The head of a leading hotel group has said the industry could do “an awful lot more” to cut its carbon use as an investment index showed travel companies below the corporate average in tackling environmental and social issues.
Jumeirah Group executive chairman Gerald Lawless warned the environment poses “a banana skin” for the industry if it does not get sustainability right.
Speaking at the World Travel and Tourism Council summit in Tokyo, Lawless said: “We cannot ignore those who say ‘what about the environment?’.
“In the hotel industry we could do an awful lot more to improve our carbon footprint. It is a huge banana skin for the industry. We have to get it right as we go forward.”
FTSE director for Asia Pacific business development Paul Hoff told the summit most travel companies attain below average ratings on the FTSE4good index of responsible policies and practice.
The index rates listed companies on a series of environmental, social and governance (ESG) issues, producing a rating on a scale of zero to five. It shows a global corporate average across all sectors of 2.7, where three reflects ‘good practice’ and two ‘some elements of good practice’.
Travel and tourism companies rate an average of just 2.42, compared with an airline average of 2.9. In the leisure sector, only gambling rates lower than travel and tourism.
However, telecommunications is the only sector of global industry rated above three on the index, leaving airlines on average in fifth place among listed companies.
Hoff said: “Human rights is the issue travel companies score lowest on – the right to water, the rights of indigenous people to land and general labour rights.
He added: “Investors are increasingly putting money into the ESG area, and travel companies will increasingly have to consider this. ESG investment has grown substantially. It is taken very seriously in Europe.
“Transparency will build the trust that helps institutional investors support your industry.”
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