Aligninganorganisation’ssustainability

needsanditsstakeholders’requests:

TheMaterialityBalancedScorecard

by

MireiaGuix

SubmittedfortheDegreeofDoctorofPhilosophy

SchoolofHospitalityandTourismManagement

FacultyofArtsandSocialSciences

Supervisors:XavierFont,JasonStienmetzandMariaJesúsBonilla-Priego

©MireiaGuix2019

II

DeclarationoforiginalityThis thesisand thework towhich it refersare theresultsofmyownefforts.Any ideas,data,

imagesortextresultingfromtheworkofothers(whetherpublishedorunpublished)arefully

identifiedassuchwithintheworkandattributedtotheiroriginatorinthetext,bibliographyorin

footnotes.Thisthesishasnotbeensubmittedinwholeorinpartforanyotheracademicdegree

orprofessionalqualification.IagreethattheUniversityhastherighttosubmitmyworktothe

plagiarismdetectionserviceTurnitinUKfororiginalitychecks.Whetherornotdraftshavebeen

so-assessed, the University reserves the right to require an electronic version of the final

document(assubmitted)forassessmentasabove.

Signature:

MireiaGuixNavarrete

Date:7thMarch2019

Theauthorconfirmsthattheworksubmittedisherown,exceptwhereworkwhichhasformed

partofjointlyauthoredpublicationshasbeenincluded.Thecontributionofthecandidateandthe

otherauthorstothisworkhasbeenexplicitlyindicated.Appropriatecredithasbeengiveninthe

thesiswherereferencehasbeenmadetotheworkofothers.

Publicationstatusandcollaboratorcontribution

Materialcontainedinchapter2ofthisthesisappearsinajointlyauthoredpublishedpaperand

twojointlyauthoredpublishedbookchapters:

• Literaturereviewrelatedtothesharedvalueframework:

o Font,X.,Guix,M.andBonilla-Priego,M.J.(2016)Corporatesocialresponsibilityin

cruising:Usingmaterialityanalysistocreatesharedvalue.TourismManagement,

53,175-186.Doi:10.1016/j.tourman.2015.10.007

• Literaturereviewrelatedtocorporatesocialresponsibility:

o Font,X.,Bonilla,MJ.andGuix.M.Chapter5Corporatesocialresponsibilitiesinthe

cruisesector,86-105.InDowling,R.andWeeden,C.(2016)HandbookofCruise

ShipTourism,2ndEd.Wallingford,UK:CABI.ISBN:9781780646084.

o Font,X.&Guix,M.Chapter37CorporateSocialResponsibilityintourism,567-580.

In Cooper C. Gartner, B., Scott, N. & Volo, S. (2018) SageHandbook of Tourism

Management.London,UK:Sage.ISBN:9781526461131.

III

Materialcontainedinchapter3ofthisthesisrelatedtotheAA1000SESPrinciplesappearsina

jointlyauthoredpublishedpaper:

• Guix,M,Bonilla-Priego,MJ.andFont,X.(2018)Theprocessofsustainabilityreportingin

international hotel groups: an analysis of stakeholder inclusiveness, materiality and

responsiveness, Journal of Sustainable Tourism, 12(7), 1063-1084. Doi:

10.1080/09669582.2017.1410164

Materialcontainedinchapter6and7ofthisthesisappears intwo jointlyauthoredpublished

papersandanindustryreport:

• Publicationofanabridgedversionofthecontentanalysisresults:Guix,M.,Bonilla-Priego,

MJ. and Font, X. (2018) The process of sustainability reporting in international hotel

groups:ananalysisofstakeholderinclusiveness,materialityandresponsiveness,Journal

ofSustainableTourism,12(7),1063-1084.Doi:10.1080/09669582.2017.1410164

• Publication of the interview results on materiality assessment: Guix, M., Font, X. and

Bonilla-Priego,M.J.(2018)Materiality:therationalebehindsustainabilitychoicesinhotel

groups, International Journal of Contemporary Hospitality Management (on-line) Doi:

10.1108/IJCHM-05-2018-0366

• PublicationofajointInfographicwithUNEPshowcasingpreliminaryresultsofthecontent

analysis.

IV

AbstractThisexploratorystudyaims todevelopacriticalunderstandingofhowlargehotelgroupscan

definestrategicsustainabilityobjectives inordertocreatesharedvalue. It isthe firststudy to

conductacomparativeanalysisofthepubliclyavailablesustainabilityreportsfromthe50largest

hotelgroupsintheworld,andtocombinethesewithinterviewresponsesfromasampleoftheir

CorporateSocialResponsibility(CSR)managersandindustrysustainabilityexperts.Therichness

of this data enables the investigation of complex and interdependent factors that influence

strategicsustainabilityplanning,measurement,managementandreporting.

Thisstudyfirstproposesastrategicmanagementframework,theMaterialityBalancedScorecard

(MBSC),todesign,communicateandrealiseCSRstrategiesthatcreatesharedvalue.TheMBSC

combines the Balanced Scorecard, and its sustainability adaptations, with the principles of

inclusiveness,materialityandresponsivenessoftheAA1000StakeholderEngagementStandard.

The MBSC constitutes a theoretical contribution in the emerging literature addressing the

relationshipbetweensustainabilityperformancemanagementandreporting.

This study then attempts to characterise and identify the internal determinants of the CSR

managementandreportingof largehotelgroups, inorder thence toappraise the feasibilityof

implementingtheMBSCwithinthehotelindustry.Thisstudyaddressesthegapintheliterature

abouthotel groups integratingCSRagendas into their organisational strategies, practices and

processes.Itextendsearlierknowledgebyincluding(1)cognitivedeterminants(inrespecttothe

stakeholderculture,thestakeholdermanagementcapability,thestakeholderinfluencecapacity,

as well as the capacity building in respect to stakeholder engagement and materiality), (2)

organisationaldeterminants (CSR rolesand responsibilities, internalaccountabilityand cross-

departmentalcoordination)and(3)technicaldeterminants(integrationofCSRwithintheoverall

business management, and the accuracy and comprehensiveness of the performance

management systems). The research establishes the implications of the determinants for the

mismanagementofsustainabilityandprogresstowardsadoptingthesharedvalueapproach.

The study also critically assesses the adoption by large hotel groups of the inclusiveness,

materialityand responsivenessprinciples that are central to theMBSC. It constitutes the first

study to assess those three principles in tandem, and together with their effect on the

organisations’accountability.Itisalsothefirstempiricalstudyonthedisclosureofandbarriers

to materiality. The study identifies the symbolic adoption of reporting guidelines and

characterises the process of managerial capture of the reporting process. The comparison

between sustainability disclosure, environmental performance and sustainability integration

revealsthatthesustainabilityreportsdonotreflectthemanagementofsustainability,addingto

thebodyofknowledgethatsuggestssustainabilityreportingdoesnotdeliveraccountabilityto

V

stakeholders. Based on these findings, a refined conceptualisation of the principles of

inclusiveness, materiality and responsiveness embedded in the MBSC is proposed to help

organisations to develop shared value strategies, thereby making a practical contribution to

addressthelimitedguidanceavailableontheimplementationofsharedvalue.

Overall,theMBSCisratheridealisticwhencomparedtotherealityofthehotelindustry,because

therequirementtoadoptsharedvaluestrategiesseemsmostlyinfeasible.Nonetheless,theMBSC

maybeapplicableinproactiveorganisationsaslongastheyarewillingi)tocommittoshared

value and ii) to engage with the principles of inclusiveness, materiality and responsiveness

openly,asameanstooperationalisethiscommitment.

VI

AcknowledgementsIwouldliketoexpressmygratitudetoallthosewhograntmethepossibilitytocompletethis

Ph.D.Forthoseunlisted,Ithankyouallforyoureffortandhelpalongtheway.

First and foremost, Iwould like to recognisemy supervisor,Dr. XavierFont,whohasbeena

tremendousmentorforme,notonlyforhisinvaluableinsightintodoingthisresearchbutalsofor

theencouragementandinspirationthatkeptmyresearchpassionalive.IwouldliketothankDr.

MariaJesúsBonillaforherconstantguidance,constructivecriticism,patienceandsupportduring

theresearchprocess.ThankyoutoDr.StephenHenderson.ThankyoutoDr.JasonStienmetz,for

hisinvaluableinsightsonmanagementconcepts.

Iwouldliketoacknowledgethecrucialroleoftheparticipantsinthisresearch.Withoutyou,this

Ph.D. would not have been possible. My sincere appreciation, therefore, goes to those who

participated.

Aspecialthankyoutomyfamily.WordscannotexpresshowgratefulIamtomymotherMªAngels

NavarreteandmyfatherJoanMªGuixforgivingmethestrengthandsupportinthedifficulttimes.

My deepest gratitude goes to Dr. Guillem Roig for his endless support and invaluable advice

throughtheemotionaljourneythathasbeenthisPh.D.

VII

TableofContentsDeclarationoforiginality.............................................................................................................II

Abstract............................................................................................................................................IV

Acknowledgements.......................................................................................................................VI

TableofContents.........................................................................................................................VII

TableofFigures.............................................................................................................................XI

ListofTables................................................................................................................................XIII

IndexofAcronyms.....................................................................................................................XVI

Introduction...........................................................................................................................17

Contextandrationale................................................................................................17

Researchaim,objectivesandscope......................................................................22

Structureofthethesis...............................................................................................24

FromCorporateSocialResponsibilitytoCreatingSharedValue............................28

Sustainablebehaviourbyorganisations.............................................................28

Towardsbeingmorestrategic............................................................................................28

Improvingperformancethroughresponsiblemanagement...............................30

Connectingsocialandeconomicprogress..........................................................38

Pursuingthefuturecompetitivefrontiers....................................................................38

Contestingsharedvalue.........................................................................................................40

Puttingsharedvaluetowork..................................................................................44

Threepathwaystocompetitiveadvantage..................................................................44

Re-evolutionoftheorganisation.......................................................................................46

Influencingtransformationsbeyondtheorganisation..........................................50

Conclusions..................................................................................................................52

Instrumentstoachievesharedvalue..............................................................................54

BSC:aperformancemanagementtool.................................................................55

Advantages....................................................................................................................................56

Challenges......................................................................................................................................63

BSCmodifications:Overcomingthechallenges.................................................66

Toincludesustainabilityissues.........................................................................................72

DeterminingthedesignoftheMBSCfrompreviousscholars’work..............73

Toincreasestakeholders’accountability......................................................................80

AdvantagesandshortcomingsofBSCmodification................................................83

VIII

Sustainabilityreportingtoincreasestakeholderaccountability.................87

Inclusiveness:stakeholderidentificationandengagement................................88

Materialityassessment:amultiplepurposetool......................................................91

Responsiveness:addressingstakeholder’sexpectations.....................................98

Assurance:increasingcredibilityofreports................................................................99

Conclusions................................................................................................................100

MaterialityBalanceScorecard.......................................................................................105

Step1.IntegratingsustainabilityintotheBalancedScorecard..................106

Step2:Recognisingstakeholdervalue(InclusivenessandResponsiveness)109

Step3:Determiningenvironmentalandsocialexposureofstrategicbusiness

units(Materialityassessment)..........................................................................................110

Step4:TheMaterialityBalancedScorecard.....................................................112

DiscussionoftheadvantagesanddisadvantagesoftheMBSC....................118

Conclusions................................................................................................................121

Methodology........................................................................................................................123

Researchparadigm,ontology,epistemologyandaxiology..........................123

Researchstrategy:qualitativemulti-methods.................................................126

Stage1A&B:Contentanalysis........................................................................................129

Stage2:Qualitativequestionnaires...............................................................................133

Stage3:Semi-structuredinterviews............................................................................136

Dataanalysis:thematicanalysis..........................................................................145

Ethicalconsiderationsandevaluationcriteria:Trustworthiness..............151

Credibility...................................................................................................................................151

Transferability..........................................................................................................................154

Dependability............................................................................................................................154

Confirmability...........................................................................................................................155

Methodologicallimitations....................................................................................155

Samplelimitations..................................................................................................................155

Limitationsofcontentanalysis........................................................................................155

Limitationsofqualitativequestionnaires..................................................................156

Limitationsofsemi-structuredinterviews................................................................156

Conclusions................................................................................................................156

Acomparativeanalysisofthedisclosureofsustainabilityreportingprocessesand

sustainabilityintegrationofhotelgroups..........................................................................158

Organisations’profiles...........................................................................................159

IX

Step0.Strategicplanningandinformationsharing.......................................163

Step1.IntegratingsustainabilityintotheBSC.................................................167

Step2.Recognisingstakeholdervalue...............................................................176

Step3.Determiningtheenvironmentalandsocialexposureofstrategic

businessunits.........................................................................................................................188

Acomparativeanalysisbetweensustainabilitydisclosure,environmental

performanceandsustainabilityintegration..................................................................206

TheAccountabilityMatrix..................................................................................................206

Therelationshipbetweensustainabilitydisclosureandenvironmental

performance....................................................................................................................................................209

TheSustainabilityIntegrationMatrix..........................................................................212

Conclusions................................................................................................................219

ThevalueoftheMBSCtowardstransitioningfromreactiveCSRtosharedvalue225

Arehotelgroups’actionsresponsiveCSRorsharedvalue?.........................225

Internalfactorsshapingthehotels’CSRpracticesandthelikelihoodof

implementingtheMBSCintheindustry..........................................................................231

Cognitivebarriersbasedonorganisationalcultureandvalues.....................233

Organisationalbarriersbasedonstructure..............................................................237

Technicalbarriersbasedonsystemsandprocesses...........................................239

Thehotels’approachtoInclusiveness,MaterialityandResponsiveness:

Consequencesforsharedvalue.........................................................................................242

Conclusions:TheMBSCasavehicleforsharedvalue....................................248

Conclusions..........................................................................................................................258

8.1. Conclusionswithregardstotheaimandobjectives......................................258

8.2. Theoreticalcontribution........................................................................................265

8.3. Practicalimplications.............................................................................................269

8.4. Limitationsanddirectionsforfutureresearch...............................................271

References............................................................................................................................273

Appendices...........................................................................................................................318

Appendix1:Listofthe50largesthospitalitygroupsintheworld(Hotels

Magazine,2015).....................................................................................................................318

Appendix2:Contentanalysisthemesandresearchquestions...................320

Appendix3:Coverletterforhotelgroupswithsustainabilityinformation

publiclyavailable...................................................................................................................323

X

Appendix4:Coverletterforhotelgroupswithoutsustainabilityinformation

publiclyavailable...................................................................................................................324

Appendix5:Participantinformationsheet(CSRmanagers).......................325

Appendix6:Questionnairequestions................................................................328

Appendix7:InfographicAnalysingthequalityandcredibilityofCorporate

SocialReportingintheHospitalitySector,2016..........................................................332

Appendix8:CSRmanager’sinterviewguide....................................................339

Appendix9:Participantinformationsheetandconsentform(Experts).340

Appendix10:Expert’sinterviewguide..............................................................342

Appendix11:Interviewthemes,categories,subcategoriesandillustrative

quotes344

Appendix12:Transcriptionsymbols.................................................................382

XI

TableofFiguresFigure1:BSCperspectives.................................................................................................................................................57

Figure2:Thecause-and-effectrelationships’strategyintheBSC................................................................59

Figure3:Strategymapappliedintoanorganisation...........................................................................................61

Figure4:ExampleofanappliedSBSC.ThestrategymapofShell.................................................................73

Figure5:VariationsofgenericSBSCarchitectures...............................................................................................74

Figure6:FrequenciesofgenericSBSCarchitectures...........................................................................................75

Figure7:ExampleofNon-hierarchicalSBSCs..........................................................................................................78

Figure8:ResponsibleScorecardarchitecture.........................................................................................................79

Figure9:ExampleofahierarchicalextendedSBSC..............................................................................................80

Figure10:ExampleofNon-hierarchicalStakeholderScorecard...................................................................81

Figure11:ExampleofHierarchicalStakeholderScorecard.............................................................................82

Figure12:TheBSCfornon-profitorganisations....................................................................................................85

Figure13:HotelindustrymaterialitymatrixfromInternationalTourismPartnership...................94

Figure14:ComparisonbetweenGRImaterialitymatrixandadaptedversions....................................96

Figure15:StepsbuildingtheMaterialityBalanceScorecard........................................................................105

Figure16:Step1–IntegratingsustainabilityintotheBSC.............................................................................106

Figure17:Step2–StakeholdervalueintheBSC.................................................................................................109

Figure18:Step3–MaterialityassessmentintheBSC......................................................................................110

Figure19:TheMBSC...........................................................................................................................................................112

Figure20:Sharedvaluechain........................................................................................................................................113

Figure21:ThegenericMBSCStrategyMap............................................................................................................117

Figure22:Researchdesign..............................................................................................................................................123

Figure23:Visualdiagramofthemulti-methodsapproach............................................................................128

Figure24:SustainabilityintegrationthemesinhotelgroupsbyMBSCsteps......................................159

Figure25:Organisationalsustainabilityintegration.........................................................................................159

Figure26:Step0Strategicplanningandinformationsharing.....................................................................164

XII

Figure27:Step1IntegratingsustainabilityintotheBSC................................................................................167

Figure28:Step2Recognisingstakeholdervalue................................................................................................176

Figure29:Matrixofthedisclosureofnarroworbroadstakeholderidentificationandsymbolicor

substantivestakeholderengagement..............................................................................................................179

Figure30:Step3Determiningenvironmentalandsocialexposureofstrategicbusinessunits.188

Figure 31: Accountability Matrix based on the disclosure on Inclusiveness, Materiality and

Responsiveness...........................................................................................................................................................208

Figure32:Comparisonofdisclosureinthesustainabilityreportingprocessandenvironmental

indicators.......................................................................................................................................................................210

Figure33:Sustainabilityintegrationmatrix...........................................................................................................217

Figure34:EffectofsustainabilitybarriersontheMBSC.................................................................................232

XIII

ListofTablesTable1:Structureofthethesis........................................................................................................................................24

Table2:ValuetypesfromCSR.........................................................................................................................................39

Table3:CSVchallenges........................................................................................................................................................40

Table4:Multi-stageprocesstodevelopCSV............................................................................................................46

Table5:Genericorganisationandsocialresultsbylevelsofsharedvalue..............................................48

Table6:DevelopmentoftheBSCconceptbyKaplanandNorton.................................................................56

Table7:CategoriesofchallengesassociatedwiththeBSC...............................................................................63

Table8:ReviewofpreviousSustainabilityBalanceScorecards....................................................................68

Table9:CategoriesofspecificshortcomingsassociatedwithanSBSC......................................................83

Table10:Engagementlevelsandmethodsofengagement..............................................................................90

Table11:Comparisonofthedefinitionsofmateriality......................................................................................92

Table12:Similaritiesbetweenthetools...................................................................................................................101

Table13:Synergiesbetweenthetools......................................................................................................................102

Table14:IssuesinrespecttoCustomer,InternalprocessandLearningandGrowthperspectives

oftheMBSC...................................................................................................................................................................107

Table15:Examplesofnegativeandpositiveexternalitiesinthehotelindustry................................108

Table16:Hospitalitygroupswithpublishedsustainabilityreportsfromthetop50organisations

accordingtothenumberofroomsin2014..................................................................................................130

Table17:Literatureinformingtheresearchquestionsforcontentanalysis........................................131

Table18:Criteriaandcodingscheme........................................................................................................................132

Table19:CriteriafortheEnvironmentalSDGs.....................................................................................................133

Table20:Literatureinformingthequalitativequestionnaires....................................................................135

Table21:SamplecompositionofCSRmanagers’interviewsandcodes.................................................137

Table22:Organisations’interviewquestionsandrationale.........................................................................139

Table23:Samplecompositionofexperts’interviewsandcodes................................................................142

Table24:Experts’interviewquestionsandrationale.......................................................................................143

Table25:Thematicanalysisphasesfortheinterviewanalysis....................................................................147

XIV

Table 26: Synthesis of the dimensions of sustainability integration broken down by the

organisationalvariablesofthe7-SFramework.........................................................................................148

Table 27: Themes identified, classified into the 7-S Framework variables, sustainability

integrationlevels,andMBSCsteps...................................................................................................................150

Table28:Researcher’sstrategiestoaddresstrustworthiness.....................................................................151

Table29:Peerscrutiny......................................................................................................................................................153

Table30:Organisationsize(Numberofroomsby31stDecember2014)andownershipofhotel

groupsby31stDecember2015(%)................................................................................................................160

Table31:Responsibilitiesforsustainabilitymanagementfrominterviewees....................................161

Table32:Departmentsinvolvedinreporting........................................................................................................163

Table33:Disseminationformatsofsustainabilityinformation...................................................................166

Table34:Environmentalindicatorsmeasuredfromquestionnairesand%disclosurefromcontent

analysis............................................................................................................................................................................168

Table35:Intensitymetricsused...................................................................................................................................170

Table36:Rewardssystems.............................................................................................................................................174

Table37:Differencebetweenenvironmentalindicatorsmeasuredanddisclosed...........................175

Table38:Comparisonbetween%identificationofenvironmentalmaterialissuesanddisclosure

ofperformance............................................................................................................................................................175

Table39:Quantitativecodingscoresforstakeholderidentificationandengagement....................177

Table40:Stakeholdersengagedinsustainabilityfromthequestionnaires..........................................178

Table41:Stakeholderengagementlevelsfromthequestionnaires..........................................................180

Table42:Levelofengagementandmethodsofengagementbystakeholdergroup........................181

Table43:Stakeholderengagementmechanismsbystakeholdergroupandorganisationfromthe

questionnaires.............................................................................................................................................................182

Table44:Responsivenessfromcontentanalysis.................................................................................................186

Table45:Hotelgroupswithpublishedsustainabilityreportsfromthetop50largestbynumber

ofroomsin2014........................................................................................................................................................190

Table46:Quantitativecodingscoresformaterialityassessment...............................................................193

Table47:Materialityassessmentstepsdisclosed...............................................................................................194

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Table48:DisclosedSErelatedactionsforMA.......................................................................................................194

Table49:Assuranceofsustainabilityreports.......................................................................................................198

Table50:Sustainabilityreportassurancecharacteristics..............................................................................199

Table51:Keydriverstoproduceasustainabilityreport................................................................................201

Table52:TransparencypercriterionandorganisationtobuildtheAccountabilityMatrix........207

Table 53: Comparison of disclosure on sustainability reporting process and environmental

indicatorsbyquantityandquality....................................................................................................................209

Table54:CriteriaandscoresfortheSustainabilityIntegrationMatrix...................................................213

Table55:Interviewees’scoresfortheSustainabilityIntegrationMatrix...............................................216

Table56:Criteriaforidentifyingmaterialissues.................................................................................................253

XVI

IndexofAcronyms• AA1000SES:AccountAbilityAA1000StakeholderEngagementStandard

• BSC:BalanceScorecard

• CDP:CarbonDisclosureProject

• CSR:CorporateSocialResponsibility

• CSV:CreatingSharedValue

• GISR:GlobalInitiativeforSustainabilityRatings

• GRI:GlobalReportingInitiative

• IIRC:InternationalIntegralReportingCouncil

• IR:IntegratedReporting

• MA:MaterialityAnalysis

• MBSC:MaterialityBalancedScorecard

• NGOs:Non-GovernmentalOrganisations

• PM:PerformanceManagement

• RRM:ReputationandRiskManagement

• SASB:SustainabilityAccountingStandardsBoard

• SAMEs:SmallandMediumsizeEnterprises

• SBSC:SustainabilityBalancedScorecard

• SDGs:SustainableDevelopmentGoals

• SE:StakeholderEngagement

• SI:StakeholderIdentification

• SR:SustainabilityReporting

• TBL:TripleBottomLine

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IntroductionThe introduction chapter outlines the research problem, context and rationale for a Materiality

BalancedScorecard,aframeworkforintegratedsustainabilitymanagementwithinthehotelindustry.

Thenthefocusturnstotheaimandobjectivesenvisagedforansweringtheresearchquestion:How

cananorganisationdefine strategic sustainabilityobjectives to create sharedvalue and translate

themintoaction,measureoutputsandreport?Finally,thechapterexaminesthestructureandscope

oftheresearch.Thechapterconcludeswiththethesisoverview,whichincludesabriefsynopsisofits

eightchaptersandtherelatedpublishedoutputs.

Contextandrationale

As the adverse impacts of tourism on the environment and society attract increasing attention,

organisationsareexpectedtotakemoreresponsibilityforthesustainableuseofresourcesandtheir

impactonsocieties.Hospitalityorganisations faceincreasinginternationalcompetitionwithever-

growing customer expectations (Han, Kim, and Kim 2011), declining resources (Laszlo and

Zhexembayeva2011),slowergrowthratesandoversuppliedandmaturemarkets(Soetal.2013).

Within this context, the researcher takes the view from van Marrewijk (2003) that corporate

sustainabilityistheultimategoalofanorganisationinitscontributiontosustainabledevelopment;

meetingtheneedsofthepresentwithoutcompromisingtheabilityoffuturegenerationstomeettheir

own needs (World Commission on Environment and Development 1987). A growing number of

organisationshaveengagedinsustainabilityactivities,socialresponsibilityandethicalbehaviours

throughCorporateSocialResponsibility(henceforthCSR)programmes(deGrosbois2012,Yunus,

Moingeon, and Lehmann-Ortega 2010, Elkington and Hartigan 2008). CSR encompasses the

economic,legal,ethicalanddiscretionaryexpectationsthatsocietyhasoforganisationsatanygiven

pointintime,anddefinestheresponsibilitiesofbusinessestowardssocietyandtheenvironmentwe

livein(CarrollandShabana2010,Carroll1999).Thethesisdistinguishescorporatesustainability,as

theultimategoalofanorganisationinitscontributiontosustainabledevelopment,fromCorporate

SocialResponsibility,astheactivitiesundertakentoachievecorporatesustainability.Thegreaterthe

attentionthatisattractedbytheorganisation’simpactsontheenvironmentandsociety,themore

responsiblearehotels’practices inmanagingthose impacts. Indeed, thisholdstrue forbothlarge

(Fontetal.2012)andmediumsizedandsmallhotels(GarayandFont2012).

18

Theprevioustrendsshapethenewphaseofcompetitiveadvantage,whereCSR,embeddedintothe

corestrategiesofhospitalityorganisations,canplayaconstructiverole.Competitiveadvantageisthe

valuecreatedbyanorganisationforitscustomersthatexceedstheorganisation’scostincreatingit

(Porter1985).Competitiveadvantageoccurswhentheorganisationdevelopsattribute(s)suchas

skills,resourcesormarketposition,allowingittooutperformitscompetition,bycostleadershipor

differentiation.Besidescompetitiveadvantage,strategicCSRdrivesperformance(GarayandFont

2013,Kirk1995),improvedrelationshipwithexternalstakeholders(MurilloandLozano2006)and

viabilityandmarketlegitimacy(Suchman1995).UntilCSRstrategieslinktosocietalexpectations,

however,organisationswillbeviewedasacauseofsocialandenvironmentalproblems(Porterand

Kramer2011).TheprincipleofCreatingSharedValue(henceforthCSV) ispreciselyrooted in the

mutualdependencybetweenorganisationsandsociety for long-termsuccess (PorterandKramer

2011).ScholarsforecastthatcompetitiveadvantagewilldrivestrategicCSR(VázquezandRodríguez

2013),withtheorganisationcontributingtothesocietywhereitoperates(Bonilla-Priego,Font,and

Pacheco-Olivares2014),andeveninconstrainedeconomictimes,organisationshaveincreasedtheir

strategic commitments to responsibility (Bansal, Jiang, and Jung 2015). Corporate and academic

worlds increasingly use CSV (Beschorner and Hajduk 2017, Corazza, Scagnelli, and Mio 2017,

Dembek, Singh, and Bhakoo 2016). Nevertheless, the exploration of shared value in hospitality

literatureremainslimited(e.g.HsiaoandChuang2016).

Aclearimplicationoftheaboveisthatanorganisation’scommitmenttosustainabilitydemandsa

strategicapproachtoensurethatitisanintegratedpartofthestrategyandprocesses(Engert,Rauter,

andBaumgartner2016).ConductingstrategicandeffectiveCSRplanningthatresultsinaclearand

demonstrable impact on the organisation’s and community is a process that still challenges

organisations(Wangetal.2016),however,andthehotelindustryisnotanexception(GarayandFont

2012). Organisations require an explicit linkage between strategic, operational and financial

objectives as well as the ability to monitor the results continuously with quantifiable outcomes

(Cokins2010).Theincreasedattentionpaidtothestrategicenvironmentalandsocialperformance

ofanorganisationintensifiesthedemandforcorporatesustainabilityperformancemeasurementand

management systems (Hansen and Schaltegger 2017, Searcy 2012). Performance management

systemshelptostrikeabalancebetweenconflictsandtotranslatestrategiesandplansintoresults.

CSV,however,entailschangingperformancemanagementsystemstoreflectnewemphasesonwhat

isrelevanttomorestakeholders.CSRresearchcapturesaconceptualshiftfromfinancialoutcomes

andappliesittothemanagementofnon-financial,socialandorganisationaloutcomes(Wangetal.

19

2016). Strategies have changed to manage intangible assets, such as customer relationships,

employee skills, innovative products and responsive operating processes, in order to create

competitive advantage (KaplanandNorton2001b). In sodoing, the valueof anorganisationhas

shifted from tangible to intangible and knowledge-based assets yet performance measurements

systemsstillreflectout-datedmodels(KaplanandNorton2001b).Inevitably,thisconditionlimitsthe

potentialtoalignCSRactivitieswiththeorganisation’sstrategyandwiththedemandsofmultiple

stakeholders–apreconditiontocreatingsharedvalue.

Theincreasedimportanceofmanagingsustainabilityforthesurvivalandsuccessoforganisations

(Cresti2009)hasshiftedresearchtohowsustainabilityissuescouldbeintegratedintoorganisational

systems and processes (Maas, Crutzen, and Schaltegger 2014, Epstein 2008). Sustainability,

incorporated intoperformancemanagement systems, enables aholistic focusonperformanceby

implementing strategic goals and adapting the organisation to operational circumstances (Otley

2001).Thistranslatesintobettermanagementandcontrolofsustainabilityperformance(Georgeet

al. 2016) and value for society (Husted and de Jesus Salazar2006, Hart andMilstein2003).The

BalancedScorecard(BSC)hasemergedasapreferredtoolforevaluatinghowmanagersperformin

CSRandformotivatingtheminthepursuitofthesegoals(Bento,Mertins,andWhite2017).Indeed,

thesustainabilityadaptationsoftheBSCareoneofthemostpromisingstrategictoolstosupportthe

implementation of a sustainability strategy (Journeault 2016) and are seen as an important

sustainability-oriented management accounting innovation of the last two decades (Hansen and

Schaltegger2017).

Stakeholders are defined as those groups or individuals who can affect, or are affected by, the

achievementof theorganisation’spurpose (DonaldsonandPreston1995). Stakeholderspressure

organisations tomeasure,manageandreportsustainabilityperformance(SchalteggerandBurritt

2010) in a manner that links with established strategic, operational and financial objectives

(Calabrese,Costa,andRosati2015,Searcy2012).Whilecorporatesustainabilityrequiresintegrative

measurementandmanagementofsustainabilityissuesratherthanseparateapplicationsofdifferent

toolsintheorganisation(Maas,Schaltegger,andCrutzen2016),however,suchintegrationremainsa

fragileconcept(Battagliaetal.2016).

Existingresearchdealsinanisolatedwaywithspecificmethodsofcapturingsustainability.Authors

have examined the role of sustainability management tools (e.g., Bonacchi and Rinaldi 2007,

Schaltegger andWagner 2006, Johnson and Schaltegger 2016) and accounting and reporting to

20

supportsustainabilityprocesses(BurrittandSchaltegger2010,Bebbington,Unerman,andO'Dwyer

2014,BakerandSchaltegger2015).Therehavebeenfewattemptstodevelopmorecomprehensive

and integratedapproaches (seeDent1990,Chenhall2003,MalmiandBrown2008),whichrarely

integrateaccounting,managementcontrolandreporting(Maas,Schaltegger,andCrutzen2016).For

instance, previous research has studied the link between sustainability balanced scorecards and

performancemanagementcontrol(Schaltegger2011), theroleofmanagementcontrolsystems in

integratingsustainabilityintoorganisationalstrategy(Baker,Brown,andMalmi2012,Crutzenand

Herzig2013)orthedevelopment,structureanduseofsustainabilitycontrolsystems(DitilloandLisi

2014).Researchaddressingtherelationshipbetweensustainabilityperformancemanagementand

reportingisstilllimitedandremainsinanexplorativestage(seedeVilliers,Rouse,andKerr2016for

a first case study). At present, few researchers have addressed the link between sustainability

reporting, organisational change and internal performance improvement (e.g. Adams, Larrinaga-

González,andMcNicholas2007,AdamsandWhelan2009).

