SERVICES SECTOR HOTELS & LODGING Sustainability Accounting Standard Sustainable Industry Classification System® (SICS®) SV-HL Prepared by the Sustainability Accounting Standards Board October 2018 INDUSTRY STANDARD | VERSION 2018-10 © 2018 The SASB Foundation. All Rights Reserved. sasb.org HOTELS & LODGING Sustainability Accounting Standard About SASB The SASB Foundation was founded in 2011 as a not-for-profit, independent standards-setting organization. The SASB Foundation’s mission is to establish and maintain industry-specific standards that assist companies in disclosing financially material, decision-useful sustainability information to investors. The SASB Foundation operates in a governance structure similar to the structure adopted by other internationally recognized bodies that set standards for disclosure to investors, including the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). 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SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 2 Table of Contents Introduction....................................................................................................................................................................4 Purpose of SASB Standards.........................................................................................................................................4 Overview of SASB Standards.......................................................................................................................................4 Use of the Standards...................................................................................................................................................5 Industry Description.....................................................................................................................................................5 Sustainability Disclosure Topics & Accounting Metrics...............................................................................................6 Energy Management...................................................................................................................................................8 Water Management..................................................................................................................................................10 Ecological Impacts.....................................................................................................................................................12 Labor Practices..........................................................................................................................................................15 Climate Change Adaptation......................................................................................................................................18 SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 3 INTRODUCTION Purpose of SASB Standards The SASB’s use of the term “sustainability” refers to corporate activities that maintain or enhance the ability of the company to create value over the long term. Sustainability accounting reflects the governance and management of a company’s environmental and social impacts arising from production of goods and services, as well as its governance and management of the environmental and social capitals necessary to create long-term value. The SASB also refers to sustainability as “ESG” (environmental, social, and governance), though traditional corporate governance issues such as board composition are not included within the scope of the SASB’s standards-setting activities. SASB standards are designed to identify a minimum set of sustainability issues most likely to impact the operating performance or financial condition of the typical company in an industry, regardless of location. SASB standards are designed to enable communications on corporate performance on industry-level sustainability issues in a cost-effective and decision-useful manner using existing disclosure and reporting mechanisms. Businesses can use the SASB standards to better identify, manage, and communicate to investors sustainability information that is financially material. Use of the standards can benefit businesses by improving transparency, risk management, and performance. SASB standards can help investors by encouraging reporting that is comparable, consistent, and financially material, thereby enabling investors to make better investment and voting decisions. Overview of SASB Standards The SASB has developed a set of 77 industry-specific sustainability accounting standards (“SASB standards” or “industry standards”), categorized pursuant to SASB’s Sustainable Industry Classification System® (SICS®). Each SASB standard describes the industry that is the subject of the standard, including any assumptions about the predominant business model and industry segments that are included. SASB standards include: 1. Disclosure topics – A minimum set of industry-specific disclosure topics reasonably likely to constitute material information, and a brief description of how management or mismanagement of each topic may affect value creation. 