*at EarthCheck registered properties that submitted data
Kempinski, Europe’s oldest luxury hotel group, is working with EarthCheck to enhance its ESG reporting and chart its sustainability strategy as it adapts to a new regulatory landscape.
For more than 125 years, Kempinski has been welcoming guests to experience the epitome of luxury at its properties. From Berthold Kempinski’s roots as a Berlin-based wine merchant in 1897, the Kempinski portfolio has grown to include over 80 five-star hotels and residences in Europe, the Middle East, Africa, Asia and the Americas.
But while guests expect timeless charm and sophistication when they step through the doors of a Kempinski property, that doesn’t mean the brand is immune to modern concerns.
Sustainability expectations have never been greater. Guests, investors and regulators alike expect transparency and accountability when businesses like Kempinski discuss their sustainability initiatives, and ESG reporting – the practice of disclosing environmental, social and governance data – is gradually becoming mandatory.
Under the European Union’s Corporate Sustainability Reporting Directive (CSRD), which is being gradually phased in at the moment, these reports will need to be prepared in accordance with European Sustainability Reporting Standards (ESRS), which require disclosure around a broader range of issues.
The CSRD and ESRS introduce ‘double materiality assessment’ – a mandatory exercise that requires companies to take both an inside-out approach, reporting on how their actions impact people and the planet, and an outside-in perspective, reporting on how environmental and social factors are likely to impact the business’ performance, both now and in the future.
It’s a significant undertaking, which is why companies like Kempinski are establishing their reporting infrastructure and building out their data collection and verification capabilities now.
Companies like Kempinski are well-versed in reporting their financial performance – but reporting non-financial ESG performance for the first time can be daunting. It requires companies to determine which issues are material to them, and how to report their performance in a way that aligns with regulatory requirements and frameworks.
Anne Marie Bettex-Baars, Kempinski’s ESG Lead, says determining which issues are material to ESG performance is particularly challenging for Kempinski, because of the company’s deliberately decentralised approach.
“Kempinski has traditionally trusted and empowered our teams in our locations around the world to be largely autonomous, and to take the lead in respecting the cultures and adapting to the environmental concerns of the regions they operate in,” she explains. “But establishing a company-wide ESG reporting framework may present some challenges, because what’s material to a hotel in Ghana may differ from what’s significant to a hotel in Thailand.”
That’s why Kempinski turned to EarthCheck for help. For more than 30 years, EarthCheck has worked with governments, businesses and destinations to deliver science-backed, strategic and sustainable outcomes.
EarthCheck’s ESG consultants help businesses to identify, understand and prioritise the issues that are most relevant to them, and put systems in place for reporting their performance.
Dr Steve Newman, EarthCheck’s Chief Sustainability Officer, says this process begins with the client identifying their key stakeholders, and then working with EarthCheck to gather their input on the likelihood and impact of each issue.
“At EarthCheck, we manage a master list of sustainability issues that are material to the travel and tourism industry,” he explains. “Through a stakeholder-engaged process of review, we prioritise which issues are material in their impact both to and from the business, and then consolidate the most relevant issues into topics for strategic development and reporting. For instance, multiple issues such as storms, sea level rise, temperature changes and dengue outbreaks can be consolidated under a single topic – climate change.”
For Kempinski, this meant consulting the company’s sustainability committee, which includes key organisational members, and engaging subject matter experts to share their perspectives. Through this process, EarthCheck and Kempinski identified:
With that review-and-ranking procedure completed, Dr Newman works with Kempinski to gather the environmental, social and governance data required from the company, and present the data in a format that aligns with existing governance, sustainability and brand frameworks.
Many Kempinski properties also take part in the EarthCheck Certified program to benchmark and improve their sustainability performance, which means their environmental and social performance is already tracked through EarthCheck’s dashboards. To capture data from the properties that don’t take part in this program, Dr Newman consults with Kempinski’s chief engineer, and the heads of relevant departments throughout the business.
In 2021, Kempinski released its first ESG report – a snapshot of the sustainability successes the company had achieved at that time, and the opportunities it had identified for innovation and improvement.
The company has now released its third report, showcasing a range of improvements across key environmental, social and governance metrics. These results include:
Anne Marie says EarthCheck’s help has been crucial to the release of these reports.
“I am extremely grateful for the expertise and structure that EarthCheck has provided,” she says. “EarthCheck has put us in the best possible position to produce these reports, because they know exactly what’s required, and they understand the hospitality sector.
“It’s significant that Dr Newman worked as a Sustainability Officer in the hotel industry for over a decade, because it gives him a deeper understanding of our business. He knows, for instance, that hotel employees tend to be very practical, hands-on people. Their immediate focus is on getting things done for our guests, not on producing these reports, so it’s important that the data collection process doesn’t interfere with their work. Because Dr Newman has that understanding, and he really knows what he’s talking about with regards to ESG reporting, it makes it very easy to work with him.”