Sustainability reporting “is a process that assists organisations in setting goals, measuring

performanceandmanagingchangetowardsasustainableglobaleconomy”(GRI2013b,85).It isa

formofdiscourseaimedoutsidetheorganisationtoachievesustainedcompetitiveadvantage.The

efforts to standardise sustainability reports take two avenues. First, creating sector standards to

determine what is sustainable, through sustainability ecolabels. Such market solutions to

sustainabilityproblemsought tobe reconsidered (Rex andBaumann2007) since thesehavenot

succeededindifferentiatingtheservicesinawaythatdevelopsmarkettraction(Font2013,Gössling

andBuckley2016). Second, by implementingmethodologies for organisations todeterminewhat

their stakeholders consider a priority, such as the Global Reporting Initiative’s requirement to

conductaMaterialityAssessment(henceforthMA).MAisatoolforprioritisingissueswithinstrategic

planning,allowinganintegratedapproachtodefiningasustainabilitystrategyandreportingonit

(GRI2013a).Theconceptofmaterialityisusedtoexplaintowhichextentasustainabilityreportis

informed by the process of engaging which prioritised stakeholders, and how. Materiality is

effectively the process of engaging with stakeholders jointly to determine shared priorities, so

organisationscanrealigntheirpracticesandreportwhatisimportanttotheaudienceoftheirreports.

ReportingorganisationssuchasSustainabilityAccountingBoard(2016a),GlobalReportingInitiative

(2013a)or the IntegratedReportingFramework(IIRC2013) advocate for increasedstakeholder-

focusedcommunication.Yet,therehavebeenfewstudiesintomaterialityforsustainabilityreporting

21

(e.g.,FasanandMio2017)andfewerstillconsideritsroleinconnectionwithsustainabilitystrategy

(Edgley2014).

Thehotel industry faces the challengeof increasing transparency about thedisclosureof current

practices(Fontetal.2012).Also,whilematerialityhasbecomearelevant issue forsustainability

disclosure,materialityisnottreatedcomprehensivelywithinthehotelindustry,whichundermines

thecredibilityofitssustainabilityreportingprocess(Jones,Hillier,andComfort2016).

This thesis studies materiality coupled with the Inclusiveness, Responsiveness and Assurance

principles of the stakeholder engagement standard AA1000SES (AccountAbility 2015). The

AA1000SES principles parallel the reporting process. First, managers identify and engage

stakeholders (inclusiveness). Second, managers use stakeholder insights to determine the

importance of sustainability issues (materiality). Third, the organisation discloses enough

informationtoallowstakeholderstojudgetheorganisation’ssustainabilityperformancebasedon

the issues that they considered important in the first place (responsiveness). And fourth, the

organisation provides confidence regarding the content and process of sustainability reporting

(assurance). The accountability approach may assist organisations in responding to stakeholder

expectationsacrossthecriticalprocesseswithintheorganisation.

This thesis contributes to the literature by investigating how sustainability performance can be

integratedintothebusinessstrategy,managementandreporting(e.g.Figgeetal.2002a,Schaltegger

andWagner2006,Chen,Hsu,andTzeng2011,Zollo,Cennamo,andNeumann2013,deVilliers,Rouse,

andKerr2016).Specifically,thisthesisaddressesthefactthatnoacademicresearchhasexamined

how theprinciples fromAA1000SES couldbe incorporated in existingperformancemanagement

systems,suchastheBalancedScorecard,todefine,implementandreportonasustainabilitystrategy.

The thesis also contributes to the CSR process-based literature that intends to understand the

‘process’ of CSR decision-making and implementation, particularly for the hotel industry. The

process-based researchhas resurged since2000, reflecting the increasing interest in an in-depth

understandingofCSRdecision-makingandimplementation(Wangetal.2016).Thethesistakesa

qualitative approach, to complement the existingquantitative researchonboth the Sustainability

BalancedScorecard literature(HansenandSchaltegger2016)and the ethicalstudies in thehotel

industry(Köseoğluetal.2016).Aqualitativestudyprovidesopportunitiesfortheorybuildingandan

in-depthunderstandingofthecontext(Wangetal.2016).Thisqualitativeresearchassessesthemost

commonchallengesincorporatedecision-making,implementationandreportingofCSRthatconcern

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thehotelindustry,andthatinturnhampermoreproactivesustainabilitystrategiessuchascreating

sharedvalue.

Researchaim,objectivesandscope

Theaimof thisPhD is to arrive at a critical understandingof how largehotel groups candefine

strategic sustainability objectives to create sharedvalue. It does sobydeveloping theMateriality

BalancedScorecard(henceforthMBSC)inthecontextofthehotelindustry.TheMBSCisanintegrated

framework that links sustainability reporting processes with sustainability performance and

management,usingtheconceptsofsharedvalue(PorterandKramer2011),theBalancedScorecard

(Kaplan and Norton 1993), the Sustainability Balanced Scorecard (Figge et al. 2002a), and the

stakeholder engagement standard AA100SES (AccountAbility 2015). This thesis expands on the

researcher’spreviousworkinmaterialityassessment,togetherwithhersupervisors(Font,Guix,and

Bonilla-Priego2016).Theresearchobjectivesare:

Objective1.Toproposeastrategicmanagementframework,theMaterialityBalancedScorecard,to

design,communicateandrealiseCSRstrategiesthatcreatesharedvalue.

Objective2.TocharacterisetheCSRmanagementandreportingoflargehotelgroupsandidentifythe

internaldeterminants.

Objective3.ToofferacriticalappraisalofthevalueoftheMaterialityBalancedScorecardwithinthe

hotelindustry.

This PhD advances the theoretical and empirical knowledge of how an organisation can define

sustainablestrategicobjectivestocreatesharedvalueandtranslatethisintoactionsusingtheMBSC

framework. CSV entails a progressive reorientation of how an organisation understands its

relationshipwithsociety.Theliteraturereviewdemonstratescomplementaritiesbetweencreating

shared value, the balanced scorecard and themateriality principle from the AA1000SES.Making

socialresponsibilityinternaltoanorganisationrepresentsachangeintheorganisationalcultureand

themindsetof themanagers.Nevertheless, thedifferentCSV implementationguidelinesprovided

(e.g.PorterandKramer2011,BockstetteandStamp2011,Pfitzer,Bockstette,andStamp2013,Tate

andBals2018,Matinheikki,Rajala,andPeltokorpi2017)donotexplainhowtoinvolvestakeholders

oridentifykeysustainabilityissues,orhowtoprioritiseandmeasurethem.Theintegrationofshared

valuewithintheMBSCstandardisestheprocessofidentifyingthesocialissues,prioritisingthemand

measuringstakeholdervalue,linkedwiththefinancialvaluethroughcause-and-effectrelationships,

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whilemonitoringtheCSVstrategyinacontinualprocess.Themeasurementofsharedvaluemustbe

embeddedintoexistingmanagement(PorterandKramer2011,Porteretal.2012).Accordingly,the

MBSCisbasedonboththeBalancedScorecard(henceforthBSC),widelyusedwithinorganisationsto

increasetheirstrategiceffectiveness(Neely2008a),andtheMaterialityassessment(henceforthMA),

which ismainlyused forsustainabilityreporting(GRI2013a).Anorganisation integratingshared

value within the BSC can track its progress on the link between sustainability and organisation

results,whichcansubsequentlycreatenewvalueandimproveperformance.

Effectivedefinitionofthesustainabilitystrategy,aswellaseffectivemanagement,measurementand

reporting, require a good interplay between different tools and actors within and outside the

organisationforthecollection,analysisandcommunicationofrelevantdata.Thisthesisisgrounded

on ‘Instrumental Stakeholder Theory’, which identifies “the connections, or lack of connections,

between stakeholder management and the achievement of traditional corporate objectives (e.g.

profitability, growth)” (Donaldson and Preston 1995, 71). The MBSC is underpinned by the

instrumental stakeholder theory entailing listening to relevant stakeholders and considering the

issuesthatarematerialtothemandintegratingthoseconcernsintheorganisationaloperations.The

recognition of a broader set of sustainability issues and stakeholders leads to improved

organisationalperformance(e.g.Johnson1998,Sundin,Granlund,andBrown2010).TheMBSCisa

framework to understand better how organisations address the stakeholder claims in respect to

sustainability through their operations, and as a result, improve performance from a wider

perspective. Full integration into the core organisation’s activities and impacts results in amore

cohesive and efficient approach to sustainabilitymanagement. Indeed, theMBSC builds into the

performance an improvement-oriented perspective as a framework for change management for

which;i)stakeholderexpectationssteerperformanceimprovements, ii) internaldevelopmentand

reportingusessustainabilityperformancedataandiii)transparencymustbeadvancedtolegitimise

the organisation’s actions through the wider stakeholder engagement. This research argues that

MBSC,anintegratedtooloftheBSCandtheAA1000SESprinciples,shouldbeasuitableinstrument

todrivechangewithinanorganisation towardsadvancedsustainabilitystrategies,culminating in

creatingsharedvalue.

Thecontributionofferedbythisthesishasbothacademicandpracticalimplications.Ontheacademic

side,totheauthor’sknowledge,thecurrentliteraturedoesnotprovidemethodsforthesimultaneous

andsystematicintegrationofthesustainabilityreportingeffortsintotheorganisationperformance

managementsystem.Onthepracticalside,theresearcherdevelopsaframeworkforintegratingthe

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concernsofkeystakeholdersintoaperformancemanagementsystem,whichpermitsorganisations

tomonitorandaccountfortheefficiencyandeffectivenessofaddressingstakeholderconcernsand

assessesitspotentialusewithinthehotelindustry.

Structureofthethesis

Thethesisconsistsofeightchapters(Table1).

Table1:Structureofthethesis

Chapter Content PhDobjectives Publicationoutput

1:Introduction • Contextandrationale.• Aimandobjectives.• Thesisstructure.

2: Literaturereview

• Corporate SocialResponsibility.

• Theoretical andcontextualperspectives.

• CreatingSharedValue.

Objective 1,and2

Publicationrelatedtothesharedvalueframework(from a Master’s thesis): Font, X., Guix, M. andBonilla-Priego, M. J. (2016) Corporate socialresponsibility in cruising: Using materialityanalysis to create shared value. TourismManagement, 53, 175-186. Doi:10.1016/j.tourman.2015.10.007Publication related to corporate socialresponsibility (from amaster’s thesis): Font, X.,Bonilla, MJ. and Guix. M. Chapter 5 Corporatesocialresponsibilitiesinthecruisesector,86-105.InDowling,R.andWeeden,C.(2016)HandbookofCruiseShipTourism,2ndEd,86-105.Wallingford:CABI.ISBN:9781780646084Publication related to corporate socialresponsibility: Font, X. & Guix, M. Chapter 37Corporate Social Responsibility in tourism, 567-580. InCooperC.Gartner,B., Scott,N.&Volo, S.(2018) Sage Handbook of Tourism Management.London,UK:Sage.ISBN:9781526461131.

3: Literaturereview

• BalancedScorecard.• Sustainability

BalancedScorecard.• Sustainability

reporting:AA1000SES

Objective1 Publication of the AA1000SES principles in theliterature review in thearticle:Guix,M,Bonilla-Priego, MJ. and Font, X. (2018) The process ofsustainability reporting in international hotelgroups:ananalysisofstakeholder inclusiveness,materiality and responsiveness, analysis ofstakeholder inclusiveness, materiality andresponsiveness, Journal of Sustainable Tourism,12(7), 1063-1084. Doi:10.1080/09669582.2017.1410164

4: Theoreticalcontribution

• Theoreticalframework: TheMateriality BalancedScorecard.

Objective1

5:Methodology • Methodology. Objective 1,2and3

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6: Findings &Discussions

• Sustainabilityreporting within thehotelindustry.

• Perceptions ofhospitality managerson the sustainabilitymanagement andreporting.

• Interpretation ofdegree ofsustainabilityintegration.

Objective 2and3

Publication of a joint Infographic with UNEPshowcasing preliminary results of the contentanalysis.Publicationofanabridgedversionofthecontentanalysis results: Guix, M, Bonilla-Priego, MJ. andFont, X. (2018) The process of sustainabilityreportingininternationalhotelgroups:ananalysisof stakeholder inclusiveness, materiality andresponsiveness, Journal of Sustainable Tourism,12(7), 1063-1084. Doi:10.1080/09669582.2017.1410164

7: Findings &Discussion

• Experts’ insights onbarriers forsustainabilityintegration.

• Interpretation of thebarriers in lightof theapplication of theMBSC in the hotelindustry.

Objective 2and3

Publicationoftheinterviewresultsonmaterialityassessment:Guix,M., Font, X. and Bonilla-Priego,M.J. (2018)Materiality: the rationale behind sustainabilitychoices in hotel groups, International Journal ofContemporary Hospitality Management (on-line)Doi:10.1108/IJCHM-05-2018-0366

8: Conclusions,contribution toknowledge

• Conclusion.• Contribution to

knowledge.

Aim andobjectives 1,2,and3

Source:Author,2017

Chapter1comprisestheintroductiontothecontext,rationale,scopeandaimsofthethesis.

Chapter2reviewsliteratureintheevolutionofthesustainablebehaviourofanorganisationfromthe

traditionalCSRtowardsbeingmorestrategicbycreatingsharedvalue.Thefirstsectionintroduces

CSRandfour theories,allofwhichrelatetohowanorganisationmanages theperceptionof itself

within society to achieve competitive advantage: the resource based view, reputation and risk

management,legitimacyandstakeholdertheory.Thesecondsectionprogressivelynarrowsthetopic

ofconnectingsocialandeconomicprogressandpresentstheconceptoftheCreatingSharedValue

framework,togetherwithitsapplicationandchallenges.

Chapter3introducestheinstrumentstoachievesharedvalue,whichincludetheBalancedScorecard

asawell-establishedperformancemanagementsystemand itssustainabilityadaptations,andthe

AA1000SESprinciplestorespondtostakeholderexpectationsacrossthecriticalprocesseswithinthe

organisation.DuetotherelationshipbetweenCSV,sustainabilityandbroadstakeholderconcerns,

thesectionalsoreviewsextendedBSCstructuresthataddresssustainabilityissuesandstakeholder

accountabilitymoreinclusively.ThelastpartdiscussesthecomplementaritybetweentheBSCand

MAasthecentralelementintheAA1000SESforrealisingsustainabilitystrategiesthatcreateshared

value,whichunderpintheMaterialityBalanceScorecard.

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Chapter4developstheMaterialityBalanceScorecardasasuitableinstrumenttodefine,communicate

and operationalise strategic sustainability objectives that create value through the organisation’s

operations.ThechapterdetailsthestepstobuildtheMBSC.Step1outlinestheSustainabilityBSC

characteristics to address sustainability issuesmore inclusively. Step 2 acknowledgeswhere the

organisationcreatesvalue for itsmultiplestakeholders.Later,Step3incorporates theMateriality

Assessmentasatooltoincreasestakeholderaccountability.Chapter4isthetheoreticalcontribution

ofthePhD(Objective2)developingaconceptualframeworkinalignmentwiththegrowingbodyof

research on Sustainability BSCs (Hansen and Schaltegger 2016). The Sustainability BSC is a

developing field where further conceptual and empirical research is needed to improve

understandingofitsbenefitsanddrawbacksinorganisations(HansenandSchaltegger2016,2017,

Journeault2016).

Chapter5exploresthephilosophical,methodological,analyticalandinterpretativeapproachestothe

dataandfindings.Thechapterbeginswithanoverviewofthepragmatismparadigminformingthe

research and the ontological, epistemological and axiological choices. Afterwards, the chapter

outlinestherationaleforaqualitativemulti-methodandcross-sectionalresearchstrategy,including

the sample and thedata collectionmethodsused. It justifies thequalitativemethodsadopted, by

complementingtheexistingcasestudies(27.7%),multi-casestudy(13%)andquantitativeresearch

(13%) on Sustainability BSCs (Hansen and Schaltegger 2016). Then, the chapter presents a

justification and detailed description of the research methods: content analysis, qualitative

questionnaires and semi-structured interviews. The chapter describes the data analysis to be

theoretical thematic analysis. Finally, the section outlines the evaluation criteria as focusing on

trustworthiness,anddescribesthelimitationsofthisresearch.

Chapter6presentsthecharacteristicsandfactorsinfluencingandhinderingsustainabilityintegration

intomanagementandreportingbyhotelgroupsaccordingto thedatacollected(contentanalysis,

qualitative questionnaires and semi-structured interviews). It does so by addressing the seven

elementsfromthe7-SFramework(strategy,structure,systems,style,skills,staffandsharedvalues)

(Waterman,Peters,andPhillips1980).Thisenablesastructuredanalysisoforganisationalvariables

drivingvariousmanagementprocesses,fromstrategyformulation(GalliersandSutherland1991),

employeeempowerment(Lin2002)tosustainabilityreporting(Thijssens,Bollen,andHassink2016).

BecausethisPh.D.paysparticularattentiontosustainabilityintegrationwithinPMS,thisresearch

incorporatesthethreedimensionsofintegrationintothe7-SFramework(cognitive,organisational

andtechnical)(Gondetal.2012,Georgeetal.2016).Cognitiveintegrationentailshowpeoplethink

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withintheorganisation,thesharedcognitions,andthechangesinfocusandbeliefs.Organisational

integrationinvolveshowprocessesareorganisedconcerningtheorganisations’formalstructureand

rolestofacilitatecommonpractices.Technicalintegrationinvolveshoworganisationsusetoolsand

methodologies for sustainability. Finally the chapter makes a comparative analysis between the

sustainabilitydisclosure, environmental performance and sustainability integrationof largehotel

groups, and presents two tools to assess their sustainability integration (the Sustainability

IntegrationMatrix)andtheiraccountabilitytostakeholders(theAccountabilityMatrix).Finally,the

chapterconcludesbyrevisitingthemainfindings.

Chapter 7 returns to objective 3 ‘To critically appraise the value of the MBSC within the hotel

industry.’First,itdiscussessomeexamplesofhotels’CSRpracticesinlightofthethreepathwaysfor

creatingsharedvalue:reconceivingproductsandservices,reimaginingthevaluechain,andenabling

cluster development. Afterwards, the section turns to the internal cognitive, organisational and

technicaldeterminantstoCSRmanagementandthereportingoflargehotelgroups,andthencethe

likelihoodofimplementingtheMBSCintheindustry.Then,thechapterdiscussesthehotelgroups’

approachestoengagingstakeholders,identifyingmaterialissuesandrespondingtothose,asaresult

of the determinants of CSR management and reporting, and discusses the implications for the

mismanagementof sustainability and the symbolic adoptionof reporting guidelines.The chapter

concludes by refining the MBSC from Chapter 4, including new guidance on the Accountability

principlestofitthesharedvaluepurpose.

Chapter 8 reflects on the attainment of the aim and objectives of the Ph.D. It also considers its

significance foracademicknowledgeandmanagementpractice, specifically for thehotel industry,

andendsbysurveyingwiththestudy’slimitationsanddirectionsforfutureresearch.

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From Corporate Social Responsibility to Creating SharedValue

Thischapterexplainsthetheoreticalbasesrelatingtosustainablebehaviourbyorganisationsandthe

evolution towards more strategic and value-creating strategies. The first section introduces

CorporateSocialResponsibility(henceforthCSR)andthesecondsectionrevisitsthetheoriesmost

usedtoresearchCSR:theResourceBasedView,ReputationandRiskManagement,andLegitimacy

and Stakeholder theories. Later, the chapter examines how organisations develop a sustainable

competitiveadvantagethroughtheCreatingSharedValueframework(henceforthCSV).Theprocess

of narrowing down the topic helps define the problem and identify the need for theMateriality

BalanceScorecard(henceforthMBSC)tooperationalisesharedvalue-creatingstrategies.

Sustainablebehaviourbyorganisations

ThesectionintroducesCSR,itscomplexdefinitionanditsterminology.ItplacesCSRasastrategictool

for an organisation’s long-term performance, and provides insights into the different theories

justifyingthebusinesscaseforCSR.Thesectionstressestheimportanceofembeddingstakeholder

concernsandsustainabilitywithintheDNAoftheorganisation,notingthatthesearefundamental

ideasshapingtheMBSCframework.

Towardsbeingmorestrategic

The concept andunderstandingofCSR isdynamic, shifting in linewith environmental andsocial

changes,externaldemandsandthemoralmaturityoftheorganisation.Differentschoolsofthought

havedevelopeddifferentCSRdiscourses,allofwhichincludetakingintoaccountthevoluntarinessof

the activity, the stakeholders’ relations and the triple bottom line impacts of an organisation’s

operations (Dahlsrud2008).TheTripleBottomLine approach (henceforthTBL) assessesCSRby

focusingontheeconomic,socialandenvironmentaldimensionsofsustainability(McElhaney2008).

CSR helps to create economic and brand value by focusing an organisation on sustainable

development.ThisthesistakesthedefinitionofCarroll,whichhasnowbeenusedforsome35years;

“the social responsibility of business encompasses the economic, legal, ethical, and discretionary

expectationsthatsocietyhasoforganisationsatagivenpointintime”(Carroll1979,500).CSRis

thereforeaboutmanagingtheorganisation’soperationsinawaythatbothmaximisesthebenefitsto

societyandminimisestheriskandcosttosociety.

The multiple definitions and terms that are used to refer to the sustainable behaviour of an

29

organisationincreaseconfusionforstakeholders,andmakeitdifficulttoembraceCSR.Theseterms,

oftenused interchangeably, include:citizenship,sustainability,corporateresponsibility,corporate

accountabilityandsocialresponsibility(Carroll1999,deGrosbois2012,Coles,Fenclova,andDinan

2013).CSRisasocialconstructwithinaspecificcontext,andthemultiplevariantsoftheconceptcan

make it difficult to engagewith (Van Beurden and Gössling2008, Orlitzky, Siegel, andWaldman

2011). As a consequence, organisations take into account the multiplicity of approaches when

definingstrategies(Dahlsrud2008).OrganisationspursuedifferentCSRobjectives,whichdirectly

influencehowtheymanagetheirresponsibilitiesandstrategies(Hawkins2006,Freeman,Harrison,

andWicks2007,McElroy, Jorna, andvanEngelen2008).Thevoluntarynature and scopeofCSR

meansthatthechoiceofwhetherandhowtodevelopitislefttotheorganisation.

OrganisationscanthereforechooseamongmultipleCSRactivities,whichcanbebroadlycategorised

asResponsiveorStrategic,dependingontheissuesaddressed.ResponsiveCSRaddressesi)generic

socialissues,whicharethosethatarenotaffectedsignificantlybytheorganisation’sactivitiesanddo

notmateriallyaffectthelong-termcompetitiveness,andii)valuechainimpacts,whichresultfrom

the organisation’s operations (Porter and Kramer 2006, 2011). Responsive CSR has been the

traditionalmodel,whereorganisationsfocusonphilanthropyandoutsourcingtheirresponsibilityto

thesupplychain,buthasreceivedmuchcriticism(Laufer2003).StrategicCSR,meanwhile,addresses

i) the value chain issues and ii) the competitive context issues, which are those factors in the

organisation’sexternalenvironmentaffectingtheunderlyingdriversofcompetitivenesswherethe

organisationoperates(PorterandKramer2006,2011).StrategicCSR isamoreholisticapproach

whereby an organisation purposefully matches internal resources (e.g. employee skills,

organisational culture) with external community-specific needs (e.g. related to food access,

education)increasingthebenefitstotheorganisationanditspositiveimpactonthecommunity.This

thesisfocusesonhowtoadvanceCSRtowardsbeingmorestrategicthroughtheMBSC.

Despite therelativeconsensusonCSR, thebusinesscase forsustainabilityremainscontestedand

researchersarecontinuingtoinvestigatehowstrategicCSRleadstocompetitiveadvantage(Porter

andKramer2011)andimprovesrelationshipswithexternalstakeholders(MurilloandLozano2006,

Bhattacharya,Korschun,andSen2009).ThenextsectiondiscussestherelationshipbetweenCSRand

organisationalperformance.

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Improvingperformancethroughresponsiblemanagement

AkeyareaofresearchhasbeentoidentifytheconditionsunderwhichCSRhasapositiveimpacton

anorganisation’sfinancialperformance,arguablyasawayofprovidingabusinesscaseargumentfor

organisations to engage more intensively in CSR. Scholars have found negative relationships

(Aupperle,Carroll,andHatfield1985,WrightandFerris1997),neutralrelationships(Teoh,Welch,

and Wazzan 1999, Lindgreen and Swaen 2005, Ioannou and Serafeim 2015) and positive

relationships(e.g.WaddockandGraves1997,StanwickandStanwick1998,MargolisandWalsh2003,

Orlitzky,Schmidt,andRynes2003,Vogel2005,GalbreathandGalvin2008,VanBeurdenandGössling

2008). These studies address the association between CSR and performancewhile other studies

researchhow to achieve aperformance increase (RowleyandBerman2000,MargolisandWalsh

2003,LuoandBhattacharya2006,BrancoandRodrigues2006,GalbreathandShum2012,Saeidiet

al.2015).ArticlesresearchinghotelperformanceinthecontextofCSRhavegrownfrom2.3%to3.7%

outofasampleofarticlespublishedinleadinghospitalityandtourismmanagementjournalsfrom

1992to2005,andthisfigureisexpectedtocontinueincreasing(Sainaghi,Phillips,andCorti2013).

While some scholars have found that CSR positively affects performance through savings from

efficiencies,avoidingfuturefinesandbrandpositioning,othershavefoundanegativeimpactdueto

increasedcosts(Nicolau2008,LeeandPark2009,Kang,Lee,andHuh2010,Pereira-Molineretal.

2012,Pereira-Molineretal.2015).Researchersareattemptingtoexplaintherelationshipbetween

CSR and performance using complementary theories as ameans to build the CSR business case

(CarrollandShabana2010).

Multiple theories overlap, providing different butuseful insights on the sustainable behaviour of

organisations.Thissectionaddressesfourtheories,allofwhichlinkhowanorganisationmanages

howitisperceivedwithinsocietyandhowCSRcanbringaboutcompetitiveadvantage.Thechapter

presentstheoriesorganisedaccordingtotheuseofmoreinternaltomoreexternalelementswhen

determining theCSRstrategy.First, theResourceBasedViewtheorypresentsCSRasadiscourse

intendedtomanagestrategicresourcese.g.reputation.Second,theReputationandRiskmanagement

theory sees CSR as a discourse that minimises risks through managing reputation. Third, the

Legitimacy theory postulates that CSR is a discourse serving to gain, maintain or repair the

organisation’srighttooperatebymanagingtheperceptionsofwidersociety.Fourth,theStakeholder

theoryunderstandsCSRasadiscourseimprovingtherelationshipbetweentheorganisationandthe

keystakeholdersbymanagingtheirperceptions.

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ResourceBasedView

TheResourceBasedViewtheorypostulatesthatanorganisationactsresponsiblytomaximiseand

sustainitscompetitiveadvantageinwayscompetitorscannoteasilyimitate(Wernerfelt1984,Russo

andFouts1997).Theorganisationreachesasustainablecompetitiveadvantagethroughtheunique

mix of rare, valuable, inimitable, non-tradable, non-substitutable, and organisation-specific

resources,capabilitiesandcompetencies(Porter1985,Barney1991,Barney,Wright,andKetchen

2001).CSRfavoursvaluablecapabilitiessuchasstakeholderintegration,innovationororganisational

learning (Garay and Font 2012) and, therefore, CSR practices enable an organisation to acquire

resourcesanddevelopskills thatcannoteasilybe imitatedbycompetitors(Barney1991,Barney,

Wright,andKetchen2001,BrancoandRodrigues2006).Thisformofvaluecreationadvancesthe

understandingofCSRasmorestrategic(Orlitzky,Siegel,andWaldman2011),andthecharacteristics

ofthesecapabilitiesdefinethestrategicleveloftheCSRinitiatives.

Ahotelcandeveloparesource-basedadvantageand increase itsperformancebycreatingservice

brandvalue thatiscultivatedby topmanagementtransformationalleadershipthroughbuildinga

servicecultureandemployeeinvestment(ChangandMa2015).Forinstance,byutilisingemployees

tocreatepositiverelationshipswithguests,Ritz-Carltonenhancestheservicestandardsthatcreate

aconsistentandsuperiorserviceimage(KandampullyandHu2007,Drohan,Lynch,andFoley2009).

Similarly,MarriottHotels attains superior customer loyalty by utilising its culture that facilitates

employeestoofferconsistentlevelsofguestrecognitionandservice(ByeongandHaemoon2004).

Nevertheless,whileResourceBasedViewcanfacilitatesustainedcompetitiveadvantage,determining

thestrategyonlybasedonwhattheorganisationpossessesratherthanthesharedresourcesacquired

throughalliances,orwhattheexternalenvironmentdemands,maybeincomplete.

TheassumptionoftheResourceBasedViewapproachthatorganisationsmustown,oratleastfully

control,theresourcesconferringcompetitiveadvantageturnsouttobeincorrect(Lavie2006).For

example, the resources of partners also influence the competitive advantage of an organisation

(Saxton 1997, Stuart 2000), and issues of reputationmay arise from the relationshipwith those

partners(GrayandWood1991,WestleyandVredenburg1991).TheResourceBasedViewtheory

postulates that reputation is a resource that can yield significant competitive advantage (Barney

1991, Deephouse 2000, Roberts and Dowling 2002), which leads to a discussion of the relation

betweenCSRandReputationandRiskManagement,asinthenextsection.

32

Reputationandriskmanagement(henceforthRRM)

RRM theory has two perspectives: management and sociological, which focus respectively on

reputationasaresourceorasanoutcomeofthereportingprocess.Reputationasastrategicresource

producestangiblebenefits,whichincludepremiumpricesforproducts,lowercostsforcapitaland

labour, improved loyalty from employees and better decision making (Beatty and Ritter 1986,

MilgromandRoberts1986,FombrunandShanley1990,Fombrun1996,LittleandLittle2000).As

such,reputationisanintangibleassetwiththepotentialforvaluecreation(LittleandLittle2000,

RobertsandDowling2002).Alternatively,reputationistheaggregateoftheassessmentsofmultiple

actorsontheorganisation’sperformancerelativetotheirexpectationsandnorms(FombrunandVan

Riel1997).Assuch,itisperceivedasbeinganoutcomeoftheprocessofmanagingtheorganisation’s

pastactionsandresultsaimedatdeliveringvaluetomultiplestakeholders(ScottandWalsham2005).

This approach suggests that reputation is one of the main drivers of sustainability reporting

(FriedmanandMiles2001,ScottandWalsham2005,Bebbington,Larrinaga,andMoneva2008).The

difficulty in studying the notion of reputation systematically (Unerman 2008) has hampered the

understandingofthespecificreportingstrategiesadoptedtomanagereputation.

Under both perspectives, reputation is “a generalised expectation about an organisation’s future

behaviourorperformancebasedoncollectiveperceptions(eitherdirector,moreoften,vicarious)of

past behaviour or performance” (Deephouse and Suchman 2008, 60). RRM links CSR and

performanceinachainofrelationships(Anderson,Fornell,andRust1997)onthebasisthatsocially

responsiblepracticesimproveproductqualityandthencecustomersatisfaction(Carroll1979,2004).

CSR can increase customer identification with the organisation, which in turn builds trust and

increases customer satisfaction (Martínez and del Bosque 2013). Higher levels of customer

satisfactionlead to increased financialperformanceviacustomer loyalty (RustandZahorik1993,

Cronin,Brady, andHult 2000,Gallarza,Gil-Saura, andHolbrook2011, Lombart andLouis2012).

Reputationmediates the loyalty and performance increase (Clarkson 1995, Galbreath and Shum

2012). Hence, there often is a positive relationship between reputation and an organisation’s

performancewithboth financialandnon-financialbenefits (FombrunandShanley1990,Albinger

andFreeman2000,Black,Carnes,andRichardson2000,Helm2007,Ghoogassian2015).