2. Accounting metrics – A set of quantitative and/or qualitative accounting metrics intended to measure performance on each topic. 3. Technical protocols – Each accounting metric is accompanied by a technical protocol that provides guidance on definitions, scope, implementation, compilation, and presentation, all of which are intended to constitute suitable criteria for third-party assurance. 4. Activity metrics – A set of metrics that quantify the scale of a company’s business and are intended for use in conjunction with accounting metrics to normalize data and facilitate comparison. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 4 Furthermore, the SASB Standards Application Guidance establishes guidance applicable to the use of all industry standards and is considered part of the standards. Unless otherwise specified in the technical protocols contained in the industry standards, the guidance in the SASB Standards Application Guidance applies to the definitions, scope, implementation, compilation, and presentation of the metrics in the industry standards. The SASB Conceptual Framework sets out the basic concepts, principles, definitions, and objectives that guide the Standards Board in its approach to setting standards for sustainability accounting. The SASB Rules of Procedure is focused on the governance processes and practices for standards setting. Use of the Standards SASB standards are intended for use in communications to investors regarding sustainability issues that are likely to impact corporate ability to create value over the long term. Use of SASB standards is voluntary. A company determines which standard(s) is relevant to the company, which disclosure topics are financially material to its business, and which associated metrics to report, taking relevant legal requirements into account1. In general, a company would use the SASB standard specific to its primary industry as identified in SICS® . However, companies with substantial business in multiple SICS® industries can consider reporting on these additional SASB industry standards. It is up to a company to determine the means by which it reports SASB information to investors. One benefit of using SASB standards may be achieving regulatory compliance in some markets. Other investor communications using SASB information could be sustainability reports, integrated reports, websites, or annual reports to shareholders. There is no guarantee that SASB standards address all financially material sustainability risks or opportunities unique to a company’s business model. Industry Description The Hotels & Lodging industry is composed of companies that provide overnight accommodation, including hotels, motels, and inns. It is a competitive industry that is primarily comprised of large hotel chains and in which customers base purchase decisions on a wide range of factors including quality and consistency of services, availability of locations, price, and loyalty program offers. Businesses are often structured in one or more of the following ways: direct revenue from hotel services, including room rental and food and beverage sales; management and franchise services with fee revenue from property management; and vacation residential ownership with revenue from sales of residential units. Note: Select companies in the Hotels & Lodging industry are also engaged in activities of the Restaurants industry. The SASB standards for such activities are outlined in the Restaurants industry standards. For the purposes of this standard, it is assumed that hotels and lodging companies do not provide food and beverage services, and therefore issues such as food safety, waste, and sourcing, which may be material for companies that offer food and beverages, are not covered by this industry standard. 1 Legal Note: SASB standards are not intended to, and indeed cannot, replace any legal or regulatory requirements that may be applicable to a reporting entity’s operations. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 5 SUSTAINABILITY DISCLOSURE TOPICS & ACCOUNTING METRICS Table 1. Sustainability Disclosure Topics & Accounting Metrics UNIT OF TOPIC ACCOUNTING METRIC CATEGORY CODE MEASURE Energy (1) Total energy consumed, (2) percentage grid Gigajoules (GJ), Quantitative SV-HL-130a.1 Management electricity, (3) percentage renewable Percentage (%) (1) Total water withdrawn, (2) total water Thousand cubic Water consumed, percentage of each in regions with Quantitative meters (m³), SV-HL-140a.1 Management High or Extremely High Baseline Water Stress Percentage (%) Number of lodging facilities located in or near areas of protected conservation status or Quantitative Number SV-HL-160a.1 endangered species habitat Ecological Impacts Description of environmental management Discussion and policies and practices to preserve ecosystem n/a SV-HL-160a.2 