Green finance is still emerging and defining itself. As such, it currently raises more questions than it provides answers for hospitality professionals, especially among family or small businesses and independent operators who cannot dedicate their limited resources to stay up to date with such specific and technical trends. As a result green investment is very often considered as an extra cost with no short-term benefits and uncertain long-term benefits.

Hightlighting the opportunites of green finance can help change hospitality professionals' perspective on green investments. Indeed, with the right finance source, a green investment can become an opportunity to access cheaper and more relevant debt or equity. 

This change of perspective can be achieved with the support of asset managers, consultants and academia. Indeed, these stakeholders are in the best position to analyse the relevance of green finance tools, develop relevant application forms and process and support hotel teams in obtaining such financing.

With a 12,5-hour module on Sustainable finance for hospitality managers introduced in 2020 as an elective course for the MSc in Hospitality Management at ESSEC, we"re investigating the leverages of green finance for hospitality businesses with students.

The introduction of this course is probably a critical first step to tackle the lack of awareness regarding the opportunities offered by green finance/ It allows graduates to start their career with awareness and understanding about these emerging opportunities on which they can keep and eye and about which they can share in their companies. More generally, dedicated training is needed for Directors of Finance and Hotel Asset Managers in this area. Indeed, Sustainability Linked-Loans, Green Bonds or Impact Funds should become part of their vocabulary to become part of their considerations.

The first step to secure green finance is to have a relatable mapping of available tools and their potential relevance to hospitality businesses. 5 of these tools are listed below with a short description of what they are most adapted to and examples of applications for the hospitality industry.

• Green Bonds: to finance projects promoting environmental-sustainability purposes
  Eg: renovation and repurposing of an old asset
• Sustainability-Linked Loans (or ESG Loans): to finance expenses and investments aiming at improving the overall non-financial performance of a company.
  Eg: expenses and investments necessary to obtain a recognized sustainability certification
• Equity from impact funds: to finance the development or acquisition of a sustainable business
  Eg: acquiring an ecolodge or an ecolodge group
• Crowdfunding: to finance sustainable or non-profit initiatives with impact and/or strong links with individuals
  Eg: opening a hotel school in a developing country
• Grants: depending on local and national priorities, grants can cover investments as well as salaries or R&D expenses aiming at improving the the environmental and/or social performance
  Eg: currently in France, a grant of €8000 can be obtained to recruit a young team member dedicated to sustainable development in the company.

Hospitality professionals can investigate green finance opportunities starting with their regular commercial bank or local tourism office. Directly or through the latter, hositality professionals can then reach out to dedicated impact investment funds, central banks and institutional investors depending on the size and type of financing they are looking for.

This UNWTO webinar offers examples of successful green finance deals with various stakeholders (https://www.unwto.org/events/webinar-3-sustainable-tourism-recovery-post-covid-19).