Sustainability-driven legislation: setting the right conditions for hospitality?
21 experts shared their view
Legislation regulates the way we utilize natural resources, avoid pollution and harmful substances, manage waste and protect ecosystems and human rights. Supporting sustainability through the use of proactive legislation is nothing new. Rather than being a constraint to businesses and individuals, proactive legislation can eliminate competitive disadvantages and thus be an instrument paving the way to a successful and sustainable future (Berger-Walliser et al., 2016). In many cases, however, legislation is enacted as a last resort. In Germany, a new law on packaging makes it mandatory for the gastronomy sector to provide reusable containers as an alternative to single-use items from 2023 onwards. This is, arguably, a long overdue legislation based on a EU Directive. In a recent representative survey conducted by the German Packaging Institute (DVI) and World Wide Fund For Nature (WWF), 85% of respondents are in favor of introducing a deposit refund system for reusable containers. And while citizens around the globe view climate change as a major threat, the most recent report from the UNFCC warns that climate action plans put forward by nations ahead of COP26 are nowhere close to meeting the goals set in the Paris Agreement. Looking at legislative initiatives in your country, where do you see room for improvement? In which area under the sustainability umbrella do you see the need for more (or less) regulations? Can you share some best (or worst) practices?
Berger-Walliser, G., Shrivastava, P. & Sulkowski, A. (2016). Using Proactive Legal Strategies for Corporate Environmental Sustainability, Michigan Journal of Environmental & Administrative Law, 6(1), 1-27.
Policy makers have a critical role to play in driving capital towards sustainable projects; however, opinions differ on whether this role should be focussed on imposing penalties (or even bans) or promoting incentives.
Sustainable finance has grown exponentially and even ESG specialists feel bewildered and desperately need a roadmap. Hence why the finance sector, which is normally ambivalent at best about regulation, is widely welcoming more regulation and clear disclosure standards. Investors trying to incorporate sustainability into their decision making need sensible, comparable information. Where disclosures are patchy or inconsistent, they struggle.
However, you do not need complex disclosure to know that fossil fuels cause climate change, yet banks still heavily invest in this sector. Thus, the clamour for (complex) regulation is partly honest, but partly also a delaying tactic(1) – The hospitality industry is no different.
The most direct way governments can green the economy is not by changing incentives, but by tough action to regulate it directly. For example it has been perfectly obvious that plastic bags are terrible for the environment. But the private sector did not stop using them until Kenya and Tanzania banned them completely, at short notice, in 2017, everyone had to just adapt and comply. The power of such direct on the ground regulation can cut years of dithering and evaluating data(2).
The new EU Disclosure Regulation(3) requires mandatory disclosure of the long-term impact mitigation of all new investment and lending . The Hotel Sector is expected to reduce its GHG emissions per room per year by 66% from 2010 levels by 2030, and 90% by 2050(4). However the sector is notoriously lagging in achieving these targets(5). The degree in which main stream hotel investment will be incentivised and regulated to put a price on its environmental externalities, is in my opinion critical to getting the sector to comply and adjust its business model.
- Responsible Investor, Jan21, Trump happens when cultures believe private can cover for public
- Global Capital, Feb20, Sustainability: More stick, less carrot
- Allen & Overy, Dec19, New ESG Disclosure Regulation
- Hotel Global Decarbonisation Report, International Tourism Partnership (ITP), November 2017,
- Ignite Economics, Energy Usage in The UK Economy