Analysis services (1) Voluntary and (2) involuntary turnover rate Quantitative Rate SV-HL-310a.1 for lodging facility employees Total amount of monetary losses as a result of Reporting legal proceedings associated with labor law Quantitative SV-HL-310a.2 currency violations2 Labor Practices (1) Average hourly wage and (2) percentage of Reporting lodging facility employees earning minimum Quantitative currency, SV-HL-310a.3 wage, by region Percentage (%) Description of policies and programs to Discussion and n/a SV-HL-310a.4 prevent worker harassment Analysis Climate Change Number of lodging facilities located in 100- Quantitative Number SV-HL-450a.1 Adaptation year flood zones SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 6 Table 2. Activity Metrics UNIT OF ACTIVITY METRIC CATEGORY CODE MEASURE Number of available room-nights Quantitative Number SV-HL-000.A Average occupancy rate3 Quantitative Rate SV-HL-000.B Square meters Total area of lodging facilities4 Quantitative SV-HL-000.C (m²) Number of lodging facilities and the percentage that are: (1) Number, Quantitative SV-HL-000.D managed, (2) owned and leased, (3) franchised Percentage (%) 2 Note to SV-HL-310a.2 – The entity shall briefly describe the nature, context, and any corrective actions taken as a result of the monetary losses. 3 Note to SV-HL-000.B – Measured as number of (1) occupied room-nights divided by (2) available room-nights across all properties. 4 Note to SV-HL-000.C – The scope includes facilities that were owned, operated, leased, or franchised during any portion of the reporting period. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 7 Energy Management Topic Summary Hotel buildings require a significant amount of energy resources to operate, which represent a substantial portion of hotel operating expenses. The majority of the industry’s electricity usage is commercially purchased. This purchased electricity indirectly leads to the release of greenhouse gas (GHG) emissions, which is a large contributor to climate change. Companies in the industry are implementing energy management best practices in order to reduce operating expenses and environmental impacts and to improve their reputations with guests, who are increasingly concerned about environmental sustainability. Accounting Metrics SV-HL-130a.1. (1) Total energy consumed, (2) percentage grid electricity, (3) percentage renewable 1 The entity shall disclose (1) the total amount of energy it consumed as an aggregate figure, in gigajoules (GJ). 1.1 The scope of energy consumption includes energy from all sources, including energy purchased from sources external to the entity and energy produced by the entity itself (self-generated). For example, direct fuel usage, purchased electricity, and heating, cooling, and steam energy are all included within the scope of energy consumption. 1.2 The scope of energy consumption includes only energy directly consumed by the entity during the reporting period. 1.3 In calculating energy consumption from fuels and biofuels, the entity shall use higher heating values (HHV), also known as gross calorific values (GCV), which are directly measured or taken from the Intergovernmental Panel on Climate Change (IPCC), the U.S. Department of Energy (DOE), or the U.S. Energy Information Administration (EIA). 2 The entity shall disclose (2) the percentage of energy it consumed that was supplied from grid electricity. 2.1 The percentage shall be calculated as purchased grid electricity consumption divided by total energy consumption. 3 The entity shall disclose (3) the percentage of energy it consumed that is renewable energy. 3.1 Renewable energy is defined as energy from sources that are replenished at a rate greater than or equal to their rate of depletion, such as geothermal, wind, solar, hydro, and biomass. 3.2 The percentage shall be calculated as renewable energy consumption divided by total energy consumption. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 8 3.3 The scope of renewable energy includes renewable fuel the entity consumed, renewable energy the entity directly produced, and renewable energy the entity purchased, if purchased through a renewable power purchase agreement (PPA) that explicitly includes renewable energy certificates (RECs) or Guarantees of Origin (GOs), a Green‐e Energy Certified utility or supplier program, or other green power products that explicitly include RECs or GOs, or for which Green‐e Energy Certified RECs are paired with grid electricity. 3.3.1 For any renewable electricity generated on-site, any RECs and GOs must be retained (i.e., not sold) and retired or cancelled on behalf of the entity in order for the entity to claim them as renewable energy. 3.3.2 For renewable PPAs and green power products, the agreement must explicitly include and convey that RECs and GOs be retained or replaced and retired or cancelled on behalf of the entity in order for the entity to claim them as renewable energy. 