- April 29, 2014
- Posted by: STTAKENYA
- Categories: Blog, Corporate Social Responsibility, Destination development
It has always been my conviction that what determines the sustainability index of a business is what they do, that which can be and has been verified and not what they say they do or what they will do. This conviction has been confirmed by the recent scandal surrounding Volkswagen’s (VW) clean diesel claims. There are many lessons for tourism from the VW emissions scandal. The scandal brings to the fore the good and not too good practices that characterise the sustainability movement.
The VW ‘clean diesel’ scandal exposed the vulnerability of consumers of ‘green’ and the deception businesses employ in order to capture a piece of the ‘green economy’ pie without investing in sustainability. In brief, the VW scandal involves claims that VW exported nearly 500,000 cars to the United States of America (USA), cars whose systems had been rigged with the sole purpose of gaining clearance from Environmental Protection Agency (EPA) thus gaining access to America’s ‘clean energy’ market. In reality, their highly hyped ‘clean diesel’ model actually exceeded the set EPA emission limits. In so doing, VW falsely gained unwarranted publicity for their supposed “green” credentials. In fact, at the time the scandal was exposed VW was ranked #11 among organisations with the best Corporate Social Responsibility (CSR) reputations by the Reputation Institute. Though VW’s chief executive officer resigned following the scandal, the damage has been done and it will take VW decades to regain its reputation and position as a top tier car producer. Not to forget the potential financial consequences related to tax rebates for clean diesel.
A red flag has been raised. More than ever before, sustainability will be in the spotlight for the wrong reasons. It made sense and ‘cents’ for VW to mimic the trend in order to tap into the ‘conscious consumer’ market. Like VW, many sustainable tourism businesses, are cashing-in on the growing number of conscious consumers by adding the sustainable label without doing much. The danger with sustainability is that the wrongdoing of a few members of a sector can easily be extended to entire sector, as sustainability cashes in on consumer values. It is value driven. Businesses have no control over these values. While businesses can subscribe to and promote certain values, ultimately, it is the consumer who decides. The main lesson drawn from the VW scandal is that businesses should not gamble with customer values nor should they compromise on sustainability issues in lieu of making a profit.
For the tourism industry, the question that we need to ask ourselves is, what should businesses do to avoid this kind of exposé? Based on STTA’s experiences in business coaching, training and research in sustainable tourism, there are a number of ‘bad’ practices that must be avoided and good ones that should be adopted to minimise risks of consumer censure. Here are a few examples:
Bad – Focussing solely on the shareholders and the bottom line: Sustainable practices require businesses to shift their focus from shareholders to the larger society. Consequently, businesses should ensure they are accountable to all stakeholders (consumers, shareholders, local communities, etc.) and not focus solely on the shareholders. This is because genuine sustainability is outward looking. In the case of VW, the management team was focused on posting good results for their shareholders that they took the risk of deceiving their clients/consumers and the larger society. This shortsightedness has cost VW heavily not only in terms of revenue but more so the reputation and trust they had established among consumers. In the tourism sector, there are similar schemes that purport to be sustainable, whereas the objective is to benefit the business. For example, some hotels promote the ‘towel change’ policy not to save water or reduce pollution, but to cut on labour, detergents and energy costs. One can easily tell if the practice is genuine by checking whether the hotel also uses biodegradable detergents, has strategic water/energy saving programs, etc. If ‘towel change’ is a stand-alone activity, it is purely for the benefit of the business.
