Why Double, When We Must Go Triple? Materiality and Hospitality

1. More than a great idea, an imperative but still some years away to mainstream adoption as no widespread/recognised framework exists for triple materiality, yet.

2. If it can be proven to increase future asset value, possibly meet/exceed local planning requirements and to offer a more relatable and reassuring sustainability alignment message to guests' own narratives.

3. Recognition by financial and insurance industry as a key comparative metric. With urban planning typically following as cities become ever increasing carbon wells.

Under the Corporate Sustainability Reporting Directive (CSRD), companies are expected to disclose how their climate targets align with the global goal of limiting warming to 1.5°C. While the CSRD does not require organisations to obtain approval from the Science Based Targets initiative (SBTi), it does require transparency about whether their emissions-reduction targets are science-based and consistent with climate science. This makes science-based targets an important benchmark for demonstrating the credibility of a company’s climate strategy, helping investors, customers and other stakeholders assess whether sustainability commitments are supported by a clear and measurable path towards net-zero emissions.

Double materiality is an important step forward, but on its own it does not yet tell us whether hospitality is moving fast enough - or in the right direction - relative to planetary and social thresholds. That is why the idea of triple materiality is so compelling.

In principle, it is exactly the challenge our sector now needs. Hospitality depends entirely on healthy destinations, resilient communities, stable resources and long-term trust. So materiality cannot stop at what is financially relevant today, or even at what impacts we disclose today. It must also ask whether our growth model, asset strategy and operating trajectory are compatible with the limits of the systems we rely on.

Where it changes decisions is in development, renovation and resource use. A conventional double materiality lens may justify expansion if demand, returns and mitigations look acceptable. A threshold-and-trajectory lens may force a different conclusion: not here, not at this scale, not unless the pathway is genuinely aligned with place-based limits.

To make it operational, we need shared metrics, credible baselines, local thresholds, transition pathways and governance that links disclosure to decisions. Triple materiality matters only if it changes how hospitality grows, not just how it reports.

Double materiality tells us what matters. It doesn't tell us whether we are operating within the limits of the destination itself. Triple materiality adds that check, and the principle is right: confirming that water consumption has fallen is not enough. We also need to know whether the volume we use is acceptable for that particular location.

The difficulty is practical. Conditions differ in every destination, reliable data is scarce for suppliers and new developments, and deciding one hotel's fair share of a water, land or carbon budget is contested. The method must stay usable, not become another reporting exercise.

Where it would change a decision: a resort planned in a water-scarce area, already approved and targeting LEED Gold, with low-flow fixtures, treated water, rainwater harvesting and efficient irrigation. Double materiality flags water as material. Triple materiality asks how much water exists, how much the community and ecosystem need, and whether that is improving or worsening. Even a more efficient hotel may be too much, leading to fewer rooms, no water features, different landscaping, another site, or no project at all.

Operationally it needs thresholds, location-specific data, an allocation method, time-bound targets, monitoring, defined consequences, community input, and board sign-off within the investment process.

Yes to triple materiality. Double materiality tells us what to disclose but never asks whether the sum of our disclosures adds up to a business operating within planetary limits. Tourism and hospitality already operate beyond biophysical boundaries in many destinations. Triple materiality would close that gap. However, while place-specific science-based data exist for climate and water, this is already thinner for biodiversity, let alone other boundaries. And the challenge: that type of data is largely absent at the property level where hospitality decisions are made. That's work in progress.

Where would triple materiality change a decision? Pretend a hotel group is expanding in a water-stressed destination. Its double materiality assessment correctly flags water as material and commits to efficiency measures so then the project proceeds. Triple materiality would ask a different question: does the hotel group's water withdrawal, current plus pipeline (e.g. new project), stay within the local sustainable yield once nature and community needs are subtracted? If the trajectory crosses that line in year three, the double materiality report is compliant but the business is breaching the boundary.

So then, operational triple materiality requires three moves: 1) adopt context-based metrics, 2) report trajectory, and 3) shift from process to outcome. Anything less and we have yet another matrix.

Triple materiality is a sound concept because it extends double materiality by asking whether business activities stay within ecological and social limits, not just whether they create financial or stakeholder impacts. It encourages long-term sustainability and resilience. However, it becomes difficult in practice because thresholds vary by location, reliable data is limited, and companies struggle to measure their share of cumulative impacts and incorporate these limits into decision-making.

This is where strong, level-headed, future-oriented leaders are required to say no to a proposed project. For example, if a threshold-and-trajectory lens is used to assess a future project, it could lead the hotel company to consider cancelling or redesigning a resort in a water-scarce region for example, even if a double materiality assessment shows acceptable financial returns and stakeholder impacts. Would this future-oriented person be overruled by other board members who have different priorities?

As to what it would take to make triple materiality operational rather than aspirational,  organisations must have clear, science-based ecological and social thresholds, location-specific metrics, robust data systems, and governance that embeds these limits into strategy, investment, and performance incentives. It is a complicated endeavour but not an impossible one when directed by purpose-driven leaders.

