The hotel sector in Asia Pacific is expanding dramatically and, as a result, so is its environmental footprint. IHG’s Green Engage programme has resulted in substantial reductions in operating costs, and helped to reduce carbon emissions and water consumption
Around the world, hotel groups are innovating to tackle the environmental cost of the rapidly expanding leisure, business travel and meeting and conference (MICE) sectors. With more than 4,700 hotels and more than 1,100 in the pipeline, InterContinental Hotels Group is the largest hotel company in the world and felt it was in a strong position to advance the development of new green building technologies and processes and to use critical mass to bring them to market.
Adopting a “shared value” approach, IHG also believed that this process could deliver significant cost savings for its hotel owners, reduce exposure to future rises in energy prices, mitigate the effect of taxes designed to combat carbon use and drive revenue through attracting green minded guests and corporate clients.
To achieve its aim, IHG developed an online environmental sustainability tool, IHG Green Engage, enabling it to measure, manage and report on the environmental impact and other “carbon reduction” aspects of its hotels. The company believed the programme offered potentially huge advantages to owners for whom energy is the second largest cost in their hotels. It also puts IHG in a strong position to respond to rising energy prices and any future carbon taxes IHG and its hotels may face.
“IHG Green Engage proves the value of our commitment to innovation and collaboration. We look for better ways to manage our carbon footprint than merely offsetting emissions and we engage with our partners to create a ‘green’ culture where owners actively explore solutions that enhance their business,” the company said.
Objectives and delivery
In Asia Pacific (including China),IHG operates more than 360hotels across more than 20countries.
IHG wanted to create a way in which to incentivise their hotels to minimisetheir environmental impacts as part of a long term programme with the flexibility to work on actions that were right for the hotel and for the guest. By developing IHG Green Engage, a comprehensive measurement, solutions and certification programme, IHG have provided their General Managers with everythingthey need to begin to tackle their impactsand drive revenue.
IHG Green Engage provides energy and water benchmarks so hotels can compare their performance with the industry, key measurements such as carbon footprint and waste diversion, and over 200 green solutions for hotels to implement. These features help hotels save money and drive revenue through supporting the sales process with corporate clients. Just as corporate customers have requirements for hotels regarding price, location and quality, they also are beginning to have sustainability requirements when choosing their hotelier.
To support this developing trend, the Global Business Travel Association (GBTA) provides a Request For Proposal (RFP) template for corporate and government clients to use as part of their travel purchasing decision making. In 2013 the GBTA launched a specific Corporate Responsibility (CR) question set (module) which was used by 30% of IHG’s corporate clients. The CR module requests metrics on carbon footprints, water consumption, energy intensity and waste diversion as well as questions relating to certifications and policies. IHG Green Engage helps the hotels answer these questions by feeding data directly into the questionnaire.
The programme also helps IHG with the increasing demands of regulatory compliance such as mandatory carbon reporting, measurement of global impacts and the development of programmes and targets to tackle material issues. Thedata that hotels have entered enables IHG to work with specialists Best Foot Forward to create an in depth understanding of their global carbon and water use. In 2013, IHG took data gathered from more than 1,100 hotels worldwide to measure their carbon footprint. In addition to this, IHG is also measuring water usage from hotels in water stressed areas.
The recommendations offered within IHG Green Engage covers every aspect of the hotel lifecycle, from picking a suitable site to selecting the correct lighting through to choosing responsible cleaning materials and providing staff training on sustainability. The return on investmentis calculated for each action point suggested with consideration made for the impact on guests.
To drive continuous improvement and incentive to develop a long term plan, IHG Green Engage offers four certification levels to its hotel owners:
- Partner – Level 1: This includes 10 activities that get properties acclimatised to using the tool, sets property teams up for success and walks them through a few activities that provide near-term energy and cost savings.
- Achiever – Level 2: This includes action items that are relatively simple to implement with good cost benefits and return on investment.
- Innovator – Level 3: This is, IHG says, more challenging to achieve. Level 3 action items will require more capital investment from the hotels and have longer paybacks.
- Leader – Level 4: This level is described as adopting best practice but may be solutions which have very long or no measurable payback. Hotels that achieve Level 4 demonstrate a leading and innovative approach to being sustainable.
By July 2014, some 2,700 hotels had been enrolled in IHG Green Engage and over 16,000 green solutions were implemented during 2013. Over half of IHG’s global properties had signed up and the company implemented new targets to drive down energy use and make sure hotels used the system to the best of their ability.
By adopting a “shared value” approach and focusing on both impact and outcomes, IHG Green Engage delivered wide-ranging efficiencies and cost reductions across hundreds of hotels. The programme has resulted in substantial reductions in operating costs, owned and managed hotels avoided more than $70 million in energy costs last year for example, while meeting broader environmental objectives.
IHG states: “IHG Green Engage proves the value of our commitment to innovation and collaboration. We look for better ways to manage our carbon footprint than merely offsetting emissions and we engage with our partners to create a ‘green’ culture where owners actively explore solutions that enhance their business.”
IHG Green Engage has also been recognised externally. IHG won the Global Business Travel Association (GBTA) Gold Medal for Sustainability and became the first hotel company to be approved for LEED pre-certification for both new build and existing hotels. In addition to this, IHG Green Engage is also endorsed by Green Key Global and Green Globe, third party certification programmes for the hotel industry.
The next phase of the programme sees the company setting tough targets to reduce its carbon and water use. Between 2013 and 2017 the company is committed to reducing its carbon footprint per occupied room by 12 per cent across its entire estate and reduce water use per occupied room by 12 per cent in water-stressed areas. IHG has already reported a 2.4% and 4.6% reduction in carbon and water respectively between 2012 and 2013.
This case study was written by SharingValueAsia in consultation with IHG. It will appear in special report entitled “Partnership in Action” produced in association with Hewlett-Packard in August 2014
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