Having begun the process of ESG reporting, Dr Newman says EarthCheck is now working with Kempinski to ensure the company is prepared for the rigours of the emerging reporting governance.
“Kempinski are looking to take the next step,” he says. “What they have achieved so far has taken substantial effort – often getting the ball rolling is the hardest part. Now they’re looking to gain momentum, and ensure the rolling ball remains on the right path. We’re hoping to help guide them by supporting a CSRD-aligned double materiality assessment, and a strategic implementation framework.
“It all takes time, but Kempinski are moving in a positive direction.”
While it will be important for all companies that fall within the scope of the CSRD to comply with its requirements, Anne Marie says that’s far from the only reason why businesses like Kempinski are embracing ESG reporting.
“The benefits of ESG reporting go beyond regulatory compliance,” she says. “Customers increasingly expect the hotels they stay with to take sustainability seriously, and investors and business partners are also seeking transparency and accountability. Anyone who’s considering working with Kempinski wants to know what the risks and opportunities are, not just from a financial point of view, but from a social and environmental point of view.”
Anne Marie says that ESG reporting has served as a gap assessment for Kempinski, helping the company to find ways to continually improve – even after more than 125 years.
“These ESG reports aren’t just for external regulators, stakeholders and investors,” she says. “They also help us internally to see where we’re making progress, and which direction we want to take in the future. When you collect ESG data, you see where the gaps are, and you can identify better ways to do things.
“As well as helping us to improve our ESG performance, that helps us to improve our financial performance. For instance, when we increase our energy efficiency and reduce our energy consumption, or make adjustments to how we maintain our swimming pools in order to cut back on the amount of water we use, it doesn’t just benefit the environment – it benefits our bottom line.
“So there are a number of factors beyond the legal requirements that make ESG reporting a worthwhile investment for businesses like ours.”
Ultimately, Anne Marie says Kempinski is dedicated to proving that world-class luxury doesn’t have to come with an environmental or societal price tag. The company’s ESG reports help to spread that message, and to drive positive change across the wider five-star hospitality sector.
“Sustainability is a process,” she says. “I don’t think any business can snap its fingers and suddenly everything is perfect. It’s a journey that we’re all on together. Kempinski is dedicated to learning and developing throughout that journey – and our ESG reports help us to show the world how far we’ve come.”
There are more than 476 million Indigenous Peoples, found in all regions of the world, from the Arctic to the tropical forests. They make up more than 6 per cent of our global population.
In the spirit of reconciliation, EarthCheck acknowledge the Traditional Custodians of Country throughout the world and their connections to land, sea and community. We pay our respect to their Elders past and present and extend that respect to all Indigenous Peoples today.
EarthCheck acknowledges that Indigenous Peoples are guardians of the forests and biodiversity hotspots we all depend on. Research shows that lands managed by Indigenous Peoples, with secure rights, experience lower deforestation rates, store more carbon, hold more biodiversity, and benefit more people than other lands — including protected areas.
We recognise and support the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), the most comprehensive international instrument on the rights of Indigenous Peoples. The Declaration is a positive document that maps out a path for Indigenous Peoples to be free from discrimination and secure in their identities and life choices.
EarthCheck science and products were developed by the Australian Government Sustainable Tourism Co-operative Research Centre (STCRC) over ten years. Our science is reviewed annually to ensure that it meets international standards relative to greenhouse gas protocols, responsible tourism, and certification.
EarthCheck products and services are built on the Agenda 21 principles for Sustainable Development endorsed by 182 Heads of State at the United Nations Rio De Janeiro Earth Summit in 1992 and aligned to the SDGs.
EarthCheck Certified provides a framework for organisations to achieve the desired outcomes for sustainable development as set out in the final report of the World Summit for Sustainable Development held in Johannesburg in 2002.
EarthCheck Certified complies with the Mohonk Agreement (2000), which outlines the guidelines and principles for an international sustainable tourism certification program. It is also a Recognised program of the Global Sustainable Tourism Council (GSTC).
EarthCheck Certified is a verification standard accepted by CDP. It is also an approved program of the Certification and Accreditation Administration of the People’s Republic of China (CNCA), London & Partners, the Mexican Secretary of Tourism (SECTUR) and the City of Sydney.
EarthCheck Certified is an approved program for meeting the EU Energy Directive for the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle – BAFA) in Germany and the Netherlands Enterprise Agency (Ministry of Economic Affairs and Climate Policy) in the Netherlands.
EarthCheck partners with international research organisations to maintain the currency of EarthCheck science and our benchmarking systems.
The EarthCheck brand signifies scientific excellence, better environmental, economic, and social performance, improved community interactions, and savings through more efficient use of resources. It provides recognition and promotional support to a global consumer market.