RRMisbasedontheavoidanceoffactorsthatnegativelyinfluencecorporatebrands,avoidingpublic

relationsscandals (Bebbington,Larrinaga,andMoneva2008).This theory includes 'cause-related

marketing',whichisastrategywherethebenefitsoftheproductarelinkedtoappealsforcharitable

33

insuchawayastocomplementtheproduct'sadvantages(FaracheandPerks2010).Forexample,

hotelgroupsincreasinglydevelopCSRstrategiesinvolvingstakeholdersthroughvariousdistribution

channels (Heikkurinen2010).Bydisclosingtheethicalprinciplesandactions tostakeholders,the

hotellegitimisesitsactions,andcreatesadirectionofpurposefortheemployee(PayneandRaiborn

2001,SchlegelmilchandPollach2005),strengthensitsreputationforenvironmentalresponsibility

and educates consumers (Khan, Serafeim, and Yoon 2016). Although RRM theory includes

worthwhileactivities,thesedonotrealisethefullpotentialofanorganisationsincetheytendtofocus

onshort-termprofits,notonaholisticview(PorterandKramer2011).Thisisanopportunisticway

ofcreatingabusinesscaseforpresentingacaringsidetotheorganisation,whichresultsinashallow

and selective presentation of some actions that hotel groups engage in, often as a distraction or

justificationforcontinuedexploitationofresourceselsewhere.Stakeholdersoughttohaveamore

active say in what the hotels choose to do if the industry is supposed to move beyond such

‘greenwashing’.

Activitiesunderthistheoryrespondto ‘responsiveCSR’(PorterandKramer2006)i.e.addressing

genericsocialissuesandvaluechainimpactswithaninward,oftenshort-term,focus.Reputationisa

strategic resource that an organisation can exploit for competitive advantage (Barney 1991,

Deephouse 2000, Roberts and Dowling 2002) but that is at the cost of strategic, operational,

compliance and financial risk in every interactionbetween the organisation and its stakeholders

(Fombrun, Gardberg, and Sever 2000). RRM also causes controversy because of the difficulty in

separating themanagementofreputationandrisk fromotherorganisationalprocesses(Fombrun

andVanRiel1997,Huttonetal.2001).Overtime,stakeholdersdevelopexpectationsregardingthe

responsiblebehaviourofanorganisation,whichareafunctionofitsexpectedbehaviourinagiven

situation (Mahon 2002). This and other stakeholder-related issues are addressed within the

stakeholdertheorysection.

Theneedtoincreasereputationandmanageriskscloselylinkstotheorganisation’sdiscoursesand

responsestocriticisms(Benoit1995)andrepresenthoworganisationsarticulatetheirmotivations

forreporting(Bebbington,Larrinaga,andMoneva2008).AuthorssuchasAdams(2008),however,

rejecttheRRMtheoryasbeingnothingmorethanlegitimacytheory.Othersarguethatcompetitive

advantagemustbe createdwithin abroader scopeof social legitimacy (Meyer andRowan1977,

DiMaggio and Powell 1983). Indeed, legitimacy and RRM are occasionally used interchangeably

(Deegan 2002, Chalmers and Godfrey 2004). The next section explains how CSR contributes to

legitimisingtheorganisation’soperations.

34

Legitimacytheory

Thedesiretoobtainsociety’sapprovalisanothermotivationforCSRdisclosure.Legitimacytheory

posits that CSR responds to political, social and economic pressures to justify the organisation’s

existencewithinsociety(ShockerandSethi1973,DowlingandPfeffer1975,GuthrieandParker1989,

Patten 1992, Deegan and Gordon 1996). Hotels’ legitimacy is based on legal and regulatory

compliance(Rivera2004,ChanandWong2006,Kasim2007)orstakeholderpressure(Henriques

andSadorsky1999,Gil,Jiménez,andLorente2001,CheyneandBarnett2001,DiefandFont2010).A

centralelement,therefore,ismeetingtheexpectationsofasocialsystem’snorms,values,rulesand

meanings(Parsons1956).Sincelegitimacyisaquestionof‘satisfying’toanacceptablelevel,some

authorsarguethattheabsenceofnegative‘problems’ismoreimportantthatthepresenceofpositive

achievements (Deephouse andSuchman2008).Althoughorganisations canachieve legitimacyon

theirown,thecommonpatternistobelegitimateinconformitywithacollectivelylegitimatetemplate

(Deephouse and Suchman 2008). Legitimacy is seen as a resource on which the organisation is

dependentforitssurvival.

Nevertheless,sinceanorganisationisinfluencedbyandhasaninfluenceonthesocietyinwhichit

operates,themanagementcanmanipulatelegitimacybypursuingstrategiestoensureitscontinued

supply.Examplesofsocietyaffectingtheorganisationinclude:consumersreducingthedemandfor

theproducts;supplierseliminatingthesupplyoflabourandfinancialcapitalorstakeholderslobbying

governmentforfinesorlawstoprohibitactionsagainsttheexpectationsofthecommunity(Guthrie

andParker1989). Legitimacy strategiesdifferdependinguponwhether themanagement tries to

gain,maintain or repair the legitimacy (O'Donovan 2002). Examples of how an organisation can

influencesocietyrestonthestrategyofdiscloseenoughinformationforsocietytoassessifitisagood

citizen (Guthrie and Parker1989). The organisation justifies the existence of its operations, as a

meanstoinfluencetheexternalperceptionofitself(Deegan2002)through,forinstance,increased

disclosure of sustainability news. Still, legitimacy changes over time follow society expectations,

thereby requiring the updating of operating and reporting practices. What was once acceptable

behaviourmaynolongerbe(Patten1992).Therefore, legitimacy isadynamicconcept(Lindblom

1994).Anorganisationmanagessustainabilityreportinginanattempttolegitimiseitsactionsinthe

eyesofsocietyandthereby,justifyitscontinuedexistence.

Legitimacy is a contested theory, which overlaps with political economy accounting theory,

institutionaltheory,stakeholdertheoryandmorerecentlyRRM(Neu,Warsame,andPedwell1998,

35

O'Dwyer2002,Parker2005,Deegan2007).Inlegitimacyandpoliticaleconomyaccounting,managers

needtoprovideinformation.Nevertheless,fromanaccountabilityperspective,managersdecideto

provideinformationonwhatmanagersareconsideredtobeaccountablefor,andstakeholders’right

toinformation,andnotonlybecausesocietyhasconcernsthatthreatentheorganisation’slegitimacy.

Then,inlegitimacyandinstitutionaltheory,anorganisationwillchangeitsoperationstoconformto

externalexpectationsaboutwhatisacceptable(DiMaggioandPowell1983).Nevertheless,froman

institutionalperspective,managersare expected to complywith the ‘norms’ imposedupon them

instead of having the ability to alter the society’s perception through disclosure (Deegan 2002).

Instead,legitimisingstrategiesmayenableanorganisationtocontinueitsoperationsregardlessof

how these affect various stakeholder groups. The section further develops the overlaps among

legitimacyandRRMandstakeholdertheoryseparately.

Legitimacy and reputation share many antecedents, consequences, measures and processes.

Definitionsofbothlegitimacyandreputationarediverse,ambiguousandcontested(Deephouseand

Suchman2008).Bothfocusonculturalfactorsinorganisationallife,suggestingthatanorganisation

canreapresourcesbyconformingtoprevailingsocialnorms(DeephouseandSuchman2008).Both

emphasisethatsocialandtechnicaloperationsareunderpinnedbythebehaviouroftheorganisation

(DeephouseandSuchman2008).Boththeoriesresultfromasimilarsocialconstructionprocessas

stakeholders evaluate the organisation (Fombrun and Shanley 1990, Ashforth and Gibbs 1990),

improving the ability to acquire resources e.g. strategic alliances or regulatory compliance

(DeephouseandCarter2005).Legitimacyandreputationcanalsoenhanceperformance,albeit in

differentways.Legitimacygathersresourcesfromexternalstakeholdersandcommandstheloyalty

of internal stakeholders by avoiding misunderstandings. While higher financial performance

increases reputation, it does not increase legitimacy (Deephouse and Carter 2005). As shown,

legitimacyandRRMhavemultipleoverlapsthatconfusethedistinctionbetweenthem.

Albeithavingmanycommonaspects,andoccasionallybeingusedinterchangeably, legitimacyand

RRMcannotbeconsideredequal.Ontheonehand,legitimacyreliesonmeetingtheexpectationsof

socialnorms,rules,andmeaningswhilereputationrelatestoacomparisonamongorganisationsto

determinetherelativestanding(DeephouseandCarter2005).Ontheotherhand,RRMcanrelateto

any organisational attribute while social and environmental aspects are not always seen to be

fundamental to legitimacy. An organisation may continue to conduct itself in the same manner,

withoutconsequences,despiteenvironmentalandsocialcontroversiesandsubsequentstakeholder

demands for change (Adams, Coutts, and Harte 1995, O'Dwyer 2002, Larrinaga et al. 2002).

36

Meanwhile,failurestoadheretofinancialstandardsofperformance,ifuncovered,arelikelytogive

risetoseriouslegitimacythreats.Hence,authorssuggestthatenvironmentalandsocialaspectsaffect

reputation,whichthenitselfhasasecondorderimpactonlegitimacy(O'Dwyer2002).Legitimacyhas

deeperinstitutionalrootsthansustainabilityreportingrequirements(Owen,Gray,andBebbington

1997). Legitimacy comes from the social acceptance resulting from adherence to regulative,

normative or cognitive norms and expectations, while reputation is a social comparison among

organisationsonavarietyofattributes,whicharenotnecessarilyrestrictedtothesamedimensions

aslegitimacy.

Stakeholdertheory

Stakeholdertheoryarguesthatanorganisationactsinresponsetostakeholderrequests,eitherina

preventativeoraproactiveway(Freeman1984).Freemandefinesstakeholdersas “anygroupor

individualwho can affect or is affected by the achievement of the firm’s objectives” (1984, 25).

Stakeholdersareprimaryorsecondary.Primarystakeholdersarethosewhohaveaformal,officialor

contractual relationship with the organisation (Freeman 1984, Clarkson 1995). Secondary

stakeholdersarethosewho“influenceoraffect,orareinfluencedoraffectedby,theorganisation,but

notengagedintransactionswiththecorporationandnotessentialforitssurvival”(Clarkson1995,

106-107). Hospitality groups today have an expanded mission from the traditional customer

orientationtoabroaderstakeholderfocus(e.g.HiltonWorldwide2014),asarespectfulandproactive

attitudetowardsstakeholdersprovidessuccessandcreatesvalue(Wheeler,Colbert,andFreeman

2003,PorterandKramer2006).Howanorganisationperformsfromastakeholderperspectivehas

becomeapriority,becausecarefulmanagementofstakeholders’interestsbringsvalueand,therefore,

increasesperformance.

Stakeholdertheoryhastwoapproachesaccordingtotheorganisation’smotivesforpayingattention

toitsstakeholders.Normativestakeholdertheoryemphasisestheresponsibilitiesofanorganisation

towards stakeholder accountability in respect to intrinsic values arising from the organisation’s

moralduties(e.g.DonaldsonandPreston1995).Thisapproachassumesthatvaluesarepartofdoing

businessandrejectsthecontentionthatethicsandeconomicscanbeseparated(Freeman1994).The

normativeapproachdoesnothave adirect role inpredictingmanagerial behaviour,whereas the

instrumentalapproachtostakeholdertheoryadoptsamanagerialstance.Theinstrumentalapproach

assumesthattheorganisationcantakeactiontoinfluenceitsaccountability,withanemphasison

managing stakeholder groups thathave an ability to control resources vital to theorganisation’s

37

operations,whilepaying less attention to those stakeholderswithoutpower (Ullmann1985).An

organisationmayemployinformationtomanage(ormanipulate)stakeholdersandgaintheirsupport

and approval or to distract their opposition and disapproval (Gray, Owen, and Adams 1996). In

summary, whereas under the normative approach the disclosure of information responds to

perceived responsibilities, under the instrumental approach that disclosure arises from strategic

reasons.

Thechallenge foranorganisation isbalancingboth the trade-offsbetweenmultiplestakeholders’

claimsandtheensuingsustainabilityreturns(Hawkins2006,CallanandThomas2009,Hahnetal.

2010,Angus-Leppan,Benn,andYoung2010).Servingabroadgroupofstakeholderscreatesmore

valueovertime(HarrisonandWicks,2013),butbearingresponsibilitytomanystakeholders,who

sometimeswillhaveconflictinggoals(McElroy,Jorna,andvanEngelen2008,Sjöström2008,Dobers

2009), andvalues (Wheeler, Fabig, andBoele2002, Freeman,Harrison, andWicks2007,Kurucz,

Wheeler,andColbert2013)entailscomplexCSRmanagement.CSRadvocatesthatorganisationsmust

be accountable to stakeholders(Suchman1995,BasuandPalazzo2008,Delmas andToffel2008,

Camilleri2012), independentlyof financialresults(GarayandFont2012),sinceeachofthemisa

legitimate object of managerial attention (Phillips 2003). Stakeholder theory explains that

determiningwhohasthelegitimacytobehearddependsontheorganisation’smoralsandvalues,

whichembodythe“sharedbeliefs,valuesandevolvedpracticesregardingthesolutionofrecurring

stakeholder-relatedproblems”(Jones,Felps,andBigley2007,142).Furthermore, thestakeholder

managementcapability,whichistheabilityofanorganisationtoidentifyitsstakeholders,andthe

degreeofsophisticationoftheorganisationalprocessesneededtomanagetherelationshipwiththem

(Freeman1984)alsoplaysaprominentroleinshapingtheCSRstrategy.Thelevelofproactivityin

balancing trade-offs and sustainable returns defines whether the stakeholder approach is more

responsiveormorestrategic.

Both stakeholder and legitimacy theory consider broader societal issues that impact how the

organisationoperatesandwhatinformationitchoosestodisclose.Boththeoriesrecognisethepower

conflictthatexistswithinsociety,andthatsociety,politicsandeconomicsareinseparable(Benson

1975).Theyareoverlappingperspectivesonreportingbehaviourundertheassumptionofpolitical

economy (Gray, Kouhy, and Lavers 1995). Nevertheless, legitimacy occurs to the extent that the

outside perception of the organisation’s social values has congruence with what society deems

appropriate social conduct (Mathews 1993, Lindblom 1994). While legitimacy theory discusses

compliancewiththeexpectationsof‘society’,embodiedwithinasocialconstruct,societyisinreality

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aconglomerateofvariousstakeholderswithunequalpowerandabilitytoinfluencetheorganisation’s

activities.Itisonthisbasisthatstakeholdertheoryacceptsthatdifferentstakeholdergroupshave

different views about how the organisation should operate, and different abilities to affect it.

Stakeholdertheoryidentifieswhatstakeholdergroupsfromthebroad‘society’mightberelevantto

particularmanagementdecisionsandwhichexpectationstheorganisationhastopaymoreattention

to.

This thesisrecognises themultiplicityofstakeholderdemandsandtheneed tobalance trade-offs

amongstakeholdersandTBLissues, forwhich itproposes touse theMaterialityAssessmentasa

methodologytoadvancetowardsmorestrategicCSR.Organisationsneedtochangetheirprioritiesif

takingresponsibilityforasustainablefutureisgoingtobecomeasharedconcern.

Inconclusion,anorganisationcanincreaseitscompetitiveadvantagemanagingitsresponsibilityby

using unique resources,managing its right to operate,managing stakeholders’ perceptions of its

reputationandaddressingstakeholders’requests.

Connectingsocialandeconomicprogress

Thissectionrevisits theconceptofCreatingSharedValue(henceforthCSV)asameansto

identifythespecificissuesthatimproveanorganisation’sperformanceandcreatelarge-scale

socialbenefits.CSVisanormativeframeworkforsolvingsocietalchallengescoinedbyPorter

andKramer(2006,2011).WhileCSRtendstobeacollectionofprogrammesthatseeksto

minimiseoraddressspecificsocialandenvironmentalconcerns,CSVmakessustainability

issues part of the organisation’s DNA by finding competitive advantage in transforming

value-chainactivitiestobenefitsocietymoreinclusively(PorterandKramer2011).Sincethe

MBSCframeworkisproposedtoadvanceCSRstrategiestowardsbeingmorestrategic,the

sectionrevisitstheCSVconcept,challengesandoperationalisation.

Pursuingthefuturecompetitivefrontiers

Organisations create valuewhen developing newways of doing things, using newmethods, new

technologies,andnewformsofrawmaterials.CSRcancreatefourvaluetypes(Jonikas2012)(Table

2).Useofvaluereferstotheparticularqualityandusefulnessofanewjob,task,productorserviceas

perceivedbyclients (BowmanandAmbrosini2000); forexample, theaesthetic featuresofanew

product or the advantages that using a new service provides to the customer. Exchange value,

39

meanwhile,isthemonetaryamountofvaluerealisedatacertainpointintime,whentheexchangeof

thenewserviceorproducttakesplace,ortheamountpaidbytheusertothesellerfortheusevalue

ofthatproductorservice(Lepak,Smith,andTaylor2007).CSRcanonlycreatesharedvaluewhenit

delivers use or exchange value (Jonikas 2012) in any interaction between stakeholders and the

organisation.Forthisthesis,‘value’isasimultaneousvaluecreatedtotheorganisationandthewider

cohortofstakeholdersinthesixcapitalsforasustainablesociety,whicharefinancial,human,natural,

intellectual, social and relationship and manufactured capitals (International Federation of

Accountants2015).Onlywhenprivateprofitsandpublicwelfarealign,cananorganisationcreate

sharedvalue.

Table2:ValuetypesfromCSR

Shared Non-shared(individual)Use Usesharedvalue Usednon-sharedvalueExchange Exchangesharedvalue Exchangenon-sharedvalueSource:Jonikas,(2012,694).

The assumption that the organisation’s success and socialwelfare are interdependent underpins

sharedvalue.Traditionally,stakeholderdemandsinrespecttoCSRareseenasoppositetomanagers’

needtoimprovebusinessperformance(NohriaandGhoshal1994,Jonikas2012).Anorganisation

gainsfromCSRthroughfinancialvalueandmarketingbenefits(MargolisandWalsh2001,Bocquet

andMothe2011,VancheswaranandGautam2011)whilethevalueforstakeholdersisasecondary

objectofCSR(Jonikas2012).CSVinsteadtargetsbothgoals(Pfitzer,Bockstette,andStamp2013),

which arise from the intersection between the organisation’s objectives and impacts, and the

sustainabilityagendasetbystakeholders’concerns.Byincreasingawarenessofthebenefitstoboth

theorganisationanditsstakeholders,managerscanmakebettersustainabilitydecisions(Burkeand

Logsdon1996). Indeed, organisations viewCSVas something related toCSR, butwith astrategic

orientation shift from sustainability to stressing societal issues as strategic priorities and the

inclusion of stakeholders’ needs (Corazza, Scagnelli, and Mio 2017). Only shared value creation

producessustainablevalueintegraltotheorganisation’sprofitabilityandcompetitivepositioning,

whereastraditionalCSRfocusesonsocietyorenvironmentalactionswithlimitedconnectiontothe

businessoperations.CSVentailsaterminologicaltransitionfrom‘responsibility’to‘creatingvalue’

thatreachesouttoscepticalmainstreammanagers,whootherwisetendtokeeptheirdistancefrom

CSR(BeschornerandHajduk2017).

CSVisanormativeframeworkinthatitclaimshowthingsoughttobe:i.e.whichactionsaresocially

valued.CSVproposestoconsidersocietalchallengesandnon-traditionalstakeholderclaimsalong

40

withinternalresourcesforprioritisinggoalsandplanningtheorganisationactions.Sharedvaluecalls

for a rethinking of the strategy, rather than disjointed activities for public relations purposes

(Baumüller, Husmann, and Von Braun 2014). Porter and Kramer (2006) predict a move from

traditionaltostrategicCSR,asCSVcanrestorethelegitimacyoftheorganisationbyincreasingtrust

and reputation (Porter and Kramer 2006, Farache and Perks 2010, Leavy 2012).While from an

instrumentalstakeholdertheoryperspective,theorganisationcreatesabusinesscasebyresponding

tostakeholders’concerns,throughCSVitinsteadpursuesprofitbyfocusingstrategyonresponding

tosocialchallengesexpressedbyawiderangeofstakeholders.Undertheinstrumentalstakeholder

theory,aquestionofprioritiesbetweenbalancingtheorganisationalperformanceandsocialchange

arises,whichthisthesisaimstoaddressbyintroducingMaterialityAssessment(Section3.3.2)atthe

strategydefinitionstage.

Contestingsharedvalue

AlthoughtheproponentsofCSVarguethatitreconceivestherelationshipbetweensocietyandan

organisation, generating virtuous circles of positive multiplier effects (Porter and Kramer 2006,

2011),itnonethelessremainsacontroversialconcept.

CSVishighlyaspirational,andassuch,ithasshortcomings,bothinitsconceptandimplementation.

CSVresearchhasinconsistentdefinitions,measurementsandpracticaluse(DembekandSingh2014),

whichindicatesepistemologicalandontologicalfragility(CornerandPavlovich2014,Dembek,Singh,

andBhakoo2016).ThissectioncategorisestheshortcomingsofCSV(Table3)tounderstandhow

thesemightaffectMBSC.

Table3:CSVchallengesLevel ChallengeConcept Narrowapproachtosustainability Unoriginal LackofdefinitionalclarityImplementation Resistancetochange-newinitiatives Strategycontent&audience:balancingtrade-offsbetweenimpactsandstakeholders Strategyandcompetitiveadvantage:Valuecreationvs.valueappropriation Operationalisationofstrategy:exploitationvs.explorationofcapabilities BusinesscaseandmeasurementofresultsSource:Author,2015.

Conceptualchallenges

Conceptually,scholarschallengeCSVforitslackoforiginalityandclarity.CSVhasbeenaccusedof

havinganarrowapproachtosustainabilitysinceit isembeddedina ‘businessasusual’paradigm

wheresocialbenefitsdependonitsabilitytocreateprofit(AakhusandBzdak2012,Craneetal.2014,

41

BeschornerandHajduk2017).TheseauthorsclaimthatCSVisanaïveframework,resultingfroma

narrowconceptualisationoftheroleofanorganisationwithinsociety.Socialneedsareseenasmeans

toandendfromapurelyeconomicperspective(BeschornerandHajduk2017).Moreover,thelackof

clarityisevidencedbythemultiplicityofhoworganisationsapproachandinterpretCSV(Corazza,

Scagnelli,andMio2017).

ScholarsalsopointoutthatCSVisbasedonearlierscholarshipthatPorterandKramer(2006,2011)

have ‘repacked’without acknowledgement as CSR, social innovation or stakeholdermanagement

(AakhusandBzdak2012,Craneetal.2014,CornerandPavlovich2014).Othersdiscreditthetermby

accusingitofbeingnothingmorethanabuzzword(DembekandSingh2014,Dembek,Singh,and

Bhakoo2016).BeschornerandHajduk(2017)argueCSVisafunctionalisticandvalue-freeconcept

inwhichsocialneedsareseenasmeremeanstoanend:thedevelopmentofmarketopportunitiesfor

profitmaximisation.Furthermore,althoughresearchsustainsthesuccessofCSVwithwin-wincases

more attention should be placed on unsuccessful instances aswhen the organisation profits but

societysuffersorwhensocietygainsbutatsignificantcosttotheorganisation(delosReyes,Scholz,

andSmith2017).

ProponentsofCSV, however,would respond that it serves to shift the focusbeyond thenarrow

management of sustainability impacts for long-term success (Kramer 2012) towards how the

organisationcanproactivelysolvesocialproblemsthroughitsoperations.Elkington(2012)saysthat

sustainability,understoodasintergenerationalequity,maybetheultimateformofsharedvaluewhen

appropriately managed. CSV can be read as an intermediate stage assisting the profit-driven

organisationtomovetowardsbeingmoremission-drivenandholisticallysustainable.

Implementationchallenges

ThefactthatCSVisaframeworkandnotatheoryleadstosubstantialchallengesinimplementation

(HugginsandIzushi2011,AakhusandBzdak2012).CSVsharesthesameimplementationchallenges

asCSR,butinadditionithasitsownproblemsarisingfromtheconceptualshortcomingsoutlined

above.Thesharedchallengesinclude1)overcomingthetensionsinherentinanorganisationwhen

implementing new initiatives and 2)defining the strategic content and audiencewhen balancing

sustainabilityandstakeholdertrade-offs.ThreefurtherchallengesparticulartoCSVare3)ensuring

astrategythatcreatesvalueanddealswithvalueappropriation,4)operationalisingthestrategyby

balancingtrade-offsbetweenexploitationandexplorationofcapabilitiesand,5)measuringresultsto

buildabusinesscase.

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First,theprocessoftakingresponsibilitywithinanorganisationproducesdefensiveness,emotional

anxiety,lackofmotivationandattachmenttooldwaysofdoingthings,allofwhichservetoconstrain

theorganisation’sabilitytochange(e.g.VinceandBroussine1996).Overcomingresistancetochange

is one of themain obstacles to strategy execution (Beer and Eisenstat2000, Hrebiniak 2006). A

participative approach is needed that fosters a culture embedding sustainability and employee

empowermenttostimulateorganisationallearning(Ahearneetal.2013).Toaddressthis,theMBSC

proposesacollectivereflection through internalMaterialityAssessment(MA)andusesaBalance

Scorecardtomanagechange.

Second,CSVignorestheinherenttensionsbetweenthesocialandeconomicvalue(Craneetal.2014)

anditisdifficulttodemonstratethelinkbetweenthesocialandfinancialvaluewhenleveragingthe

organisation’scapabilities.ThiscausesmanagerstoholdbackfromembracingCSV.Furthermore,the

difficultyinbalancingshort-termcostsagainstlong-termexternalitiesremains(Hahnetal.2010),

even if scholars agree that the success of an organisation and socialwelfare are interdependent

(NohriaandGhoshal1994).Furthercomplexitycomesfromdecidingwhichstakeholderstoengage.

Since the implementation of CSR brings different values to different stakeholder groups, not all

stakeholdersareequallyimportanttoanorganisation.WhilesomescholarsarguethattheCSRpolicy

shouldfocusonthestakeholdergroupstowhomtheorganisationcreatesthelargestsharedvalue

(Jonikas2014),otherssuggestCSRcreatesvaluewhenitfocuseson'primarystakeholders',anda

wider orientation has an insurance effect (Bosch-Badia, Montllor-Serrats, and Tarrazon 2013).

Choosingtheappropriatestrategyandthentheappropriatecontentandaudienceforthatstrategyis

therefore controversial. This thesis proposes to integrate MA to inform managers on what

sustainabilityissuesstakeholdersvaluethemostaftertheorganisationdefineswhichstakeholders

aremostvaluable.

Third,conflictsbetweenvaluecreationandvalueappropriationemerge.Anorganisationmaycreate

andrenewthesourcesofitscompetitiveadvantageonlywithvalue-creatingstrategies(Moranand

Ghoshal1999).Insomeinstances,however,anorganisationthatcreatesvaluemayloseit,orshareit

with other stakeholders (Nohria and Ghoshal1994, Porter andKramer 2006, 2011, Chatain and

Zemsky2011).ThissituationincreasestheresistanceofmanagerstowardsembracingCSVstrategies.

Thevalueappropriationriskiscommontoallstrategies,however,andthereforethedecisionabout

engaginginCSVdependsontheriskevaluation.

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Fourth, tensions arise between exploiting current capabilitieswhile exploring new opportunities

(March1991,OReillyandTushman2004,AndriopoulosandLewis2010).Exploitationconsistsof

squeezing more value out of the existing processes and products through efficiencies, while

exploration involves the creationof newproducts and services (March1991).An example is the

aviationsector,whereairplanesarebecoming increasinglyefficient (exploitation),but therehave

beenfewerattemptstolaunchnewproductsthatdrasticallyreducethegreenhousegasemissions

(exploration). Instead,voluntarycarbonoffsettingschemes in theaviationsectorare increasingly

popular,butthesedonothingtoreduceairemissionsdirectlywhilereinforcingthebeliefthatneither

organisationsnorconsumersneedtochangetheirbehaviour.Inanotherexample,cruiseoperators

increasingly operate shore excursions that encompass charitable and responsible tourism-based

dimensionssoastoincreasethebenefitsforthelocalcommunitiesatdestinationsreceivingcruises

(Font,Guix, andBonilla2017)but froma criticalperspective thissimply serves to illustratehow

tourism organisations continue with their 'business as usual' approach and incremental social

initiativesthatdonotproducethetransformationclaimedbyPorterandKramer(2011).TheMBSC

aimstoaddressthistensionthroughthecontinuousreflectioninherentintheBSCandMA.

Fifth, isdeciding fromthewiderangeofsocial issues toaddress,and thendevelopingaseparate

measurementsystemorintegratingCSVwithinexistingmanagement.Whilescholarsseektomeasure

sharedvalue at impact level (long-termchange)andprovide empirical examples (Bockstette and

Stamp2011,Porteretal.2012,Pfitzer,Bockstette,andStamp2013),theyhavenotyetspecifieda

methodology toclarifythemeasurement.Efforts tomeasureandunderstandthedegree towhich

socialperformanceimproveseconomicvaluefortheorganisationareonlybeginning.Tostrengthen

thebusinesscaseforCSV,theMBSCintegratescause-and-effectlinkagesbetweenmeasures.

The substantialmeasurement difficulties from the definitional shortages and the complexity and

nature of CSR make it difficult to operationalise shared value creation. While organisations are

engaging in CSV (Mackey and Sisodia 2014) the majority of them have yet to achieve the

transformationrequiredtobringaboutsharedvalue(PorterandKramer2011).Recentresearchalso

revealsthatsuperiorfinancialperformanceleadstogreaterCSVinsteadofCSVleadingtoincreased

economic value (Jones andWright 2016). Despitemuch criticism, organisations are increasingly

adoptingCSVasastrategicallyorientedshiftfromsustainabilitytotheinclusionofstakeholderneeds

(Corazza,Scagnelli,andMio2017),andscholarsareresearchinghowbettertoenablethistransition

fromCSRtoCSV(CornerandPavlovich2014,delosReyes,Scholz,andSmith2017).Thenextsection

exploresseveralmethodstooperationaliseCSV.

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Puttingsharedvaluetowork

This section explains both the existing guidelines to create shared value along with the

improvementsrequiredtomainstreamCSV.First, thissection introducesthepathwaysto

futurecompetitiveadvantagebyaddressingstrategicsocialandenvironmentalchallenges.

Later,itexplainsthere-evolutionoftheorganisationneededtoembracesharedvalue,and

finally,itdiscusseshowanorganisationcanexpandthevaluecreationbeyonditssphereof

influenceandmaximiseitspositiveimpactonsocietyandcompetitiveness.

Threepathwaystocompetitiveadvantage

Porter and Kramer (2011) point to three different ways to create shared value through

transformationalrealignmentoforganisationsandsociety:i)Reconceivingproductsandmarkets,ii)

Reimaginingthevaluechain,andiii)Developingsupportiveclusters.

First, reconceiving products andmarkets requires innovating and developing products to satisfy

unmetneedsthatexistedinthemarketbeforetheircreation(Porteretal.2012).Itfocusesonthe

revenuegrowth,marketshareandprofitabilitythatarisefromtheenvironmentalorsocioeconomic

benefitsbroughtbyanorganisation’sproductsandservices.Constantexplorationofsocietalneeds

facilitates the detection of new opportunities for differentiation and positioning. For instance,

StarwoodHotels&ResortscreateditsElementbrandwithaninnovativeuseofspaceandservices

targeting environmentally-conscious customers and those looking for abody-mindhealth retreat

(StarwoodHotels&Resorts2015b).BurkeandLogsdon(1996)longagoexplainedthepossibilityof

creatingnewproductsoraccessingnewmarketsthroughstrategicCSR.Similarly,creatingshared

value by reconceiving products and markets is about making the social dimension of the

organisationalstrategybecomepartofthecustomervalueproposition.

Secondly, theorganisation identifies its positiveandnegative social impacts andthen reimagines

valuechainsandredefinesproductivityaccordingly.Porter(1986)referstothevaluechainasatool

to identify those operational issues affecting the performance of the organisation and the social

consequences (both positive and negative) of its operations. Accordingly, an organisation gains

competitive advantage and position in themarket by creating, producing, selling, delivering and

supportingproductsandservices(PorterandKramer2011).Operationalsupplychainmanagement

iskeytooptimisingthesocialandenvironmentalfootprintssuchashostcommunityengagementand

environmentalprotectionpractices(Herrera2015),andtocascadingtheorganisation’svaluesdown

45

through the supply chain (Maltz and Schein 2012). For example, the implementation of green

innovationsthroughthesupplychainofhotelgroupscanenhancebothbusinessandenvironmental

performance(HsiaoandChuang2016).Proactivemanagementofthevaluechainbringscompetitive

advantage.

