Who – the protagonist
Catherine Dolton, Chief Sustainability Officer and Vice President, Global Corporate Responsibility at IHG Hotels & Resorts.
What?
IHG’s business model was an asset-light one, in which it either franchised its brands to hotel operators or managed hotels on behalf of owners.
At the end of 2021, 71% of IHG’s hotel rooms were operating under the franchise model, 28% were managed, and 1% were owned (or leased) by the group itself, resulting in 17% of 2021 revenues.
In the same year, IHG’s operating profit stood at $494 million. Down compared to pre-COVID, but a significant improvement.
Why?
IHG announced that it would be stepping up its commitment to the fight against climate change by setting emission reduction targets in line with a 1.5 degree increase in average global temperatures compared to pre-industrial times.
IHG had already been trying to meet the previous target of two degrees over the last 15 years, so this lower number meant that a significant additional reduction in carbon emissions was now required by 2030.
When?
According to the Sustainable Hospitality Alliance, to align with targets that were set in the Paris Agreement on climate change, and given the projected increase in hotel rooms worldwide, the industry needed to reduce its carbon emissions per room by 66% in 2023, and by 90% in 2050.
Just to get to two degrees by 2030 would mean IHG having to reduce total emissions from its owned, leased and managed hotels by 15%, and by 46% per square metre in franchised hotels.
Where?
By 2021, IHG had 17 hotel brands across customer segments and a presence in over 100 countries with nearly 6,000 hotels and 900,000 rooms.
The Americas was the largest region, accounting for 50% of revenues, while Greater China had been the fastest growing region, representing over 10% of revenues.
In February 2021 IHG changed its name to IHG Hotels & Resorts.
Key quote
“Corporate customers are starting to use carbon emissions data when deciding which hotels to book for their staff, and leisure guests are also becoming more interested in the sustainability performance of hotels. Meanwhile, investors are increasingly taking ESG considerations into account and competitors are moving ahead with their sustainability efforts.”
Catherine Dolton, Chief Sustainability Officer and Vice President, Global Corporate Responsibility at IHG Hotels & Resorts
What next?
Coming out of the COVID pandemic, profitability at hotels had suffered worldwide and there was a great need to improve financial performance in the short term.
IHG were no different, maintaining plans for 240,000 new hotel rooms across the globe. One of the major challenges would be to work with developers and make them look past the high cost of sustainability features on construction.
Moreover, sustainability goals would also depend on external factors such as the pace of technological innovation, the de-carbonisation of electricity grids and government policies. But IHG’s impact could be limited as it was only one of the large global hotel companies.
Getting your point across through a case
Tim said: “I have been working on corporate responses to climate change for some time. After considering the topic from various angles, I have come to the conclusion that the idea that companies obtain a competitive advantage by being proactive about climate change and emission reductions can best be communicated through cases and simulations.
“Statistical analyses of the relationship between company performance and climate action are useful, but they do not speak to the imagination in the same way as in-depth discussions of corporate sustainability strategies of interesting companies.
“I chose a leading global player in the hotel sector for the case since most learners know something about this industry (at least as a customer), and many people have ideas about how hotels can be more sustainable.”
Relatable subject
Tim continued: “Teaching the case has been very enjoyable. It’s an easy story to relate to for both teachers and students. Since curricula on sustainable business are not yet well developed, the case provides an opportunity to cover all the aspects that are relevant to integrating emission reductions in business strategy. The story in the case brings these points out in a step-by-step way and students can deduce the lessons for themselves, rather than being told through a series of bullet points on a slide.”
Industry cross-over
He added: “The fact that many learners have an affinity with the hospitality industry makes it easy for them to engage with the material.
“It has also been possible to generalise the learnings and to make parallels with other industries. Many companies have gone through similar stages of integrating sustainability in their strategies and are facing the same challenges of target-setting, sustainability performance measurement and the trade-offs between short-term cashflow on the one hand and medium-term business performance and sustainability on the other.
“With the case, learners find these concepts easy to relate to, even if they have no work experience yet.”
Case writing tips
Tim commented: “I believe that a good case is based on field research, including discussions with a variety of relevant people at the company. Since senior management time is scarce, it is important to do as much desk research as possible prior to any meetings. This helps to establish the author’s credibility and makes the meeting time more productive.”
Importance of climate change learning materials
Tim concluded: “Teaching about corporate action on climate change is an important and rapidly developing field. More than ever, we need a variety of engaging learning materials to get managers to integrate climate change into their strategies and operations. Cases are already making a big contribution to business education on climate change and as the topic evolves, new cases will help to capture and share the learning.”
