SDG 12 - SUSTAINABLE CONSUMPTION and PRODUCTION

Tourism is a dominant service sector that contributed about 10% to global GDP in 2019, with 2023 numbers expected to nearly recover to pre-pandemic levels. Through linkages with other sectors such as transportation, infrastructure and gastronomy, tourism consumes large amounts of land, water, energy and food. While certain sustainable tourism trends emerged over the course of the pandemic, negative pre-pandemic trends – specifically mass tourism – are on the rise again, and the sector’s resource consumption levels are increasing again too. The current post-pandemic developments in tourism therefore appear to go in a different direction than what is needed to deliver Sustainable Development Goal (SDG) 12.

In order to generate sustainable consumption and production patterns in tourism, we need to stop measuring success through purely economic indicators such as GDP and employment figures. We do not just need more jobs, but better ones: Workers deserve fair wages, as well as safe and healthy labor conditions. Similarly, we need to move from top-down tourism development to participatory models, and we need to ensure environmentally and climate-sensitive travel. While these changes obviously require significant efforts in the tourist destinations, we must not forget that consumption and production are mutually dependent. Therefore, it is imperative that we hold source markets responsible and shift demand from unsustainable tourism products to those considered more sustainable.

Target 12.b calls for the development and implementation of “tools to monitor sustainable development impacts for sustainable tourism that creates jobs and promotes local culture and products.” As corporate practices in the source markets affect tourism production in the destinations, target 12.b – albeit it does not specifically say so – also requires source markets to take action. Specifically, strong legislations and public support in the tourist sending countries are needed to accompany businesses on a transformative pathway to sustainable tourism and drive the development of adequate monitoring tools.

Supply chain due diligence: a legal “push” for sustainability?

Supply chain due diligence marks a significant chance in this regard, because it requires companies to both monitor the human rights impacts of their business activities, and to take measures to prevent, mitigate and remediate negative human rights impacts along their supply chains. Tourism supply chains do not just involve hotels, transportation and excursions, but also bars, restaurants, and local souvenir shops. Besides, tourism relies heavily on the informal sector. Informal workers such as street vendors or rickshaw drivers, who often find themselves in particularly vulnerable situations, account for about half of all tourism jobs worldwide. As a concept, supply chain due diligence requires tourism and travel companies to consider these aspects and to carefully assess and monitor the human rights impacts of their own business activities. If put into legislation (as is increasingly the case), it will drive companies to come up with adequate monitoring instruments, which – to date – are often missing.While the due diligence concept originally emerged as a means to assess and address human rights risks in supply chains, recent pieces of legislation also refer to environmental risks, albeit to varying degrees. While the German Supply Chain Due Diligence Act (LkSG, by its German acronym) includes environmental due diligence requirements, the latter are limited to environmental impacts that directly affect human rights. A direct responsibility to address environmental risks is limited to three binding international legal instruments (see endnote 1) while climate change is left out altogether.Another weakness is that the German law only applies to companies of 3.000 or more employees (the number will decrease to 1.000 in 2024), making it only marginally relevant for the tourism industry as a whole. As of today, only the largest four out of 3.000 German tour operators are affected by it. Nevertheless, it paved the way for more ambitious legislation to follow, with the European Corporate Sustainability Due Diligence Directive (CSDDD) currently under way. The latter will apply to European companies of 250+ employees and a sales volume of 40+ million euros. In its current form, it will require more thorough risk analyses (the German law only covers Tier-1 suppliers) and include stricter sanctions mechanisms for those companies that fail to comply. While many small and medium-sized tourism companies will continue to be exempted from the legal requirements, one can hope – and efforts must be undertaken to ensure that this is the case – that the legislative changes will lead to improved sustainability standards across the industry as a whole.

While the CSDDD includes a specific article on climate-related risks (Article 15), business partners and supply chains are exempted from this article (see endnote 2), and the obligations imposed under Article 15 are far lower than those imposed under the articles covering human rights risks. They include instructions to ensure compatibility with the Paris Agreement’s 1.5° C target and, where climate change has been identified as a salient risk, the setting of emissions reduction objectives. In terms of climate-related risks, therefore, supply chain due diligence does not yet appear to be an adequate instrument for change.

Science-based targets: on the road to effective emissions reductions?