Althoughmitigatingharmfromthevaluechaindoesnotcreatesharedvalue,thiscanbeachievedby

transforming the value chain activities tobenefit societywhile reinforcing strategy. For example,

externalitiesinflictinternalcostsontheorganisationevenintheabsenceofregulationsorresource

taxes(PorterandKramer2011).Forexample,environmentalexternalityreductionstrategiescreate

limitedcompetitivenessthroughimprovedreputationintheshorttermandmightbeprofitablein

the long run as the regulatory environment tightens (Ghisetti and Rennings 2014). Energy and

resourceefficienciescreateshort-term'win-win'situationsbyreducingtheenvironmentalimpactof

productionandimprovingtheorganisation’seconomicperformance(RenningsandRammer2009).

Thirdly,anorganisationgeneratesnewvaluebydevelopingsupportiveclusters,sincesurrounding

organisations and infrastructure have a positive effect on its success (Porter andKramer 2011).

Clustersincludemultiplestakeholdersinteractinginalignment,toachievelocaldevelopmentgoals.

Ageographicconcentrationofclustersfostersproductivity, innovationandcompetitiveness.Local

clustersimprovetheexternalenvironmentoftheorganisationthroughcommunityinvestmentsthat

servetostrengthenlocalsuppliers,institutionsandinfrastructure(Porteretal.2012).Casestudies

demonstratethatcollaborationwithstakeholdersacrossprofitandnon-profitboundaries,aswellas

knowledge exchange on sustainability issues, serve to improve environmental and social

performance (Anhet al. 2011,Maltz andSchein2012).Anorganisationmaydevelopa long-term

mutualrelationshipwiththosestakeholdersuponwhomitsdependenceisvital,ratherthanfocusing

on the immediate profit (Andriof andWaddock 2002). Kramer and Pfitzer (2016) provide real

examplesthatstresstheimportanceofbuildinga‘sharedvalueecosystem’,meaningorganisations

mustpromoteandjoinmulti-sectorpartnerships.Forinstance,theBarcelonaForumDistrictgroups

institutionsandorganisationswhich share commonvalues, actions andstrategies to advance the

sustainable development of the locality (Barcelona Forum District n.d.). Accordingly, connecting

stakeholders’interestssoastoseekmutualwin-winoutcomescreatesCSV.

To re-conceive products and markets targeting unmet needs of the market drives incremental

revenueandprofits.Toreimaginevaluechainsandtoredefineproductivitytranslates intobetter

management of internal operations, increasing productivity and reducing risks. To develop

46

supportiveclustersthatchangesocietalconditionsoutsidetheorganisationunleashesnewgrowth

andproductivitygains.Thevalueinoneareagivesrisetoopportunitiesforothers(PorterandKramer

2011).Nevertheless,theactivepursuitofsharedvaluerequiresdifferentplanningandmanagement,

asdetailedinthenextsection.

Re-evolutionoftheorganisation

Thepreciseapproachthroughwhicheachorganisationappliessharedvalueisuniqueanddepends

onitsspecificstrategy,context,competitiveposition(BockstetteandStamp2011)andeconomicor

mission-drivenorientation(MaltzandSchein2012).Differentscholarshavedevelopedaprocessfor

anorganisationtoadoptasharedvalueapproachwithcomplementaryandoverlappingstages(Table

4).Insevenstages,thissectionexplainseachofthesestepschronologically.Additionally,thesection

expandstotheCSV+framework(delosReyes,Scholz,andSmith2017).

Table4:Multi-stageprocesstodevelopCSV

Stages BockstetteandStamp(2011)

Porteretal.(2012) Pfitzeretal.(2013)

1 Commitment tothesocialpurpose

1.Define a vision as anengineforCSV

1.EmbedasocialpurposeCommunicate social purposeinternallyandexternally

2 Strategyformulation:Identifying andprioritisingissues

2.StrategyformulationIdentifykeyissuesSetgoals

1.Identify the social issues totarget.Prioritisethesocialissues

2.DefinethesocialneedConductextensiveresearch

3 Build thebusinesscase

2.MakethebusinesscaseIdentifytargetsSpecifyactivitiesandcostsMakinggo/no-godecision

DevelopthebusinesscaseIdentifyexecutioncapabilitiesinsideandoutsidetheorganisation

4 Create theoptimalinnovationstructure

3.Create the optimal innovationstructureDifferentoptions

5 Delivery:leveraging assets,efforts, andpartners

3.DeliveryLeverageassetsManageeffortsMobilisepartners

4.Co-create with externalstakeholdersEnlistawiderangeofstakeholdersLeverageother’scapabilities

6 Track progressby measuringsharedvalue

3.TrackprogressTrack inputs, outputs, andfinancial performance aboutprojections

5.MeasuresharedvalueEstimatetheorganisationandsocialvalueEstablish intermediate measuresandtrackprogress

7Managementforperformance:measuring andunlocking newvalue

4. Management forperformanceMeasureresultsLearnfromengagementBringissuestoscaleCommunicateprogress

4.Measure results and useinsighttounlocknewvalueMeasureresultsLessonslearned

Assesssharedvalueproduced

Source:Author,2015.

47

Stage1.Commitmenttothesocialpurpose

Embeddingsharedvalueintotheorganisation’sculturebydefiningaclearsocialpurposeiscrucial

for success. Seniormanagement commits toCSV, elaboratesa clear vision(BockstetteandStamp

2011),andembedssharedvaluewithintheculture(Pfitzer,Bockstette,andStamp2013).Achieving

consensus,commitmentandclarityoversharedvalueareapreconditionforchange.Matinheikkiet

al.(2017)expandthisinternalviewwiththeneedtocreateastrongsharedvisionwithallactors

involved in creating sharedvalue. For example, ashared commitmentandvisionbecomes apre-

requisite forCSVthrough collaboration amonganetworkof actors ina cluster, including, among

others,otherorganisationsandNGOs.

Stage2.Strategyformulation:Identifyingandprioritisingissues

Managers translate the vision into a clear strategy articulating measurable impact goals. After

extensive research (Pfitzer, Bockstette, and Stamp 2013),managers identify andprioritise social

issuesthatrepresentopportunitiestoincreaserevenueorreducecosts(BockstetteandStamp2011,

Porteretal.2012).Theorganisationidentifiestheunmetsocialneedsandgapsandexamineshow

thoseoverlap throughout the three levels of sharedvalue (Table5).Theorganisationdefines its

priorities by understanding its goals, its societal impact and the effect of social issues on its

competitiveness(BockstetteandStamp2011).Porteretal.(2012)explainhowthisstepresultsina

listofprioritisedsocialissues,butitremainsunclearhowtoidentifyandprioritisetheissues.While

BockstetteandStamp(2011)emphasisetheneedtoprioritisetheissuesinternallytoretaincontrol,

this thesisproposes to involveexternalstakeholders throughtheMA,sinceexternalstakeholders

provideusefulinformationonwhatissuesarethemostvalued.InlinewithBurkeandLogsdon(Burke

and Logsdon 1996), managers first need to identify the critical stakeholders for achieving the

organisation’smissionbeforetheycandeterminetheCSRpoliciesthatwillbesociallyvaluable.

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Table5:Genericorganisationandsocialresultsbylevelsofsharedvalue

Source:Porteretal.(2012,3).

Stage3.Createthebusinesscase

The profit-driven ormission-driven orientation of the organisation influences the choice of CSV

investment. A profit-driven organisation tends to prioritise short-term initiatives with defined

financialreturns.Socialandenvironmentalconsiderationsarethereforeonlylegitimateinthismodel

whentheyproducemeasurableanddemonstrableresults (MaltzandSchein2012). Incontrast,a

mission-drivenorganisationismoreopentodiscussinghowlong-terminitiativesimpactprofitability

and the organisational benefit may not need to be as explicit. The underlying drivers of an

organisationthereforeshapetheCSVstrategies.

After shortlisting the social issues, managers create the business case by examining how social

improvementsadvancetheorganisationalperformance(BurkeandLogsdon1996,Porteretal.2012,

Pfitzer, Bockstette, andStamp2013).Managers define specific goals to unlock the organisation’s

value toachievechange(Pfitzer,Bockstette,andStamp2013),theactivitiesandcosts involvedin

eachopportunity(Porteretal.2012)andhowcloselytheissuesfittheorganisation’smissionand

objectives(BurkeandLogsdon1996).Thegreaterperceivedcongruencebetweenshareholderand

social value, the greater the consistency of the shared value initiative (Maltz and Schein 2012).

Managersevaluateandmeasure thesharedvalue initiativesbydetermining theability tocapture

organisationalbenefitsandthedegreetowhichtheactionplannedanticipatesemergingsocialtrends

(BurkeandLogsdon1996).Basedonthesefindings,managersdecidewhetherornottoinvestineach

49

initiative.Afterwards,theorganisationmobilisesabroadrangeofinternalandexternalresourcesto

achievetheobjectives(Pfitzer,Bockstette,andStamp2013).ThisthesisproposestheBSCtoassist

managersincreatingthebusinesscaseforsharedvaluestrategies.

Stage4.Createtheoptimalinnovationstructure

To ensure CSV initiatives fit with the organisation, managers create the organisation’s optimal

innovation structure depending on the risk level (Pfitzer, Bockstette, and Stamp 2013). The

organisation develops CSVwith a legacy businesswhen it has a clear social purpose, target and

process,andthecompetenciesrequiredtocreatesocialvalueandfinancialreturns.Whenthesocial

venturewilltakealongtimetobecomeprofitable,theorganisationestablishesasemi-autonomous

unit.When theorganisation lacks the expertise todevelopan in-depthunderstandingof a social

problemandacost-effectivesolution,oranopportunity toaddresssocialneedsdoesnotprovide

clearprofitability, itmayfinanceexternalentrepreneursorseekothersourcesofexternalfunding

(Pfitzer,Bockstette,andStamp2013).Alternatively,theorganisationcanco-createtheCSVinitiative

with external stakeholders by involving them in identifying the problem and designing and

implementingsolutionstherebyleveragingsharedcapabilities.

Stage5.Delivery:leveragingassets,effortsandpartners

Theorganisationorganisesmultipleassetstoaddresstheissue,fromgoodsandservicestoskillsand

influence(BockstetteandStamp2011).Whencombined,certaincapabilitiessuchasthesupply-chain

expertise,collaborationandresearchanddevelopment,supportthecreationofsharedvalue(Maltz

andSchein2012).Then,theorganisationmanageseffortsholisticallyacrossdepartments,aligning

employeeswith the corporateobjectivesandpurpose (Spitzeck andChapman2012)so that they

understand shared value and have a sense of ownership. Next, the organisation develops broad

stakeholder consultation processes engaging in collaborative partnerships, since stakeholder

involvementdrivesCSV(BockstetteandStamp2011,Pfitzer,Bockstette,andStamp2013).Whilethe

authorssuggestenlistingarangeofstakeholdersandleveragingtheircomplementarycapabilities

theyfailtoexplainhowthishappens.TheresearcherintroducestheMAtoassistinthiscollaboration.

Stage6.Trackprogressbymeasuringsharedvalue

Afterwards,managersestimate theorganisationalandsocialvalue(Pfitzer,Bockstette,andStamp

2013) and track the progress of inputs, activities, outputs and financial performance relative to

50

projections(Porteretal.2012).Theorganisationinstallsmetricstomonitorintermediateprogress,

asbenefitscantaketimetomaterialise.

Stage7.Managementforperformance:measuringandunlockingnewvalue

Then,managersusekeyindicatorstomeasureprogressagainstintermediategoalsandcommunicate

thesesoastoengagewithexternalstakeholders(BockstetteandStamp2011).Sincelearningfrom

measurementsiscentraltoimprovingtheorganisation’sefforts,measuringresultsandusinginsights

to unlock new value requires approaches to be reviewed and strategies redefined accordingly

(BockstetteandStamp2011,Porteretal.2012).This thesisintroduces theBSCasaperformance

managementsystemtoreviewtheCSVstrategyperiodicallyandtheMAtocommunicatetheprogress

oftheinitiativesexternallyandinternally.

Additionally,de losReyesetal. (2017)developacomprehensive frameworkcalledCSV+toassist

managersinidentifyingtherightCSVopportunities,andeitherusethenormsalreadyexistingor,if

these are missing, become a norm-maker. In CSV+, managers ask first if there is a societal or

environmentalneedthattheorganisationispositionedtoaddressandsecondiftherearelegitimate

normstofollow.

In the end, implementing CSV requires complex management involving internal and external

stakeholders to embed the concept into culture and vision, designing the strategy, planning the

activities,budgeting,measuringandcommunicatingprogress.Dembeketal.(2016,245)arguethere

isaneedto‘‘providesharedvaluewithmeaningandorganisationswithguidancehowtoimplement

it.’’ThedifferentguidelinestoimplementCSV,however,donotexplainhowtoinvolvestakeholders,

orhowto identify the issuesandprioritise them,whichrenders theprocessmorechallenging. In

parallel,somescholarsbelieveCSVshouldnotonlybeimplementedinternallyintheorganisationbut

also enhancedbeyond itssphereof influence.Thenext section explainshowanorganisation can

achievethis.

Influencingtransformationsbeyondtheorganisation

SomescholarsarguethatasecondorganisationmayreplicatetheCSVinitiativeanddoitinthefirst

organisation’sbestinterest,oratleastinsuchawayasnottobedetrimentaltothefirstorganisation,

aswell as for the social value it creates, under the resource-basedperspective.MaltzandSchein

(2012)determinefourdifferentapproachestoinfluenceawidercreationofsharedvalue,whichare:

i)supplychaininfluence,ii)competitiveresponse,iii)technologytransferandiv)partnershipswith

51

Non-GovernmentalOrganisations(henceforthNGOs).Theyfoundthatthesupplychaininfluenceis

themostusedapproach,duetoitsrelativelyeasymeasurementandthequickreturnsoninvestment.

In this approach, however,management has to have the ability to collaborate and innovate. For

example,theorganisationinfluencesthesuppliertochangeitsprocessesandreduceenvironmental

impacts in a way that is likely to be a better fit for the organisation itself. For example, Hilton

Worldwideinfluenceditssupplychainbyswitchingalleggusagetocage-freeby2017andensuring

pigsarebredfairlyby2018(SustainableHotelNews2015).Societybenefitsfromtheorganisation’s

reductionofitsglobalfootprintandimproved'animalwelfare'andtheorganisationbenefitsfrom

improvedbrandimage.

Another way to enhance CSV is to influence the competitive response within and outside the

organisation.Again,innovationisacentralcapabilityinresearchanddevelopmenttomaintainthe

long-termvalueassociatedwiththeCSVinvestment.Forinstance,enhancingthesustainabilityofthe

organisation’ssupplybaseandsharingmethodologieswithcompetitorsincreasesthestabilityofthe

supplybasefortheentireindustry(MaltzandSchein2012).Bybeingthefirstorganisation,theytake

alltheriskbutalsomostadvantage.

The thirdway isbysharing technologieswithotherprofit-seekingorganisations.ResourceBased

Viewassumesthatwhileorganisationsownthevalue-creatingresources,sharingresourcesthrough

alliancesincreasescompetitiveadvantage(Lavie2006).Technologytransferinthehospitalitysector,

therefore,standsfor“theabilityoflocalnationalstoadoptandadaptexistinghotelsystems,possibly

tothepointofcreatingnewsystems,tocontinuouslysatisfybothinternationalanddomesticdemand

forhotel services” (Pine1992, 6). Examples are the implementationof green technologieswhich

requirecollaboration(MaltzandSchein2012)orinternationalhotelgroupsexpandingtodeveloping

countriesthattransfertechnologytothenewfranchises.Theseprocessesareanimportantelement

inthelong-termdevelopmentofthehotelindustrywithinthosecountriessoastomatchinternational

travellers’demands.

Thefourthwayisalong-termcollaborationwithanNGOwithcomplementarycapabilities.Strategic

partnershipssupportthecompetitiveadvantageoftheorganisationwhendevelopingsector-specific

CSRactivities(JamaliandKeshishian2009).PartnershipswithNGOs facilitateco-determining the

priority of sustainability responsibilities, shifting from the tangible (e.g.money) to the intangible

outcomes (e.g. trust, reputation, human resources) (Nisar, Martin, and Seitanidi 2007). A better

understandingofcustomerneeds(PorterandKramer2011),andinvestmentintrustingrelationships

52

withnon-traditionalpartners(e.g.NGOsandcompetitors)whosecapabilitiesarecomplementaryand

synergistic (Maltz and Schein2012), enhances the creation of CSV. Qualitative research suggests

sharedvalue is often implemented, creating standards andbestpractices (Maltz,Thompson, and

Ringold 2011). For example, the cross-sector alliances between hospitality organisations and the

International Tourism Partnership create aplatform for sharing information among competitors,

discussingsustainabilityissuesanddecidingpracticalsolutions(InternationalTourismPartnership

2016).OrganisationsastheRezidorHotelGroup,MarriotInternationalandStarwoodHotelshighlight

the benefits of this long-term partnership (Tupen 2012). Another example is Meliá Hotels’

collaborationwithTUITravelindistributinganeducationalguideforpurchasingsouvenirs(Martínez

and del Bosque 2013). Partnerships with non-traditional partners facilitate the co-creation of

solutionsforcommonsustainabilityissuesand,inturn, integratesustainabilityprinciplesintothe

productdesignandcorporategovernance.

Conclusions

The complexityofCSR, regarding terminologies,definitions, strategiesandactivitieshampers the

managementofthesustainablebehaviourofanorganisationanditspotentialtocreatecompetitive

advantage.Nonetheless,scholarsingeneralagreethatCSRoffersaviablebusinesscaseforgenerating

change.Anorganisationincreasesitscompetitiveadvantagebyusingitsuniqueresources,improving

reputation and minimising risks, legitimating its actions, addressing stakeholders' requests or

creating value for society and the organisation itself. Indeed, the latest evolutionary step of CSR

assumesthatoursisawin-winworld,wheremanagersdowellfortheorganisation,theenvironment

andsociety.Theresearcheracknowledgesthisisahighlyoptimistic,andpotentiallynaïveviewofthe

world.WhileCSVisstillarelativelynewconcept,itisanopportunitytodealwithsocialengagement

asalong-terminvestmentintrinsictosuccess,bothwithinandoutsidetheorganisation’sinfluence.

Previousresearchevidencestheadvantagesofsharedvalue(BockstetteandStamp2011,Spitzeck

andChapman2012,Porteretal.2012,AmahandAhiauzu2014),whileacknowledgescomplexities

in its concept (Elkington 2012, Crane et al. 2014), implementation (Bockstette and Stamp 2011,

CornerandPavlovich2014)andmeasurement(Porteretal.2012).Thechallengehereisnotwhether

thevisionisaspirational,butwhetherthehotelindustrycollectivelyhasthestrengthtotakeshared

responsibilitytostrivetowardsit.

Asorganisationshaveyettoachievethetransformationrequiredtobringaboutthisnewapproach,

thisstudycontributestosettingthesustainabilityagendatowardscreatingsharedvalueinthehotel

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industryandoperationaliseCSV.Thedifferentguidelinestoimplementsharedvalueleaveanumber

ofquestionsopen,suchastohowtoinvolvestakeholders,identifytheissuesandprioritisethem.The

lackofanappropriateframeworkandmethodologytoguideanorganisationinthemanagementof

CSVhampersthepotentialcompetitiveadvantagefromsustainablebehaviour.TheMBSCframework

aims to advance themanagement of shared value and clarify the links between the tangible and

intangibleresultsfortheorganisationandsociety(Chapter4).

StudiesinvestigatingCSVremaingenerallyconceptual,suchascategorisingcorporationsregarding

socialvalue(Moon,Pare,etal.2011),extendingthetheoreticalbackgroundofCSV(Leeetal.2014)

anddifferentiatingbusinessandethics(SzmiginandRutherford2013).Otherscoverareasrelatedto

the environment (Spitzeck and Chapman 2012), social entrepreneurship (Pirson 2012), social

innovation(Herrera2015)andlow-incomemarkets(Michelini2012,MicheliniandFiorentino2012).

Fewscholarsprovidesystematicandempiricalstudies(e.g.MaltzandSchein2012).Recently,there

has been an increase in research on the CSV concept (Dembek, Singh, and Bhakoo 2016), its

application(Corazza,Scagnelli,andMio2017)andimplementationguidelinesfororganisations(Tate

and Bals 2018, de los Reyes, Scholz, and Smith 2017, Matinheikki, Rajala, and Peltokorpi 2017).

Within this context, this thesis contributes to the normative and empirical research, by first

developingaframeworktooperationaliseCSVstrategies(Chapter4)andthentheorisingitsvaluein

thehotelindustry(Chapter7).ThenextchapterexplainsthetoolstheMBSCbuildsfrom,highlighting

itsadvantagesandchallenges.

54

InstrumentstoachievesharedvalueChapter 3 investigates how to integrate sustainability performance into the business’ strategy,

managementandreporting(e.g.SchalteggerandWagner2006,deVilliers,Rouse,andKerr2016)by

exploring the potential of selected instruments to achieve shared value. From a performance

managementperspective,thechapterintroducestheBalancedScorecard(henceforthBSC)andits

adaptationstoincludesustainability.ThechoiceoftheBSCfromtherangeofpossibleperformance

management systems responds to the resurgence of this tool for measuring and improving the

managers’performanceandmotivationinthepursuitofCSRgoals(Rigby2013,Bento,Mertins,and

White2017).OrganisationsapplytheBSCtoincreasetheireffectiveness(Neely2008b), including

largehotelgroups(HuckesteinandDuboff1999,DentonandWhite2000,McPhail,Herington,and

Guilding2008,Fisher,McPhail,andMenghetti2010,Balogluetal.2010,Chen,Hsu,andTzeng2011,

Sainaghi, Phillips, and Corti 2013) and, to a lesser extent, small and medium size organisations

(Bergin-SeersandJago2007).Fromasustainabilityreportingperspective,thechapterfocusesonthe

Inclusiveness,Materiality,ResponsivenessandAssuranceprinciplesofAA1000SESasastakeholder

engagementstandardthatrespondstostakeholderexpectationsacrossthecriticalprocesseswithin

the organisation. International standards, such as AA1000SES, and guidelines for sustainability

reporting,suchasGRIG4,emphasisestakeholderengagement throughthematerialityassessment

toolasthemostimportantmeanstodevelopmeaningfulreports(GRI2013a,AccountAbility2015).

TheuseofMaterialityAssessment(henceforthMA)forsustainabilityreportingisincreasingacross

industries(Jones,Comfort,andHillier2016b,Jonesetal.2017,JonesandComfort2017).Thischapter

explainsthetheoreticalfoundationsunderpinningtheMBSCtoexecutesharedvalue,revealingthe

characteristics,strengthsandweaknessesofeachtool.Exploringtheconceptualandimplementation

challengescontributestoidentifyingthedifferences,similaritiesandsynergiesofthetools.

ThefirstsectionexplainstheBSCframeworkfromitsearlydefinitionasaperformancemeasurement

framework,integratingnonfinancialandfinancialmeasurestoaperformancemanagementsystem.

Then,duetotherelationshipbetweenCSV,sustainabilityandbroadstakeholderconcerns,thesection

reviewsextendedBSCstructuresthataddresssustainabilityissuesandstakeholderaccountability

more inclusively. Afterwards, it discusses the literature that integrates sustainability into the

conventionalBSC.Thenextsectionaddressessustainabilityreporting,focusingontheAA1000SES

principles for stakeholder accountability: inclusiveness, materiality and responsiveness and the

externalassuranceofreports.ThesectionplacesparticularimportanceonMAasthetooltointegrate

55

into the BSC in order to realise sustainability strategies that create shared value. The last part

discussesthecomplementaritiesbetweentheBSCandMA.

BSC:aperformancemanagementtool

Thissectionexplains theBSC fromitsorigin,concepts, strengthsandweaknessessinceadetailed

understandingfacilitatesthedevelopmentoftheMBSCinChapter4.

By the endof the20th-century, therewasan increasingpaceand level of change tostrategies to

manageintangibleassets,suchascustomerrelationships,employeeskillsandknowledge,innovative

productsandservices,aclimateencouraginginnovation,andhigh-qualityandresponsiveoperating

processes(KaplanandNorton2001b).Theexclusiverelianceonfinancialindicators,however,ledto

thesacrificingoflong-termvalueforshort-termperformance(Porter1991).Theorganisationwas

unabletomeasuretheintangibleassets(JohnsonandKaplan1991),hamperingtheimplementation

ofnewstrategies(CharanandColvin1999,KaplanandNorton2001b).KaplanandNorton(1992)

developedtheperformancemeasurementframeworkcalledBSCasaresponsetothis.TheBSCseeks

to address, i) the increased concern over traditional financial accounting measures misleading

managersinoperationaldecision-making,andii)theproliferationofnewmeasurestocapturethose

areas.

Initially,theBSCwasaperformancemeasurementtoolthatwithtimedevelopedintoaperformance

managementsystem(Table6).Throughthatprocess,KaplanandNortonexaminedmorethan300

organisations, producing a series of articles (Kaplan andNorton 1993, 1996a, c, 2000, 2001b, c,

2004a)andbooks(KaplanandNorton1996b,2001a,2004b,2008).TheBSCisnowconceivedasa

performance management system that translates the organisation’s strategic goals into a set of

interlinked financial and non-financial objectives that provide key performance indicators for

management.

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Table6:DevelopmentoftheBSCconceptbyKaplanandNorton

Source:Hoque(2014,36).

Advantages

TheBSChasseveraladvantageshighlightedbytheconcepts’proponentsinthenormativeliterature

(e.g.,KaplanandNorton1996b)andconfirmedinempiricalresearch(Othman2006,Lucianetti2010,

MadsenandStenheim2014a).Thissectionpresentstheseadvantages,whichareitsmanagerialfocus

onstrategy,thebalanceofmeasures,alignmentofgoals,communicationandvisualisation,cultural

andmotivationaltoolandchangecatalyst.

Managerialfocusonstrategy

TheBSCtranslatesstrategyintooperationalgoals,makingmanagersfocusonwhatisrelevantinthe

long-termandassistingthemindecision-making.TheBSCcapturestangibleandintangibleelements

usingfourinterconnectedperspectives(Figure1):Financial,Consumer,Internal,andLearningand

Growth (e.g., Kaplan and Norton 1996b). An organisation decides a financial target (Financial

perspective) and then establishes how the customer should see the organisation (Customer

57

perspective).Latertheorganisationidentifiestheinternalprocessesneedingimprovementordesign

(Internalperspective).Finally,theorganisationdeterminestherequiredknow-howtoachievethe

financialtargetandsustainitintime(Learningandgrowthperspective).

Figure1:BSCperspectivesSource:AuthorfromKaplanandNorton(1996b).

TheFinancialperspectiverepresentsthetraditionalapproachtoorganisationalsuccess:long-term

returnoninvestment,commonlymeasuredbyprofitability,growthandshareholdervalue(Kaplan

andNorton1996b).AlltheobjectivesandmeasuresoftheotherperspectiveslinkwiththeFinancial

perspectivetoachievebusinessresults.

TheCustomerPerspectiveseekstoalignthecorecustomermeasures–satisfaction,loyalty,retention,

acquisitionandprofitability–tothetargetedcustomersandmarketsegments(KaplanandNorton

1996b).Thecustomer-value-propositionforeachtargetedsegmentdefinesauniquemixofproduct,

price,service,relationshipandimageofanorganisation(KaplanandNorton2001b).Whileremaining

sensitive to the cost of the products,measurements include the value for the customers in time,

quality,performanceandservice.Afteridentifyinghowconsumersseetheorganisation,theBSCdeals

withwhattheorganisationmustexcelatinordertofulfilcustomers’expectationsandshareholder

satisfaction.

The Internalperspectivemeasures competencies andprocesses.According toKaplanandNorton

(2001b), an organisation can develop four high-level processes. First, ‘Build the franchise’ spurs

innovationtodevelopnewproductsandservicesinordertopenetratenewmarketsandcustomer

segments. Second, ‘Increase customer value’ expands and improves relationships with existing

customers. Third, ‘Achieve operational excellence’ improves supply-chain management, internal

processes,assetutilisationandresourcecapacitymanagement.Fourth, ‘Becomeagoodcorporate

FinancialTosucceedfinancially,howshouldweappeartoourshareholders?

CustomerToachieveourvision,howshouldweappeartoourcustomers?

ProcessTosatisfyourshareholdersandcustomers,whatbusinessprocessshouldweexcelat?

Learning&GrowthToachieveourvision,howwillwesustainourabilitytochangeandimprove?

58

citizen’ establishes relationshipswith external stakeholders.A complete strategy should generate

returns from all four processes (Kaplan and Norton 1996b), which closely relate to Porter and

Kramer’s (2011) actions to create shared value: developing clusters for innovation, improving

supply-chainmanagementandbuildingameaningfulrelationshipwithstakeholders.

While the Customer and the Internal perspectives identify the most relevant parameters for

competitivesuccess,inachangingenvironment,howcananorganisationcontinuetoimproveand

createvaluewhenthetargetsforsuccesskeepchanging?KaplanandNorton’s(1996b)responseis

theinvestmentintheongoingimprovementofpeople,systemsandprocedures,prioritisingelements

thatservetocreateaninternalclimatesupportingchange,innovationandgrowth.Thisperspective

measurestheinternallearningneededtogeneratetherightinnovationtocreatesharedvalue.

Balanceofmeasures

The BSC reduces the information overload and the over-emphasis on financial measures and

condenses data in one report that holistically expresses the organisation’s performance. An

organisationwouldneedbetweenfourandsevenindicatorsforeachperspective,developedintoan

integratedhierarchy(KaplanandNorton1996c).TheBSCtracksthekeyperformanceindicatorsofa

strategy (Kaplan andNorton1993) andhasbeenproven to improve thebalanceof financialand

nonfinancial,short-termandlong-term,andqualitativeandquantitativesuccessmeasures(Madsen

and Stenheim 2014a). Restricting the number of measures focuses the attention towards those

aspectsexpectedtodelivercompetitiveadvantage.

Kaplan and Norton (1996a) distinguish between diagnostic and strategic measures. Diagnostic

measures capture aspects that allow the organisation to operate, monitoring whether the

organisationremainsincontrolandsignallingunusualevents.Diagnosticmeasuresareinsufficient

forachievinglong-termgoalsandcompetitivesuccess.Instead,strategicmeasuresdefineastrategy

forcompetitiveexcellence,dividingintocomplementarylaggingandleadingindicators.

Laggingindicatorsaregenerictothesector,whileleadingindicatorspointtowardsprocessesunique

toanorganisationanditsstrategy.Laggingindicatorsexpresstheresultofthelong-termstrategy,

thus remain backwards looking (Zingales, O'Rourke, and Hockerts 2002). For example, financial

indicators,customersatisfactionoremployeeattitudesreflecthowanorganisationperformedinthe

past butdonot give insight into theperformance of the comingyear. Instead, leading indicators

expresshowtoachieveresultsbyreflectingthedistinctivenessoftheorganisation’sstrategy.Leading

indicators are known to act as ‘early warnings’ signalling the future performance (Madsen and

59

Stenheim 2014a). For example, the quality of the relationship between the organisation and its

customerssuggestsalikelihoodofachievingbettercustomersatisfactioninthefuture.Thelagging

indicators without the leading indicators do not communicate how to achieve the outcomes.

Conversely, leading indicators without lagging indicators enable the achievement of short-term

operational improvementsbut failtoreveal the long-termsuccess.Abalancedmixof laggingand

leadingindicatorsenablesanintegratedstrategy.

TheBSCcanassistmanagerstoimplementCSVstrategiesbybalancingdifferentmeasuresthatbest

capturetheintangibleassetsleadingtocompetitiveadvantage.

Alignmentofgoals–cause-and-effectrelationships

Building these lagging and leading indicators intohierarchies creates the cause-and-effect chains

betweenobjectivesandmeasurementstoproduceeconomicresults(Figure2).Sinceimprovements

inintangibleassetsaffectfinancialoutcomes(e.g.Huselid1995),bylinkingandmeasuringthosein

units other than currency, the BSC becomes a “feed-forward control system” (Hoque 2014, 35)

describingvalue-creatingstrategies.Thecause-and-effectchainswithin theBSCcancontribute to

buildingaclearerbusinesscaseforsustainability.

