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All Together Now: Sustainability Gains Momentum in Hospitality Industry

Throughout my education and career, I have continuously strived to feed the pro-social bent of my heart and mind.
By Priyank Arora

By Priyank Arora

In the small town in which I grew up in India, many kids from my neighborhood couldn’t afford an education. I would gather them together to teach them basic writing and algebra. I remember, in particular, a young girl who had just learned to write her name in English proudly showing her notebook to me. I knew this skill wouldn’t completely change the girl’s life. However, I believed I could inculcate in her a lifelong thirst for knowledge. She could then perhaps provide encouragement to other youths in the community to pursue education—someway, somehow.

Throughout my education and career, I have continuously strived to feed the pro-social bent of my heart and mind. When I entered college, I co-founded a student organization in which we taught day laborers’ children during free time in the evening. After graduation, I worked at Samsung Electronics, where I had ample opportunities to grow professionally but a dearth of opportunities to make a significant social impact. While corporations in the U.S. and Europe were steadily integrating social responsibility into their corporate strategies, this change had not yet become as deeply embedded in Indian firms. Was I completely unhappy at Samsung? No. Rather, I treated my time there as a learning experience where I had a front seat to observe the sea change in the corporate landscape.

Over the last decade, the increasing importance of social and environmental responsibility among practitioners (read, the private sector) has received considerable attention in academic research. Motivated by this context, when I started my graduate studies at the Scheller College of Business, I decided to develop my PhD dissertation to study research problems that involve social and environmental dimensions. In particular, my current research efforts focus on understanding the interaction of these two dimensions with operations and supply chain management principles.

When I heard that a “Business, Environment, and Society Series” talk was being hosted by the Ray C. Anderson Center for Sustainable Business on October 2nd, my interest was piqued. I attended the talk to hear Matt Turner, Lead for Corporate Responsibility - Sustainable Communities at InterContinental Hotels Group (IHG), present on the subject of “Aligning CSR in Hospitality to the SDGs.” The 17 United Nations Sustainable Development Goals (UN SDGs) highlight critical areas in terms of social and environmental responsibility. A key reason for developing the list was to garner commitment from all parties, including governments, the private sector, civil society, and individuals, to ensure fulfillment of these goals by 2030.

IHG aims to target a subset of six SDGs where they see the greatest potential to make a meaningful contribution. These include: Clean Water and Sanitation, Decent Work and Economic Growth, Reduced Inequalities, Sustainable Cities and Communities, Responsible Consumption and Production, and Climate Action. Turner indicated that IHG’s decision to focus on a subset of goals is grounded in the principle of “do less in order to do more.” I believe this principle is valuable for all involved parties—especially for non-governmental organizations (NGOs) that wrestle with the urge to provide “everything for everyone.”

It was heartening to hear IHG (the third largest international hospitality brand) admit that its huge global presence has a tremendous impact on the environment and society. For example, IHG hotels use significant amounts of water and energy, and they have a large employee-base whose needs must be considered. The company realizes the financial implications of being committed to sustainability (or not). Research has shown that a firm’s sustainability efforts not only can help the firm reduce costs and risks but also can increase revenue by opening up new markets (i.e., socially-conscious or “green” consumers). Also, as Turner pointed out, large corporate clients now push to ensure that hotels with which they have accounts have a certain level of sustainability performance. In order to provide the most useful information possible, IHG has developed the means by which it can amass and present detailed sustainability reports. The IHG Green Engage System, for instance, helps the hotel group measure and improve energy usage at its establishments, as well as reduce food waste and conserve water.

Turner highlighted IHG’s leadership role within the International Tourism Partnership (ITP), a consortium of 13 hospitality brands that account for over 50% of hotel rooms globally. The partnership allows industry representatives to work together pre-competitively in order to share ideas, build relationships, and work collaboratively with all key stakeholders, including suppliers, NGOs, regulatory bodies, and academics. The hospitality industry has effectively generated a collective buy-in in order to deliver on the SDGs. Turner said ITP “creates momentum that individual companies can then get behind.”

One of the greatest internal challenges IHG faces as it works towards achieving SDGs stems from its franchise system. Turner reminded the audience that many of IHG’s franchisees are, in effect, small business owners. For these operators, who are getting by on small margins, the business case for investments related to energy, carbon, and water sometimes seems less motivating than other lower hanging fruits that are believed to be linked to quicker financial returns.

My main takeaway from Turner’s talk is that all stakeholders need to come together to create a more sustainable future; it can’t be done alone. He underscored the need for firms to partner with NGOs to create shared value. For instance, to help victims of hurricanes Harvey and Irma, IHG tapped into its scale of operations by offering its locations as blood collection centers for the Red Cross. Furthermore, by collaborating with NGOs and suppliers to mitigate against forced labor in its value chain (e.g., vegetable sourcing and textile manufacturers), IHG hopes to reap benefits by becoming the preferred choice of millennials (a quickly-growing, socially-conscious market segment). Turner reinforced the message that the creation of social value can go hand in hand with profit.

With regard to the UN SDGs, I agree with Turner’s assessment: The private sector is moving in the right direction but needs to increase the pace. Also, we need to re-evaluate the direction of our progress continuously. Hearing this talk renewed my motivation to research how key contextual parameters interact with complex social and environmental dimensions. The recent years offer proof that academic scholars can contribute to management science by enhancing economic impact as well as improving societal outcomes. I am excited to make my contribution by advancing operational decision-making within the context of UN SDGs.

Priyank Arora is a PhD Candidate at the Scheller College of Business in Operations Management. 

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