When we first met, I joked that your dual title – chief financial and sustainability officer – is perfection because sustainability efforts often hit financial walls. So, tell me, how smart is it to give you oversight of both functions?
Prior to Kevin (Kevin Goh, CEO, lodging, CapitaLand Investment) asking me to take on this role, I was managing a listed REIT and driving a lot of sustainability initiatives. I have a strong personal interest in sustainability and I can see why it is important for businesses.
Since taking on this role (in August 2022), I’ve got Ascott certified by the Global Sustainability Tourism Council (GSTC), drawn up the Ascott CARES sustainability framework, and set targets that are fairly ambitious for our group.
That has been our journey in the public eye, but our internal sustainability efforts have been extensive for a long time. We work very closely with our teams across countries to get them excited about sustainability initiatives. We have sustainability champions and clusters in every country.
Being a chief financial officer that is also a chief sustainability officer helps, as it allows sustainability to be included in the leadership agenda. Driving sustainability from the top makes a difference. Furthermore, through the finance lens that I wear, I can appreciate why there is capex (capital expenditure) on sustainability initiatives and know that there can be financial returns on these investments. It makes it easier for projects to be approved.
This is a truly purposeful role.
There is a common belief that being sustainable helps lower costs, so customers should benefit from these savings too. What are you seeing on the financial side of being sustainable?
Cost savings can be one outcome of sustainability initiatives, such as when you tweak technical procedures like installing motion sensors to control lighting and air-conditioning. We have seen close to 20 per cent savings on utility bills just by making these maintenance and engineering adjustments. Better food waste management also results in cost savings.
However, these things involve capex upfront.
As with all business decisions, a cost-benefit analysis is required. Usually, the payback from capex investment comes five to seven years on average.
Having said that, we are not passing the cost of our sustainability efforts to the customer.
In any case, I don’t see consumers asking for a reduction in room rates just because the property is sustainable. On the contrary, I think people are expecting sustainable products to be a bit more expensive.
Being sustainable has business benefits. A lot of OTAs and corporate buyers place great emphasis on sustainable travel suppliers. When a hotel meets certain ESG (environmental, social and governance) criteria, it is pushed to the top of listings and that results in greater visibility and more eventual bookings.
Ascott has a lot of corporate business, and we see sustainability questions being included in RFPs. Failing to meet the sustainability criteria of our clients would mean getting removed from their (supplier) programme.
So, while some see sustainability as a cost item, I see it as a business opportunity.
The concept of sustainability has changed a lot for many travel and tourism organisations over recent years. How has it evolved for Ascott?
Sustainability is no longer a ‘why do it’ but a ‘how to do it’. Most of us are long past justifying the need to be sustainable.
Ascott is part of CapitaLand, which has a heavy focus on sustainability and has been running initiatives for the past decade. CapitaLand publishes an annual sustainability report that is according to GRI Standards – that means all subsidiaries, including Ascott, have to be aligned with CapitaLand when it comes to sustainability.
When we started Ascott CARES last year, we determined our efforts based on the five pillars of Community, Alliance, Respect, Environment, and Supply Chain. We went out to all our teams across countries to get their buy-in, and we set achievable targets to motivate everyone to do more.
We also set up Ascott Sustainability Community and Engagement, held once every two months to bring everyone, every cluster, together online to talk about their projects and outcomes, and for related training, such as GSTC certification requirements.
We have done four sessions so far, and had close to 700 people dialling in globally. The sessions are very encouraging, as different clusters can learn about what others are doing in the sustainability space, and adopt suitable ideas themselves.
When it comes to sustainability efforts, the common observation is that one cannot go at it alone. Partners, contractors and suppliers must be aligned too. How is this happening at Ascott?
Procurement is a big part of sustainability efforts, so CapitaLand has a supplier code of conduct that covers various aspects of sustainability. Before suppliers can be onboarded, they need to sign off on this code.
We know different companies will undergo the sustainability journey differently, especially SMEs. The good thing is, Enterprise Singapore (a government agency tasked with helping local companies grow) is helping SMEs here to adopt sustainability processes. At Ascott, we also help our suppliers along with education, to show what is important for them to do and what certification they need to attain.
Looking ahead, what is the next sustainability frontier for Ascott?
We have achieved quite a lot in the past one year, and we continue to set targets every year for the next five years to keep challenging ourselves.
We have set targets for properties that need to be green and GSTC-certified.
Sustainability is living and evolving, so we expect targets will need to be refreshed when they are no longer relevant.
We will keep going on this journey, learning and improving our efforts as we do.
