The United Nations has set 2030 as the target year to achieve the United Nations' 17 Sustainable Development Goals, providing a roadmap for peace and prosperity for people and the planet now and into the future. The travel industry is currently at a critical juncture, with ESG initiatives reshaping corporate responsibility and investment priorities. As consumer demand for sustainable travel options continues to drive innovation, there are clear growth opportunities for companies that truly embrace sustainability.
There is also a clear message from regulators when it comes to ESG policy development that can no longer be ignored. Regulators are cracking down on greenwashing and introducing tougher measures to counter attempts to check the ESG box.
With this tightening of regulations, companies' awareness of ESG is also changing. This is no longer just a checkbox requirement, but a way for companies to reduce risk, gain competitive advantage, attract talent and investment, and extend the life of the company.
As transparency and trust become industry standards, trust becomes an increasingly strategic asset. So how is the travel industry responding?
Prioritize all ESG factors
It is positive that many travel companies are responding to the growing demand for ESG policies and recognizing that it is not enough to be profitable on their own. They recognize the need to act ethically and take responsibility for their decisions.
Industry investment levels serve as a key indicator of ESG priorities. Our recent research across the travel industry, including airports, airlines, travel retailers, car rental companies and hotels, found that almost half (46%) of travel companies intend to increase their ESG investments in 2024. has become clear.
This research reveals different investment priorities for ESG initiatives across travelers' journeys. Airlines are focused on developing solutions that improve the energy efficiency of their operations, reduce emissions, and help travelers reduce their environmental impact. Energy reduction, health, safety, welfare and responsible water management are top priorities for hotels. Meanwhile, travel sales companies are focusing on reducing carbon emissions, and large companies are focusing on sustainability education for their employees.
This increased investment is aimed at contributing to reduced environmental impact, positive social impact and increased stakeholder trust.
The study also highlighted the common importance of all ESG factors. In addition to reducing environmental impact, social aspects such as employee well-being, diversity, equity, and inclusion, and a more inclusive tourism industry that has a positive impact on local communities at destinations. Promotion is particularly important for the global travel industry.
Good governance is key to guiding responsible decision-making, and strong governance paves the way for progress in environmental and social initiatives. Companies must set goals and continue to report on their progress in these areas, demonstrating high ethical standards, integrity and transparency.
Despite growing momentum, the travel industry still faces barriers in translating intent into action and delivering on environmental initiatives. Key factors include perceived high costs but low economic returns, lack of technology and expertise, and insufficient buy-in from executives.
So where do we go from here?
Companies have clear goals and recognize that there are barriers to progress when it comes to ESG. The question for all of us is: How can the industry provide targeted solutions and tackle these challenges head-on?
The first step is for everyone in the travel industry to recognize their impact and take action. Therefore, at Amadeus, we continue to work as an organization to address our environmental and social impact.
Technology also plays a clear role in helping the travel industry achieve its goals. New technologies can help travel companies improve infrastructure to reduce emissions, prevent environmental damage, and save money that can be redirected to sustainable initiatives.
Sustainable aviation fuels are one promising example, reducing carbon emissions by up to 92% compared to conventional fuels. Search technology is being developed for consumers to prioritize sustainable travel options at every stage of their journey. Artificial intelligence algorithms are just one way AI can be used to personalize recommendations for travelers based on their preferences. And technology can also play a vital role in promoting inclusive and accessible travel for all.
Innovations like this are key to reshaping the travel industry's business and addressing global challenges.
Industry cooperation is also paramount. By pooling our expertise and resources, we can help each other bridge gaps and achieve more together. Collaboration with business partners, industry associations, academic institutions and NGOs strengthens collective knowledge and awareness and creates synergies.
Finally, we need a centralized framework for ESG compliance. Again, this is about taking everyone on a journey. In our recent research, the companies surveyed showed that sustainability is not only a best practice, but also a competitive advantage. A clear framework ensures that investments are directed where they will be most effective and businesses reap the rewards.
By taking a holistic and strategic approach to ESG, we can be part of the solution. Collaborations that combine people and technology can drive innovation that ensures travel and tourism remains a force for good.
