The demand for sustainability information from stakeholders is growing rapidly. Governments and regulators worldwide are increasingly mandating sustainability reporting for businesses, including the tourism sector. Understanding whether and how your tourism business needs to comply is essential for staying competitive and building trust. 

Sustainability reporting is the process of publicly sharing a business’s environmental, social, and governance (ESG) impacts. These reports not only demonstrate commitment to sustainability but also provide transparency for customers, investors, and regulators. Let's start with the basics.

Here is a chart from the UNWTO that shows in general terms what ESG means for tourism business: 

• Investors: In 2023, 98.6% of companies in the S&P 500 published sustainability reports (source: G&A Institute).

• Consumers: Among U.S. consumers, 69% agree businesses should communicate more about sustainability and social impact (source: TriplePundit). 

• Government: Governments are increasingly enforcing sustainability reporting. A survey of senior executives from 750 companies found that 66% of respondents say their companies must now report ESG data or will soon be required to do so. The percentage is even higher, 78%, for listed companies (source: KPMG). 

In addition: 

• Competitive advantage: A sustainability report can differentiate your business and attract these eco-conscious customers.  

• Transparency: Sustainability reporting enhances corporate reputation and builds trust.   

• Access to financing: Investors are prioritising companies with strong ESG criteria. A well-crafted sustainability report can improve access to capital and attract investment from sustainability-focused funds. 

• Risk mitigation: Proactively reporting sustainability helps manage regulatory and reputational risks, allowing your business to stay ahead of potential issues. 

• Efficiency: Sustainability reporting identifies areas to improve efficiency and reduce costs.   

Today, the scope of ESG frameworks and standards can be overwhelming for tourism businesses due to the wealth of information available and the lack of uniformity between the different frameworks that exist. While many of these frameworks are voluntary, they derive their authority from two key sources: legislation and endorsement by relevant international bodies and stakeholders (such as the United Nations).

Here are some key concepts (source: UN Tourism): 

Voluntary frameworks: Flexible and often sector-specific, these help businesses start sustainability reporting but lack enforceability. 

Examples: 

• Global Reporting Initiative (GRI): Guides companies in reporting sustainability impacts. 
  Example: A hotel chain shares its carbon reduction efforts. 

• Biosphere Tourism Certification: Evaluates sustainable practices in tourism. 
  Example: An eco-lodge promotes itself to sustainable travelers. 

Mandatory regulations: Legally enforced, ensuring transparency and comparability. 

Examples: 

• EU Corporate Sustainability Reporting Directive (CSRD): Requires large firms to disclose ESG impacts using strict standards. 
  Example: A UK airline operating in the EU reports its environmental footprint. 

• UK TCFD Disclosures: Obligates firms over £500M turnover to assess climate risks. 
  Example: A travel agency aligns financial risks with climate targets. 

1. Materiality analysis: identify ESG impacts, risks and opportunities that are relevant to the company's business model. 
2. Set key metrics: Identify relevant indicators, like water usage or plastic reduction.
3. Collect consistent data: Use digital tools to track your metrics.
4. Follow standards: Use frameworks like GRI or the Greenhouse Gas Protocol to structure your reports.
5. Communicate efforts: Share your report on your website or with partners and clients.