3.3.3 The renewable portion of the electricity grid mix that is outside of the control or influence of the entity is excluded from the scope of renewable energy. 3.4 For the purposes of this disclosure, the scope of renewable energy from hydro and biomass sources is limited to the following: 3.4.1 Energy from hydro sources is limited to those that are certified by the Low Impact Hydropower Institute or that are eligible for a state Renewable Portfolio Standard; 3.4.2 Energy from biomass sources is limited to materials certified to a third-party standard (e.g., Forest Stewardship Council, Sustainable Forest Initiative, Programme for the Endorsement of Forest Certification, or American Tree Farm System), materials considered eligible sources of supply according to the Green-e Framework for Renewable Energy Certification, Version 1.0 (2017) or Green-e regional standards, and/or materials that are eligible for an applicable state renewable portfolio standard. 4 The entity shall apply conversion factors consistently for all data reported under this disclosure, such as the use of HHVs for fuel usage (including biofuels) and conversion of kilowatt hours (kWh) to GJ (for energy data, including electricity from solar or wind energy). SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 9 Water Management Topic Summary Hotel buildings require a relatively large amount of water resources to operate. While water is not the industry’s greatest operating cost, reduced water availability or significant price increases could impact financial results. This impact may be particularly acute in water-stressed region due to supply constraints. Companies in the industry are implementing water management best practices in order to reduce operating expenses and environmental impacts and improve to their reputations with guests, who are increasingly concerned about environmental sustainability. Accounting Metrics SV-HL-140a.1. (1) Total water withdrawn, (2) total water consumed, percentage of each in regions with High or Extremely High Baseline Water Stress 1 The entity shall disclose the amount of water, in thousands of cubic meters, that was withdrawn from all sources. 1.1 Water sources include surface water (including water from wetlands, rivers, lakes, and oceans), groundwater, rainwater collected directly and stored by the entity, and water and wastewater obtained from municipal water supplies, water utilities, or other entities. 2 The entity may disclose portions of its supply by source if, for example, significant portions of withdrawals are from non-freshwater sources. 2.1 Fresh water may be defined according to the local laws and regulations where the entity operates. Where there is no legal definition, fresh water shall be considered to be water that has less than 1,000 parts per million of dissolved solids per the U.S. Geological Survey. 2.2 Water obtained from a water utility in compliance with U.S. National Primary Drinking Water Regulations can be assumed to meet the definition of fresh water. 3 The entity shall disclose the total amount of water, in thousands of cubic meters, that was consumed in its operations. 3.1 Water consumption is defined as: 3.1.1 Water that evaporates during withdrawal, usage, and discharge; 3.1.2 Water that is directly or indirectly incorporated into the entity’s product or service; 3.1.3 Water that does not otherwise return to the same catchment area from which it was withdrawn, such as water returned to another catchment area or the sea. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 10 4 The entity shall analyze all of its operations for water risks and identify activities that withdraw and consume water in locations with High (40–80 percent) or Extremely High (>80 percent) Baseline Water Stress as classified by the World Resources Institute’s (WRI) Water Risk Atlas tool, Aqueduct. 5 The entity shall disclose its water withdrawn in locations with High or Extremely High Baseline Water Stress as a percentage of the total water withdrawn. 6 The entity shall disclose its water consumed in locations with High or Extremely High Baseline Water Stress as a percentage of the total water consumed. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 11 Ecological Impacts Topic Summary Healthy ecosystems are linked with the economic and financial performance of local communities and businesses. The influx of tourists and the waste generated by hotels can present risks to sensitive ecosystems such as coral reefs and nature preserves. Poor environmental protection practices may preclude hotels from obtaining new construction licenses in these sensitive areas and could, in the long term, diminish natural attractions for tourists that help to generate revenue for communities and hotels. In contrast, protection of the environment may make travel destinations more attractive and increase demand for room bookings. Accounting Metrics SV-HL-160a.1. Number of lodging facilities located in or near areas of protected conservation status or endangered species habitat 1 The entity shall disclose the number of lodging facilities operated, owned, leased, or franchised in sites with protected conservation status, or areas of endangered species habitat. 