The setting of emissions reduction targets is the primary aim of the Science Based Targets Initiative (SBTi). Covering GHG emission scopes 1-3 (see endnote 3), the STBi has popularized a number of methodologies to assess whether or not a company’s emissions reduction objectives align with contemporary climate science, specifically the long-term global warming scenarios and the ambitions set in the Paris agreement (well below 2° C compared to pre-industrial levels, with efforts to further limit the increase to 1.5° C). To this end, the science-based targets (SBT) depart from the assumption that there is a global carbon budget, which cannot be exceeded if the commitments set in the Paris agreement are to be met. Over the past few years, an increasing number of tour operators and airlines have begun to have their emissions reduction plans validated by the SBTi. This constitutes an important development, as the industry has long been plagued by misleading net-zero schemes, in which carbon offsets are promoted as an effective means towards net-zero. The SBTi marks a significant improvement in this regard (see endnote 4), as it clearly acknowledges that carbon offsets do not replace the urgent need to slash emissions. The SBTi therefore only considers offsets as an option for companies wanting to engage in sustainability practices beyond value chain mitigation.

In this way, the SBTi is successfully setting a new bar for corporate climate action across the globe. However, the SBTi does not assess the actual transformation measures taken at the company-level, as it only validates emissions reduction plans. Further oversight and monitoring instruments are needed to ensure that these plans will translate into actions. So far, the SBTi validating team seems too small to meet this huge responsibility.

How to encourage consumers to make sustainable travel choices?

While tourism and travel companies should be the ones to bear the primary burden when it comes to reducing emissions and increasing sustainability, consumer choices matter too. But what drives consumer behavior, and what options do companies have to steer such behavior?A Booking.com study recently found that 76 percent of travelers want to travel more sustainably within the coming 12 months. While these results seem promising, the intention-action gap is known to be high in tourism, and the question remains how to close it. To this end, the Booking.com study uncovers insightful findings: about half (49%) of travelers want economic incentives to book sustainable travel options, while 43% state that they would be willing to pay more for sustainable travel products.There is no doubt that governments play a significant role in fostering sustainable travel, and this entails ensuring that such choices remain reasonably priced in comparison to less sustainable alternatives. From this perspective, it is foremost imperative that unsustainable government subsidies – such as exempting airlines from paying a kerosene tax – are removed. Instead, governments should strive towards increasing the availability and affordability of sustainable travel options such as train travel. At the same time, product prices must reflect the true costs of production. In other words, travel products must be priced in such a way as to enable fair wages, good labor conditions and sound environmental standards. While this does in some cases lead to price increases, the reality is that much can be done to increase sustainability in tourism without major price hikes.Indeed, travelers often have the possibility to book sustainable – or rather more sustainable – travel options at affordable prices. Yet they often fail to do so, which perhaps has more to do with a lack of trust than with purely economic considerations. How do consumers know what brands and what labels to trust? When looking for sustainable travel options, consumers are confronted with a wide array of sustainability labels and certificates. Determining which ones to trust can be challenging for consumers exploring sustainable travel options. The process takes time and effort, which is why intermediaries (such as travel agencies and booking platforms) should step in to inform and encourage consumers to make sustainable travel choices. This holds especially true in today’s digital age, where a growing number of individuals arrange their travels online. Prominent booking platforms such as Booking.com or Skyscanner have enormous market power and they can – and should – use this power to leverage sustainability. They can do so, for instance, through prioritizing sustainable accommodations and travel options in their search rankings, as well as through informing consumers about the sustainability risks of a given travel product prior to purchase.

Conclusions

While we have seen a number of important legislative and corporate developments over the past few years that move us somewhat – albeit very marginally – closer to ensuring sustainable consumption and production patterns in tourism, we remain “far off track” (UN, 2023) in delivering SDG 12. In order to sustainably transform the tourism industry as a whole, actions are required at all levels: political-legislative (from municipal to state level), corporate and individual. The fact that SDG 12 includes an explicit target on tourism goes to show that the SDG framework recognizes the sector’s crosscutting nature and strong economic weight. However, target 12.b remains flawed in that it only speaks to the need to develop monitoring instruments for sustainable tourism. While the latter is important, target 12.b leaves out the question who should be responsible for developing such instruments. Indeed, the question of responsibility remains inadequately addressed throughout SDG 12 as a whole. In order to deliver SDG 12, states, corporations and consumers must all take action, and the SDG’s targets could specify who carries what type of responsibilities. Sadly, however, they fail to do so.