The new carbon neutral Zeal Hotel in the UK

The British government has declared a climate emergency and as a result, we need to act before the problem gets worse.  

Our present level of CO2 emissions needs to be reduced considerably in order to comply with the government’s legally binding target to bring the UK’s total greenhouse gas emissions to net-zero by 2050.  

The majority of hotel groups and operators are being proactive towards operating branded hotels in a sustainable manner and we are seeing positive results, albeit at a slow pace! Among other things; single-use plastics are being removed, linen is cleaned at the guest’s request (sometimes), LED lighting is becoming an optional spec., energy-saving FF&E is an advantage & food waste is seriously being looked at.  

Although the action is being taken, operationally, the hotel industry is still behind the curve regarding sustainability action. This is primarily due to the fact that a lot of hotel groups are ‘asset light’ and as such don’t actually own the branded hotel assets. 

The majority of branded hotels (80%) are owned by private investors & funds and most of these have been constructed to a specific budget in line with the equity & debt provider’s ROC requirements. 

Larry Fink, CEO of Blackrock announced on 14th Jan 2020 that the climate crisis is going to ‘trigger a fundamental reshaping of finance’.  This has resulted in many other investment companies and asset managers revisiting their investment criteria in favour of long term sustainable assets. Further down the pecking order, private equity investors & in turn banks will, I am sure, see the light!  

Funds are already committing to ‘de-carbonise’ their portfolios with the goal of net-zero by 2050.