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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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.