Figure2:Thecause-and-effectrelationships’strategyintheBSCSource:KaplanandNorton(2001b,91)

60

Foreachperspective(Financial,Customer,InternalandLearningandgrowth),managersdefineand

articulategoalsandmeasuresatcorporateandlocallevelsthroughatop-downprocess.TheBSCis

bestdefinedforoperationalisingandmeasuringstrategiesfromStrategicBusinessUnits(henceforth

SBUs) (e.g. hotel properties within a chain). The BSC formalises the relationship between the

corporateofficesandtheSBUs, involvingtheservicessharedwithin theorganisation(e.g.human

resourcesandmarketing)(Zingales,O'Rourke,andHockerts2002).SBUscanfacilitateastreamlining

ofthesustainabilityissuesacrosstheentirevaluechainwherecommonproblemsaretheisolation

betweendepartmentsandtheshort-termversuslong-termsustainabilityobjectives.SinceSBUsdrive

sharedvaluestrategiesanddecisions,theroleoftheSBUsinmeasuringsocialperformanceneedsto

increase (Porter et al. 2012). Cascading the BSC down through the organisation improves goal

congruencebyincreasingtheawarenessofthelong-termgoals.

TheBSChelpstobringafocustocriticalmanagementprocessessuchas“departmentalandindividual

goalsetting,planning,capitalallocations,strategicinitiatives,and feedback learning”(Kaplanand

Norton1996b,152)enablinganorganisationtoachieveperformancebreakthroughswithintwoto

threeyears(KaplanandNorton2001b).TheBSCbecomesamanagementsystemlinkinglong-term

strategytoshort-termactions(KaplanandNorton1996b).WiththeBSC,anorganisationcapitalises

onexistingresourcesavailableforlong-termvaluecreation.

Communicationandvisualisation:Thestrategymap

Communication isacommonobstacle tostrategyexecutionnegatively impactingcompetitiveness

(Beer and Eisenstat2000, Hrebiniak2006),which also affects the hotel industry (Weernink and

Willemijn 2014). In response, Kaplan and Norton (2004b) developed the strategy map, which

visualisesthecause-and-effectrelationshipsbetweenthestrategicobjectivesofthefourperspectives

(Figure3)andhasbeenempiricallytested(IttnerandLarcker1998,Banker,Potter,andSrinivasan

2000). The strategymap shows how an organisation converts intangible resources into tangible

outcomesthroughthecausallinkagesassumedbetweenstrategicobjectives.

61

Figure3:StrategymapappliedintoanorganisationSource:KaplanandNorton(2001b,92)

A strategy map is a powerful tool for diagnosis, communication and performance improvement

purposes(KaplanandNorton1996b,2001b,MadsenandStenheim2014a,HansenandSchaltegger

2016).Asadiagnosistool,itidentifiesgapsinstrategiesappliedatlowerlevelsoftheorganisation

(KaplanandNorton2001b)andoffersamodelforadaptingtheorganisationtocontextualchanges

(Kaplan,Petersen,andSamuels2012).Forcommunicationpurposes, thestrategymapprovidesa

comprehensiveviewoftheorganisationperformancemeasurementandmanagement(Hansenand

Schaltegger2016)and facilitatesdiscussion(MadsenandStenheim2014a).Thegenerationof the

strategymapenhancesperformance,asmanagersreflecton theoperationsandhowthosecreate

value(Wilkes2005,Othman2006,Lucianetti2010),canclarifythecause-and-effectlinksbetween

CSVelements andalign the internal resources.A lackof a strategymap, on the other hand,may

decreasetheorganisation’scompetitiveness(Lucianetti2010).

Sinceperformanceimprovementsrequireorganisationalchanges,thenextsectionexplainstherole

of the BSC in developing the culture and motivation of the employee so as to increase the

organisation’scompetitiveness.

62

Culturalandmotivationaltool

TheBSCactsasaculturalandmotivationaltoolwhenlinkedtopersonalobjectivesettingandrewards

programmes(KaplanandNorton1996b).TheBSCchangeshowtheorganisationthinksbyfocusing

itsoperationsontheelementsthatledtobetterperformanceinthelong-term.Inthehotelindustry,

employeesplayasignificantroleinachievingserviceexcellenceandfulfillingcustomers'expectations

(Berry2000).Employeeswhoperceivetheirworkasbeingmeaningfulandforwhomthereisagood

fitbetweentheirpersonalvaluesandthebrandvaluesaremorecapableoftransformingthebrand

promises into reality (Xiong and King 2015). To support this, managers integrate the personal

objective setting and the rewards system after employees have learnt about the key strategic

components (Kaplan and Norton 1996b). Unclear responsibilities and accountability for

implementingdecisionsoftenobstructstrategyexecution(BeerandEisenstat2000,Hrebiniak2006).

LinkingtheBSCmeasurestoarewardsystemhasthereforebeenfoundtobeuseful(Madsenand

Stenheim2014a).Motivationincreasesasaresultofindividualgoalsettingandexplicittargetsand

incentivesthatencouragetherightbehaviour.Theaccountabilityfordecisionsalsoincreases,which

improvestheexecutionofstrategy(Porteretal.2012).Toadvancetheoverallperformanceofthe

organisationandtheemployeeeffectiveness,however,organisationallearningisneededthatgoes

beyondsimplygeneratingtherightbehaviourandasupportiveculture.

Changecatalyst:double-looplearning

Organisational learning is essential tomanage change for strategy execution (Beer and Eisenstat

2000,Hrebiniak2006).TheBSCencouragesmanagers toreview, testandvalidate theunderlying

assumptionsofthestrategyandvalues,examiningthecause-and-effectrelationshipsamongleading

andlaggingindicators.Asaconsequence,theBSCemphasisesstrategicdecision-makingusingboth

operational (single-loop) learning, from comparing the targets with the results and making the

adjustments for operational efficiency, and strategic (double-loop) learning, from reflecting if the

strategyremainsviabletoachievethegoals(KaplanandNorton1996c).Periodicmeetingsrevisitthe

strategyandmakecollectivedecisions.Organisationswithoutexplicitcause-and-effectrelationships

betweenmeasures use the BSC simply as a control ormeasurement system, thus only achieving

operationallearning(KaplanandNorton1996c).Theseareimportantlessonstorememberasthis

thesisaimstocreateanMBSCthatadvancestheperformanceofanorganisationimplementingCSV.

Despitethemultipleadvantages,theBSCdoesnotremainwithoutcriticism,anditschallengesaffect

thecreationoftheMBSC.

63

Challenges

ChallengesarisefromtheBSCconceptanditsimplementation(Table7),andthethesistakesthese

into account when designing an MBSC. This section expands Madsen and Stenheim’s (2014b)

classification of implementation challenges into five themes. At a conceptual level, it reviews the

technical and cognitivebarriers.At the implementation level, it identifies technical, cognitive and

organisational issues. Later, section 4.2 explains how an MBSC addresses these conceptual

shortcomingsby integratingtheMAandthesolutionsproposedbypreviousscholars.Section4.5

brieflyacknowledgestheimplementationchallenges,whicharedealtwithcasebycase.

Table7:CategoriesofchallengesassociatedwiththeBSC

Level Theme ChallengeConceptual Technical Double-looplearning

StakeholderconcernsMeasurementtypeCausalrelationship–strategymap

Cognitive PerspectivesandobjectivesImplementation Technical Technical

Cognitive OrganisationalcultureParticipationCommitmentResistance

Organisational TimeandresourcesThechampionContinuity

Source:Author,2015.

Conceptualchallenges

The BSC concept can be problematised by studying first its technical and cognitive barriers. The

technicalbarriersincludefourmajorissues.First,thefixedstructurehampersthedevelopmentof

strategic learning (Nørreklit 2003) and second, the limited approach in respect to stakeholders

hinders the inclusion of sustainability issues (Figge et al. 2002a). Third, applying the BSC to an

organisation challenges itsmanagers to choose themeasures.While they ought to consider only

strategicmeasures(KaplanandNorton1996b)researchshowsmanagersalsoincludenon-strategic

measures(MalinaandSelto2001,IttnerandLarcker2003,Bryant,Jones,andWidener2004,Burney

andWidener2007).Fourth,managersexperiencedifficultiesinexpressingthecausalrelationships

betweenmeasuresinthestrategymap(Zingales,O'Rourke,andHockerts2002,MadsenandStenheim

2014b).

Atthecognitivelevel,theeffectivenessoftheBSCdependsonhowtheconceptisinterpretedand

adapted foruse inaspecificorganisation(LuegandCarvalhoeSilva2013,MadsenandStenheim

64

2014b). Amajor cognitive barrier is the selection of perspectives and objectives (Laitinen 2003,

Hoque2014).Thefollowingparagraphsexplaineachofthosechallengesindetail.

a/Technical

First,whiletheBSCencouragesstrategiclearning,itsformaltop-downcontrolnegativelyinfluences

employeeeffectiveness,inhibitingtheabilityofanorganisationtoadapttochange(Nørreklit2003,

Nilsen 2007). The BSC creates operational rules, procedures and rigidity when translating the

organisationstrategy intoworking tasks(O'Donnell et al.2006),which leads to justa few senior

managers choosing the indicators to report on(Nørreklit 2003,Cokins2010).Employees seldom

participatethroughincentivesandallocationofresources(O'reillyandChatman1996),influencing

negativereflectivebehaviouronthepartofemployees(Antonsen2014).Employeeeffectivenessalso

decreaseswithmorestandardised,constrainedand individualisedwork(HackmanandWageman

2004).Strategiclearningdemandsemployeeparticipationandbottom-upcommunication(Nørreklit

2003) since both individual and collective reflections promote organisational development (Van

Woerkom2004). In response to these challenges, theMBSCaims to facilitate collective-reflection

throughtheMA(Section3.3.2).

Second,earlyuseoftheBSCfailstofocusonallthematerialissuesofstakeholdersbecauseitresponds

totheneedsofonlyparticularstakeholdergroups(EpsteinandWisner2001a,Figgeetal.2002a,Van

derWoerdandvanDenBrink2004).TheBSCfailstorecognisethecontributionofsuppliers(Neely,

Adams,andCrowe2001)andthecommunity(Smith2005)totheachievementoftheobjectives.To

addressthischallenge,scholarshaveadaptedtheBSCtobroadenthestakeholderfocusandtoinclude

sustainabilityissues(Section3.2).Thisrepresentsasignificantcontributiontotheprocessofbuilding

theMBSCbecausesharedvaluerequireanorganisationtoengagewithstakeholdersnotconsidered

inthetraditionalscorecard.

Third, there is disagreement about the types of measures to include. Instead of including only

strategicmeasures(KaplanandNorton1996b),organisationsandexternalevaluatorsfavouradding

non-strategicmeasures (Lipe andSalterio2000,MalinaandSelto2001, IttnerandLarcker2003,

Bryant, Jones, and Widener 2004, Burney and Widener 2007). The inclusion of non-strategic

measures,knownasdiagnosticmeasures,changesthepurposeoftheBSCfromstrategictooperations

management,thereforeitisarguedherethattheMBSCshouldnotincludenon-strategicmeasures.

Rather,asKaplanandNorton(1996b)argue,abalancedmixofstrategicmeasures,includinglagging

andleadingindicators,iscrucialtoestablishingintegratedstrategies.TheMBSC,doesnotpropose

65

specificmeasuressincethosearedependentonthestrategy.Instead,itleavestothemanagementthe

decisionastowhichlaggingandleadingindicatorstoinclude.

Fourth,centraltoevaluatingtrade-offsandmanagingastrategyarethecausalrelationshipsbetween

objectivesandthefourperspectives.TheBSC’ssub-optimaluseasameanstoreviewstrategycan

comeaboutduetoweakcause-and-effectlinksbetweenobjectives(BraamandNijssen2004,Davis

and Albright 2004). A failure to have sufficiently clear cause-and-effect links betweenmeasures

resultsinfewerperformanceimprovements.Whileastrategymapclarifiesthecausallinks(Kaplan

and Norton 2001b, 2004b), few organisations develop such amap because of the complexity of

making those links clear (Zingales, O'Rourke, andHockerts 2002,Madsenand Stenheim 2014b).

Scholars critique the strategy map in that it does not show how trade-offs between conflicting

objectivesarehandled(HansenandSchaltegger2017)andbecauseitcontainsamixofobjectiveand

subjectiverelationships,notalwaysstatisticallyvalidated(Sundin,Granlund,andBrown2010).Still,

theBSCisincreasinglyusedacrossavarietyofsectors(Zingales,O'Rourke,andHockerts2002,Ittner,

Larcker,andRandall2003,Marretal.2005,Lucianetti2010).Clarifyingthecausallinkages,either

statistical or subjective, between CSV elements remains necessary to facilitate the BSC

implementationasaperformancemanagementtool.

b/Cognitive

TheeffectivenessoftheBSCdependsonhowtheconceptisinterpretedandused.Whenusedonlyas

aperformancemeasurementsystem,theBSCdecreasestheorganisation’sperformance,butwhen

usedasaperformancemanagementsystem,itincreasesperformance(BraamandNijssen2004,Davis

andAlbright2004,DeGeuser,Mooraj,andOyon2009).Selectingtheperspectives(Laitinen2003)

and identifying the relative importance andtrade-offs betweenthese (Cokins2010,Hoque2014)

remainsachallenge.TheBSCfailstospecifyhowtohandlethosetrade-offs(Jensen2002).Solutions

proposedareintegratingtheBSCwithperformancemanagementoperationsthatdealwithtrade-offs

(Cokins2010), or leaving thesedecisions to themanager (KaplanandNorton2001b).TheMBSC

followstheHansenandSchaltegger(2017)viewthattensionsandtrade-offsshouldbeaddressedas

part of the strategy-making process, whenmanagers clarify how to position the organisation in

respect to those difficult choices (selecting the perspectives, indicators and building the causal

relationships),andalsothatsomedegreeofdecision-makingandproblem-solvingcapabilityshould

bedelegatedtotheunitmanagers,asindeedissupportedbyempiricalresearch(Sundin,Granlund,

andBrown2010).

66

Implementationchallenges

Attheimplementationlevel,challengesarisefromtheorganisation’stechnical,organisationaland

cognitiveissues.TechnicalissuesoccurwhendevelopinganinfrastructuretosupporttheBSC,since,

being an organisation-wide performance management system, it requires sound information

technologytocollectandmanageallnecessarydata(KaplanandNorton1996b).Theorganisations

alreadyusingtheBSCarethemosttechnologicallypreparedtoadapttotheMBSCbecausetheycan

usethesametechnicalinfrastructureandinformaticssystem.Organisationalissuesincludetimeand

resourceconsumption,lackofanemployeeresponsiblefortheBSC(e.g.asustainabilitychampion)

and turnover threatening the continuity (Zingales, O'Rourke, and Hockerts 2002, Madsen and

Stenheim 2014b). Cognitive issues refer to the behavioural response to implementing the BSC.

Cognitiveissuesincludelackofalignmentwiththeorganisationalculture(Butler,Letza,andNeale

1997),lackofcommitmentfromtopmanagement(Zingales,O'Rourke,andHockerts2002),lackof

participation(MadsenandStenheim2014b)andemployeeresistancetochange(Zingales,O'Rourke,

andHockerts2002,MadsenandStenheim2014b).HencemanagerscanonlyimplementtheMBSC

when an organisation is committed to advancing its CSR strategy, which already presupposes a

changeinthemindsetofthemanagerstobemoresustainability-oriented,minimisingthecognitive

issuesraisedabove.TheMBSCresultsfromawiderstakeholderengagementthroughtheMA.The

impactsofthecognitiveandorganisationalchallengesdependonthetopmanagementcommitment

toadvancingCSRandtheexistenceofaBSCpreviouslyinuse.TheMBSCdealswiththetechnical,

organisationalandcognitiveissuescasebycase.

Despite the challenges discussed above, academics recognise that the BSC is a useful tool for

performance measurement and management (Atkinson et al. 1997, Hoque 2014, Hansen and

Schaltegger 2016). Hence, theMBSC in Chapter 4 starts from Kaplan and Norton’s BSC and the

multiplevariationsdevelopedbyformerscholarstoincludesustainabilityissuesandstakeholders,

ascoveredinthefollowingsections.

BSCmodifications:Overcomingthechallenges

Toenable theexecutionofsustainabilitystrategies, severalscholarshavemodified thetraditional

BSC (Table 8). These sustainability-oriented BSCs are referred to as Social and Environmental

Scorecards(Johnson1998,EpsteinandWisner2001a,b),SustainabilityBalancedScorecards(Figge

etal.2002a,b,Wagner2007,Searcy2012),andResponsiveBusinessScorecards(VanderWoerdand

vanDenBrink2004).ThisthesisreferstoallscorecardsintegratingsustainabilityasSustainability

67

BalancedScorecards(henceforthSBSC).AnSBSCimplementscorporatestrategyandsupportsthe

elementsofsustainabilityrelevantto theorganisation’ssuccess.SBSCsshare theaimto integrate

sustainabilityintocorporatestrategybutdifferintheirapproachandinthedetailoftheidentification

andprioritisationofsustainabilityissues,theirintegrationintoperspectives,andinthecause-and-

effectlinksbetweenissuesandtheirmeasurement.Thissectionfocusesontheneed(1)tobemore

inclusive of sustainability issues by building a social purpose and, (2) to increase stakeholder

accountability.

The integration of sustainability into the BSC usually results in hierarchically extended designs

reflectingcause-and-effectrelationshipsamongtraditionalandnewperspectives.Whilecause-and-

effect linksareanessentialcomponentoftheBSC, fewarticlesaddressthemvisuallythroughthe

strategymap(e.g.ReefkeandTrocchi2013),fewerstillofferafullexplanation,andonlyTsaietal.

(2009)empiricallytesttherelationshipbetweenperspectives.Scholarscreatescorecardsmostlyat

thecorporatelevel(e.g.MöllerandSchaltegger2005,O'Donnelletal.2006),followedbyStrategic

BusinessUnits(e.g.,HahnandWagner2001,VanderWoerdandvanDenBrink2004)andShared

BusinessUnits(e.g.EpsteinandWisner2001b,ChalmetaandPalomero2011).Then,scholarsprovide

example indicators (Denton and White 2000, e.g. Dias-Sardinha and Reijnders 2005) but few

distinguish between lagging and leading indicators (Bieker andWaxenberger 2002, Schaltegger

2011).Betterunderstandingthepotentialbenefitsandtheshortcomingsoftheseattemptslaysthe

foundationfortheMBSC.

68

Table8:ReviewofpreviousSustainabilityBalanceScorecards

Author Topic

Sustainability

integration

Perspectives CascadingdownCause-and-effect-links Is

sues

Stakeholders

Indicators

Measurement

FullIntegration

Extended

Financial(F)

Custom

ers(C)

InternalProcess(IP)

Learning&Growth(L&G)

Rename

Extraperspective

Corporate

SBUs

FullIntegration

Extended

Financial(F)

Custom

ers(C)

InternalProcess(IP)

Learning&Growth(L&G)

Rename

Extraperspective

Corporate

Involvement

FullIntegration

Extended

Financial(F)

Custom

ers(C)

InternalProcess(IP)

Learning&Growth(L&G)

Rename

Extraperspective

Corporate

HierarchicalDesign(DentonandWhite2000)

Community ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

(MöllerandSchaltegger2005)

Sustainability ✓ ✓ ✓ ✓ ✓ Environmental ✓ ✓ ✓ ✓ ✓ ✓

(Panayiotou,

Aravossis,and

Moschou2009)

Sustainability ✓ ✓ ✓ ✓ ✓

Customers(External

Stakeholders)Growth(L&G)

✓ ✓ ✓ ✓ ✓ ✓ ✓

(Zingales2010)

Sustainability ✓ ✓ ✓ ✓ ✓

Customers(Stakeholders)Development&Growth(L&G)

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

(Huang,Pepper,and

Bowrey2014)

Sustainability ✓ ✓ ✓ ✓ ✓ Customers

(Suppliers) ✓ ✓ ✓ ✓

69

(EpsteinandWisner2001b,a)

Sustainability ✓ ✓ ✓ ✓ ✓

Society&Planet/Social&Environmental

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

(Dias-Sardinha,Reijnders,and

Antunes2002)

Sustainability ✓ ✓ ✓

Sustainability/Ecoefficiency

(F)Stakeholders(

C)

✓ ✓ ✓ ✓ ✓ ✓ ✓

(Chalmetaand

Palomero2011)

Sustainability ✓ ✓ ✓ ✓ ✓

Society/SocietalTechnology

Environmental✓ ✓ ✓ ✓ ✓ ✓ ✓

(HahnandWagner2001)

Sustainability ✓ ✓ ✓ ✓ ✓ Non-market ✓ ✓ ✓ ✓ ✓ ✓

(Figgeetal.2001,

2002b,a)

Sustainability ✓ ✓ ✓ ✓ ✓ Non-market ✓ ✓ ✓ ✓ ✓ ✓

(Hansenand

Spitzeck2011)

Community ✓ ✓ ✓ ✓ ✓ Society/Societal ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

(Hamner2005)

Sustainability ✓ ✓ ✓ ✓

Operational(IP)Stakeholders

(C)Development

(L&G)

✓ ✓ ✓

(Wagnerand

Schaltegger2006)

Sustainability ✓ ✓ ✓ ✓ ✓ Non-market ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

(ReefkeandTrocchi2013)

Supplychain ✓ ✓ ✓ ✓ ✓ Non-market ✓ ✓ ✓ ✓ ✓ ✓

(Hansen,Sextl,andReichwald2009,2010)

Community ✓ ✓ ✓ ✓ ✓ Community(Non-market) ✓ ✓ ✓ ✓ ✓ ✓ ✓

70

(Kangetal.2015)

Sustainability ✓ ✓ ✓ ✓ ✓ Non-market ✓ ✓ ✓ ✓ ✓

(Schaltegger2011)

Sustainability ✓ ✓ ✓ ✓ ✓ Non-market ✓ ✓ ✓ ✓ ✓ ✓

(Maltz,Shenhar,andReilly2003)

Sustainability ✓ ✓ ✓ ✓ ✓

Market(C)People(L&G)Future/Innovati

on

✓ ✓ ✓

(NikolaouandTsalis2013)

Sustainability ✓ ✓ ✓ ✓ Stakeholders

(C) ✓ ✓ ✓ ✓ ✓Semihierarchicaldesign (VanderWoerdandvanDenBrink2004)

Responsible ✓ ✓ ✓ ✓ ✓

SocietyandPlanet/Social

andEnvironmental

✓ ✓ ✓ ✓ ✓ ✓

(Tsai,Chou,andHsu2009)

Sustainability ✓ ✓ ✓ ✓ Stakeholders

(C) ✓ ✓ ✓ ✓

(Dias-Sardinhaand

Reijnders2005)

Sustainability ✓ ✓ ✓

Sustainability(F)

Stakeholders(C)

✓ ✓ ✓ ✓ ✓

Non-hierarchicaldesign(BiekerandWaxenberger2002)

Integrity ✓ ✓ ✓ ✓ ✓ Society/Societal ✓ ✓ ✓ ✓ ✓ ✓

(Bieker2002,2003)

Sustainability ✓ ✓ ✓ ✓ ✓ Society/Societal ✓ ✓ ✓ ✓ ✓

(O'Donnelletal.2006) Innovation ✓ ✓ ✓ ✓ ✓

Networkstakeholdervalue(F)Customer

partnerships(C)Business-network

processes(IP)

✓ ✓ ✓ ✓

71

(Hubbard2009)

Sustainability ✓ ✓ ✓ ✓ Society/Societal

Environmental ✓ ✓ ✓ ✓ ✓ ✓

Notspecifieddesign

(Sarkisetal.2010)

SupplyChain

Management

✓ ✓ ✓ ✓ EnvironmentInnovationandlearning(L&G)

✓ ✓ ✓

Source:Author,2015

72

Toincludesustainabilityissues

An SBSC functions as a multidimensional performance measurement and management tool

incorporatingmarket andnon-market sustainability issues andprocesses, on the basis that both

affecttheorganisation’ssuccess.Marketissueshaveadirectimpactonthefinancialgoals,e.g.costs

forCO2emissionsorsavingsinenergythroughefficiency(Figgeetal.2002a,Schaltegger2011).At

thesametime,non-marketissuesindirectlyaffecttheeconomicsuccessofanorganisation(Figgeet

al.2002a,Schaltegger2011),e.g.asupplier’suseofchildlabourcantranslateintonegativebrand

reputation. Socio-cultural, legal and political aspects conform the non-market environment

(Schaltegger2011).Socio-cultural issues involve the legitimisationofbusinessactivities,products

andservices, traditions, socialvalues,mediareactionsandpublicopinion.Voluntarystandardsof

sustainabilitymanagement, e.g. the InternationalOrganisation for Standardisationarepart of the

ethicalcommitmentofanorganisation.Legalaspectsincludethechangesinlawsandregulationthat

may imposehigher costs on theorganisation. Political issues includeboth the governmental and

politicalchangeswithintheorganisation.TheSBSCconsidersbothmarketandnon-marketprocesses

sincetheyeachaffecttheorganisation’ssuccess.

Particularly,externalitiesarebothpositiveandnegativenon-marketaspectsnotcapturedbymarket

transactionsandarisingasaconsequenceofanorganisation’seconomicactivityonunrelatedthird

parties.Anexternalityisacostorbenefitthataffectsastakeholderwhodidnotchoosetoincurthat

costorbenefit(BuchananandStubblebine1962).Positiveexternalitiesaddvaluetotheeconomynot

reapedbythestakeholdercreatingthem,whilenegativeexternalitiesremovevaluenotpaidbythe

causingstakeholder.Previousscholarshaveincorporatedexternalitiesinmultiplewaysthrougha

specific perspective called non-market (e.g., Figge et al. 2002b, a, Schaltegger 2011), as further

detailedinSection3.2.2.1.

Inpractice,organisationsincorporatesustainabilityintheirBSCatthecorporatelevelascorporate

themes,cascadingdowntotheSBUs,orbuildingawareness(Zingales,O'Rourke,andHockerts2002).

At corporate level, managers either establish corporate themes with single indicators, such as

‘environmentally friendly’, or they aggregate multiple sustainability impacts in indexes such as

‘corporatesocialresponsibility’or‘environmentalreputation’(Figure4).Then,managerscascadethe

themesdowntotheSBUs.Dependingonthe‘weight’thoseissueshave,theSBUsincorporatemore

or fewer sustainability-related measures as environmental indicators (Internal perspective),

reputationindexandexternalstakeholderrelationscores(Customer),oremployeeretentionrates

(Learningandgrowth).OtherorganisationsusetheBSCtocreateawarenessofsustainabilityissues

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betweenthedifferentSBUsbyinvitingtheSBUstobuildtheBSC.Thefollowingsectiondiscussesthe

alternatives,strengthsandweaknessesoftheSBSCforinformingtheMBSC.

Figure4:ExampleofanappliedSBSC.ThestrategymapofShellSource:ZingalesandHockerts(2002,11).

DeterminingthedesignoftheMBSCfrompreviousscholars’work

TwovariablesdeterminethestructureoftheSBSCs(HansenandSchaltegger2016)(Figure5):a)the

sustainability strategy influences thedegreeof sustainability integrationwithin a traditionalBSC

(add-on,partial,fullintegrationandextended)andb)theorganisationalvaluesysteminfluencesthe

hierarchy and the cause-and-effect chains among perspectives (strictly hierarchical, semi-

hierarchicalandnon-hierarchical).HansenandSchaltegger(2017)arguethatthistwo-contingency

dimensionaltypologyprovidesguidanceastohowbesttochooseanappropriateSBSCdesign,but

acknowledgethatexceptionsandintendedandunintendedmisfitsexistinpracticebetweentheSBSC

design, the sustainability strategy and the organisational value system: for example, when an

organisation decouples its SBSC design from actual practice as an external legitimacy seeking

strategy.ThissectionoutlinesthealternativestojustifythechoicesfortheMBSC.

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Figure5:VariationsofgenericSBSCarchitecturesSource:HansenandSchaltegger(2016,13).

3.2.2.1. Sustainabilityintegration

The sustainability strategy usually determines the degree of sustainability integration within a

traditionalBSC(Figure6),althoughtherearesomecasesthatcancontradictthiscontinuummodel

(HansenandSchaltegger2017).Aseparatescorecardisusuallyusedinreactivestrategies,an‘add-

on’modelindefensivestrategies,a‘partial’or‘fullintegration’inaccommodativestrategies,andan

‘extended’ integration in proactive strategies (Gminder and Bieker 2002). The next paragraphs

explorethedifferentoptionsforsharedvaluemanagement.

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Figure6:FrequenciesofgenericSBSCarchitecturesSource:HansenandSchaltegger(2016,13).

Formulatingaparallel environmental/social scorecarddoesnot fully integrate sustainability into

mainstreambusinessmanagement(Epstein1996,Figgeetal.2002a).Butleretal.(2011)recommend

creatingaseparatescorecardonlywhenanorganisationi)doesnothaveanexistingBSCandwants

to integrate sustainability without adopting a full-scale BSC, and ii) does not wish to change a

functioning BSC. To achieve shared value, sustainability must be embedded at the core of the

organisation’soperationsand,consequently,thisoptionisunsuitableforanMBSC.

Second,the‘add-on’modeloffersanon-marketperspectivethattreatssustainabilityasanexternality

(e.g.,HahnandWagner2001,Figgeetal.2002a,Schaltegger2011).Scholarshavepreviouslyuseda

non-marketperspectivewhenenvironmentalorsocialaspectsaffectedthenon-marketcontextofan

organisation(HahnandWagner2001)orwhenthoseaspectsrelatedtostakeholderswhoarenot

contractualpartnersoftheorganisation,e.g.thecommunity(GminderandBieker2002).Whilean

organisationmightneedadditionalperformanceperspectives(KaplanandNorton1996a,Epstein

1996, Deegen 2001, Figge et al. 2002a, b) the “Add-on”modelmanages sustainability objectives

separatelyfromthemaincorporatestrategy,andthusrisksbeingside-lined(HansenandSchaltegger

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2016).Thischoicehasthereforebeenviewedasanoptionoflastresort(Figgeetal.2002a)when

managers cannot integrate sustainability objectives into existing perspectives, and, in such a

circumstance,theadd-onperspectiveneedstolinktoessentialmanagementprocessesifitaimsto

createsharedvalue.

Third,integratingsustainabilityintotheBSCperspectives,witheithera‘partialintegration’ora‘full

integration’ofsustainability, results intheBSCremainingalmostentirely intheeconomicsphere

(Figge et al. 2002a). Partial integration contains sustainability within some of the traditional

perspectivesandcoreoperations,thusrepresentinganarrowapproachthathindersthecreationof

sharedvalue.Forexample, the Internalprocessperspective incorporatessafety,environmentand

communitywell-beingundertheumbrellaofquality(EpsteinandWisner2001b,Joseph2008).Full

integrationincludessustainabilityaspectsinthefourtraditionalperspectivesmakingsustainability

an integral part of the conventional BSC. For example, a fully integrated SBSC includes green

capabilities and intellectual capital in the Learning and growth perspective (Claver-Cortés et al.

2007).ThemarketshareofgreenproductsislocatedintheCustomerperspective(VanderWoerd

andvanDenBrink2004).TheInternalprocessperspectiveencompassessustainabilityinnovation

(Maltz,Shenhar,andReilly2003)andtheFinancialperspective integratescostreduction through

eco-efficiency(Dias-Sardinha,Reijnders,andAntunes2002).Full integration isappropriate foran

organisationhavinganall-encompassingdefinitionofsustainability,orwhen italreadyhasaBSC

established and wants to include sustainability aspects (Butler, Henderson, and Raiborn 2011).

Nevertheless,environmentalandsocialaspectslinkthroughcause-and-effecttofinancialresultsand

tomanagesharedvalue-creatingstrategiesnotonlyfinancialresultsmustbeachieved,butmustlead

tosocialresults.Accordingly,theMBSCneedstoexpandintothesocialandenvironmentalspheres.

The MBSC takes the "extended" approach, which integrates sustainability into all perspectives

(Learning and Growth, Internal Processes, Customer and Financial) but also adds an additional

perspective for sustainability issues that by themselves donot contribute to short-term financial

success(A3fromFigure5).Forexample,Figgeetal.(2002a)includeanon-marketperspectivewhile

Hansen et al. (2010) include a Community contribution perspective. Alternatively, Chalmeta and

Palomero (2011) add three new perspectives called Technologies, Social and Environmental.

OrganisationsincreasethenumberofperspectivestoapplytheSBSCandtoincreasethesocialand

environmental commitment (Figge et al. 2002a, Chalmeta and Palomero 2011). Nevertheless,

increasingsustainabilityperspectivesalsoincreasestheriskofisolatingsustainabilityissuesfrom

thecorporatestrategysinceinpracticeeachperspectiveendsuphavingitsspecialist.Despitethe

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challengeoflimiting‘add-on’perspectives,however,theextendeddesignremainsthemostadequate

tocreatesharedvaluebecauseitisappropriatetomanagestrategicCSR(GminderandBieker2002).

