Climate Change, Risk Management, Resource Scarcity, And The Travel And Tourism Industry
In 2015, travel and tourism’s total economic contribution was more than $7 trillion in GDP representing 9.8% of total GDP, and travel and tourism employed 284 million people, according to the World Travel & Tourism Council (WTTC). As one of the world’s largest hospitality companies Wyndham Worldwide contributes to these effects by operating lodging facilities or buildings, and using transportation and products to provide services. These sectors emit greenhouse gases that contribute to global warming, climate change and resource scarcity.
Climate change and resource scarcity may present the following risks to our businesses:
Increased natural disasters in areas where we operate our properties and franchise our brands.
Rising costs of fuel, energy and water.
Reduced travel from increasing costs to consumers and natural disasters affecting availability.
Increased regulatory legislation which may inhibit growth and negatively impact operational profitability under current business practices.
Some key opportunities that may be driven from climate change to our business include:
Increased demand by customers for existing products and services due to new green building certifications, and standards such as the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) and Energy Star labeling.
Increased green regulations and in turn development of new guidelines and products, such as the development of Wyndham Worldwide’s eco-software program called the Green Toolbox, which tracks and reports its environmental performance. This makes it easier for owners to comply and meet changing requirements.
New product efficiency standards, new products such as Energy Star rated appliances and renewable energy installations that help owners reduce operating expenses over time.
Revenue opportunities by major clients requesting green hotels and resorts as part of their own supply chain sustainability requirements.
Climate Risk Management
The above listed risks and opportunities are industry drivers that have influenced our strategic plan. The plan also reviews our performance and the materiality of our risks and opportunities, competitive positioning and stakeholder perceptions. One of our major goals linked to climate change is to reduce our carbon emission 25% by 2025 and green our supply chain of $2.1 billion to 30% by 2020. In 2015, we reduced our GHG emissions by 21%. This goal has been disseminated throughout the organization.
A key goal of our environmental management system is to help our facilities reduce their energy usage, improve our building performance and increase the use of green products and services. The sustainability department focuses on tracking and measuring Wyndham Worldwide’s environmental performance as well as training and educating internal and external stakeholders and providing resource tools. The department tracks legal compliance and assesses significant risks and the economic impact on the Company associated with climate change.
SVP CSR/Sustainability, Wyndham Worldwide