This article has been written by Narendra Kumar Chaurasia, head of sales and marketing.

Introduction

In the current scenario, sustainability has become strategically important, whether it comes in the context of economics or the environment. In simple words, we can understand sustainable as “able to continue over some time.”

Sustainability refers to initiatives and actions taken to protect a specific resource. It’s very important to understand the four pillars of sustainability – Human, social, economic, and environmental.

Three pillars of corporate sustainability

Social sustainability

Social sustainability is a process for creating sustainable, successful places that promote well-being, by understanding what people need from the places they live and work. Sustainable development focuses on economic and social development in order to improve the quality of life without disturbing the environment.

Economic sustainability

Economic sustainability refers to practices that support long-term economic growth without negatively impacting the social, environmental, and cultural aspects of the community. As social sustainability aims to improve social equality, similarly, economic sustainability aims to improve the standard of living. The main objective of sustainable economics is to maintain stable and high-level economic growth. The quality and quantity of growth both matter.

Environmental sustainability

Environmental sustainability is the responsibility to conserve natural resources and protect global ecosystems to support health and well-being, now and in the future. The objective of environmental sustainability is to protect our natural resources like air, water, land, forests, minerals, etc. Many decisions taken today may have an impact on the environment after many years.

According to Dunphy et al. (2000), an environmentally sustainable business seeks to integrate all four sustainability pillars, and to reach this aim, each one needs to be treated equally.

Tourism and its benefits

No one can ignore the importance of tourism, as it is one of the fastest-growing industries in the world. One of the most important sources of foreign exchange is the tourism industry. The tourism industry not only generates foreign exchange but also creates jobs and stimulates economic growth. Tourists spend money on hotels, restaurants, transportation, and entertainment, which encourages local businesses and earnings in particular areas. We can define the positive impact of tourism as follows.

Social benefits

Tourism offers many social benefits to the community. Mainly, it helps in cultural exchange not only at the domestic but also at the international level. Due to tourism, people from different cultures interact and exchange their thoughts, cultures, and beliefs. Therefore, tourism helps promote peace and harmony. Tourism also encourages the learning of new languages, as different countries have different languages. One of the most important benefits of tourism is that it preserves cultural heritage by supporting local craft, art and music.

Tourism may have some social costs as well. Sometimes there is conflict with local communities due to differences in ideas, views and lifestyles among tourists. In the long term, it may lead to a loss of traditional values and culture as there is a difference in the culture and value system of visitors.  

Educational benefits

Tourism offers educational benefits as it promotes learning through understanding the new culture, history and geography of the local area. Due to tourism, not only the visitor but also the host benefit. One of the main educational benefits of tourism is that it promotes foreign language learning and also helps the local community improve communication skills.

Environmental benefits

When tourism is managed sustainably, it offers environmental benefits as well. The aim of sustainable tourism is to minimise the negative impact of tourism on the environment. Sustainable tourism also promotes the conservation of natural resources, such as water and energy, and reduces waste.  

Economic benefits

Tourism offers economic benefits in two ways, i.e., direct and indirect. Tourism offers direct benefits through various transactions such as food and beverage, hotel accommodation, entertainment, travel, etc. Local areas mostly get direct economic benefits. On the other hand, indirect economic benefits take place due to the transaction of intermediary items.

How corporate governance fuels sustainable tourism

Corporate governance in sustainable tourism places more emphasis on the use of natural and cultural resources; the minimization of pollution and waste; the conservation of landscapes, biodiversity, and cultural heritage; the fair and responsible treatment of employees, suppliers, and guests; and the fair use of local products and services.

In a challenging world, good governance is extremely essential everywhere, either domestically or within corporations. Good governance means governing the people in a way that the interests of the people of all sections are preserved rightfully. All the individual’s rights are protected and they feel that they are not discriminated against on the grounds of caste, creed, sex, race and religion. Similarly, good governance is also required for the smooth functioning of a corporation. Enron, Cadbury, Wal-Mart, Satyam and Xerox are a few examples of bad corporate governance.

The term corporate governance refers to how companies are run and for what purpose. It defines an organisation’s power structure, accountability structure, and decision-making process. Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled.

Effective corporate governance empowers both management and the board to address the complexities of company operations. Corporate governance establishes robust decision-making protocols and controls and ensures a harmonious balance of interests among stakeholders, including employees, suppliers, customers, and the community.

Pillars of good corporate governance

Accountability

Accountability is about more than simply understanding where blame or praise lies once something happens. Proactively taking steps to own your decisions means discovering risks and creating solid internal control systems. Understanding and taking ownership of risks is very important for the success of an organisation in sustainable tourism.

