Following unprecedented disruption due to the COVID-19 pandemic, the travel industry has begun to show signs of recovery. Data suggests that US domestic travel spending could hit more than $1.1 trillion in 2022, overreaching pre-pandemic levels by more than 11%.
With this resurgence comes a growing chorus calling for added emphasis on tourism-based ESG issues, including equal opportunity in aviation and sustainability in the travel industry more broadly. Along with airlines’ huge carbon dioxide emissions, tourism can impact destinations and local residents negatively, as seen in the endangerment of animals and plants in Hawaii and rent hikes and housing scarcity in Barcelona.
The stakes are high, and as the travel industry takes off again, its players will have to determine to what extent they will embrace ESG—or balk at doing so.
Local authorities and nonprofits in well-trodden tourist destinations have captured recent efforts to boost sustainability in the travel industry. For instance, the state government of Hawaii encourages businesses to incorporate sustainable practices into their business plans through the Sustainable Tourism Certification program. Led by the nonprofit Sustainable Tourism Association of Hawaii, the program’s goal is to protect the local environment and culture through responsible travel and education. There are currently 46 certified sustainable ecotourism businesses in Hawaii, offering services such as biking and surfing.
In the ESG tourism sphere, “regenerative” tourism or travel has gained ground—the idea of going beyond maintaining the status quo of an environment and actually improving an area for future generations. For example, nonprofit initiative Lisbon Sustainable Tourism offers responsible walking tours for tourists and funnels the proceeds into community programs. The group’s work dovetails efforts like the slow travel movement, which seeks to give travelers a more intimate connection with a destination.
In response to a swell in the number of remote workers during the pandemic, many more destinations are also offering visas for digital nomads, who can stay in one, or multiple, locations for longer periods and experience a quasi-business, quasi-pleasure experience in a country that will contribute to the local economy on a long-term basis.
Signs of Progress
Signs also indicate that more tourist businesses are realizing sustainable tourism can act as a selling point and begin a virtuous circle where the local culture, environment, and businesses can prosper together. For example, Regenerative Travel’s global network of hotels aims to generate a lasting positive social and environmental impact for local people and environments.
Hotels chains are also stepping up their ESG efforts. Hilton, for example, has aligned itself with the UN’s Sustainable Development Goals to meet a variety of targets by 2030, including on group-wide energy, water, and waste management as well as more localized efforts such as preserving destinations like Seychelles. It also tracks progress in an annual ESG Report alongside other hotel chains like Wyndham and Marriott.
Sustainable Aviation Fuel
Sustainable aviation fuel (SAF) biofuels—made from renewable biomass and waste resources—can help reduce airlines’ notoriously large CO2 emissions, and some airlines are rolling out the technology on commercial flights. Aer Lingus announced a deal in July for 6.3 million gallons of SAF per year for five years, while in July, American Airlines received a batch of SAF from Neste, the world’s leading producer of SAF. This in turn has prompted greater interest among investors in the oilseed crops that can help produce SAF.
With the pressures of climate change and overtourism only on the upswing, ESG efforts look set to feature at the top of the travel industry’s agenda—offering a range of avenues for investors to make an impact in sustainability all around the world.