1.1 Lodging facilities are considered to be located in areas of protected conservation status if they are located within: 1.1.1 Biosphere Reserves recognized within the framework of the United Nations Educational, Scientific and Cultural Organization's (UNESCO) Man and Biosphere (MAB) Programme 1.1.2 International Union for Conservation of Nature (IUCN) Protected Areas (categories I-VI) 1.1.3 Natura 2000 sites 1.1.4 Ramsar Wetlands of International Importance 1.1.5 Sites that meet the IUCN’s definition of a protected area: “A protected area is a clearly defined geographical space, recognized, dedicated, and managed through legal or other effective means to achieve the long term conservation of nature with associated ecosystem services and cultural values."5 1.1.6 UNESCO World Heritage Sites 1.2 These sites may be listed in the World Database of Protected Areas (WDPA) and mapped on Protected Planet. 5 N. Dudley, (ed.), Guidelines for Applying Protected Areas Management Categories (Gland, Switzerland: IUCN, 2008), pp. 8-9. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 12 2 Lodging facilities are considered to be located in or near endangered species habitat if they are in or near areas where species on the IUCN Red List of Threatened Species that are classified as Critically Endangered (CR) or Endangered (EN) are extant. 2.1 A species is considered extant in an area if it is a resident, present during breeding or non-breeding seasons, or if it makes use of the area for passage. 2.2 For the purposes of this disclosure, “near” is defined as within five kilometers (km) of the boundary of an area of protected conservation status or an endangered species habitat. 3 The entity may separately identify properties in areas with additional ecological, biodiversity, or conservation designations such as those listed by the A-Z Guide of Areas of Biodiversity Importance prepared by the United Nations Environment Programme’s World Conservation Monitoring Centre (UNEP-WCMC). 4 The entity may provide discussion around lodging facilities that are located in protected areas or endangered species habitat but that present low risk to biodiversity or ecosystem services. The entity may provide similar discussion for lodging facilities located in areas with no official designation of high biodiversity value but that present high biodiversity or ecosystem services risks. SV-HL-160a.2. Description of environmental management policies and practices to preserve ecosystem services 1 The entity shall describe its environmental management policies and practices relating to preservation of ecosystem services. 1.1 Ecosystem service is defined as a service people obtain from the environment, based on the transformation of natural assets (soil, plants, animals, air, and water) into things that are directly valued. Ecosystem services can be viewed as (a) provisioning, which refers to use for resources such as food and water; (b) regulating, which refers to uses such as flood and disease control; (c) cultural, which refers to uses that are spiritual, recreational, or provide cultural benefits; or (d) supporting, which refers to those systems that maintain the conditions for life on Earth. This definition is derived from the International Union for Conservation of Nature’s Commission on Ecosystem Management. 1.2 The scope of disclosure includes, where relevant: 1.2.1 Lifecycle stages to which the policies and practices apply, such as: design, construction, commissioning, operation, decommissioning, closure, or, where applicable, post-closure. 1.2.2 The topics addressed by the policies and practices, including: (a) policies to reduce impacts on the ecosystems, such as ecological and biodiversity impacts, waste generation, noise impacts, emissions to air, discharges to water, natural resource consumption, and tourism impacts; and (b) adaptation measures to minimize impact from changes in ecosystem services as may occur with climate change or SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 13 other external pressures, such as changes in legal protections for sensitive areas or limitations on resource consumption. 1.2.3 The underlying references for its policies and practices, including whether they are codes, guidelines, standards, or regulations and whether they were developed by the entity, an industry organization, a third-party organization (e.g., a non-governmental organization), a governmental agency, or some combination of these groups. 2 For locations in areas of protected conservation status and/or areas of critical habitat, the entity shall discuss specific policies and practices that apply. 