Sustainability-Driven Legislation - Setting The Right Conditions For Hospitality? A Review Of Viewpoints

21 experts from the HospitalityNet Sustainability in Hospitality Panel shared their thoughts on Sustainability-driven legislation: setting the right conditions for hospitality?: A review of viewpoints.

By Willy Legrand - Professor of Hospitality Management at the IU International University of Applied Sciences, Germany

29 March 2021
Legrand

From single-use plastics to building efficiencies, from extended producer responsibility (EPR) to user-pays principle (UPP), regulations are an intricate component of how society governs environmental impacts. Of course, there seems to always a fine balance between reactive and proactive approaches to regulations, between 'Too late: cleaning up' and 'Too early: stifling innovation'.

Case in hands are the phasing out of chlorofuorocarbons (CFCs) via the Montreal Protocol or the banning of lead in gasoline (Sidkar, 2019). Those successes support the argument that bans are the way forward to achieve substantial changes. In the words of Prof Geyer from UC Santa Barbara: "Not with cap and trade systems, not with taxes, not with offsets, not with capture and sequestration, but with bans" (Geyer, 2021, para 3). Putting a price tag on emissions is also argued. The Potsdam Institute for Climate Impact Research reasons that a 'two carbon pricing system' may provide the necessary levers to achieve climate neutrality by 2050. Legislation, if undertaken wisely, can promote innovation, rather than hindering it (Patanakul and Pinto, 2014).

From bans to market pricing, from directives to legislation; all affect the way we'll do business in the near future, and my panel co-host, Franziska Altenrath asked: where do hospitality and tourism experts stand on the topic?

Too little too late? Setting a level playing field? Or spokes in the wheels?

The summary of expert entries is based on the following seven sections:

  • Legislation as Level Playing Field
  • Legislation and Risk
  • Legislation and Value Chain
  • Restrictive versus Supportive Legislation
  • Legislation, Externalities and the Commons
  • Legislation and Politics
  • Regulations in Practice

The following figure provides an overview of key points discussed by business professionals, academic researchers, industry consultants and NGO leaders, followed by key entries from all experts:

Sustainability-Driven Legislation - Setting The Right Conditions For Hospitality? A Review Of Viewpoints
Sustainability-Driven Legislation - Setting The Right Conditions For Hospitality? A Review Of Viewpoints
  • Legislation as Level Playing Field

Moreover, as Eric Ricaurte, Founder at Greenview reports, 'more and more legislation is coming, whether we like it or not'. So, taking this as a starting point, Inge Huijbrechts from Radisson Hotel Group argues that 'the benefit of legislation is that it creates a level playing field and can be an accelerator'. This is echoed by Stefan Gössling, Professor at Linnaeus University whereby 'common climate policies can create a level playing field for all'.

  • Legislation and Risk

As climate-related financial risk reporting is set to become mandatory (under Task Force on Climate-Related Financial Disclosures (TCFD)), Ricaurte argues that indeed, legislations 'will fall under the umbrella of Transition Risk or the regulatory risk that companies will be expected to monitor and manage'. Therefore, our industry is set to see numerous types of climate legislations toward reporting and performance. And this is urgently needed argues Lucienne Mosquera, Founder of Hospitality Business Development, since we have experienced an exponential growth of sustainable finance offers under the ESG umbrella, 'hence why the finance sector, which is normally ambivalent at best about regulation, is widely welcoming more regulation and clear disclosure standards.'

Assessing risk is critical to businesses in all sectors of course and Maurice Bergin, Managing Director at GreenHospitality.ie reinforces that 'tourism businesses worldwide should be applying risk analysis already to identify how they will maintain their profitability as conditions change - both financially and climatically'. Trevor Girard, Director of Standards and Accreditation at Hotel Resilient, further explains that risk assessment should be used to drive sustainable legislation, 'just as land-use plans are based on risk assessments, proactive sustainable legislation requires the identification of risk factors that consider the impacts of human activity on the environment and the impacts of climate change'.

  • Legislation and Value Chain

Along the same lines, Madhu Rajesh, CEO at the Sustainable Hospitality Alliance, adds that legislation 'can also ensure that the responsibility for improving sustainability is shared more throughout the value chain'. This is particularly relevant since sustainable hospitality does not translate into 'one company trying to do its very best in a given market' but rather, it is an entire industry that stands up to face the environmental and societal challenges. Legislation is only a part of the sustainability journey as Marloes Knippenberg, CEO of Kerten Hospitality, argues that 'no legislation or tax exemption can build more impactful and outcome-focused initiatives than public-private efforts that prioritise a sustainability agenda and help ensure each entity is "walking the talk"' since 'a policy is only as strong and meaningful as its implementation across the whole value chain'. In some cases, regulations are established following pressures from community-driven initiatives. Sarah Habsburg-Lothringen, Business Mentor for Small, Independent Hotels, presents an interesting case in Chile where a local government prohibited the use of plastic bags following pressure from accommodation owners who wished to preserve the natural beauty of their destination; a key selling point. Habsburg-Lothringen therefore maintains that 'we need and value the legislation, but as you can see from my case study, immediate action can be taken with insight and collaboration'.

