The European Commission, on July 31, 2023, officially adopted the European Sustainability Reporting Standards (ESRS). These standards are of paramount relevance to the tourism industry within the European Union. They apply comprehensively to all companies operating in the tourism sector, aligning with the Corporate Sustainability Reporting Directive (CSRD), a pivotal directive for sustainability reporting ratified in November 2022.
The ESRS, meticulously crafted by the body known as the European Financial Reporting Advisory Group (EFRAG), are slated to come into effect in January 2024. As per the CSRD, businesses in the tourism sector will be compelled to align their reporting practices per these newly established standards.
Outlined below are the 12 distinct categories that comprise the ESRS, along with detailed explanations, particularly tailored to their relevance in the tourism industry:
- ESRS 1: General Requirements
- Within the tourism industry, ESRS 1 underscores the fundamental prerequisites for comprehensive sustainability reporting. This encompasses considerations like resource conservation, community engagement, and responsible tourism practices.
- ESRS 2: General Disclosure
- ESRS 2 emphasizes the importance of transparently disclosing pertinent information related to sustainability practices within the context of the tourism sector. This includes details about eco-friendly initiatives, cultural preservation efforts, and community-driven tourism projects.
Environmental Information
- ESRS E1: Climate Change
- ESRS E1 is particularly relevant in the tourism industry, urging companies to assess and report on their contributions to combating climate change. This includes initiatives to reduce carbon emissions, promote sustainable transportation, and support local conservation efforts.
- ESRS E2: Pollution
- In tourism, ESRS E2 encompasses a critical focus on pollution, urging companies to implement robust waste management systems, reduce water pollution, and adopt practices that minimize environmental impact.
- ESRS E3: Water and Marine Resources
- ESRS E3 holds special significance in tourism, highlighting responsible water management practices and the protection of marine environments. This involves measures to conserve water resources and safeguard coastal ecosystems, critical for coastal tourism destinations.
- ESRS E4: Biodiversity and Ecosystems
- In the tourism industry, ESRS E4 is dedicated to biodiversity conservation and ecosystem preservation. It urges companies to actively contribute to the protection of local flora and fauna, safeguarding the natural attractions that draw tourists.
- ESRS E5: Resources and Circular Economy
- Within tourism, ESRS E5 focuses on resource management and the transition towards a circular economy. This involves initiatives to minimize resource consumption, reduce waste, and promote sustainable sourcing practices in the hospitality sector.
Social Information
- ESRS S1: Utilized Workforce
- In tourism, ESRS S1 pertains to the management of the diverse workforce that forms the backbone of the industry. This includes considerations like fair employment practices, diversity and inclusion, and the promotion of local employment opportunities.
- ESRS S2: Workers in the Value Chain
- ESRS S2 is particularly pertinent to the tourism sector, encompassing fair labour practices and ethical considerations within the broader value chain. This extends to the treatment and well-being of workers in various facets of the tourism industry.
- ESRS S3: Affected Communities
- Within tourism, ESRS S3 deals with the impacts of a company’s operations on the communities in which they operate. It urges companies to actively engage with and support local communities, ensuring tourism benefits are distributed equitably.
- ESRS S4: Consumers and End Users
- In the tourism industry, ESRS S4 centres around consumer relations and end-user considerations. This includes efforts to enhance customer experiences, promote responsible tourism behaviour, and ensure the safety and satisfaction of tourists.
Governance Information
- ESRS G1: Business Conduct
- ESRS G1 holds significant weight in tourism, emphasizing ethical conduct and governance practices. This encompasses considerations like responsible tourism policies, adherence to local regulations, and engagement with local authorities for sustainable tourism planning.
In addition to these detailed standards, the ESRS has incorporated various significant considerations tailored to the tourism industry:
- Concept of Dual Materiality:
- Within tourism, this obliges companies to assess not only how their business operations impact ESG issues but also how ESG factors, in turn, influence their economic and financial performance, thereby ensuring a balanced approach to sustainability.
- Value Chain Impacts, Risks, and Opportunities:
- Companies in the tourism sector are mandated to identify and report on the impacts, risks, and opportunities associated with their entire value chain. This ensures a holistic view of the company’s operations and its role in the broader tourism ecosystem.
- Comprehensive Policy, Action Plan, and Objective Disclosures:
- Companies in tourism are required to furnish detailed information regarding their policies, action plans, and objectives across all relevant sustainability topics. This provides stakeholders with a transparent view of the company’s sustainability initiatives, instilling confidence in its commitment to sustainable tourism practices.
The information conveyed in alignment with the ESRS empowers stakeholders in the tourism industry to comprehend the significant impacts of companies on both individuals and the environment. It also sheds light on how sustainability matters affect the development, outcomes, and overall standing of the tourism industry as a whole, reinforcing its role as a responsible and sustainable economic driver.
