The hospitality sector is facing major technological and regulatory changes and keeping the pace on asset and operational decarbonization increasingly depends on securing finance to drive this transformation. Green finance provides funding instruments that support businesses that are committed to reducing their carbon footprint for example. Therefore, hospitality businesses that wish to harness these financing opportunities also need to provide the right data on sustainability since green finance is specifically allocated for projects with quantifiable environmental benefits. In the hospitality industry, such projects can include energy efficiency upgrades, renewable energy systems, water conservation measures, or sustainable waste management programs. But research shows that while green finance offers tremendous potential in the transformation of entire sectors and a general agreement that access to finance is a key component to rapid climate action[1], there are many barriers to surmount. Specifically for businesses these include the lack of awareness of green finance products, the complexity of analyzing green finance options, the ambiguity around the assessment of corporate sustainability and the unavailability (better lack?) of sustainability data[2].

So, with this in mind, and with the goal to provide some support to the hospitality sector on green finance, we are asking the following:

  • What is the most effective strategy (or best practice) for identifying, applying for, and securing green finance opportunities tailored to the unique needs and goals of a hotel business aiming to implement sustainable initiatives? (optional: what are the challenges to overcome?)

References:

[1] IPCC (2023). AR6 Synthesis Report: Climate Change 2023. https://www.ipcc.ch/report/sixth-assessment-report-cycle/, p.80

[2] Gilchrist, D., Yu, J., & Zhong, R. (2021). The Limits of Green Finance: A Survey of Literature in the Context of Green Bonds and Green Loans. Sustainability, 13(2), 478. https://doi.org/10.3390/su13020478

Chalana Perera
Chalana Perera
Founder – RETRACE™ Hospitality
Marloes Knippenberg
Marloes Knippenberg
CEO of Kerten Hospitality
Glenn Mandziuk
Glenn Mandziuk
CEO, Sustainable Hospitality Alliance

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Natasha  Montesalvo
Natasha Montesalvo
Principal Consultant – Destination, Strategy and Insight at EarthCheck
Nancy Scanlon
Nancy Scanlon
PhD, Professor at Florida International University

The most effective strategies for securing green finance would seem to focus on evidence of  financial stability and ability to repay financing in a timely manner and the opportunity for  lending institutions to apply an organization's documented environmental, social and governance value (ESG) efforts to their corporate reporting. Investment Business Daily recently noted that "Investors want stocks to align with ESG values". An article in Hotel Tech Report in February of 2023 details the ESG process for the hotel industry. https://hoteltechreport.com/news/hotel-sustainability-statistics 

Related article by Nancy Scanlon

Johanna Wagner
Johanna Wagner
Co-Founder of La Belle EDuC, Founder of Upside Up Hotel Asset and Guest Lecture at ESSEC MSc in Hospitality Management (IMHI)

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Catherine Dolton
Catherine Dolton
Chief Sustainability Officer, IHG Hotels & Resorts
Willy Legrand
Willy Legrand
Professor at IU International University of Applied Sciences Germany