Triple materiality is a natural evolution of sustainability reporting because it moves beyond identifying impacts to evaluating whether a business is operating within the ecological and social limits of the places where it exists. Hospitality developments cannot be assessed in isolation, they must be measured against local environmental thresholds, community capacity, and long-term resilience.

A threshold-and-trajectory lens would fundamentally change development decisions. Rather than simply asking whether a project creates jobs or reduces emissions, it asks whether the project contributes to restoring ecosystems, strengthening communities, and moving toward a regenerative future over time.

Making triple materiality operational requires measurable, place-based metrics, science-based targets, transparent reporting, and collaboration with local stakeholders from the earliest stages of development.

At VIRTU Resort & Residences, this is central to our model. Our close collaboration with the World Indigenous Business Network and the Indigenous Nations where we develop ensures that projects are guided by local knowledge, cultural values, environmental stewardship, and long-term community prosperity. This place-based approach helps transform sustainability from a reporting exercise into a framework for regenerative development with lasting social, environmental, and economic value.

Going beyond a double materiality approach seems like a good idea in principle. In practice though, I would suggest making it much more approachable, understandable and adoptable than double materiality.

Calling it a "reality check" for instance and associating it with 4 to 8 criteria that anyone can understand and use as a new compass would help integrate it in decision-makers' habits.

Yes, we need to integrate the Planetary Health Check for sure, as nobody wants to be the hiker who leaves home with the best equipment and intentions but is heading toward a burnt forest without knowing it (any resemblance to recent events France and elsewhere is NOT coincidental). Therefore sustainability experts need to get closer to processes and tools currently used by development, investment, strategy and marketing professionals. Their approach has to meet professionals where they are in order to make what's obvious to them, obvious to everyone.

Yes, we need to integrate the Planetary Health Check for sure, but nobody will be willing to do so if it's too scientific, if it's seen as an additional process to follow and if only problem are raised with no hope for solutions.

Great question – but just what is “materiality”?

Before tackling the question, a little context is helpful. I really don’t want to answer this question as though I knew what it was asking before I did some background research.

Single and double materiality are part of the reporting requirements of the Corporate Sustainability Reporting Directive (CSRD)/European Sustainability Reporting Standards (ESRS). Materiality is on the minds of European sustainability professionals.

Discussion around “materiality” is less common in the US, and the topic itself highlights the divergence in the current approaches between the US and Europe. The pullback from ESG federal reporting requirements in the U.S. is a contributing factor. Differing perspectives on just what “material” is also a factor. US securities law defines materiality narrowly around financial performance (single materiality) rather than the broader European perspective that incorporates society and the environment (double materiality). Triple materiality takes a more holistic perspective, places corporate decisions in the context of systems impacts, and looks at how they fit into the bigger picture.

Should we incorporate triple materiality into our thinking and report on it? Of course. You can’t manage what you don’t measure.

Will we? Unfortunately, it seems unlikely anytime soon.

Triple Materiality Assessment (TMA) is a sustainability concept which holds that businesses cannot survive without taking their local environmental and social context into account. Therefore, businesses must embed the global sustainability goals within their own context, as these may vary from case to case and may not necessarily be universally applicable, achievable or even logical. To certain extent this is re-applying the ideas of early 20th-century intellectuals regarding historical particularism, as these theories reject a ‘one-size-fits-all’ universal system of rules, arguing instead that a system can only be truly understood by looking closely at its unique local history, culture, society, economy and environment.

To implement TMA, companies must define their global indicators whilst taking local conditions into account. Following an assessment of double materiality, companies must work together with local experts and communities to identify specific ecological and cultural critical points. This enables businesses to adjust their risk assessments by incorporating local contextual factors alongside standard ESG indicators. Finally, they must publish context-dependent indicators relative to these target values, rather than relying on general, misleading corporate averages.

Although the TMA requires further effort from the company, it will yield more meaningful and significant sustainability outcomes than global assessments.

In principle, what a beautiful idea. To not only consider our impact as it stands, but to include future plans against science-based limits......However, how many businesses are even conducting a materiality assessment for their operations?

In order to shift this from a nice to have to a business-as-usual focus we need to consider education and embedding the understanding of the how and the why among students. Tourism and hospitality professionals are skilled in operational delivery, business management and often marketing. The training of sustainability practices are limited at best, non-existent in many instances. No wonder we are not considering this approach when the technical skills and knowledge is missing.

Once we have the skills, the other consideration is our measures of success. In most instances the priority focus on the ground is on RevPar and maybe guest satisfaction. It is rare sustainability measures are a priority.

So, where we champion growth and economic success over all else, is there room for consideration of our impact on the planet? We need to normalise (mandate) environmental and social impact as success measures and then we may start to see a shift in prioritisation and a range of sustainability impact measures adopted.

I agree with the central diagnosis: a double materiality assessment captures a snapshot of now but does not, by itself, tell a business whether its trajectory is compatible with the limits of our planet or whether it meets essential social needs. That said, I think the path forward requires pragmatism alongside ambition.