The case
Who – the protagonist
Catherine Dolton, Chief Sustainability Officer and Vice President, Global Corporate Responsibility at IHG Hotels & Resorts.
What?
IHG’s business model was an asset-light one, in which it either franchised its brands to hotel operators or managed hotels on behalf of owners.
At the end of 2021, 71% of IHG’s hotel rooms were operating under the franchise model, 28% were managed, and 1% were owned (or leased) by the group itself, resulting in 17% of 2021 revenues.
In the same year, IHG’s operating profit stood at $494 million. Down compared to pre-COVID, but a significant improvement.
Why?
IHG announced that it would be stepping up its commitment to the fight against climate change by setting emission reduction targets in line with a 1.5 degree increase in average global temperatures compared to pre-industrial times.
IHG had already been trying to meet the previous target of two degrees over the last 15 years, so this lower number meant that a significant additional reduction in carbon emissions was now required by 2030.
When?
According to the Sustainable Hospitality Alliance, to align with targets that were set in the Paris Agreement on climate change, and given the projected increase in hotel rooms worldwide, the industry needed to reduce its carbon emissions per room by 66% in 2023, and by 90% in 2050.
Just to get to two degrees by 2030 would mean IHG having to reduce total emissions from its owned, leased and managed hotels by 15%, and by 46% per square metre in franchised hotels.
Where?
By 2021, IHG had 17 hotel brands across customer segments and a presence in over 100 countries with nearly 6,000 hotels and 900,000 rooms.
The Americas was the largest region, accounting for 50% of revenues, while Greater China had been the fastest growing region, representing over 10% of revenues.
In February 2021 IHG changed its name to IHG Hotels & Resorts.
Key quote
“Corporate customers are starting to use carbon emissions data when deciding which hotels to book for their staff, and leisure guests are also becoming more interested in the sustainability performance of hotels. Meanwhile, investors are increasingly taking ESG considerations into account and competitors are moving ahead with their sustainability efforts.”
Catherine Dolton, Chief Sustainability Officer and Vice President, Global Corporate Responsibility at IHG Hotels & Resorts
What next?
Coming out of the COVID pandemic, profitability at hotels had suffered worldwide and there was a great need to improve financial performance in the short term.
IHG were no different, maintaining plans for 240,000 new hotel rooms across the globe. One of the major challenges would be to work with developers and make them look past the high cost of sustainability features on construction.
Moreover, sustainability goals would also depend on external factors such as the pace of technological innovation, the de-carbonisation of electricity grids and government policies. But IHG’s impact could be limited as it was only one of the large global hotel companies.
Author perspective
Getting your point across through a case
Tim said: “I have been working on corporate responses to climate change for some time. After considering the topic from various angles, I have come to the conclusion that the idea that companies obtain a competitive advantage by being proactive about climate change and emission reductions can best be communicated through cases and simulations.
“Statistical analyses of the relationship between company performance and climate action are useful, but they do not speak to the imagination in the same way as in-depth discussions of corporate sustainability strategies of interesting companies.
“I chose a leading global player in the hotel sector for the case since most learners know something about this industry (at least as a customer), and many people have ideas about how hotels can be more sustainable.”
Relatable subject
Tim continued: “Teaching the case has been very enjoyable. It’s an easy story to relate to for both teachers and students. Since curricula on sustainable business are not yet well developed, the case provides an opportunity to cover all the aspects that are relevant to integrating emission reductions in business strategy. The story in the case brings these points out in a step-by-step way and students can deduce the lessons for themselves, rather than being told through a series of bullet points on a slide.”
Industry cross-over
He added: “The fact that many learners have an affinity with the hospitality industry makes it easy for them to engage with the material.
“It has also been possible to generalise the learnings and to make parallels with other industries. Many companies have gone through similar stages of integrating sustainability in their strategies and are facing the same challenges of target-setting, sustainability performance measurement and the trade-offs between short-term cashflow on the one hand and medium-term business performance and sustainability on the other.
“With the case, learners find these concepts easy to relate to, even if they have no work experience yet.”
Case writing tips
Tim commented: “I believe that a good case is based on field research, including discussions with a variety of relevant people at the company. Since senior management time is scarce, it is important to do as much desk research as possible prior to any meetings. This helps to establish the author’s credibility and makes the meeting time more productive.”
Importance of climate change learning materials
Tim concluded: “Teaching about corporate action on climate change is an important and rapidly developing field. More than ever, we need a variety of engaging learning materials to get managers to integrate climate change into their strategies and operations. Cases are already making a big contribution to business education on climate change and as the topic evolves, new cases will help to capture and share the learning.”
