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How ESG principles are shaping the future of tourism and hospitality

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The travel and hospitality industry can no longer shy away from accelerating ESG principles. In an Op-Ed article, TRSDC Chief Governance Officer Dr. Maryam Ali Ficociello said that ESG plays a key role in advancing the sustainability agenda.

If left unchecked, greenhouse gas emissions could reach record highs by 2023. At the same time, it is predicted that climate change could reduce the annual output of the global economy by as much as $23 trillion by 2050.

Environmental, social and governance (ESG) considerations are no longer a niche topic confined to the boardroom. This is something that affects us all.

This is why the need to address these issues is increasingly permeating consumer values, and the travel industry is no exception. More and more travelers are taking a new approach to responsible travel and expressing a strong preference for destinations that demonstrate a sustainable spirit. There is also a focus on how developers can benefit the local community, thereby acknowledging their social responsibility.

These trends are stark reminders that the travel and hospitality industry can no longer shy away from accelerating ESG principles. Be it governments, businesses or investors, ESG plays a key role in advancing the sustainability agenda. This requires setting the right goals and measuring what matters, as well as creating the right incentives to promote sustainable investment – ​​an approach we think is mainstreaming in Saudi Arabia.

top-down transition

Saudi Arabia’s announcement that it will achieve net-zero emissions by 2060 has sparked a call for action that ripples across the public and private sector ecosystems. Sustainability is at the heart of Vision 2030, with ambitions to look at the energy transition, achieve the Sustainable Development Goals (SDGs) and forge the way forward for a new round of investment. Other national initiatives, such as the Saudi Green Initiative, have also inspired national ESG outlooks. Likewise, the Saudi Public Investment Fund (PIF), which aims to allocate $1 trillion in investments by 2025, has put ESG principles firmly at the center of its considerations.

The role of investors

The investment community has an important role to play in holding organizations accountable. They are key players in driving the effective adoption of ESG and reporting across industries. Investors in both the public and private sectors are in a prime position to ask companies to provide fact-based reporting on how their funding will support positive change.

As Austrian-American management consultant, educator and author Peter Drucker put it, “What gets measured gets managed.” Sir, I have seen firsthand how a structured, highly integrated and compliance-driven approach to ESG can drive organizational change at scale.

ESG in practice

At TRSDC, we’re going beyond project governance to ensure it’s not just business as usual. Every step of the way, we support a sustainable approach based on our core principles. Not only do we comply with local legal and regulatory framework requirements, but we aim higher by adopting world-leading governance practices. Our robust reporting demonstrates how we systematically address ESG factors in our core business in accordance with the Global Reporting Initiative (GRI) and the Global Real Estate Sustainability Benchmark (GRESB). In fact, the latest Benchmark ranks us in the top 20% of outstanding organizations and recognizes us as a regional sector leader.

Ultimately, through these efforts, our goal is to present the industry with a successful blueprint for raising the bar on ESG standards like never before. We want to demonstrate that by prioritizing ESG as a core component of our business strategy, we can all collectively benefit from investing in higher standards of sustainability, accountability and transparency. –arab trade news agency

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