3.2.2.2. Hierarchyandorganisationalvalues:cause-and-effectchains

Theorganisation’svaluessysteminfluencesthecause-and-effectlinksand,throughthem,determines

if theSBSC isappropriate formanagingastrategy(VanMarrewijk2004,HansenandSchaltegger

2016). SBSCs are usually strictly hierarchical for a profit-driven organisation explained by the

instrumental theory,semi-hierarchical foracare-drivenorganisationexplainedbysocial/political

and normative theories, and non-hierarchical for a systemic-driven organisation explained by

normative theories (VanMarrewijk2004,HansenandSchaltegger2016).Still,allSBSCdesigns—

regardless of value system and hierarchy—can be grounded in all three theoretical perspectives

(HansenandSchaltegger2017).AlthoughmostSBSCstakeasingleperspective,afewapplymultiple

theoreticalperspectivesaccordingtothechangesofthemanagerialmotivationwhenimplementing

the SBSC (Hansen and Schaltegger 2016, Bento, Mertins, and White 2017). The organisational

structurealsoconstrainsthecause-and-effectchains(HansenandSchaltegger2016):alimitedpublic

organisation engages in hierarchical designs, while family owned or public–private owned

organisations, cooperatives and hybrid organisations usually build semi-hierarchical or non-

hierarchicalarchitectures.

Non-hierarchicalSBSCsinterlinkallperspectiveswithobjectivesandmeasuresbutdonotbuildlinear

cause-and-effectchains(HansenandSchaltegger2016)(Figure7)becausethosearenotsufficientto

manageanorganisationinadisruptiveenvironment(O'Donnelletal.2006).Hubbard’s(2009)non-

hierarchicalSBSC(Figure5:C0)addsupindicatorsintoasinglescorethroughaggregatedweighting

systems (Jensen 2001), but these do not reveal the interdependencies between the various

performanceoutcomes anddrivers (Sundin,Granlund, andBrown2010).Thedrawbacksofnon-

hierarchicalSBSCsincludeadifficultyinmaintainingfocusandalackofcommitmenttoorganisations

and people (Van Marrewijk 2004), difficulty in making trade-offs (Jensen 2001) and uncertain

feasibilityinpractice(VanderWoerdandvanDenBrink2004).Sofar,non-hierarchicalSBSCshave

remained conceptual approaches (Hansen and Schaltegger 2016, 2017). The complexity of non-

hierarchical SBSCs hinders their application to manage strategy, and they are therefore, not

appropriatefortheMBSC.

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Figure7:ExampleofNon-hierarchicalSBSCs

Source:BiekerandWaxenberger(Bieker2002,17).

Semi-hierarchical SBSCs reject cause-and-effect relationships (Chen, Hsu, and Tzeng 2011) and

recognisemultiplegoalsandstakeholdersinaparticularperspective(Dias-Sardinha,Reijnders,and

Antunes2002,VanMarrewijk2004,VanderWoerdandvanDenBrink2004,Tsai,Chou,andHsu

2009). Semi-hierarchical scorecards deal with conflicting stakeholder interests (Hansen and

Schaltegger 2016, Brignall 2002) (Figure 8). Dias-Sardinha and Reijnders (2005) replace the

Customer perspectivewith one for Stakeholders and the Financial perspectivewith one for Eco-

efficiencyorSustainability(Figure5:B2).VanderWoerd(2004)renamesthetraditionalperspectives

linkingthemtospecificstakeholdersandaddsadedicatedsustainabilityperspective(Figure5:B3).

Tsaietal.(2009)replacetheCustomerperspectivewithoneforStakeholders.Allthepreviouscases

recognisestakeholders in theday-to-dayoperations(MunillaandMiles2005,PerriniandTencati

2006).Then,whileDias-SardinhaandReijnders(2005)donotrefertothecause-and-effectlinks,Van

derWoerd(2004)relatesomeof,butnotall,theperspectiveslinearly,andonlyTsalisetal.(2009)

testcause-and-effectrelationshipsbetweenperspectives.

Multiple organisations embrace semi-hierarchicalSBSCs (HansenandSchaltegger2016)avoiding

interconnectingallperspectives(Chen,Hsu,andTzeng2011)andpursuingenvironmentalandsocial

objectivesindependently.Insuchasituation,first,stakeholdersshouldnothaveaspecificpositionin

theBSC(KaplanandNorton1996b),andsecond,tomanagestrategy,alltopicsneedtolinkthrough

cause-and-effectchains(KaplanandNorton1996b).Furthermore, implementingsemi-hierarchical

SBSCsisatime-consuminggroupprocess(VanMarrewijk2004)andrequiresnewlearning(Vander

Woerd and van Den Brink 2004). By rejecting cause-and-effect relationships and explicitly

recognisingmultiplestakeholdersinaparticularperspectiveintheBSC,semi-hierarchicalSBSCsare

morelikelytobeusedasperformancemeasurementsystemsonly.

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Figure8:ResponsibleScorecardarchitectureSource:VanderWoerd(2004,178).

HierarchicalSBSCs(Figure9)meanwhile,includeallstrategicgoalsdirectlyorindirectlycontributing

to financial outcomes, including environmental and social objectives, andwith either statistically

verifiable (Kaplan and Norton 2001c) or socially constructed cause-and-effect chains (Sundin,

Granlund,andBrown2010).ThemaincriticismofhierarchicalSBSCsisthedifficultyinestablishing

cause-and-effect chains between perspectives, with reliance placed predominantly on qualitative

measures (Anand, Sahay, and Saha 2005). Furthermore, organisations aiming at higher levels of

sustainabilityfindthemselvesconstrainedbystrictcausalrelationships(VanderWoerdandvanDen

Brink2004).Notcomplyingwithcause-and-effectrelationships,however,carriesahigherriskofthe

scorecardsbeingusedonlyasperformancemeasurementsystems(KaplanandNorton2001b,2004b,

Kaplan2008).Moreover,evenstrictlyhierarchicalSBSCscansupportsustainabilitytransformation

iftheyimplementproactivestrategiesthatalignprofitswithadvancingsustainability(Hansenand

Schaltegger2017).Tomanagesharedvaluestrategywithinaprofitdrivenorganisation,therefore,

theMBSChasahierarchicalstructurethatlinksstakeholdersandfinancialvaluethroughcause-and-

effectchains.

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Figure9:ExampleofahierarchicalextendedSBSC

Source:AdaptedfromFiggeetal.(2002a).

SofarthechapterhasmadeacaseforastrictlyhierarchicalMBSCmodel,withanextendeddesign

with full integration andadd-on sustainability aspects.Whilenonconventionalhierarchieshold a

greaterpotentialforradicalinnovationtowardssustainability(HansenandSchaltegger2016),there

is limited empirical evidence of their effectiveness (Hansen and Schaltegger 2016, 2017). The

researcherarguesthattheMBSCisintendedasarationaladvancementinperformancemeasurement

andmanagement,similarlytopreviousSBSCsunderpinnedbytheinstrumentalstakeholdertheory.

TheMBSC isdesigned for integrativesustainabilitymanagement in “forprofit”organisations.The

MBSCisaresultoflisteningtorelevantstakeholders,consideringtheissuesthatarematerialtothem,

andintegratingthoseconcernsintheorganisationaloperations.Therecognitionofabroadersetof

sustainability issuesandstakeholders leadsto improvedperformance (e.g. Johnson1998,Sundin,

Granlund,andBrown2010).Thenextsectionaddressestheneedforstakeholderinclusivenesswhen

constructingaBSC.

Toincreasestakeholders’accountability

Howanorganisationperformsfromastakeholderperspectivehasbecomeapriority,becausecareful

managementofstakeholders’interestsbringsvalueandincreasesperformance.Sincestakeholders

are evermore concernedabout environmental and social issues (BrunkandBlümelhuber2011),

organisations need tomanage these concerns by aligning their activities accordingly (Calabrese,

Costa,andRosati2015).Scholarsagreeontheneedtoinvolvestakeholdersinthedefinitionofthe

corporate strategy (e.g.Wheeler and Sillanpa 1998, Costa andMenichini 2013) and increasingly

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debatetheroleofstakeholderengagement in integratingsustainability intomanagementsystems

(Seuring and Gold 2013, Ferri, Pedrini, and Pilato 2016). Stakeholder scorecards identify the

organisation’smaingroupsofinterest,andtheirclaims,anddefinetheorganisation’sgoals,measures

andtargets(Atkinson,Waterhouse,andWells1997).

SomearguethatthetraditionalBSCalreadyconsiderstheclaimsoftherelevantstakeholderswithout

theneedforanindependentperspective(KaplanandNorton1996b,Bieker2002,Hubbard2009).

TheBSCexplicitlyrecognisestheinterestofshareholdersandcustomersandimplicitlyacknowledges

employeesandsuppliers.Thisapproach,however,neglectsthedemandsofsocietalstakeholderswith

legitimateclaimsontheorganisation(e.g.NGOs).Otherscholarsaddaperspectiveaimedtofitwith

aspecificgroupofstakeholders(Bieker2002,VanderWoerdandvanDenBrink2004,Chalmetaand

Palomero2011)(Figure10),butthisisachievedattheexpenseoflosingthecause-and-effectchains

(HansenandSchaltegger2016).Thus,thosescorecardsareinappropriateforstrategicmanagement

andonlyusefulforanorganisationwithoutsynergiesacrossSBUs(KaplanandNorton2001b),or

when the organisation pursues a strategy to satisfy multiple stakeholders and goals (Sundin,

Granlund,andBrown2010).

Figure10:ExampleofNon-hierarchicalStakeholderScorecard

Source:VanderWoerd(2004,178).

Instead,othersre-nameoneormoretraditionalperspectives(e.g.StakeholdersinsteadofCustomer

perspective)whilemaintainingthehierarchicalstructureoftheBSCanditscause-and-effectlinkages

(Dias-Sardinha,Reijnders,andAntunes2002,Hansen,Sextl,andReichwald2010,NikolaouandTsalis

2013)(Figure11).Havingexaminedthealternatives,theresearchersupportstheviewofscholars

thatthe traditionalBSCexhibitsanarrowapproach to the identificationofstakeholdersand thus

argues for the need to recognise the contribution of a broader range of stakeholders while

maintainingthecauseandeffectchains.WithintheMBSC,theoverlappingconcernsfrommultiple

stakeholdersandtheorganisationaffectthelatter’scompetitivestrategyandthusneedtobeincluded

withintheMBSC.

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Figure11:ExampleofHierarchicalStakeholderScorecard

Source:Dias-SardinhaandReijnders(2005,62).

Taking intoaccountstakeholderconcernswhenmakingdecisionsrequiresnegotiatingconflicting

objectives(Roberts1992,Bellantuono,Pontrandolfo,andScozzi2016),withstakeholdersinfluencing

theorganisation’sprioritiesforaction.Organisationsmustmanagetheseconflictsandmayneedto

givepreferencetoonestakeholdergroupoveranother.Theorganisationmaytakeaninstitutional

approach,bywhichitwillgiveprioritytothosegroupswithgreatercapacitytoinfluencethevalueof

theorganisation(Jones,Felps,andBigley2007).Otherwise,theorganisationmaytakeanormative

perspective,where legitimacy isthekeyqualitydeterminingwhichstakeholdersshallbeengaged

(Bermanetal.1999).Ineithercase,itisfundamentaltohaveaclearstakeholderculture,purposeand

agreedoutcomes for engagingwitheachstakeholdergroup(AccountAbility2015).As Jonesetal.

(2007) theorganisation’sstakeholderculturedetermineswhotherelevantstakeholdersarewith

whomtheorganisationshallengage.Thestakeholderculturethereforeimposesrestrictionsonthe

strategysincetheinputusedintheMaterialityAssessmentforstrategydefinitionvariesaccordingto

thestakeholdersengaged.

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AdvantagesandshortcomingsofBSCmodification

An SBSC for sustainability management delivers a single integrated management system for

managingtheeconomic,socialandenvironmentalimpactsoftheorganisation.Anorganisationusing

an SBSC exclusively for sustainability management may not therefore require parallel systems

managing social, financial and environmental aspects (Hansen and Schaltegger 2016). An SBSC

understands and dealswith trade-offs among stakeholders, and empirical evidence supports the

capabilityofmanagerstobalancedifferentobjectivesandtrade-offs(Sundin,Granlund,andBrown

2010). The flexibility of an SBSCallowsmanagers to choose the approach that fits bestwith the

organisationalculture,needs,andsustainabilityobjectives(Butler,Henderson,andRaiborn2011).

AnSBSC,therefore,buildsa“sharedunderstandingofreasonsbehindstrategicrelevanceofselected

sustainability issues” and “integrates strategically relevant sustainability issues with existing

routinesandbusinessmodels”(HahnandFigge2018,928).SincetheuseofanSBSCadvancesthe

CSRstrategiesfromlesstomoreproactivesustainabilitymanagement, it isanappropriatetoolto

considerwhenpursuingsharedvaluecreation.

Nevertheless,thedifferentapproachestowardsexplicitlyintegratingsustainabilitywithintheBSC

generate several challenges, including the limitations of the BSC, and other conceptual and

implementationshortcomingsoftheSBSC(Table9).Thissectionreviewstheseinturnwhilealso

acknowledginghowtheMBSCaimstoovercomethesechallenges.

Table9:CategoriesofspecificshortcomingsassociatedwithanSBSC

Level Theme ChallengeConceptual Cognitive Unsuitabilityofthetool

ReductiveuseoftheinstrumentTechnical Causalrelationships

NonfinancialoutcomemeasuresatsocietallevelImplementation Organisational CascadingdowntotheSBUSource:Author,2015.

a/Conceptualchallenges

Attheconceptuallevel,themainchallengeariseswiththecognitivelevelduetotheunsuitabilityof

the SBSC and the fact that the knowledge (or lack of it) that the organisation has of the SBSC

determinesitsuse.Technicalshortcomingsariseduetothecausalrelationshipsandtheselectionof

nonfinancialmeasures.

First,academicscontesttheextenttowhichtheSBSCissuitableforsustainabilityadvancement.Hahn

andFigge(2018)arguetheSBSCisnotasuitabletoolforachievingtransformationalstrategicchange

forsustainabilitybeyondinstrumentalism(2018).HansenandShaltegger(2017)respondthatitis

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notthetaskofanSBSC,oranyothermanagementcontrolsystem,toinitiateradicalchangebutto

support strategy implementation, and the strategy is inplacebeforehand.Additionally,Hahnand

Figge(2018)addthattheSBSCwouldreinforce,justifyandstabiliseunsustainablebusinessmodels

and practices. Any organisational policies, structures, and processes purposely increase the

formalisationandconsequentlystabilisationoftheorganisation,however(HansenandSchaltegger

2017).VanderWoerdandvanDenBrink(2004)previouslyrecognisedthatanSBSCcanbecomea

barriertochangeifappliedtoorigidly,butasHansenandSchaltegger(2017,14)explain:“TheSBSC

isoneapproachinawiderangeofsustainabilitymanagementtools,eachwithdifferentstrengthsand

weaknesses,andtheireffectivenessdependsonthestrategybehindthem,howtheyaredesigned,and

howtheyarecombinedandimplemented.”

Second, scholars acknowledge the reductiveuseof an SBSC,with trade-offs favouring short-term

financialperformancewithassociated“purelyinstrumentalalignmentofsustainabilityissueswith

financial outcomes” (Hahn and Figge 2018, 928). Managers may therefore use an SBSC in an

instrumentalistway(Figgeetal.2001,Bieker2002)toachieveeconomicsuccess(Bieker2002)and

notensuringorganisationalandsocio-environmentalrooting(Hoqueetal.2012).Judgementaleffects

hamper the integration of sustainability, limiting the effectiveness of the SBSC when managers

prioritiseconventionalfinancialindicators(e.g.costefficiency)overlong-termsustainablereturnon

investment. In such cases, an SBSC is used in a narrow approach to political co-responsibility

(Zingales,O'Rourke,andHockerts2002,BiekerandWaxenberger2002).Asaresult,theexecutionof

asustainabilitystrategywithanSBSCconstitutesatheoreticalexercise,translatinginpracticeinto

imbalancedBSCs(Zingales,O'Rourke,andHockerts2002,Bieker2002).HahnandFigge(2018)go

beyondthistostatethatanSBSConlysuitstheimplementationofbusinesscase-drivensustainability

strategies.Thepartialintegration,fullintegrationandextendeddesignofSBSCscanrepresentHahn

and Figge’s (2011) dichotomy of ‘‘inclusive profitability’’, in which profits come from products

integratingTBLobjectives,and‘‘boundedinstrumentality’’,inwhichenvironmentalandsocialissues

areattendedtoonlybecausetheycontributetotheprofitabilityofestablishedbusiness(Hansenand

Schaltegger2017).ItwillalldependonthestrategydesignedbeforehandthattheSBSCimplements.

ToovercomethereductiveuseoftheSBSC,theBSCforNGOsisexamined.Besideshavingafinancial

purpose,organisationspursuingproactivesustainabilitystrategieshaveaclearsocialpurpose.For

NGOs,KaplanandNorton(2001b)substitutetheFinancialperspectivewithlong-termgoalsandthree

System-levelperspectives:thecostincurred(operationalefficiency),thevaluecreated(output)and

legitimisingsupport(Figure12).PlacinganoverarchingobjectiveontheBSCcommunicatesthelong-

termmissionoftheorganisation(KaplanandNorton2001b)andhavingaclearsocialpurposetobe

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subsequentlypublicisediskeytoachievingCSV(Pfitzer,Bockstette,andStamp2013).Thedesignof

theMBSCresultsfromamixofaprofit-drivenorganisationrespectingthecause-and-effectchains,

and a care-driven organisation with a top perspective collecting the long-term sustainability

objectives.

Figure12:TheBSCfornon-profitorganisations

Source:KaplanandNorton(2001b,101).

Third,dependentonthedesign,anSBSCcanbeconsideredeitherasaperformancemeasurementor

performance management tool. Some authors are critical of the causal relationship between

perspectivesbecausetheyaffectthevalidityoftheBSCforastrategicmanagementtool(Norreklit

2000,Nørreklit2003,Hoqueetal.2012,Hoque2014).Notcomplyingwiththestrictcause-and-effect

relationshipscreatesahigherriskofusingnetwork-likeandsemi-hierarchicalscorecardsonlyas

performancemeasurementsystems(KaplanandNorton2001b,2004b,Kaplan2008).Ontheother

hand, Hahn and Figge (2018) argue that the linear cause-and-effect chains translate to an SBSC

incapable of specifying the trade-offs between conflicting sustainability objectives. Hansen and

Schaltegger (2017) resolve that the complexity of the trade-offs must be addressed during the

strategy-makingprocessandnotwithintheSBSC.

Fourth, the difficulty of measuring social and environmental outcomes at societal level with

nonfinancialindicatorslimitstheapplicationoftheSBSC.Measuringsocialimpactswithnonfinancial

indicators increases the difficulty of building an SBSC (Bieker 2002, Huang, Pepper, and Bowrey

2014).Sustainabilitymeasuresarehardertoquantifyand,therefore,harderalsotoincludeinthe

generalmanagementandcontrolsystems(Bieker2002).ThetraditionaluseoftheSBSCislimitedto

the organisational-levelmeasures (e.g., corporateGHG emissions) because of the complexity and

resourceintensenatureoftheSBSCprocess(HansenandSchaltegger2017).Forexample,ahotel

grouphasalimitedimpactonthedestinationinwhichitoperates,andmultipleactorscaninfluence

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the outcome of societal level indicators. Only in rare cases is it possible to measure corporate

contributionstosustainabilityoutcomesatthesystemslevel(HansenandSpitzeck2011).Scholars

have taken opposing views on whether the SBSC architecture must explicitly recognise these

outcomes.HahnandFigge(2018)claimthataneffectiveSBSCmustindeedgobeyondorganisational

performanceoutcomesandincludeTBLoutcomesatthesystemlevel.Ontheotherhand,Hansenand

Schaltegger(2017)explainthatmostorganisationswilluseonlyorganisational-levelperformance

indicatorsbutnotsystem-leveloutcomes.TheMBSC,asaframeworktomanagecreatingsharedvalue

strategies proposes to use both organisational measures, in order to track organisational

sustainabilityprogress,andsystemmeasures, inorder to track theorganisation’s impact into the

environment and the creation of shared value with society. Following results from Hansen and

Schaltegger(2017)theauthoracknowledgesthat,whileoutcomemeasuresareencouragedinthe

MBSC,organisationsriskmeasuringonlyorganisationalperformanceandstrugglewithsystem-level

indicators,therefore,failingtomeasurethesharedvaluetheycreate.

b/Implementationchallenges

Attheimplementationlevel,theSBSCsuffersfromthesametechnical,organisationalandcognitive

challengesastheBSC,plusaparticularorganisationallimitation.TheSBSC’seffectivenessdepends

on thepowerrelationsduring thestrategy formulation,andtheprocessesofcascadingdownthe

objectivesandmetricstotheSBUs(Zingales,O'Rourke,andHockerts2002).Whentopmanagement

doesnotclarifyhowthesustainabilityelementscreatevaluebycascadingdownperformancemetrics

to implement, verify and validate the strategy, the SBSC hardly creates any long-lasting cultural

changesand insteadgeneratesanegativeperceptionof the toolat the lowermanagement levels.

These challenges stress the importance of engagement towards sustainability at all levels of the

organisation.

Despite themultiplechallenges,academicsandpractitionersconsiderSBSCs tobeanappropriate

accounting tool for sustainability issues (Hansen and Schaltegger 2016). While the necessity to

engagewithmultiplestakeholdersiswidelyrecognised(Dias-SardinhaandReijnders2005,Hansen,

Sextl,andReichwald2010,NikolaouandTsalis2013),thereislittleguidanceonthematter.Similarly,

despitetheimportanceofcorrectlyselectingandprioritisingsustainabilityissuesbeforebuildingthe

scorecard,fewacademicsaddressthetopicwhenconstructinganSBSC(e.g.Figgeetal.2002a).The

MBSCaddresses these twoshortcomingsandproposesMaterialityAssessmentas the tool first to

engagestakeholdersandthencetoinformsustainabilityissues.

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Sustainabilityreportingtoincreasestakeholderaccountability

Corporate sustainability requires more integration between sustainability performance

management,measurementand reporting(Maas,Schaltegger, andCrutzen2016,Moriokaandde

Carvalho2016).AfterhavingreviewedabovetheSBSCasatooltomanagesustainabilitystrategies,

thissectionintroducessustainabilityreportingasavehicletocommunicatetheorganisation’sactions

in response to stakeholder concerns, thus increasing stakeholder accountability. In this thesis,

accountabilityisdefinedas“assumingresponsibilityforandbeingtransparentabouttheimpactsof

[the organisation’s] policies, decisions, actions, products and associated performance”

(AccountAbility2015, 34).Accordingly, accountability includes theway inwhich anorganisation

governs, sets strategy and manages performance. Taking a stakeholder theory approach,

sustainability accountability is reviewedas amodeof governanceusing theAA1000Stakeholder

EngagementStandard(AccountAbility2015)(henceforthAA1000SES).Themeasurableprinciplesof

inclusiveness, materiality and responsiveness included in the AA1000SES reflect the reporting

processesofidentifyingandengagingwithstakeholders,usingstakeholder’sinsightstodetermine

theimportanceofsustainabilityissuesandtransparentlycommunicatingtheorganisation’sresponse

to thesematerial issues. These are reviewed in turn in the ensuing subsections, with particular

attentionbeingpaid totheMaterialityAssessment(henceforthMA)since this is the tool that it is

proposed to integrating into the BSC. The final subsection addresses the need for assurance of

sustainabilityreportstoincreasethecredibilityoftheorganisation'sdisclosure.

SustainabilityReporting(henceforthSR)isconceivedasasymbolofwhattheorganisationstandsfor.

SR“isaprocess thatassistsorganisations insettinggoals,measuringperformanceandmanaging

change towards a sustainable global economy” (GRI 2013b, 85). SR complements financial

accounting,andshouldprovideacompleteviewofanorganisation’sperformanceandvaluecreation

(SASB2013,MurninghanandGrant2013).WhileSRisnowastandardpracticeworldwide(KPMG

2015b) it remains a platform for the external accounting of sustainability impacts and how an

organisationtakesresponsibilityforcontinuousimprovement.

WhileSR isevolving fromriskmitigationtogeneratinglong-termvalueopportunities, the lackof

stakeholder engagement andmateriality content in reports (MoratisandBrandt2017) limits the

capacityofsustainabilityreportingtodifferentiatetheproductoraddvalue,asisshowninthecoming

sections. Furthermore, available standards and guidelines do not provide detail on how to link

reportingwiththeorganisation’sstrategy.Forexample,anorganisationmaywanttomeasureitsCO2

emissionsinordertounderstanditsglobalfootprintandhowthislinkstocustomersatisfactionand

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financialaspects,buthowtomeasureimprovedperformancewillremainachallenge(Jaeger2014).

Additionally, existing sustainability reporting frameworks do not foster organisational indicators

linked to global sustainability issues, such as the Sustainable Development Goals (Schaltegger,

Etxeberria,andOrtas2017).Academicsandpractitionersexpectthesustainabilitystandardstomove

from an extensive collection of unrelated measures to a small number of metrics connected to

strategyandperformance(Jaeger2014,AndersonandVarney2015).Integratingreportingwiththe

BSC may assist managers to understand the link between sustainability and performance more

clearly,ultimatelyenablingmorestrategicperformanceorientedreporting.Underaproactiveand

integrated sustainability approach, reports would account for all material impacts, strategies

adopted,practicesimplementedandvaluesharedamongtheorganisationanditsstakeholderswhile

providingtransparentinformationontheprocessandoutcomesofstakeholderdialogueandMA.

Inclusiveness:stakeholderidentificationandengagement

Inclusivenessexplainstheextenttowhichanorganisationdecidestoidentifywhichstakeholdersare

relevant, and how it chooses to prioritise them. Inclusiveness depends on the organisation’s

stakeholder management capability, which is the ability of the organisation to identify its

stakeholders and manage the relationship with them (Freeman 1984). Under a normative

stakeholder approach, the inclusivity principle means that an organisation is supposed to be

accountable toallstakeholders(AccountAbility2015),sinceeachof themisalegitimateobjectof

managerialattention(Phillips2003).Determiningwhohasthelegitimacytobehearddependsonthe

organisation’smoralsandvalues,whichembodythe“sharedbeliefs,valuesandevolvedpractices

regarding the solutionof recurring stakeholder-relatedproblems” (Jones, Felps, andBigley2007,

142). Thosemorals and values are visible in the Stakeholder Identification (SI) and Stakeholder

Engagement(SE)choices.

Although identifying stakeholders and their conflicting interests is key to sustainability strategy

definition and reporting, stakeholder-related reporting practices are limited and not consistent

across organisations. If the organisation’s strategic objectives are to be achieved, identifying the

stakeholders is essential (Burke and Logsdon 1996), and broad stakeholder engagement also

increases thequalityofdecision-making(Hage,Leroy,andPetersen2010). Inpractice,however,

incorporatingandprioritisingstakeholderviewsisacommonchallenge(KPMG2014b).Forinstance,

previousresearch–notincludinghotelgroups–foundthatonly12%oforganisationsexplaintheir

SI(Eccles,Krzus,andRibot2015a)while87%oforganisationsexplaintheirSE(Eccles,Krzus,and

Ribot 2015b). Similarly,Moratis and Brandt (2017) foundmost organisations fail toprovide full

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disclosureonSEindefiningreportcontentandlessthanhalfdisclosetheorganisationresponsesto

stakeholderconcerns.OrganisationsarereluctanttodescribetheirSIandprioritisation,sinceit is

throughthatprocessthattheorganisationrevealsitsvalues.Trade-offsexistbetweenstakeholders

intermsofthosefocusedonenvironmentalissuesandthosefocusedonsocialissuesbecausethey

havedifferentexpectationsofhowtheorganisationought tobemanagedsustainably(Ecclesand

Serafeim 2013). Indeed, when the organisation engages multiple stakeholders in CSR dialogue

tensionsmayarisebetween:(i)anidealisticversusarealisticapproachtoCSRstakeholderdialogue;

(ii)asharedversusanindividualagenda;and(iii)acommercial–economicduties–versusasocial–

ethicalobligations–position(Høvring,Andersen,andNielsen2016).Evadingtheseconflictsthrough

conciliatory statements inhibits the organisation’s ability later to determine the important

sustainabilityissues.

Stakeholderaccountabilityrequiresidentifyingtowhomtheaccountismade,aswellasdisclosureof

themechanismsutilisedtofacilitatestakeholderinput(CooperandOwen2007).Dependingonthe

influence that the organisation gives to each group, engagement can be classified as informative

(organisationinforms,stakeholderlistens),consultative(organisationandstakeholderdialogue)and

decisive (organisation actively involves the stakeholders indecision-making) (GreenandHunton-

Clarke2003).ThemechanismsfordialoguereflectthepurposeanddepthofSE–informativeand

consultative mechanisms are symbolic, and only decisive consultation is substantial (Green and

Hunton-Clarke 2003), – and this consequently determine the breadth of information potentially

gathered(Table10).Anarrowinstrumentalapproachusesstakeholderdialoguestrategicallyforthe

organisation’sneeds,whileanormativeapproachseesdialogueasopenanddeliberative(Spitzeck

and Hansen 2010). Also, the resource dependencies on different stakeholders lead to the

developmentofdifferentstakeholderrelationships,whichpresentfivecharacteristics:directnessof

communication, clarity of stakeholder identity, the deliberateness of collecting feedback,

inclusivenessofstakeholders,andutilisationofstakeholderengagement for learning(Herremans,

Nazari,andMahmoudian2016).WhatisclearisthatSEmustprecedesustainabilityreportingifthe

qualityofreportsistobeimproved(ThomsonandBebbington2005).

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Table10:Engagementlevelsandmethodsofengagement

Engagementlevels Methods

Nature oftherelationship

Informative

Shortterm

RemainPassiveNoactivecommunication

Letters,media,websites,protests

MonitorOne-waycommunication:stakeholdertoorganisation

Mediaandinternettracking,second-handreports

AdvocateOne-waycommunication:organisationtostakeholders

Pressureonregulatorybodiesandlobbyingefforts

InformOne-waycommunication:organisationtostakeholder,thereisnoinvitationtoreply

Brochures

Mediumterm

Consultative TransactLimitedtwo-wayengagement:settingandmonitoringperformanceaccordingtotermsofcontract

Public-private partnerships, private financeinitiatives

ConsultLimited two-way engagement: organisation asksquestions,stakeholders,answer

Publicmeetings,workshops

NegotiateLimitedtwo-wayengagement:discussaspecific issueor range of issues with the objective of reachingconsensus

Collectivebargainingwithworkersthroughtheirtradeunions

InvolveTwo-way or multi-way engagement: learning on allsides but stakeholders and organisation actindependently

Advisorypanels,consensusbuildingprocessesandfocusgroups

Longterm

Decisional CollaborateTwo-way or multi-way engagement: joint learning,decisionmakingandactions

Multi-stakeholderinitiatives,on-linecollaborativeplatforms,partnerships

EmpowerNew forms of accountability; decisions delegated tostakeholders; stakeholders play a role in shapingorganisationalagendas

The integration of stakeholders intogovernance,strategyandoperationsoftheorganisation

Source:AuthorfromGreen&Hutton-Clarke(2003),Plaza-Úbedaetal.(2010),andAccountability(2015).ThedashedlineindicatesthatsomeSEsystemscanbeclassifiedintodifferentlevelsofparticipationdependingontheusegiven.

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Materialityassessment:amultiplepurposetool

MaterialityAssessmentfirstprovidesguidelinestoidentify,selectandprioritisesustainabilityissues

according to their influence on the organisation and its stakeholders, and second measures the

organisation’s sustainability performance for reporting purposes. Materiality emerged from

accountingasaprincipleusedforjudgmentoftheimportanceofanissue(Messier,Martinov-Bennie,

andEilifsen2005,Edgley2014),andhasbeen increasinglyapplied forsustainabilityassessments

(León, Ferrero-Ferrero, and Muñoz-Torres 2016, Whitehead 2017). Materiality is the threshold

betweentheimportantandthetrivialatbothindustryandorganisationlevels,andunderlinesthe

enforcementandsubsequentdisclosureofsustainabilitypractices.

