GSAIR 2023 : EMEA 8
It ’ s all about capital
GSAIR 2023 highlighted the ever-increasing importance of sustainable accommodation options to agents and corporates with 64 % of agents saying it is important to their clients . 2 What does this mean for the hospitality industry and how can we be ready ? Ufi Ibrahim explains …
New regulation will transform prospects of attracting capital
By Ufi Ibrahim CEO Energy & Environment Alliance
When it comes to sustainability , most businesses in the hospitality and lodging sector have been focused on energy related regulation , such as the UK minimum energy efficiency standards and energy performance certificates . The reason is that a failure to meet the required standards could result in a ban on the commercial use of a building .
Coupled with the huge spike in energy costs , such regulation has encouraged improvements in energy efficiency and thereby , the operational carbon performance of many hotels and serviced apartments .
Improvements in energy use have largely been achieved through behavioural change and low capital expenditure , such as switching to more efficient light bulbs . However , achieving more substantial improvements will require substantial capital expenditure ; and that ’ s a challenge , given high interest rates and the sums required .
However , the pressure to invest in transformational change is about to increase , starting with new , mandatory climate disclosure requirements , which are expected to have a sobering effect on global financial markets , akin to rules initiated following the stock market crash of 1929 . Back then , regulators grappling with ways to avoid another great depression granted powers to the Securities and Exchange Commission ( SEC ), which was licenced to regulate business practices . This led to the creation of globally accepted accounting and auditing principles which , even today regulate business practices worldwide . Given this proven track record of success , it should come as no surprise that almost 100 years later , regulators are adopting the same principles to tackle growing concerns over misinformation and greenwashing .
New sustainability and climate disclosure requirements were launched in June at the London Stock Exchange . These new rules , governed by the International Financial Reporting Standards ( IFRS ) and International Sustainability Standards Board ( ISSB ), aim to consolidate and rationalise sustainability reporting globally . They were drafted in conjunction with world securities regulators from 130 countries , all of whom are expected to mandate them in their jurisdictions over the coming months . The US ( SEC ), Singapore , Hong Kong , the United Kingdom , Australia , South Africa and Japan have already done so ; and the EU has confirmed interoperability between the IFRS / ISSB and European reporting requirements . They will take effect in the 2024 financial year .
So , financial reports in 2025 will be very different to the audited accounts of the past . First , annual reports will include non-financial , as well as financial risks and prospects . Just as financial information is audited , non-financial information will have to be assured by independent auditors . The non-financial information , which , at the outset , covers general sustainability and climate-related material disclosure , will have to be conveyed using a common language , allowing investors to compare performance across any given sector or market .
2 . Global Serviced Apartment Industry Report 2023