The Pros and Cons of Sustainability Reporting

By Michelle Millar Assistant Professor Hospitality Management, University of San Francisco | November 03, 2013

What is a Sustainability Report?

Corporate sustainability reports, in terms of an exact definition, are just as difficult to pin down, as are sustainability or corporate social responsibility definitions. What the reports include, how they are formatted, how extensive they are, and whether to actually produce one depends upon the company. Essentially, however, sustainability reports communicate the company’s corporate social responsibility efforts to clients and stakeholders. As the Global Reporting Initiative (GRI) explains, “A sustainability report is an organizational report that gives information about economic, environmental, social and governance performance”. “A report conveys disclosures on an organization’s impacts – be they positive or negative…”, and is often available as a stand-alone document separate from financial annual reports and other financial information. Instead, the reports focus on the “people and planet” side of sustainability. Other common names for a sustainability report are corporate responsibility report, environmental report, corporate citizenship report, accountability report, and social report. Although some companies have been producing reports for many years, such as 3M who first started reporting in the early 1990’s, reporting is relatively new in the lodging industry. Creating and publishing a sustainability report is completely voluntary – for now. There are some that would like to make the practice mandatory so that sustainable efforts, or lack-thereof become very transparent for the public. In fact, in China, all state owned companies must produce a sustainability report. Although private companies do not have this requirement, the number of them producing reports in China is also on the rise. In the United States, however, no such requirements exist.

Global Reporting Initiative

In response to the growing number of companies that are producing sustainability reports, the non-profit Global Reporting Initiative (GRI) was created. Their primary purpose is to promote environmental and social sustainability, and provide “all companies and organizations with a comprehensive sustainability reporting framework that is widely used around the world”. As such, they have created guidelines for reporting that are meant to help companies produce reports “that matter, contain valuable information about the organization’s most critical sustainability-related issues, and make such sustainability reporting standard practice”. The guidelines, first reported in 2000 and now in their fourth iteration called G4, are broken down into three categories – economic, environmental, and social with different “aspects” under each category. For example, under the environmental category, different aspects are related to emissions, water and effluents and waste. There are also 4 sub-categories under Social – labor practices and decent work, human rights, society, and product responsibility – with each of those sub-categories comprised of their own “aspects”. At first glance, when reading all of the guidelines, they appear complicated. In fact, they are not, and they actually simplify the reporting process. The Marriott Corporation uses the GRI guidelines to produce its sustainability report, as do Shangri-La, Wyndham Worldwide, and Mandarin Oriental.

The Marriott Corporation has been involved with sustainability for years, especially when it comes to giving back to charities and the local communities in which its hotels operate. It is only within the past few years, however, that they have been publishing extensive sustainability reports. Their most recent report for 2013 highlights their sustainable efforts for 2012 that include social, as well as environmental efforts, and talks about the charities with whom they have partnered. The report is lengthy, and is primarily accessible online via their website. The question one might ask, however, is who reads the report? Or, does anyone even know such a report exists? If so, would anyone find it interesting reading? Perhaps, most importantly, one might ask, “why even produce a sustainability report”? Read further for the pros and cons of producing sustainability reports – staring with the “cons”, and ending on a positive note with the “pros”.

Cons of Sustainability Reporting

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Guest Service: Empowering People

Excellent customer service is vitally important in all businesses but it is especially important for hotels where customer service is the lifeblood of the business. Outstanding customer service is essential in creating new customers, retaining existing customers, and cultivating referrals for future customers. Employees who meet and exceed guest expectations are critical to a hotel's success, and it begins with the hiring process. It is imperative for HR personnel to screen for and hire people who inherently possess customer-friendly traits - empathy, warmth and conscientiousness - which allow them to serve guests naturally and authentically. Trait-based hiring means considering more than just a candidate's technical skills and background; it means looking for and selecting employees who naturally desire to take care of people, who derive satisfaction and pleasure from fulfilling guests' needs, and who don't consider customer service to be a chore. Without the presence of these specific traits and attributes, it is difficult for an employee to provide genuine hospitality. Once that kind of employee has been hired, it is necessary to empower them. Some forward-thinking hotels empower their employees to proactively fix customer problems without having to wait for management approval. This employee empowerment—the permission to be creative, and even having the authority to spend money on a customer's behalf - is a resourceful way to resolve guest problems quickly and efficiently. When management places their faith in an employee's good judgment, it inspires a sense of trust and provides a sense of higher purpose beyond a simple paycheck. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.