Theconceptualisationofmaterialityremainsanopendebate,withamyriadofcompetingdefinitions

(Edgley2014,Jones,Comfort,andHillier2016b).Sincenosetofagreedrulesformaterialitythreshold

decisions exists (ColmanandMay2007,Edgley2014), institutions codifyandexpandmateriality

differently (GRI 2013a, SASB 2013, International Federation of Accountants 2015), limiting

standardisationand comparability (Edgley2014,KPMG2014a).Both regulatory andprofessional

environments have changed (Messier, Martinov-Bennie, and Eilifsen 2005) and, as a result, new

standards are emerging (Jaeger 2014). Both accounting bodies –International Federation of

Accountants-aswellasnon-accountingstakeholderinstitutions–GlobalReportingInitiative(GRI),

InternationalIntegratedReporting(IIRC),SustainabilityAccountingStandardsBoard(SASB),Global

InitiativeforSustainabilityRatings(GISR)andCarbonDisclosureProject(CDP)–expandandcodify

materialityindifferentways(Table11).Somedefinitionsfocusoninvestorsandshareholders(e.g.,

IIRC2013)whileothersembraceawiderstakeholderfocus(e.g.GRI2013a).Indeed,thedifferent

choiceofsustainabilityreportingframeworkentailsadifferentapproachtomateriality,whichresults

intheidentificationofvaryingmaterialissues;forinstance,theGRIG4focusesonamulti-stakeholder

approach, the IR focuses on value creation, and the SASB focuses on investors (Landrum and

Ohsowski2018).Discrepanciesareduetothedifferentcontextinwhichthereportingstandardsare

applied, their values and their experience in engaging with stakeholders (Corporate Reporting

Dialogue2016).MAisthereforeasocialconstruction(Lai,Melloni,andStacchezzini2017),subjective

andevolving(ColmanandMay2007,Edgley2014,Edgley,Jones,andAtkins2014).Thesedefinitional

differencesmayresultinsustainabilityissuesbeingincludedasmaterial,ornot,dependingonthe

frameworkused.

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Table11:Comparisonofthedefinitionsofmateriality

Source:EcclesandKrzus(2014,125).

Despite the different definitions, MA focuses organisations on matters that are critical to the

achievement of organisational goals and themanagement of impacts on society (Calabrese et al.

2016). For theMBSC, material issues impact on the organisation’s ability to create, preserve or

dissipatesocial,economicandenvironmentalvalueforitselfanditsstakeholders(GRI2013a).

3.3.2.1. Materialityassessmentinpractice

Withinthesharedvaluecontextofthisthesis,MAisunderstoodastheidentification,redefinitionand

assessment of potential sustainability and governance issues that affect, or could affect, the

organisation’sabilitytocreatesimultaneousvaluefortheorganisationanditsstakeholders.Hence,

MA condenses thesematters in a shortlist informing strategy definition, target setting, resource

allocationandreporting.Althoughmaterialityisacentralelementintheagendaforfutureresearch

(deVilliers,Rinaldi,andUnerman2014),thematerialityassessmentprocessremainsunderstudied

(UnermanandZappettini2014).

WhiletheuseofMAinSRisincreasing,organisationsstruggletodefineandimplementmateriality

(KPMG2014a).EarlierresearchfoundanincreaseintheuseofMA(GRI2013d,Dubkowski-Joy2011).

Yet,theyalsoidentifiedthatlessthanhalfoftheorganisationsapplytheMAresults(Dubkowski-Joy

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2011).Also,lessthanhalfdisclosetheMAprocess(KPMG2014a),althoughthereisatrendtowards

the explicit reporting of the list of material issues (Report Sustentabilidade 2013). Some

organisations,however,are findingMAtoocomplex tobemeaningfulwhenthescope isnotwell

defined(GRI2013a,KPMG2014a).WhileMAusehasincreased,researchonmateriality,particularly

inthehotelindustry,isscarce.

Inpractice,theassignmentofresponsibilityforundertakingMAvariesbetweenguidelinebodies,e.g.

sustainabilitydepartment(GRI2013a,b),multipledepartments(KPMG2014a),orbroadercorporate

governance(EcclesandSerafeim2015).Theorganisationsneedtodecidewhichguidelinetofollow

andbeconsistentthroughouttheassessment.Accordingly,theorganisationalsoneedstodefineits

materialitythresholdwithintheboundariesofacceptedandevolvingstandards(EcclesandKrzus

2014,Jones,Comfort,andHillier2016b).Then,theboardofdirectorsdecideswhatisstrategically

relevant(EcclesandKrzus2014).

Asystemapproachisessentialtoassesswhichissuesarematerial,andmanagersareexpectedto

evaluatethisrelevancefromtheperspectiveoftheorganisation’sstakeholders(Hsu,Lee,andChao

2013).Calculatingtheimpactofeachpotentiallymaterialissuerequiresthedefinitionofinternaland

externalcriteria,and,later,thereviewingofqualitativeandquantitativedata(EcclesandSerafeim

2013).Industryspecificguidelineshelpidentifysector-specificissues(Ecclesetal.2012,Ecclesand

Krzus2014,Edgley2014,KPMG2014b).Althoughcommonmaterialissuesandindicatorsexistfor

several industries (GRI 2013a, b, SASB 2013), only GRI (2013c), the International Tourism

Partnership(InternationalTourismPartnership2016,Tupen2014)andSustainabilityAccounting

StandardsBoard(2018)identifymaterialissuesrelevanttothehotelindustry.Bothcanserveasa

basistointegratesustainabilityintheorganisation’spriorities.

Onceidentified,managersprioritisetheissues,butthemethodofdefiningparameters,criteriaand

thresholds are only partly reported, suggesting difficulty in scaling up sustainability into the

organisation’s governance, decision-making processes and strategies. For instance, 44% of

organisationswerefoundtoprioritisesustainabilityissueswhile48%didnotspecifyprioritytopics

(Report Sustentabilidade 2013). Prioritising sustainability issues is indeed a pre-requisite to

formulating the strategy (Porter et al. 2012). Nonetheless, prioritisation was conducted without

guidelinesbeforeMA;anissue’spercentageeffectonincomewasthemostimportantfactorinthe

auditors’materiality judgments (e.g.Messier 1983, Chewning, Pany, andWheeler 1989,Messier,

Martinov-Bennie,andEilifsen2005).Currently,formaterialitydecisions,thepresentdayandfuture

impact for theorganisation ismorerelevant than theconvergencebetweenseveralstakeholders’

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opinions(ReportSustentabilidade2013).Nevertheless,Laietal.(2017)foundthat,fororganisations

subscribedtoIntegratedReporting,themeaningofmaterialitycorrespondswiththeorganisation’s

strategicpriorities,actionsandresults.Overall,organisationsvaryinthewaytheydefinemateriality

andprioritisetheissues(Jones,Comfort,andHillier2016a).

Despitedifferencesinassessingmateriality,thereisacommonapproachtodisclosingtheMAresults

visually,throughagraphcalledtheMaterialityMatrix(Jones,Comfort,andHillier2016b,Jonesetal.

2017,Jones,Comfort,andHillier2016a).Figure13showsanexampleofmaterialitymatrixforthe

hotelindustry.TheMMemergedforSRundertheAccountabilityandGRIguidelinesandhasrecently

beenacceptedbyIIRC.WhiletheuseofMMshasincreasedfrom13%in2011(Dubkowski-Joy2011)

to61%in2013,itsusefordecision-makingremainsunclear,sincefewerthan50%oforganisations

providedcleartargetsonmaterialissues(ReportSustentabilidade2013).Feworganisationslinkthe

matrixwiththecontentofthereport,anditsuseforresourcecommitmentdecisionsisopaque(Eccles

andKrzus2014).Overall,despitebeingrecognisedbythereportingguidelines,andthemostcommon

approachusedtodisclosematerialityissues(Jones,Comfort,andHillier2016b),theMMremainsan

emergingtoolandresearchonitsconstructionanduseislimited.

Figure13:HotelindustrymaterialitymatrixfromInternationalTourismPartnershipSource:(Tupen2014)

TheuseofMMraisesthequestionofhowtherelativeimportanceofdifferentissuesisdetermined.

WhileorganisationsusetheMMforSR,academicsdebatewhetherornotthistoolactuallyservesthe

purpose of SR (McElroy 2011, Eccles and Krzus 2014). The existing materiality guidelines

differentiatebetweentheimportanceofanissueforanorganisationanditssignificanceforsociety

(GRI 2013a, IIRC 2013). Accordingly, MM appears with multiple variations adhering to GRI’s

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recommendations (Figure 14). Usually, the X-axis represents the importance of different

sustainability issues and the Y-axis represents the importance from ‘society’ as a result of some

stakeholder engagement (Eccles and Krzus 2014). Challenges arise in understanding the

prioritisationprocess,however,becauseofthelackoftransparencyinrespectto:i)themeaningand

changesofcriteria,ii)thescoringmechanismstocreateasingle‘society’viewpoint,andiii)thevaried

layoutofMMs;allofwhichresultinmatricesthatarenotcomparable.

First,whenassessingmateriality,feworganisationsexplainthecriteriausedforscoringtheissuesas

‘significant’and‘influential’(EcclesandKrzus2014)(Figure14).Also,manyvarytheaxiscriteria

(Dubkowski-Joy 2011, McElroy 2011, Report Sustentabilidade 2013, Framework LLC 2016), for

example,bychangingthetimelinefromimmediatetopotentialimportance(EcclesandKrzus2014),

failingtoexplaintheweightofeachtermintheevaluation.Inrecentstudiesithasbeenshownthat

theMMvarybetweenorganisationsanddiffer fromtheGRIrecommendations,seemingto favour

corporate continuity goals rather than sustainability concerns (Jones, Hillier, and Comfort 2017,

Jones, Comfort, and Hillier 2016a, Jones and Comfort 2017). All these changes in the matrices

evidenceashiftinthecriteriaforidentifyingsustainabilityissuesthataffecttheorganisation’sgoals,

strategy, financial performance, reputation or regulatory compliance. Second, because the

organisationchooseswhichstakeholderstolistentoandwhichtoignore,aswellashowtoassess

theirviewsandtheweightingassignedtoeachofthem,theoutcomeofMAisnotanobjectiveviewof

whatmatterstosocietybutratherreflectshowtheorganisationhaschosentolistentosociety.The

organisationdetermineswhatissuesarematerialforitselfandsociety(EcclesandKrzus2014).

Usually,theexecutivemanagementteamisexclusivelyresponsibleforelicitingandrepresentingthe

viewsoftheorganisation’sstakeholders(Jonesetal.2017).Organisationsusedifferentweighting

systemstogetintoasingledimensionof‘stakeholder’or‘society’withoutdisclosingthose.Third,the

MM’slayout(descriptionofissuesandscoring)variesbetweenorganisations.Somereversetheaxis,

usesymbolsandcolourstodenotethemes,varythesizeofthedottorepresentthedegreeofcontrol

overtheissue,includeanarrowforthechangeinsignificancetotheorganisation’sperformanceor

showtheimportanceofissuesthroughnumericalorwordlabels(EcclesandKrzus2014).Asaresult,

matricesarenotdirectlycomparable,yetreportingguidelinesprovideindicationstostandardisethe

matricesforexternalscrutinysothattheresultsofeachorganisation’sMAaremoreaccessibletothe

reader.Nonetheless,matriceshavebeencritiquedfornotprovidingsufficientdetailtounderstand

theprioritisationprocessthatledtotheiroutcomes(EcclesandKrzus2014).

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Figure14:ComparisonbetweenGRImaterialitymatrixandadaptedversionsSource:AuthorfromGRI(2013b)andMcElroy(McElroy2011).

StakeholderaccountabilityinSRcomesfromtheorganisationreportingonthecriteriaandprinciples

usedtodefinewhatismaterialtothem.Bybeingclearonwhattheorganisationseesassignificant

and what not, the organisation establishes credibility and legitimacy and avoids charges of

greenwashing. Materiality requires the identification of a set of potentially relevant issues by

conducting a (challenging) SE exercise and the prioritisation of these issues, to first align an

organisation’ssustainabilitystrategywithitsstakeholders’concerns,andthentoreportonthem.The

limiteddisclosureon the underlyingprocess and scoringmechanismsused to assessmateriality,

coupledwiththemanagerialcaptureoverthewholeprocesslimitsthestakeholderaccountability.

Theconcernaboutpotentialmanagerialcaptureariseswhen“themanagementtake[s]controlofthe

whole process (including the degree of stakeholder inclusion) by strategically collecting and

disseminatingonlytheinformationitdeemsappropriatetoadvancethecorporateimage,ratherthan

beingtrulytransparentandaccountabletothesocietyitserves”(Owenetal.2000,85).Thislackof

information hinders the understanding of the decision-making and the potential of MA as a

managementtoolforstrategydefinitionanddisclosure.Thelackofknowledgeonthestateoftheart

ofthematerialityanalysiswithinthehotelindustrymeansthatitisnecessarytoundertakeaprior

analysisoftheindustry(Chapter5).

3.3.2.2. ChallengesandopportunitiesforMAasatoolforstrategydefinition

andperformancemanagement

Thelackofadefinitionofmaterialityandassociatedmethodologychallengesmanagersintheirability

to differentiate betweenmaterial and immaterial sustainability issues and in balancingmultiple

stakeholderinterests,whichlimitsthepotentialoftheMAtoassistinperformancemeasurement.

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First,thedifferentdefinitionsrendermaterialityarathervagueandsubjectiveconcept(Zhou2011,

Jonesetal.2016),withmaterialityjudgmentsvaryingbetweenorganisations.OnlyFasanandMio

(2017)contributetothematerialitydeterminationprocess,identifyingthatindustryandboardsize,

anddiversity,eachplaysignificantrolesinthedeterminationofmaterialitydisclosure,whereasthe

legal environment in which organisations operate does not. Second, the lack of a detailed

methodologyentailsalackofclarityonhowtooperationalisemateriality,challengingorganisations

on how to identify relevant sustainability issues for reporting and how to prioritise those by

stakeholder needs (Zhou and Lamberton 2011, Hsu, Lee, and Chao 2013). Scholars have instead

focused on developing multi-criteria decision-making methods to assess materiality in practice

(Calabreseetal.2017,Bellantuono,Pontrandolfo,andScozzi2016,Calabreseetal.2016,Hsu,Lee,

andChao2013).Sustainabilityreportingguidelinesdonotaddressthelinkbetweensustainability

issues,businessstrategyandpraxis(Lozano2013),whichconfusesorganisations(Ecclesetal.2012).

Third,themanagers’inabilitytodifferentiatebetweenmaterialandimmaterialissues,duetoalack

of capabilities and SE (Eccles and Krzus 2014), results in managers improving performance on

immaterialissues(Grewal,Serafeim,andYoon2016).Thishasbeenfoundevenamongorganisations

with advanced sustainability management and reporting (Miller and Serafeim 2015). Finally,

organisationscontinuetofacechallengesinbalancingstakeholderinterestsformaterialitydecisions,

whenreconcilingtherelationshipbetweenmanagement,investorsandawiderangeofstakeholders

(Edgley2014,Jones,Comfort,andHillier2016b,Jonesetal.2016).Researchdemonstratesthatthe

effect on the organisation’s profitability continues to be the most significant element informing

stakeholders’ judgments in materiality and disclosure decisions (Messier, Martinov-Bennie, and

Eilifsen2005).

Despite these shortcomings, materiality assessment is awidespread practice, providingmultiple

benefits to the organisations undertaking it. Materiality has been recognised to increase the

consistency and transparency of reports, improve the stakeholder relationships, contribute to

creatingsharedvalue,andfocusmanagementtowardsforwardthinking.Materialityaddressesalack

ofconsistencyofreportingfromyeartoyearandbetweenorganisations,aswellasthehighvolume

and low quality of information that renders communications increasinglydifficult tomanage for

decisionpurposes(Hewitt1977,Ghoogassian2015).Materialitycanleadtodifferentiatedreporting

basedonstakeholderinterests(Kjaergaard,Schleper,andSchmidt2016).Moreover,materialitylinks

tothetriplebottomline,functioningasastakeholder-orientedmethodintheengagementbetween

the organisation and society (Edgley, Jones, and Atkins 2014, Jones, Comfort, andHillier2016b).

Indeed,thematerialityapproachcananticipateandmanagechangethroughimprovedSE(Borgaet

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al. 2009), connecting society with economic progress (Schadewitz and Niskala 2010) and target

setting(GRI2013a).Materialityconsiderspastperformancebutalsofocusesthemanagementofan

organisation on anticipating significant sustainability risks and challenges (Edgley 2014, Edgley,

Jones,andAtkins2014).Furthermore,MAcandrivelong-termvaluecreationbyaligningstrategy,

performance management and reporting (Schmeltz 2014). Organisations therefore benefit in

multiplewaysfromoperationalisingmateriality.

Becausesustainabilitygoalsneedtorelatetotheorganisation’sstrategyandoperationsinamaterial

way, this thesisproposesmateriality to be the threshold informing strategy formulation besides

simplyreportingcontent.Whenlinkedtootherperformancemanagementmethodologies,theuseof

MAprovidesat-a-glancereportingonoperationalareasinurgentneedofattention.MAcanplaya

significantroleinre-addressingCSRtowardsbeingmoreinclusiveoftheneedsofstakeholders(Font,

Guix,andBonilla-Priego2016).MAmaythereforebeabletoassistthehotelindustrytochangeits

engagementfrombeingreactivetoexternalpressures(e.g.changesinregulationsorbadpress),to

makinginternaldecisionslinkedtostakeholderexpectations.

Responsiveness:addressingstakeholder’sexpectations

WhichactionsareselectedtobeacteduponfromtheMAresultswillspeakoftheimportancethat

organisationsgivetotheirstakeholders’concernswhenthesecompetewiththeorganisations’own

interests.Responsivenessreferstoanorganisation’sresponsibilitytoacttransparentlyonmaterial

issues (AccountAbility 2015), its willingness to provide a thoughtful response to stakeholder

concernsandcommittocontinuedworkonthosematerialissues(David,Bloom,andHillman2007).

Responsiveness requires an organisation to explain how it perceives the relationships with its

stakeholders,howitintendstobuildandsustaintheserelationships(Painter-Morland2006)andthe

processbywhichmanagersinterprettheissuesanddecidewhichareworthyofaresponse(Bundy,

Shropshire,andBuchholtz2013).Responsivenessrequirestheorganisationtoinvolvestakeholders

in identifying and responding to sustainability issues and reporting the decisions, actions and

performance to stakeholders (AccountAbility 2015). An organisation therefore realises

responsiveness through its governance, strategy, performance and communication with the

interested parties. A defined process of SE is required, with a balanced and comprehensive

engagement of stakeholders that results in outcomes that address the sustainability issues in an

accountableway.Indeed,beingresponsivetostakeholderconcernsacknowledgesanaccountability

relationshipwiththeidentifiedstakeholders(CooperandOwen2007).Thestakeholderlensprovides

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new insights into how organisations assume responsibility for, and are transparent about, their

impacts.Here,responsivenessbecomesanintegralelementoftheMBSCinChapter4.

Assurance:increasingcredibilityofreports

ThevoluntarynatureofSRandthelackofmechanismstoenforcethereliabilityoftheinformation

reportedhasincreasedtheneedforexternalassuranceofthereports(Craswell,Stokes,andLaughton

2002,ManettiandToccafondi2012,KPMG2014a).Assuranceistheprocessofprovidingconfidence

astothecontentandprocessofSR,whichmayinvolveinternalandexternalstakeholders,andits

outcomeisthedegreeofreliancethatcanbeplacedonreporteddata(Jones,Hillier,andComfort

2014). Assurance evaluates an organisation’s “public disclosures about its performance, its

underlying systems, data and processes, against suitable criteria and standards” (AccountAbility

2015,34). ItisacriticalelementinguaranteeingthecredibilityandreliabilityofSR(Jankovićand

Krivačić2014,Bebbington,Larrinaga,andMoneva2008,Edgley,Jones,andSolomon2010).Areport

that is relevant, reliable, free from bias, accurate and balanced mitigates reputational risk and

providesincreasedconfidence(Simnett,Vanstraelen,andChua2009,JankovićandKrivačić2014).

Althoughtheglobaltrendistowardsincreasedsustainabilityassurance,assurancelevelsremainlow,

anditsabilitytogiveconfidenceinthereport’sreliabilityremainsconstrainedbecauseofitslimited

scope. Previous research found that less than 50% of organisations were undergoing external

assuranceanddisclosing the thirdpartyassurancestatements–that isthecommunicationof the

resultsoftheassuranceprocess(KolkandPerego2010,Smith,Haniffa,andFairbrass2011,Report

Sustentabilidade2013,GRI2013b,Jonesetal.2017).Hotelgroups,inparticular,lagbehind(Janković

andKrivačić2014).Assurancechallengesinclude:i)theexistenceofdifferentstandardsandfocus,ii)

the guarantee of the stakeholder engagement process and iii) the audience of the assurance

statement.First,thescopeandcontentofexistingassuranceguidelinesandstandardsvary(Manetti

andToccafondi2012),andassuranceprovidersuseacombinationofoftencontradictoryguidelines

(O'DwyerandOwen2007).Second,doubtsremainabouttheextenttowhichthe‘expertinput’has

hadenoughaccesstodatatomakecriticallyinformedjudgements(performanceassurance)andthe

degree to which invited stakeholders represent the full range of stakeholders interests (process

assurance).Particularconcernsrelatetothescopeoftheassuranceprocess,theindependenceofthe

assessments,themanagementcontrolovertheassuranceandtheassurancelevel(Jones,Hillier,and

Comfort2014,Jonesetal.2017).Forexample,recentstudiesfoundtheexternalassuranceamong

varioussectorswaslimited in itsscopeandmaterialissues(e.g. Jones,Hillier,andComfort2017,

Jones andComfort2017).Third, responsiveness to stakeholders is seldom fullydiscussed,which

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makes it difficult to assess the extent to which stakeholders’ views influence corporate decision

making. These current practices diminish the credibility, transparency and internal benefits for

managementderivedfromassurancestatements(GürtürkandHahn2016).Still,asAdams(2004)

explains,stakeholderdialoguemaybetheconclusivelegitimisationtoolasthecontentofareportthat

hasbeenassuredishardertoquestion.

Conclusions

Authors have called formore integration among different toolswithin organisations to improve

sustainabilityperformance(Maas,Schaltegger,andCrutzen2016,Battagliaetal.2016).Thischapter

hasrevisitedtheBSCandSBSCtoolsandtheAA1000SESprinciples,toinvestigateiftheycouldbe

integrated to provide a cohesive approach to sustainability measurement, management and

reporting.ThisconcludingsectioncomparestheBSC,SBSCandMAastoolsthatcanlaterbecombined

intheMBSC(Chapter4).

These tools havemany similarities (Table 12), such as responding to themeasurement needs of

nonfinancialintangibles(NortonandKaplan1992,Whitehead2017).Furthermore,intheory,allthe

tools set goalsandmanage changeusingorganisation-specific internal andexternalmeasures. In

practice,however,thesetoolsareonlysometimesusedtoachieveperformanceimprovementsand

change(LuegandCarvalhoeSilva2013,MadsenandStenheim2014b,EcclesandKrzus2014).The

impactontheprofitabilityoftheorganisationdominatesthemeasurementdecisionsintheBSC,SBSC

andMA (Messier,Martinov-Bennie, and Eilifsen2005, Figge et al. 2002a), and the samepolitical

challengesthreatentheBSCandSBSCs(Zingales,O'Rourke,andHockerts2002).Whiletheyareall

well-establishedmethods, theBSChasanexplicitmethodology(KaplanandNorton2001a)while

materiality practices and the SBSC vary across organisations (Jones et al. 2016, Hoque 2014).

Furthermore,MA focuseson relevant sustainability issues (GRI2013a)while theBSC focuses on

issuesaffectingcompetitiveadvantage(KaplanandNorton2001b).Hence,acombinedtoolarguably

offers the opportunity to focus on the critical sustainability issues that create a competitive

advantage.

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Table12:Similaritiesbetweenthetools

BSC SBSC MA MBSC

Characteristics Theory Practice Theory Practice Theory Practice Theory

Origin Financialreportingmisleadingnon-financialareasdecisions

✓ ✓ ✓ ✓ ✓ ✓ /

Purpose Balancefinancial&non-financialmeasures ✓ ✗(−) ✓ ✗(−) ✓ ✓(+) ✓Leadstocompetitiveadvantage ✓

Sometimes

(−) ✓

Sometimes

(−) ✓

Sometimes

(−) ✓

Focus

Intangibleassets ✓ Sometimes(−) ✓ Sometimes

(−) ✓ ✓ ✓

Economicdriven ✓ ✓ ✗(+)

Reductiveuse(−)

✓ ✓ ✓Methodology Organisationspecificmeasures ✓ ✓ ✓ ✓ ✓ ✓ ✓Internal&externalmeasures ✓ ✓ ✓ ✓ ✓ ✓ ✓Use Goalsetting ✓ ✓ ✓ ✓ ✓ ✓ ✓

Performancemanagement ✓

Sometimes(−)

✓

Sometimes(−)

✓

Sometimes(−)

✓

Changemanagement ✓ ✗(−) ✓ ✓(+) ✓ ✗(−) ✓Socialchallenge Fittingthecultureofanorganisation ✓ ✗(−) ✓ ✓ ✓ ✓ ✓Lackofparticipation&topmanagementcommitment ✓ ✓ ✓ ✓ ✓ ✓

Sometimes

(+)Politicalchallenge Time&resourceconsumption,lackofaresponsibleperson,turnoverthreateningthecontinuity

✓ ✓ ✓ ✓ ✓ ✓ Sometimes(+)

Yes✓,No✗,Advantage(+),Disadvantage(−) Source:Author,2015.

The tools complement eachother in severalaspects, overcoming someof eachother’s challenges

(Table13).Theyalladvancesustainability;theBSCandSBSCimprovethestrategyimplementation

(KaplanandNorton1996c)whileMAevolvespracticesanddisclosure(Calabreseetal.2016).MA

changessustainabilitypracticestomanagestakeholders'expectations;however,thelackofacausal

relationship between measures may hinder its ability to relate how the changes in strategy,

implementation,andmeasurementcontributetoorganisationalsuccess(EcclesandKrzus2014).All

thetoolscanredefinethestrategy;theBSCandSBSChelptheprocessofreflectingonwhetherthe

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strategy remains viable to achieve the targets (Kaplan and Norton 1996c), and MA assists in

establishingthestrategicprioritiesbasedonunderstandingwhatmatterstostakeholders(Schmeltz

2014).Revisitingstrategy isanon-goingprocess; theBSCandSBSCmonthly(KaplanandNorton

1996b)andMAannually(GRI2013b).Furthermore,theBSCrespondstotheorganisation’sneeds

(Kaplan andNorton1996b) andMA responds to the stakeholders’ requests (Jones, Comfort, and

Hillier2016b).ThecombinationofSBSCandMAcanarguablyenhancecompetitiveadvantageby

aligning the organisation’s needs and the stakeholders’ requests. Moreover, they all minimise

informationoverload,theBSCandSBSCininternalreporting(MadsenandStenheim2014a)andMA

inexternalreporting(Kjaergaard,Schleper,andSchmidt2016).Thecombinationof the toolscan

thereforearguablybeappropriatetomanagesustainabilitystrategy,practicesanddisclosure.

Table13:Synergiesbetweenthetools BSC SBSC MA MBSCCharacteristics Theory Practice Theory Practice Theory Practice TheoryPurpose

Astrategymanagementtool ✓ ✗(−) ✓ ✗(−) ✓ Sometimes(−) ✓

Strategyrevision&redefinition ✓

Sometimes

(−) ✓ ✓ ✓

Sometimes

(−) ✓

Alignmentofgoals ✓ ✓ ✓

Sometimes(−)

✓

Sometimes(−)

✓

Performancemeasurement ✓ ✓ ✓ ✓ ✓ ✓ ✓

Aday-to-dayoperationstool ✗ ✓(−) ✗

Sometimes(−)

✗ ✗ ✗Focus Proactivesustainabilityapproach ✗ ✗ ✓ Narrow(−) High

(+) High(+) High(+)

Answersmanager'sneeds ✓ ✓ ✓ ✓ ✗(−) ✗(−) ✓(+)Answersstakeholders'expectations ✗(−) ✗(−) ✓ ✓ ✓ ✓ ✓(+)Methodology Variousinterpretations,sometimessuboptimal ✗ ✓(−) ✗ ✓(−) ✓ ✓(−) ✗(+)Useofstrategicmeasurements ✓ ✗(−) ✓

Sometimes

(−) ✓

Sometimes

(−) ✓

Useofnon-strategicmeasurements ✗ ✓(−) ✗ ✓(−) ✓ ✓ ✗(+)

Lagging&leadingindicators ✓

Sometimes(−)

✓

Sometimes(−)

✓

Sometimes(−)

✓

Acceptance(academic/practitioners) ✓ ✓

Sometimes

(−)

Sometimes

(−) ✓ ✓ Pending

Design Causalrelationships:strategicobjectives ✓ Sometimes

(−) Sometimes(−)

Sometimes(−) ✗ ✗ ✓(+)

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Causalrelationships:stakeholders&TBLimportance

✗ ✗

Sometimes(−)

Sometimes

(−) ✓ ✓ ✓(+)

Illustration Strategycommunication&visualisation ✓ Sometimes

(−) ✓ Sometimes(−) ✗ ✗ ✓(+)

Strategymap:clarifycauselinks ✓ ✗(−) ✓ ✗(−) / / ✓(+)Transparency Transparencycontribution ✓ ✓ ✓ ✓ ✓ ✓ ✓Internalreporting ✓ ✓ ✓ ✓ ✓ ✓ ✓Externalreporting ✓ Sometimes

(−) Sometimes(−)

Sometimes(−) ✓ ✓ ✓(+)

Technology Needfortechnologicalsupport ✓ ✓ ✓ ✓ ✓ ✓ ✓Social

Cultural&motivationaltool ✓ Sometimes(−) ✓ Sometimes

(−) ✗ ✗ ✓(+)Results Performanceenhancingeffect ✓ Sometimes

(−) ✓ Sometimes(−) ✓ Sometimes

(−) ✓Doublelooplearning ✓ ✗(−)Fixed

structure ✓ Sometimes(−) ✓ Sometimes

(−) ✓Yes✓,No✗,Advantage(+),Disadvantage(−)Source:Author,2015

MAcanovercomethechallengesoftheBSCandSBSCinrespecttodecidingupontrade-offs,objectives

andmeasures,byprioritisingsustainabilityissuesandbalancingsustainabilitystakeholderconcerns.

Furthermore,MAisaholisticmethodinvolvinginternalstakeholders,thus,overcomingthenarrow,

top-downorientationof theBSCthathindersstrategic learning(Nørreklit2003,Nilsen2007).By

guidingtheprioritisationofissues,MAcanexpandthereductiveuseoftheBSCandSBSC,prioritising

long-termsustainabilitygoalsovershort-termfinancialobjectives.Throughthis,theBSCandSBSC

canbetteroverseethestakeholders’involvement(Figgeetal.2002a),whichneedstobeaddressed

beforetheycanbecomecompletetoolsintegratingsustainabilitystrategies.Managersneedguidance

when engagingwith relevant stakeholders, and the inclusivenessprinciplemayassist them. It is

strikingthat,despitetheimportanceofcorrectlyselectingandprioritisingsustainabilityissuesbefore

buildingthescorecard,fewacademicsaddressthetopicwhenconstructinganSBSC(e.g.Figgeetal.

2002a).TheMAprinciplecanhelptogatherstakeholderinformationsoaslatertodefinestrategies

thatcreatesharedvaluebetweensocietyandtheorganisation.Finally,theresponsivenessprinciple

canassistorganisationsinimprovingthedisclosureofsustainabilitydecision-making,actionsand

performancetoenablestakeholderstoassessorganisationalpracticesandcontributetothegreater

transparencyandcredibilityofreports,whichisofparticularimportancetotheindustry(Fontetal.

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2012, Jones et al. 2016). SinceCSR is in continuous evolution, a scorecard shouldbe an evolving

methodbalancingsustainabilityissuesandunlockingaspectsofsuccess.