  • Restrictive versus Supportive Legislation

A recurring theme discussed by panel experts is the balance between restrictive and supportive legislation. Sam Laakkonen, Contingent Managing Director Sustainability at Techstars mentions that 'governments employ a wide range of methods to build a more sustainable future such as increased taxation on more harmful technologies and tax incentives on greener options'. For example, Laakkonen argues that 'we already have relatively mature technologies to solve most if not all of these issues' and therefore, what is required is for governments to take a more aggressive and proactive approach in driving the change and support technology deployment. Supported with many examples, Cassia Patel, Program Director of Oceanic Global, also states that 'legislation is a critical tool for behavior change to encourage innovation in technology as well as to catalyze a market shift towards responsible consumption'.

  • Legislation, Externalities and the Commons

Another recurring theme is the way governments and businesses deal with externalities. Xenia zu Hohenlohe, Partner/Director at Considerate Group, argues that legislation is required to create a 'solid framework around the costs or taxes on externalities, such as the use of water in production of products, sand for cement […] to Co2 emissions'. Lucienne Mosquera, Founder of Hospitality Business Development, maintains that 'the most direct way governments can green the economy is not by changing incentives, but by tough action to regulate it directly', by putting a price tag on environmental externalities. Franziska Altenrath, Co-Founder at TUTAKA, explains that governments must ensure a reduction of green premiums (e.g. the additional cost of adopting a clean technology) and this can be achieved 'by internalising externalities into conventional practices (for e.g. cap-and-trade, carbon or import taxes) or banning them entirely (for e.g. ozone depleting substances or certain types of single-use plastics)'. Frauke Fischer, Founder of Agentur Auf!, refers back to the Tragedy of the Commons, with public goods are prone to unsustainable use but also warns that in regards to biodiversity and ecosystem service, 'we should not let the "free market" define the rules of consumption and trade of natural goods (and services)'. Fischer therefore calls for a system of strict rules and regulations that are 'urgently needed to stop the erosion of biodiversity and ecosystem services - for the benefit of all of us'.

  • Legislation and Politics

Kathy McGuire, Principal Sustainable Development at 3 Pillar Solutions, LLC, discusses the changes in the US administration and the 2050 net zero horizon but also warns that 'given that this bold action plan relies on feuding politicians in Congress to pass the legislation, the outcome is uncertain'. Federico Vignati, Principal Executive at CAF - development bank of Latin America, recaps that 'legislation should and will follow up the Paris Agreement and the overall social push for change'.

  • Regulations in Practice

Simon Martin, Head of Development Hospitality-Catering at IECD, argues that when looking at tourism development, 'imposing laws or updating existing ones that would restrict the wilder developments, brings rules and obligations that favour best practices' is critical. Johanna Wagner, Co-Founder of La Belle EDuC, also sees 'the need for more regulations in all areas under the sustainability umbrella' citing the smoking bans as an example to understand the benefits of legislation. Who would want to go back to restaurants filled with smoke? However, in regards to climate issues, 'getting hotels (and other buildings) to make this change will probably take more than regulation—it will also require financial support' argues to Dan Ruben, Director at How to Green Your Hotel. Celine Vadam, Founder & CEO of WE(i) Think, further argues that 'sustainability-driven legislation should not be only falling on the governments, but also be a responsibility for hospitality operators and investors'. Vadam provides examples of documents which have an overall impact on the way the industry operators from design standards to lease/management/franchise agreements and operating guidelines. These are 'effective tools to enforce, monitor and report on sustainability practices at property level' maintains Vadam with the potential to set environmental performance targets 'and enforce them into operating agreements'. Along the same line, Jonathon Day, Graduate Program Director School of Hospitality and Tourism Management at Purdue University has identified, via an analysis of the Global Sustainable Tourism Council (GSTC) destination criteria , that environmental and social policies are required to support sustainable tourism. This also includes 'legislation to eliminate exploitation and discrimination, protect property rights, and ensure the safety of workers and visitors'. This is a call for proactive, supportive and forward looking actions to governing authorities.

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Sustainability-driven legislation: setting the right conditions for hospitality?

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References

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IU International University of Applied Sciences

Muelheimer Strasse 38
Bad Honnef, 53604
Germany
Phone: +49 (0)30 220 272 80
www.iu.org

Willy Legrand

Dr. Willy Legrand is Professor of Hospitality Management at the IU International University of Applied Sciences in Germany since 2003. Over the past 15 years, he has established over two dozen undergraduate and graduate courses on sustainable development in tourism and hospitality management in Germany but also as a visiting professor at universities in China, Dubai, Singapore, France, India, Peru and the United States. Prof. Dr. Legrand is the lead author of Sustainability in the Hospitality Industry: Principles of Sustainable Operations, a leading textbook used across universities globally now in its 4th edition. He is the lead author of Social Entrepreneurship in the Hospitality Industry: Principles and Strategies for Change is a timely book addition tackling the many challenges facing the industry in the coming decade. Prof. Legrand is also the Guest Chief Editor of the Hotel Yearbook Sustainable Hospitality 2018 and 2020 Special Editions. Since 2019, he co-chairs the HospitalityNet World Panel on Sustainability in Hospitality. The panel tackles all sustainability issues (e.g. around energy, water, waste, food, facilities, communication, social, and strategy) and is supported by more than 90 industry professionals, consultants and scientific experts across many fields. The aim is to get sustainability anchored more than ever into the tourism and hospitality conversation and decision-making. Prof Legrand received the “Bridging the Gap” Award 2020 from the European Council on Hotel, Restaurant and Institutional Education (EuroCHRIE) for his work promoting close cooperation between the industry and academia.

Willy Legrand

Prof, Department of Hospitality, Tourism and Event Management
Phone: +49 (0) 2224 9605 209
willy.legrand@iu.org