Choice Hotels Boosts Environmental Reporting But Overlooks Key Pieces

Skift Take

Choice Hotels is late to the ESG party, but it’s now started to formally report some data. All in all an important first step, but we hope there’s more to come.

Wouter Geerts

Choice Hotels International released its 2022 Environmental, Social and Governance (ESG) report earlier this week, but emissions from the vast majority of its properties — franchised hotels — are missing. 

It is the first time the company has reported on its environmental and social efforts at this scale. While other hotel companies of Choice’s size have done so for many years, the owner of brands like Comfort, Quality Inn, Clarion, and EconoLodge is coming late to the party. It probably didn’t have an option as scrutiny of hotel groups intensifies.

The report provides some emissions data for the company, as well as achievements and targets to improve further over the coming years.

Skift Research recently released its Progress in Sustainability report, investigating the environmental reporting and performance of six of the largest hotel companies. Choice Hotels was not included as the company had no reporting at the time of research. That has now changed, although its reporting remains less thorough than that of its competitors.

The company now reports on scope 1 and 2 emissions, which is an important step forward, but it offered no insight into scope 3 emissions yet. 

Chief Executive Officer Patrick Pacious writes in the report that the company is “in the process of implementing a systemwide automated utility tracking dashboard that will make it easier for franchised hotels to identify opportunities for energy and water reduction. The dashboard will also provide us with the high-quality data we need to begin understanding Scope 3 emissions.”

In scope 3, Choice is missing an important piece of the puzzle because emissions from franchised hotels fall under scope 3. 

According to Capital IQ, Choice Hotels had nine hotels under operational control in 2022 (which fall under scope 1 and 2 emissions), while a whopping 7,388 properties were franchised and therefore not measured.   

Some other key points we would like to see from Choice to improve its reporting further:

• We commend Choice for its efforts around social efforts around staff and community, including driving a 53 percent year-over-year increase in the company’s hotel franchise deals with woman owners and committing $25 million in incentives for contracts with underrepresented minority and woman owners by 2025. The report is heavily skewed towards social elements and much thinner on environmental and climate change efforts.
• The report offers some great insights and examples of the company’s work, but clear near and long-term targets for emission and water reductions are missing. The company has not set science-based targets yet, or formally committed to doing so, although it is mentioned in the report as an action point for the company.
• Start reporting efforts to the CDP (formerly known as the Carbon Disclosure Project). While a company-branded ESG report is a good start, it allows Choice to leave out parts where it is not yet tracking its impact. 

All in all an important first step, but we hope there’s more to come. For context, subscribers can read Skift Research’s Progress in Sustainability report.