2.1 Areas of protected conservation status and/or areas of critical habitat are defined as areas of high biodiversity value, including (a) habitat of significant importance to Critically Endangered and/or Endangered species; (b) habitat of significant importance to endemic and/or restricted-range species; (c) habitat supporting globally significant concentrations of migratory species and/or congregatory species; (d) highly threatened and/or unique ecosystems; and/or (e) areas associated with key evolutionary processes. This definition is derived from the International Finance Corporation’s (IFC) Performance Standard 6. 3 If the environmental management policies and practices do not apply to all of the entity’s sites or operations, the entity shall indicate the percentage of sites to which they are applied. 4 The entity shall disclose the degree to which its environmental management policies and practices are aligned with the IFC's Performance Standards on Environmental and Social Sustainability, specifically including: 4.1 Performance Standard 1—Assessment and Management of Environmental and Social Risks and Impacts 4.2 Performance Standard 3—Resource Efficiency and Pollution Prevention 4.3 Performance Standard 6—Biodiversity Conservation and Sustainable Management of Living Natural Resources SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 14 Labor Practices Topic Summary The Hotels & Lodging industry is highly reliant on labor to operate large facilities. A service-oriented workforce that is able to provide guests a pleasant stay is a key value driver for hotel companies. This, combined with labor force dynamics, can lead to low job satisfaction that can result in high turnover and potential lawsuits, which contribute to increased expenses for hotel operators. Hotels that work to prevent discriminatory practices and ensure fair wages can improve worker satisfaction and reduce turnover. Accounting Metrics SV-HL-310a.1. (1) Voluntary and (2) involuntary turnover rate for lodging facility employees 1 The entity shall disclose employee turnover for lodging facility employees as a percentage. 2 Turnover shall be calculated and disclosed separately for (1) voluntary and (2) involuntary departures. 2.1 The (1) voluntary turnover rate shall be calculated as the number of employee-initiated separations (such as resignation or retirement) during the reporting period, divided by the total number of employees during the reporting period. 2.2 The (2) involuntary turnover rate shall be calculated as the number of entity-initiated separations (such as dismissal, downsizing, redundancy, or non-renewal of contract) during the reporting period, divided by the total number of employees during the reporting period. SV-HL-310a.2. Total amount of monetary losses as a result of legal proceedings associated with labor law violations 1 The entity shall disclose the total amount of monetary losses it incurred during the reporting period as a result of legal proceedings associated with labor law violations, such as those relating to wages, work hours, overtime, and meal and rest breaks. 2 The legal proceedings shall include any adjudicative proceeding, whether before a court, a regulator, an arbitrator, or otherwise, in which the entity was involved. 3 The losses shall include all monetary liabilities to the opposing party or to others (whether as the result of settlement or verdict after trial or otherwise), including fines and other monetary liabilities incurred during the reporting period as a result of civil actions (e.g., civil judgments or settlements), regulatory proceedings (e.g., penalties, disgorgement, SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 15 or restitution), and criminal actions (e.g., criminal judgment, penalties, or restitution) brought by any entity (e.g., governmental, business, or individual). 4 The scope of monetary losses shall exclude legal and other fees and expenses incurred by the entity in its defense. 5 The scope of disclosure shall include, but is not limited to, legal proceedings associated with enforcement of relevant industry regulations promulgated by regional, national, state, and local regulatory authorities, such as: 5.1 U.S. Department of Labor (DOL) 5.2 U.K. Health and Safety Executive (HSE) 5.3 People’s Republic of China Ministry of Human Resources and Social Security (MOHRSS) Note to SV-HL-310a.2 1 The entity shall briefly describe the nature (e.g., judgment or order issued after trial, settlement, guilty plea, deferred agreement, or non-prosecution agreement) and context (e.g., improper working conditions or unfair compensation) of all monetary losses as a result of legal proceedings. 2 The entity shall describe any corrective actions it has implemented as a result of the legal proceedings. This may include, but is not limited to, specific changes in operations, management, processes, products, business partners, training, or technology. SV-HL-310a.3. (1) Average hourly wage and (2) percentage of lodging facility employees earning minimum wage, by region 1 The entity shall disclose (1) the average hourly wage for lodging facility employees for each geographic region for which it conducts segment financial reporting. 