corporate conduct.
- Corporate control and direction: adopting management practices that ensure adequate control and effective strategic direction to address ESG risks and opportunities.
IoT Systems Supporting Hospitality ESG
To pursue such an ambitious and complex goal, companies (hotels and groups) need to adopt operational and decision-making tools that can assist and guide them. Technology and AI are no longer employed solely for the individual interests of the company but become tools that support the improvement of its existence and those who interact with it (suppliers, employees, local residents, environment, etc.).
IoT (Internet of Things) systems can significantly support hotels’ ESG policies, contributing to sustainability and operational efficiency in various ways:
- Energy consumption monitoring and control: IoT devices can monitor and control energy use in hotels, optimizing lighting, heating, ventilation, and air conditioning (HVAC) based on needs, leading to more efficient energy use and reduced carbon emissions.
- Water consumption reduction: Smart sensors can detect and analyze water consumption data, helping hotels identify leaks or waste and implement corrective actions to reduce water use.
- Waste management: IoT can be used to monitor waste containers, optimizing collection and recycling operations, and reducing the volume of waste sent to landfills.
- Supply chain traceability and transparency: Hotels can use IoT systems to monitor and trace the origin of products used on-site, promoting sustainable and transparent sourcing practices.
- Promotion of sustainable transportation: Hospitality facilities can implement IoT systems to encourage the use of sustainable transportation options like bicycles and electric vehicles by offering incentives or facilitating car-sharing service bookings.
- Guest engagement and awareness: using IoT devices in guest rooms, hotels can provide real-time information on energy and water use, educating guests to reduce their environmental impact during their stay (eco-informative feedback).
The effective implementation of interconnected systems can enable hotels to more accurately measure and monitor their environmental, social, and governance impacts, not only to reduce operational costs but also to promote social and environmental responsibility.
The Role of BI in Hotel ESG
The integration of ESG criteria into investment decisions and corporate strategies in the hospitality sector is increasingly recognized as a good practice for promoting long-term positive impact and sustainable management of resources and business relationships.
Business Intelligence (BI) solutions can play a significant role in helping hotels improve their ESG ratings and successfully integrate ESG criteria into their corporate strategy.
The contribution of BI can be realized in many ways, with the five most salient points being:
- ESG data collection and analysis: BI solutions enable easy and intuitive collection, integration, and analysis of data related to ESG criteria. Data collected from IoT sensors, such as energy consumption, waste management, water use, and other environmental metrics, become meaningful when linked to metrics and KPIs, supporting advanced analyses to help hotels better understand their impact and identify areas for improvement.
- ESG performance monitoring: real-time dashboards and reports allow tracking of key metrics, measuring the impact of business decisions, and monitoring progress toward established ESG goals through the use of milestones and predictive analysis.
- Identification of areas for improvement: Advanced analyses allow the identification of areas where improvements can be made to achieve maximum impact on the environment and society, from resource optimization to waste reduction to improving environmental and social sustainability.
- Transparent reporting and disclosure: Producing accurate and detailed ESG reports allows sharing information with internal and external stakeholders, such as investors, certification organizations, customers, and regulatory authorities, in a clear and transparent manner.
- Supporting ESG-oriented corporate strategy: Real-time analysis and predictive insights enable better alignment of hotel corporate strategy with ESG principles, incorporating these considerations into the development of management and operational strategies.
The introduction of Advanced Analytics tools in hospitality facilities can be achieved through ready-to-market pre-configured tools (such as the BBI x Hospitality solution), without precluding the possibility of customization that such Business Intelligence models allow.
We realize Business Intelligence & Advanced Analytics solutions to transform simple data into information of freat strategic value.