Good – Engaging the entire organisation in sustainability issues: Involving the entire staff in the organisations sustainability agenda is critical for the program’s realisation and success. Staff involvement encourages ownership of the agenda by providing a forum for staff to contribute ideas, which encourages innovation. Secondly, it establishes an internal audit team that checks on the organisation’s performance against the set sustainability actions. It is even a better practice to have a staff member with requisite skills in the specific areas identified to take lead. Nevertheless, even staff involvement can be misused. In some instances, businesses focus on activities to involve staff without having a strategy for staff engagement. For example, an organisation could choose to set up ‘green teams’ and while having a green team is a good idea, it is imperative to develop a strategy to ensure green teams work towards organisational green goals, which would be a sustainable investment. On example that comes to mind is the ‘green teams’ set up by many coast-based hotels. These, ‘green teams’ mainly undertake beach cleaning along their respective hotels sometimes in collaboration with community members, guests and beach operators, but rarely conduct sensitisation. Consequently, one would ask, is the goal to keep the beach clean for hotel guests or to save the ocean from pollution? In addition, how sustainable are these clean up exercises? These are pertinent questions, which should be asked to establish the motive behind the cleaning exercises and the agenda of hotels in establishing green teams. –
Bad – Good intentions without commitment: Intentions that are not matched by long-term investments cannot translate into sustainable practices or values. A genuine interest in sustainability is demonstrated by making the sustainability agenda part of an organisation’s business strategy. This means funds are earmarked to meet goals, progress is monitored internally and externally through third-party assessments and reports are produced. Some tourism businesses that claim the sustainability label often lack strategy or long-term focus on the agenda. Instead, they have good intentions executed through ad hoc sustainability actions like donating desks, renovating schools or using gifts from guests to make donations. These are acts of charity and charity and CSR must not be confused with sustainability. This mainly happens where owners and/or directors are aware of the opportunities made possible by having the sustainability label, but choose not to invest. They do little and then employ the best public relations companies or travel writers to promote their CSR project as sustainability. Unfortunately, the media hype has managed to mix-up CSR and sustainability.
Good – Producing regular and/or annual sustainability report: When sustainability becomes part of an organisation’s culture, they should produce a narrative and financial sustainability report. The sustainability report is what a business should use to promote its sustainability agenda. The report is an accounting document that opens the business to professional scrutiny. Many different organisations have developed reporting tools that businesses can adapt. A good report will be informed by data generated from structured documentation. Similarly, there are monitoring tools that businesses can adapt or they can develop their own generic tools that suit their needs. Currently, very few tourism businesses, including multi-year award winners, produce sustainability reports or have reliable documentation. Award organisers are partly to blame for lowering the standards and handling businesses with “white gloves” when it comes to sustainability.
Bad – Exclusively depending on philanthropic contributions to finance sustainability practices: The tourism sector is notorious for this sustainability ‘crime’. Few tourism businesses can claim to fund their sustainability practices from profits as they often top-up the investments with philanthropic funds. There is nothing wrong with attracting additional funding, but there are two principles that require adherence. First, a business must demonstrate that the funds being solicited are for scaling-up the impact of on-going initiatives. This means you must have started the project with your business investment funds/profits. Secondly, one must declare the level of investment of philanthropic funds in their sustainability report and in any publicity campaigns, award applications and other communications. This is to ensure that philanthropic funds and business funds are not combined. Transparency is as such, a key driver and factor. Based on financial records, audits reports and other documentation, an assessor of a business sustainability index should be able to determine that the business has invested in sustainability and accounted for philanthropic funds.
Good – Sharing practices and interventions with stakeholders including policy makers, other tourism businesses, researchers and communities for wider impact: Any business keen on sustainability will share their experience. Adopting sustainability means opening -up to external scrutiny, which could include business competitors. It is also important to note that sharing is not restricted to success stories. Failures and challenges should also be shared. The reason many businesses are afraid to share their claims of sustainability is mainly because they have no tangible data to support their claims. Before one can share, one must have documented evidence, which requires consistent monitoring and reports. While businesses can make direct efforts to share, they need to be supported by stakeholders including peer organisations and sector interest groups
Bad – Businesses focus on external awards and recognition more than the impact or level of transformation of their interventions and/or practices: It is common for businesses to make a one-off ‘green’ investment and capitalise on this flagship effort to gain as much publicity as possible. For example, in the tourism industry it is quite common to see businesses claiming they are sustainable or green because they planted 500 trees or supported a conservation drive five years ago or so. A few questions need to be raised when such a claim is made. For example, what is the guarantee that the land where trees are planted will not be converted to other uses before the trees mature? Some businesses have no idea where the trees are planted because they donated seedlings to some organisation to plant the trees and the only evidence they have is a photo-op of the cheque handing-over ceremony and images of a newly planted tree seedlings on some piece of land, which could be anywhere! Then there is the question of the survival-rate of the trees. What is guarantee that trees will be cared for to maturity? Are there reports indicating the surviving trees each year? Unfortunately, most awards and recognition schemes, including some certification programs, do not have the capacity to verify claims of awardees or simply do not consider it important. As a result, many tourism businesses have become award chasers and do not emphasise impact assessment, which is misleading.
“Good practices can be copied, but values have to be learnt”.
NB: Judy is the founder of STTA. STTA conducts direct business coaching and training workshops for businesses on how to establish a good sustainability strategy, reporting, monitoring and more. STTA also conducts assessments for business to determine their sustainability performance.