How a hospitality company devised a robust ESG framework

Aprominent hospitality company wanted to provide bigger impetus to its commitment toward driving sustainability in its business and emerge as a responsible organization. In line with its constant strive to improve its Environmental, Social, And Governance (ESG) performance, the company was looking to develop a meaningful strategy to integrate ESG in the organization and prepare disclosures in line with the globally recognized frameworks. To further deepen its sustainability commitment, the company endeavors to implement a comprehensive ESG strategic framework that is backed by key focus areas pertaining to its operations, corporate policies and other practices.

With its extensive market experience in advising companies and supporting them in their sustainability journey, the company worked with EY to facilitate the following: 

1.  Assess the company’s ESG maturity state in line the mega trends in the hospitality sector and as against the performance of peers
2.  Conduct a detailed materiality assessment exercise to understand the key topics relevant to the company’s business and its stakeholders
3. Support the development of a tailored ESG strategic framework that can be implemented by the company to enhance its nonfinancial performance

EY's approach to supporting and advising the company in building a tailored strategy encompassed well-defined steps, including an in-depth research to understand its current state, opportunities for development, and measures that can assist in enhancing disclosures.

EY conducted an in-depth peer benchmarking with respect to sectoral mega trends and peer performance to understand the current state of the organization from an ESG perspective. The exercise helped in identifying the key gaps that could be addressed by the company to enhance its sustainability performance and disclosures. Furthermore, EY supported the company in sensitizing its stakeholders on aspects pertaining to ESG.

As a next step, EY assisted the company in undertaking a materiality assessment to identify the key topics that:

•  Are relevant to the expectations of the stakeholders
•  Have the potential to impact the organization either positively or negatively

To do this, EY researched and developed a universe of material issues as per the industry standards, global standards, and peer best practices. Post this, we helped the company in identifying the relevant internal and external stakeholders to conduct meaningful interactions with them. This activity helped us in gathering the views of the company’s critical stakeholders and leveraging their responses to develop the materiality matrix and ESG strategy.

Supported by EY’s Materiality Assessment Tool, the company was able to utilize the materiality results to determine the key focus areas that are relevant to its business and matter the most to its stakeholders.

EY also supported the company in developing a customized ESG strategic framework by recommending strategic focus areas across the value chain. The strategy is supported by significant pillars that reflect the company’s brand ethos. Furthermore, EY also assisted the company in drafting its ESG policy in line with the certain globally recognized standards. In addition to this, EY provided recommendations on establishing an ESG Governance Framework and determining roles and responsibilities.

Over the years, EY has been successfully assisting and supporting various organizations across diverse sectors to embark on their ESG journey and create a positive impact on the ecosystem. EY’s expertise has helped these organizations in improving their nonfinancial performance and implementing result-oriented strategies that are in line with the business objectives and stakeholder interests. 

Similarly, the company was able to achieve the following outcomes through EY’s advisory and support:

1. Identified current ESG maturity as against its peers and determined the key material topics relevant to its business
2. Established an enterprise-wide long-term vision and purpose that entwines with its sustainability commitment
3. Determined the key pillars that will be fundamental in driving its sustainability performance
4. Determined the relevant KPIs that will further help the leadership to visualize nonfinancial performance
5. Established short-term, medium-term and long-term goals to achieve its sustainability vision and purpose
6. Development and implementation of a three-tier ESG Governance Structure that brings together the Board, Senior Management and Execution Teams together to achieve sustainability targets