Transparency

The companies must have a willingness to share clear information with all shareholders regarding performance. It plays an important role in decision-making. For good corporate governance, transparency is very important.

Fairness

For good corporate governance, fairness is very important. There must be clear information among all shareholders. Which helps us in effective decision-making.

Responsibility

The board is responsible for the oversight of corporate matters and management activities. The board must act in the best interests of a company and its investors.

Sustainable tourism

Sustainable tourism is a concept that covers the complete tourism experience, including concern for economic, social and environmental issues, as well as attention to improving tourists’ experiences and addressing the needs of host communities.

The World Tourism Organisation defines sustainable tourism as “tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities.”

Based on General Assembly Resolution 70/193, 2017 was declared the International Year of Sustainable Tourism for Development.

Sustainable tourism can be divided into the following categories:

1-Responsible tourism: Tourism that minimises environmental damage and carbon footprint.

2-Solidarity tourism: Tourism that aims to develop territories and help local communities.

3-Fair tourism: Tourism based on the principle of fair trade.

Eight elements of sustainable tourism

The eight elements of sustainable tourism are as follows:

Energy efficiency

Energy efficiency is one of the most important elements of sustainable tourism. We should reduce our dependence on fossil fuels and use renewable sources of energy, such as electricity generated from solar panels or wind power.

Water conservation and waste management

Effective management of waste and water conservation is one of the important roles of corporate governance in sustainable tourism. ‘Reduce, reuse, recycle’ are the key activities in waste management, and the phrase is highly recognisable by people.

The Swachh Bharat Mission, Swachh Bharat Abhiyan, or Clean India Mission is a country-wide campaign initiated by the Government of India on October 2, 2014, by Prime Minister Mr. Narendra Modi. Water conservation involves using water more sparingly and reducing waste.

Greenhouse gas emissions and carbon offsetting schemes

Reducing carbon emissions is the most important factor in addressing climate change. Which is one of the most important factors in a sustainable tourism business. We should plant more trees or support projects that make our planet happy in order to take care of greenhouse gas emissions and carbon offsetting schemes.

Community relations labour practices and human rights

Community relations means making friends wherever we go. We must respect the people who live there and their traditions.

Labour practices are like teamwork. People who work in hotels, restaurants, or other places should be treated fairly and with respect. They deserve to have good working conditions and fair pay for their hard work. Employing local people in your business is very important for sustainable tourism. Sustainable tourism advocates for recruiting local people. 

Human rights are all about treating everyone with kindness and fairness. No matter where we are, everyone should have the right to be safe, happy, and free. We need to make sure our travel choices don’t harm people but instead help them have better lives.

Maximising positive impact on local cultures

There must be good interaction between tourists and local cultures and communities. Community-based tourism (CBT) is a fast-growing niche market within the tourism industry. Tourism must have a positive impact on local culture. Tourists must be aware of local culture and tradition. Tourists must respect the traditions, culture and lifestyle of the communities they are visiting. Tourists can support the local economy by purchasing handmade crafts and other local articles.

Health and safety

Taking care of Health and safety is one of the important roles of corporate governance in sustainable tourism. We have to ensure clean hotels and hygienic food for tourists. Safety for tourists is of utmost concern. We should brief all tourists on the local rules and regulations of the country.

Animal welfare

Animal welfare in tourism is an emotional topic for travellers. Therefore, animal welfare is crucial for sustainable tourism. Animals should not be harmed for entertainment purposes. Activities must be designed for tourists that take care of the health and wellbeing of animals. To attract tourists, we must have a strict animal welfare policy. These policies ensure that wildlife tourism experiences are ethical, sustainable and meet high standards of animal welfare.

Responsibility statement

To communicate your commitment to sustainable tourism, you should write a responsibility statement for your business. This statement must reflect dedication to the environment as well as society. 

Conclusion

The role of corporate governance is not only to create corporate value but also to work on the development of tourism in the country. Moreover, one of the important objectives of corporate governance is to enhance the financial performance of an organisation. No doubt, the role of corporate governance in sustainable tourism is slightly different from corporate governance.

References

• https://dictionary.cambridge.org/ 
• https://www.adecesg.com/resources/faq/what-is-social-sustainability/#:~:text=Social%20sustainability%20is%20a%20process,places%20they%20live%20and%20work.
• https://sustainability.umw.edu/areas-of-sustainability/economic-sustainability/#:~:text=Economic%20sustainability%20refers%20to%20practices,cultural%20aspects%20of%20the%20community.
• https://www.cgi.org.uk/about-us/policy/what-is-corporate-governance
• https://sdgs.un.org/topics/sustainable-tourism
• https://www.unwto.org/tourism4development2017