Shift from voluntary to mandatory sustainability reporting
The global shift from voluntary to mandatory sustainability reporting is transforming the Travel & Tourism sector. What was once an optional framework for companies to disclose their environmental, social, and governance (ESG) practices is now becoming a regulatory requirement. As governments and regulatory bodies around the world, such as the European Union and the US Securities and Exchange Commission (SEC), enforce stricter sustainability disclosure standards, Travel & Tourism companies are increasingly being held accountable for their environmental impact. This shift not only ensures greater transparency but also challenges businesses to integrate sustainability into their core strategies, shaping the future of responsible travel.
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The global shift from voluntary to mandatory sustainability reporting is transforming the Travel & Tourism sector. What was once an optional framework for companies to disclose their environmental, social, and governance (ESG) practices is now becoming a regulatory requirement. As governments and regulatory bodies around the world, such as the European Union and the US Securities and Exchange Commission (SEC), enforce stricter sustainability disclosure standards, Travel & Tourism companies are increasingly being held accountable for their environmental impact. This shift not only ensures greater transparency but also challenges businesses to integrate sustainability into their core strategies, shaping the future of responsible travel.
Progression timeline:
- Voluntary frameworks:
- GRI (Global Reporting Initiative): Widely adopted voluntary standard.
- PRI (Principles for Responsible Investment): Framework guiding responsible investment practices.
- TCFD (Task Force on Climate-Related Financial Disclosures): Supported by over 5,000 companies, providing a strong foundation for global standards.
- Transition phase:
- Stakeholders increasingly demand transparency and accountability. Only 42% of travel companies had defined a climate target as of 2021, highlighting the gap in voluntary adoption.
- Mandatory frameworks:
- CSRD (Corporate Sustainability Reporting Directive - EU): In force from 2023, requiring double materiality reporting on both financial and environmental impacts.
- SEC Climate-Related Disclosures (US): New rules expected, with Scope 1 and 2 emissions reporting requirements.
- ISSB (International Sustainability Standards Board): Launched in 2023, global standard for consistent sustainability reporting.
KEY TAKEAWAY: Companies must transition from voluntary frameworks to meet mandatory, global reporting standards that ensure transparency and comparability across industries and regions.
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