1.1 Lodging facility employees are defined as non-manager employees earning an hourly wage. 1.2 The average hourly wage shall be calculated as the total wages, including tips, earned by lodging facility employees during the reporting period, divided by the number of hours worked by lodging facility employees during the reporting period. 2 The entity shall disclose (2) the percentage of lodging facility employees earning minimum wage before tips for each geographic region for which it conducts segment financial reporting. 2.1 Minimum wage is defined as the local or prevailing minimum wage applicable for each worker. 2.2 The percentage shall be calculated as the number of lodging facility employees earning minimum wage divided by the total number of lodging facility employees. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 16 2.3 For countries or regions with no prevailing minimum wage requirement, the 10th percentile hourly wage of all wage earners in that country or region shall be used. 3 The scope of disclosure includes employees of company-owned and franchise locations. 4 The scope of disclosure excludes salaried and corporate employees. 5 The entity may disclose the average minimum wage, weighted on an hours-worked basis, that applies to the entity's lodging facility employees. 6 The entity may discuss its sensitivity to future adjustments in the minimum wage, including what percentage of its employees would be affected by an increase in applicable minimum wage requirements. SV-HL-310a.4. Description of policies and programs to prevent worker harassment 1 The entity shall describe its policies and programs for detecting and preventing worker harassment. 1.1 Worker harassment is defined as employment discrimination that creates a work environment that a reasonable person would consider intimidating, hostile, or abusive.6 1.2 Relevant policies to describe include, but are not limited to, those related to reporting channels and whistleblower protections. 1.3 Relevant programs to describe include, but are not limited to, employee training, use of panic buttons or other technology, maintaining lists of guests accused of harassing employees, investigations and audits, and partnerships and agreements with labor unions and employee representatives. 2 The description shall include how policies and programs apply to business partners, such as franchisees and joint venture partners. 3 The description shall include outcomes and impacts of these policies and practices, such as those related to worker efficiency and retention and indirect impacts on brand reputation and revenue. 6 Definition adapted from the U.S. Equal Opportunity Commission (EEOC)’s guidance on harassment. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 17 Climate Change Adaptation Topic Summary Hotels operating in climate change-exposed areas may be impacted by physical climate risks including inclement weather and flooding. Inclement weather may damage property and disrupt operations, thereby reducing asset values and revenues. In addition, hotels may face higher insurance premiums for buildings located in coastal regions or may be unable to insure their properties. Hotel operators will likely need to adapt to shifting climate trends such as rising sea levels, hurricanes, and flooding in order to maintain their climate-exposed revenue-generating properties. Accounting Metrics SV-HL-450a.1. Number of lodging facilities located in 100-year flood zones 1 The entity shall disclose the number of its lodging facilities that are located in 100-year flood zones. 1.1 100-year flood zones are defined as land areas subject to a one-percent or greater chance of flooding in any given year. Such areas may also be referred to as being subject to the one-percent annual chance flood, the one-percent annual exceedance probability flood, or the 100-year flood. 1.1.1 Examples of 100-year flood zones may include, but are not limited to, coastal flood plains, flood plains along major rivers, and areas subject to flooding from ponding in low-lying areas. 1.2 For lodging facilities located in the U.S., 100-year flood zones shall include those land areas designated by the U.S. Federal Emergency Management Agency (FEMA) as special flood hazard areas (SFHA). 1.2.1 SFHAs are defined as land area in the flood plain subject to a one-percent or greater chance of flooding in any given year. The area may be designated in the applicable flood insurance rate map, as per the U.S. National Flood Insurance Program, as Zones A, AO, AH, A1-30, AE, A99, AR, AR/A1-30, AR/AE, AR/AO, AR/AH, AR/A, VO, V1-30, VE, and V. This definition is derived from U.S. 44 CFR 59.1. 2 The scope of disclosure shall include all of the entity’s lodging facilities that are located in 100-year flood zones, regardless of the country of their location. SUSTAINABILITY ACCOUNTING STANDARD | HOTELS & LODGING | 18 SUSTAINABILITY ACCOUNTING STANDARDS BOARD 1045 Sansome Street, Suite 450 San Francisco, CA 94111 415.830.9220 info@sasb.org sasb.org