ThenextchaptermergestheSBSCasatoolforperformanceimprovementandtheAA1000principles

for increasing stakeholder accountability, with the objective to enable effective strategic

sustainabilitymanagement.TheincorporationoftheAA1000accountabilityprinciplesintotheBSC

can integrate sustainability management practices within the organisation, increase stakeholder

accountability by embedding wider stakeholder engagement (inclusiveness), capitalise on the

organisation’s current reporting efforts for determining strategy (materiality) and trace the

effectivenessofaddressing thesustainabilitystakeholderconcerns(responsiveness). Insummary,

this chapter hasmade a case for a strictly hierarchicalMBSC,with an extended designwith full

integrationandadd-onsustainabilityaspects.ThenextchapterexplainsthisMBSCinmoredetail.

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MaterialityBalanceScorecardChapter4respondstoobjectiveoneofthisthesis,bydevelopinganintegratedinstrumenttoaddress

stakeholder needs (AA1000SES) and internal management processes (SBSC) to improve the

sustainability performance management. The purpose of this chapter is therefore to develop a

framework, theMateriality BalancedScorecard (henceforthMBSC), for an organisation todefine,

operationalise and communicate strategic sustainability objectives that create value through the

organisation’soperations.TheMBSCbridgesresearchontheoperationalisationofstrategy(Porter

1985,KaplanandNorton1993,PorterandKramer2006)sustainabilitymanagement(Figgeetal.

2002a, Van der Woerd and van Den Brink 2004), sustainability reporting and stakeholder

accountability (SASB 2013, GRI 2013a, AccountAbility 2015). TheMBSC positions at its core the

valuesofinclusivity,materialityandresponsivenessascriticaltoensuringeffectivetransparencyand

accountability,essentialelementsforpursuinganintegrativeviewofcorporatesustainability.

ThischapterdetailsthestepstobuildtheMBSC(Figure15).Step1outlinestheSBSCcharacteristics

toaddresssustainabilityissuesmoreinclusively.Step2acknowledgeswheretheorganisationcreates

valueforitsmultiplestakeholders.Later,Step3incorporatestheMaterialityAssessment(henceforth

MA)asatooltoincreasestakeholderaccountability.Afterwards,thediscussionsectionconsidersthe

conceptualandimplementationchallengesoftheMBSCanditscontribution.Finally,thelastsection

summarisesandconcludes.

Figure15:StepsbuildingtheMaterialityBalanceScorecardSource:Author,2015.

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Step1.IntegratingsustainabilityintotheBalancedScorecard

Section 3.2.2 made a case for a strictly hierarchical MBSC, with an extended design with full

integration and add-on sustainability aspects. The aim of the MBSC is to achieve competitive

advantage, therefore, reinforcing the business case for sustainability by ensuring that the

organisation’sstrategyintegratesintotheMBSC(Figure15).Thosearecharacteristicsofastrictly

hierarchical BSC (were all goals contribute to financial outcomes) with a strong instrumental

perspective (Hansen and Schaltegger 2016). Researchers acknowledge that a general drawback

applyingtomanagementcontrolsystemsisthedifficultyofcapturingcomplexrelationshipsamong

measures(GrabnerandMoers2013).Nonetheless,iftheMBSCistobecomeastrategicmanagement

system rather than just being used to manage operations, the cause-and-effect chains among

perspectives(Figure16)needtobeeitherstatisticallyverifiableorsociallyconstructed.

Figure16:Step1–IntegratingsustainabilityintotheBSC

Source:Author,2015.

Moreover, the management of proactive sustainability strategies requires not only the financial

objectivestobeachievedbutthatthisisdonewithasocialandenvironmentalintent.Therefore,the

MBSC takes the ‘extended’ approach and integrates sustainability aspectswithin the Learning&

Growth, Process, Customer and Financial perspectives (Table 14) and adds a fifth perspective

exclusivelyforlong-termsustainabilityissues(theSystem-levelperspective).

Financial

Customer

InternalProcess

Learning&Growth

System-level

Inclusion

of

Non-market

aspects

(externalities)

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Table14:IssuesinrespecttoCustomer,InternalprocessandLearningandGrowthperspectivesoftheMBSC

Issues Authors

System-

level

perspectiv

e

Improvementofqualityoflife (Bieker2003)Socialjustice (Elkington1997)Environmentalquality (Elkington1997)Economicprosperity (Elkington1997)

Financialperspective

Cost reduction through eco-efficiencies /Eco-efficiencyratio

(Dias-Sardinha,Reijnders,andAntunes2002,Möller andSchaltegger2005,Huang,Pepper,andBowrey2014)

Return on sustainability related investment/R&D

(Huang, Pepper, and Bowrey 2014, Maltz, Shenhar, andReilly2003)

Revenuesfrom‘green’positionedproducts (EpsteinandWisner2001a)Costsavingsfromcompliance (Epstein and Wisner 2001a, Reefke and Trocchi 2013,

Huang,Pepper,andBowrey2014)Selection of Global Reporting Initiativeindicators

(Panayiotou,Aravossis,andMoschou2009,ChalmetaandPalomero2011,NikolaouandTsalis2013)

Custom

er

perspective

Marketshareofgreenproducts (VanderWoerdandvanDenBrink2004)Brandandlabelrecognition (VanderWoerdandvanDenBrink2004)Productdifferentiationthroughsustainability-relatedcharacteristics

(Figgeetal.2002b,a)

Responsiblecommunicationpolicy (Bieker2002)Community-relatedcustomerengagement (Hansen,Sextl,andReichwald2010,HansenandSpitzeck

2011)

Internalprocessperspective

Innovationsustainabilityprocess (Bieker2002,Maltz,Shenhar,andReilly2003)Co-responsibility of Effective solutions forsocialandenvironmentalproblemsand

(Bieker,2002)

Extensiontothevaluechain (Bieker2002)Energy,waterandmaterialefficiency (Figgeetal.2002b,a)Businessnetworkprocesses (O'Donnelletal.2006)Greenpurchasing (Zhu,Sarkis,andLai2007,Zuetal.2011,Zhu,Sarkis,and

Lai2013)Environmentalmanagement (VanderWoerdandvanDenBrink2004)Defineandincludesustainabilitycriteriainthesupplierselectionprocesses

(Gold,Seuring,andBeske2010,Gopalakrishnanetal.2012,BeskeandSeuring2014)

Monitorsuppliers (KlassenandVereecke2012)Integratedcarbonmanagement (Gopalakrishnanetal.2012)Internalperformancemeasurementsystems (Zhu,Sarkis,andLai2013)

Learningandgrowthperspective

Socialandenvironmentalresponsibilityintheday-to-dayoperations

(Bieker2002)

Gatheringstakeholderfeedbackandredefiningmission,visionandstrategy

(Bieker2002)

Ethical management systems, a code ofconduct, ethics commission, ethicalmanagement systems, and communicationprocessesfacilitatingsustainability

(Butler,Henderson,andRaiborn2011,Bieker2002)

Collective knowledge exchange with non-traditionalpartners

(Maltz,Shenhar,andReilly2003)

Suppliers’ capability investment to foster thelearningrequiredforinnovation

(Maltz,Shenhar,andReilly2003)

Greencapabilitiesandintellectualcapital (Claver-Cortésetal.2007)Labourpractices (Butler, Henderson, and Raiborn 2011, Bieker and

Waxenberger2002)Community-relatedemployeeengagement (Hansen,Sextl,andReichwald2010,HansenandSpitzeck

2011)Source:Author,2016.

The extended design makes it possible to run the business operations in conjunction with

sustainabilityissuesandtoaddresstheorganisation’sexternalities,whichareconsequencesofthe

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organisation’s economic activity on stakeholders (Buchanan and Stubblebine 1962) and which

require integration into strategicmanagement systems (Guenther, Endrikat, andGuenther2016).

Table 15 exemplifies negative and positive externalities that may arise with hotel operations.

Externalitiesinflictinternalcostsontheorganisationevenintheabsenceofregulationsorresource

taxes(PorterandKramer2011)andcansignificantlyinfluencetheorganisation’slong-termsuccess

(Figgeetal.2002a).AllocatingexternalitieswithintheMBSCmainstreamsthesustainabilityissues

withinthecoreoperations.

Table15:Examplesofnegativeandpositiveexternalitiesinthehotelindustry

NegativeExternalities PositiveexternalitiesProduction:• Highlyrelatedtotheprocurementchoices• Airpollutionfromtransportationofgoods• Environmental costs of air travel to a tourist

destination• Energyprovisionandgreenhousegasemissions• Depletionofthestockoffishduetooverfishing• Negative effects from industrial farm animal

production (e.g. excess use of antibiotics,contaminationofrivers,animalwelfareproblems)

• Noisepollution• Waterpollutionthatharmsplants,animalsandhumans• OthersConsumptionduringtheguestsstay• Consumptionoftheproductbyonetypeofclientmay

cause prices to rise and, therefore, make otherconsumers worse off, perhaps reducing theirconsumption.

• Deprivation of the enjoyment of common areas of ahotel or heritage site due to misbehaviour of otherconsumers

• Sleepdeprivationduetoaneighbourguestlisteningtoloudmusiclateatnight

• Shared costs of declining health caused by smokingand/oralcoholabuse

• Increased education for the employee throughtrainingcan leadto increasedproductivityor lowerunemploymentrate

• Employeefirstaidtrainingtoincreasejobsafetymaysavelivesoutsidetheorganisation.

• Anewhotelinadevelopingcountrymaydemonstrateup-to-date technologies and sustainability practicestolocalsuppliersandimprovetheirproductivity

• A hotel chain contributes, from its presence incompetitive clusters in rural areas to increasingmarket value of the properties, increasing pool ofspecialisedskillsandhumanresourcesandincreasingproductivity

• Reductionofcrimeratesinatouristdestinationwhenhotelsengagewithlocalsinthelocaldevelopmentofthearea.Anorganisationpolicythatencouragestheuse of electric vehicles charged by electricity fromrenewable sources to their employee and guestsreduces the greenhouse gas emissions, improvinglocalairqualityandleadingtobetterpublichealth

Source:Auhtor’sownfromLiebowitzandMargolis(1994),AlmeidaandKogut(1999),GrinolsandMustard(2001),ChungandKalnins(2001),Panisetal.(2004),IršováandHavránek(2013).

Furthermore,theSystem-levelperspectivetakesintoaccountthelong-termsustainabilityissuesand

outcome measures at the organisational environment (system) exclusively. Sustainability

performancemanagement systemsneed to account for long-termsustainability aspects and thus

need to incorporate the time dimension (Antolín-López, Delgado-Ceballos, and Montiel 2016).

Moreover, Hahn and Figge (2018) claim that an effective SBSC must go beyond organisational

performanceoutcomesandincludeTBLoutcomesatthesystemlevel,despitethechallengethisposes

fororganisations(HansenandSchaltegger2017).ThecontentoftheSystem-levelperspectivederives

fromthewidestakeholderengagementwhendevelopingtheMA, furtherexplained inStep3,and

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focuses on the organisation’s impact on the external environment (economic, social and

environmental).

Step2:Recognisingstakeholdervalue(InclusivenessandResponsiveness)

Step2explainswheretheMBSCcapturesthevalueforeachstakeholdergroup(Figure17).Scholars

take opposite approaches regarding how to guarantee stakeholder inclusiveness in the BSC by

implicitlyorexplicitlyacknowledgingstakeholders in theexistingornewperspectives,asseen in

Section 4.2. The researcher also acknowledges the BSC’s narrow approach to stakeholder

identification, but the responseproposeddiffers from thoseof previous scholars, since theMBSC

takesaninclusiveapproach,incorporatingthegoalsofstakeholdersspecificallyintheperspectives

wherethevalueoccurs.Thisisoperationalisedasfollows:whiletheFinancialperspectivecaptures

valuetoshareholdersandLearningandGrowthcapturesemployeevalue,otherstakeholders,such

as the localcommunity,donot link tooneparticularperspective.Localcommunityvaluemaybe

captured in the Process perspective, when the organisation manages externalities that would

otherwiseimposeacostontheneighbouringarea,intheLearning&Growthperspectivethrougha

partnership with NGOs to improve local capabilities, or in the Financial perspective when the

organisationinvestsinlocalinfrastructureandcommunitydevelopment.Thisway,theMBSCmakes

itpossibletotrackhowtheorganisationperceivestherelationshipwiththestakeholders,andhowit

reportsbacktothemonthedecisions,actionsandperformanceonthematerialissues.

Figure17:Step2–StakeholdervalueintheBSCSource:Author,2016.

Financial(Firminfrastructure)(e.g.Shareholdervalue)

Customer(Marketing&Sales,After-sales)(e.g.Customervalue,Communityvalue)

InternalProcess(Procurement,Inboundlogistics,Operations,Outboundlogistics)(e.g.Suppliersvalue,Communityvalue,Governmentvalue)

Learning&Growth(Humanresources,Technologydevelopment)

(e.g.Employeevalue,Communityvalue,Governmentvalue)

System-level(e.g.Environmentvalue,Governmentvalue,Communityvalue)

Inclusion ofStakeholdersvalue

110

Because organisations face a range of stakeholders with potentially conflicting interests, the

organisationmustclarifybeforeconductingthestakeholderengagementandtheMA,whoarethe

relevantstakeholders,andthespecificgoalandoutcomedesiredfromengagingeachoftheminthe

organisationalactivities–anissueaddressedindetailinChapter7whenprovidingguidanceonthe

inclusiveness,materialityandresponsivenessprinciplesunderpinningtheMBSC.

Step 3: Determining environmental and social exposure of strategicbusinessunits(Materialityassessment)

ThisstepproposesMaterialityAssessmenttodeterminewhatsustainabilityissuesmatter,soaslater

tointegratetheminthedifferentperspectives(Figure18).Thestartingpointistheselectionofan

MAguidelineaccording to theorganisation’sculture,since theMAresultswilldifferaccording to

whichofthemultiplereportingguidelinesarechosen(e.g.GRIG4,IIRC).Theorganisationneedsto

selecttheMAguidelinesthatbestsuittheirstakeholderculture,andintegratetheresultsintothe

organisation’sperformancemanagementsystem.

Figure18:Step3–MaterialityassessmentintheBSCSource:Author,2016.

Later,themanagementhastoidentifytheenvironmentalandsocialexposureofthebusinessunits

and their relevance. Through MA, managers and stakeholders co-identify current and potential

sustainability risks and challenges and co-assess their significance to the organisation and

stakeholdersthroughawiderprocessofengagement.Similartoenvironmentalmanagementsystems

that expect employee contributions (Zutshi and Sohal 2004), MA enables managers to listen to

employees’ sustainability suggestions, thereby facilitating the collective reflection needed for the

sustainabledevelopmentofanorganisation.

System-levelHowistheorganisationcontributingtosystemicsustainabletransformations?

Whatistheimpactandoutcomesfromtheorganisation’sactionsinitsenvironment?Howistheorganisationcontributingtosharedlong-termSDGs?

Financial

Customer

InternalProcess

Learning&Growth

Materiality

Themes

Indicators

Indicators

Indicators

Indicators

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Then,theMBSCplacesatthetopthe‘add-on’perspectivereferredtohereastheSystem-level.The

System levelperspectivemanagesorganisationcontributionsto thelong-termsustainabilitygoals

recognised from the organisation’s strategy, assuming the organisation has undergone the MA

processforaccommodatingthediversestakeholderdemandsthroughtheSE.Whileitisproductive

for organisations to integrate sustainability concerns in their core strategy and operations (e.g.

Orlitzky,Schmidt,andRynes2003),shareholdersareinparallelpushingtopmanagementtodevelop

cost-effectivesustainabilitypolicies(Calabreseetal.2012).TheSystem-levelperspectiveprotectsthe

long-term stakeholder orientation and assists organisations in overcoming the reductive use of

previousSBSCs(Bieker2002,Figgeetal.2002a).Thisperspectivealsomonitorsthesustainability

purposefromorganisationspursuingproactivesustainabilitystrategies.

Then, all the objectives within the other MBSC perspectives link to improve the system-level

objective/s. Input and output organisational performance measures are managed within the

traditionalperspectivesbutthenaffecttheoutcomeofsystem-levelmeasuresforsharedvalueinthe

topperspective(System-levelperspective).Forexample,"investmentintrainingoflocalpopulation"

wouldbeplacedintheLearningandGrowthperspective,and"absoluteGHGemissionreductions"at

theProcessperspective.Thesetwoindicatorswouldthentranslate,respectively,attheSystem-level

perspectiveinto"%ofhouseholdswithincreasedincomeatadestination"(impactlevel)andthe"%

ofGHGemissionsfromthehotelindustry"(fromabenchmarkoftheindustry).Themaindifferences

between the MBSC and the previous SBSC is the process by which the sustainability issues are

selected,whichderivesfromawiderstakeholderengagementprocessandtheinclusionofsystem-

leveloutcomemeasurestotrackprogressagainstlong-termsustainabilitygoalsandorganisational

impacttotheexternalenvironment.

TheMAinformsthelong-termobjectives,theresourceallocationandtheindicatorsforassessingthe

organisation performance, monitoring strategy implementation and subsequent sustainability

reporting. Integrating MA results into the MBSC reinforces the role of the SBSC for strategic

management, moving the organisation towards more sustainable performance. A clearer

understandingofwhatismaterialtostakeholderscontributestotheprocessofadjustingCSRtowards

integratingasustainabilitystrategybymanagingandreportingsustainabilityissuesrespondingto

stakeholderexpectations.

112

Step4:TheMaterialityBalancedScorecard

TheMBSCisdesignedtosuitabroadspectrumoforganisationsprovidingabasicstructurethrough

itsinterconnectedperspectivesthat,whennecessary,canbeadaptedtofitspecificneedsoraccording

totheorganisation’svaluesystemandsustainabilitystrategy.Thissectiondiscussestheprioritisation

ofissuesandthevaluecreationprocessacrosstheMBSCperspectivesbeforeexplainingthecontent

ofeachperspective.

After the identification of the environmental and social exposure of the business units and their

relevancethroughtheMA,thekeymaterialissuesaresetasthemesonthescorecardandarecascaded

downfromtheSystem-leveltotheLearningandGrowthperspective.Thatis,prioritisationoftargets

andindicatorsoccurswithatop-downapproachintheMBSCbyanalysingeachrelevantissueagainst

thefiveMBSCperspectives(Figure19).Fromthelong-termsustainabilityobjectives(attheSystem-

levelperspectivee.g. fightclimatechange),theorganisationdecidestherequired financial targets

(Financialperspectivee.g.costreduction%througheco-efficiencies,savingsfromlawcompliance

and increased revenues from ‘green’ positionedproducts). Then it establishes how the customer

shouldseetheorganisation(Customerperspectivee.g. increasedbrandrecognitionassustainable

and ‘green’positionedproducts).Later, theorganisation identifiesthe internalprocessesneeding

improvementordesign(Internalperspectivee.g.eco-efficiencyandsupplier’scapabilityinvestment

tofosterinnovationinbusinessnetworkprocesses).Then,finally,theorganisationdeterminesthe

requiredknow-howtoachievethelong-termsustainabilityobjectiveandsustainitintime(Learning

and growth perspective). Value creation, meanwhile, occurs in the opposite direction, from the

bottomup. It isthroughthe improvementson theLearningandgrowthperspective, that Internal

processobjectivescanbeachievedandleadtoCustomervalue,whichinturnbringsFinancialvalue

andultimatelyprotectstheSystem-levelanditslong-termsustainabilityobjectives.

Figure19:TheMBSCSource:Author,2016.

Financial

Customer

InternalProcess

Learning&Growth

System-level

Prioritization

Value

creation

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The elements from the support and primary activities of the Value Chain (Porter 2001), and the

extendedvaluechain includingsocialimpacts (PorterandKramer2006),contribute totheMBSC.

Thisiscontingenttotheorganisation’sstrategyandindustry(Figure20).Thefollowingparagraphs

exemplifythecontentoftheMBSCperspectiveandthecontributionsoftheorganisationalactivities.

Figure20:SharedvaluechainSource:Author’sadaptationfromPorter(2001)andPorterandKramer(2006),2015.The Learning and Growth perspective recognises the role of stakeholders in the organisation’s

successandthelearningneededtogeneratevalue.Organisationallearningisessentialtoovercome

oneofthemainchallengesforstrategyexecution;managingchange(BeerandEisenstat2000).This

114

is related to the adaptive capacityof theorganisation (Zollo, Cennamo, andNeumann2013) and

whether its leadership is capable of deploying changes in the organisational culture to integrate

sustainabilityintothebusiness(Pereira-Molineretal.2012).TheactivitiesofHumanResourcesand

technologydevelopmentcontributetothemanagementofcurrentandfuturecapabilitiesrequired

implementing sustainability strategies. The Learning and Growth perspective captures aspects

involved increatingvalue throughdevelopingsupportiveclustersand innovatingbyreconceiving

products and markets and re-imagining the value chain and productivity. Once the corporate

governanceandthehumancapitalarealignedwiththesustainabilityrequirements,theorganisation

cancreatevaluethroughitsinternaloperations.

The InternalProcessperspective,meanwhile,managescompetenciesandprocesseswithina total

qualitymanagementapproach.ItinvolvesProcurement,InboundLogistics,OperationsandOutbound

Logistics and, thereby, can mean the development of shared resources and capability. Internal

Processcollectsaspectsofimprovedsupply-chainmanagement,internalprocesses,assetutilisation

andresourcecapacitymanagement(KaplanandNorton2001b)toachieveoperationalexcellence.As

socialandenvironmentalrisksandopportunitiesarisealongthesupplychain,sustainabilitysupply

chainmanagementandgreeninnovationpracticesbecomecritical(SeuringandMüller2008,Hsiao

andChuang2016).TheInternalperspectivethereforecapturestheessentialaspectsinvolvedinthe

creationofvaluebyre-imaginingthevaluechainandproductivity.

TheCustomerperspectivecapturestheprocessofexpandingandimprovingtherelationshipwith

existingcustomers,andtheinnovationneededtodevelopnewproductsandservicespenetratingnew

marketsandcustomersegments.ThisperspectiveincludesaspectsofMarketingandSalesandAfter-

salesservices.TheMBSCtakesabroaderunderstandingofcustomersbyextendingtootherexternal

stakeholders and capturing the organisation’s improved relationship with them. Through the

managementof the externalities, theorganisationbecomes a good corporate citizen (Kaplan and

Norton2001b).Thisperspectivemay includemanaging society’s expectations, relationswith the

local community (VanderWoerd and vanDen Brink 2004), partnershipswith communities, co-

creating with consumers and legitimate behaviour towards all stakeholders (Bieker 2002). The

perspective captures both the organisation’s influence on responsible behaviour downstream

(customers)anditsresponsetobroadersocialexpectations.Accordingly,theCustomerperspective

captures aspects of creating value through reconceiving products and markets and developing

supportiveclusters.

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TheFinancialperspectiverepresentsthetraditionalapproachtoorganisationalsuccess:long-term

financialreturnoninvestment.Itincludesprofitability,growthandshareholdervalue(Kaplanand

Norton 1996b). The Firm infrastructure contributes to the Financial perspective with e.g. Cost

reductionthrougheco-efficiencies,Returnoninvestmentonsustainabilityissues,localinfrastructure

and institutions, or Risks related to social and environmental impacts. Sustainability value goes

beyond simply complyingwith regulations, laws, standards and agreements. These are therefore

collectedintheMBSConlywhentheyarenotachievedandwhenthislackofachievementhasan

impactbothfinancially(Financialperspective)andtothebrandreputation(Customerperspective).

TheFinancialperspectivecapturestheeconomicaspectsofshareholdervaluewhilevaluetoother

stakeholdersoccursintheotherperspectives.

The System-levelperspective contains theoverarchingobjective set by theMA results.Onemain

differencetopreviousSBSCwithanadd-onperspectiveisthattheprocessbywhichthegoalsare

selected is the result of a wider stakeholder involvement. Another difference is the inclusion of

measuresatthesystemoutcomeleveltomanageprogressalongsideminimisingnegativeimpactsto

theorganisation’sexternalenvironment,includingtheeconomy(e.g.povertyalleviation),society(e.g.

gender equality) and the environment (e.g. climate change), as well as maximising positive

contributions. These outcome measures are closely linked to measuring the organisation’s

contributiontotheachievementofthe17SustainableDevelopmentGoals(henceforthSDGs)(United

Nations 2015, 2016). To the author’s knowledge, there is currently no SBSCwith a system level

perspective,despiteseveralscholarshaving identified theneed toachievesystemicsustainability

transformations(HahnandFigge2018).Thisadd-onperspectivealsodifferentiatestheMBSCfrom

previousresearchlinkingsustainabilityreportingandtheBSC(deVilliers,Rouse,andKerr2016).

TheSystem-levelperspectiveassistsorganisationstoovercomethereductiveuseofSBSCs(Bieker

2002,Figgeetal.2002a)becausecause-and-effectlinksforcefullyconnecttheinternalperspective

with value through the financial perspective, which results in the MBSC only considering CSR

activitiescloselyrelatedtotheorganisation’soperations.TheSystem-levelperspectivesafeguards

thelong-termSDGsbybeingplacedatthetopofthescorecard,andsupportsintegratedthinkingand

decision-makinginawaythatfocusesonthecreationofvalueovertheshort(Financial)andlong

term(System-level).

In summary, Figure 21 furthermodels the cause-and-effect links in a possible strategy aimed at

creatingenvironmentalvaluewithintheMBSCwithanexampleofhowsustainabilitycanaffectthe

differentperspectives,andhowthedifferentsustainabilityaspectsrelatetoeachother,creatingvalue

ascendingintheMBSCperspectives.

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Startingfromthebottomright-handside,employeetraininginsustainability(Learning&Growth)

contributes to developing eco-efficiency with better resource allocation and consumption and

sustainabledesign,whichinturndecreasesnegativeenvironmentalexternalitiessuchaswaterand

airpollution(InternalProcess).Theorganisationappealstogreenmarketsandenhancescustomer

satisfaction, increases brandperceptions and, therefore, establishes better relationshipswith the

community (Customer). In turn, this leads to a lower ratioof environmental regulatory finesand

increasedrevenue fromnewmarkets (Financial).Throughtheeconomicactivity, theorganisation

createsvalueforabroadersetofstakeholders,contributingtomitigatingclimatechange,poverty

reductionandgenderequality(System-level).

Taking a social example, developing supportive clusters fosters productivity, innovation and

competitiveness(Porteretal.2012).Ahotelenteringadevelopingdestinationmaybenefitfromlong-

term partnerships with non-profit organisations with complementary capabilities (Learning &

Growth). Benefits include training locals, identifying authentic tours and handcraft products,

providingreliablesuppliersormonitoringanimalsinanearbylagoon.Itincreasesthelikelihoodof

employees becoming more productive as they understand the tourism sector better, as well as

engaging more constructively with customers (Internal Process). Local employees enhance the

customerexperiencebybettercommunicatingtheirpassiontowardsthedestinationtotheguests

(Customer). This translates into increased financial benefits from more horizontal selling and

reducedcostsarisingfromnotunderstandingthecontextofthenewdestinationandpossiblefines

(Financial).Finally,thelocalemployeeshaveanincreasedsenseofprideintheircultureandself-

esteem,andanincreasedandstableincomeimprovesthewell-beingoftheirfamilies(e.g.poverty

alleviation and gender equality) (System-level). This may be a shared objective among the

organisation,thepartnerNGOsandthelocalauthoritiese.g.itlowerssubsidyrelatedcosts.

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Figure21:ThegenericMBSCStrategyMapSource:Author,2017.

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DiscussionoftheadvantagesanddisadvantagesoftheMBSC

TheMBSCaddressestheneedforintegrationbetweenperformancemanagement,measurementand

reporting (Maas, Schaltegger, andCrutzen2016,Morioka anddeCarvalho2016),and integrating

stakeholders(e.g.WheelerandSillanpa1998,CostaandMenichini2013)andsustainabilityissues

(Battaglia et al. 2016) into thedefinitionof the strategy. Integratedapproaches for sustainability

performancemeasurement,managementandreportingtakeeitheratransparencyoraperformance

improvementperspective(Maas,Schaltegger,andCrutzen2016).Inthetransparencyperspective,

societalexpectations,reportingrequirementsandstandardsinfluencetheselectionofindicatorsfor

assessmentandreporting.Alternatively,intheperformanceimprovementperspective,thebusiness

strategy,andtheanalysisofwhatissuesarerelevantforaneffectiveimplementationofthestrategy,

shapetheperformancemanagementandreportingsystems(Maas,Schaltegger,andCrutzen2016).

For effective improvementof sustainabilityperformance, however, scholarshave called formore

comprehensiveandinterlinkedapproachesthatsupporttheexchangebetweeninternalandexternal

stakeholders (Maas, Schaltegger, and Crutzen 2016) in a way which enacts sustainability

improvementsinaniterativeprocess(BakerandSchaltegger2015).

The MBSC is proposed as an integrated framework, taking a “twin track” approach with a

transparency perspective (AA1000 Accountability principles: inclusiveness, materiality and

responsiveness), and a performance improvement perspective (SBSC). First, a transparency

perspectiveisusedtoselectkeysustainabilitychallengesaccordingtostakeholderexpectations.The

MBSC delivers greater transparency and accountability, derived from the participation of more

stakeholders, from theirmore effectiveparticipation, andby taking amaterialityapproach to the

definitionofthesustainabilitystrategy,aswellasitsimplementation,monitoringandvalidationfor

reporting.Then,aperformanceimprovementperspectiveisusedtoselectadequateindicatorsand

measurements according to internal requirements for effective decision making based on the

businessstrategyanditsimplementation(BurrittandSchaltegger2010).Thechoiceofindicatorsand

measurementmethodsneedstorespondtointernalrequirementsbutmustbeeasilyaggregatedand

translated into indicators legitimised by international standards (see Seele 2016). The MBSC

thereforeaimstosupportbettermanagementdecisionswhileadvancingthecorporatesustainability

strategythroughaligningwiththeexternalstakeholderexpectations.

Another important issue is theorganisationalcontext, internalandexternal,which influences the

integrationofsustainabilityintothebusiness(MoriokaanddeCarvalho2016).Theinternalcontexts

such as themainstream strategy, the corporate governance, the structure and the organisational

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cultureandvalues,influencethestakeholderidentificationandengagement,materialityresultsand

responsiveness.Similarly,theexternalorganisationalcontext,rangingfromthelegislation,industry

specificfactorsandsocietyandenvironmentalpressures,influencethemanagers’approachtowards

sustainabilitymeasurement,managementandreporting.Theseandotherfactorsarediscussedinthe

contextofthehotelindustryinrelationtotheireffectonthelikelyimplementationoftheMBSC(see

Chapters6and7).

TheMBSCdoes,however,sufferfromsomesimilardrawbacksastheBSCandSBSCs,aswellassome

additionalchallengesofitsown.Forexample,theMBSCissubjecttothesameconceptualchallenges

as theBSCandSBSC in respect to thedifficultyof balancing conflicting interests for stakeholder

consensusandbuildingcausalrelationshipsbetweenindicatorsandperspectives.Also,thedifficulty

ofmeasuringsocialandenvironmentalissuesandchoosingappropriateindicatorsaffectstheMBSC.

Inthisrespect,anewchallengeisthatofmeasuringsystem-leveloutcomeswithindicatorslinkedto

the SDGs, sincemost organisations use only organisational-level performance indicators but not

system-level outcomes (Hansen and Schaltegger 2017). Other specific drawbacks include its

requirement for high internal awareness and top management commitment to sustainability,

especiallyintermsofbeingwillingtoadvancefromlesstomoreproactivesustainabilitystrategies.

Also, facilitating stakeholder contribution to decisionmaking requiresmanagement to negotiate

conflicting objectives and allow stakeholders the opportunity (or risk) of influencing their

organisation’spriorities.Acertaincultureandconfidenceisrequiredtoallowsuchengagement.In

addition, successfulmanagement of an integrated sustainability strategywith theMBSC requires

coordinationamongtheorganisation’sdepartmentsandnon-traditionalpartners.Thisconstitutesa

drawbacksinceeffectivecommunicationbetweenstakeholdershasbeenshowntoberare(Ingram

and Desombre 1999, Shoemaker and Lewis 1999, Marks, Richards, and Chillas 2012). When

successful, however, integrated thinking advances sustainability strategies and supports value

creation(Craneetal.2014,AndersonandVarney2015,Eccles,Krzus,andRibot2015a,Thomson

2015).WithintheMBSC,nosingleexpertisresponsibleforeachperspective,whichovercomesthe

riskofdepartmentalspecialistsjustfocusingontheirownperformancearea(e.g.Figgeetal.2002a,

b,VanderWoerdandvanDenBrink2004).

Furthermore, the MBSC also presents challenges derived from the lack of agreement as to the

definitionandmethodologyofMA,whichchallengesmanagersintheirabilitytodifferentiatematerial

issues and to balance stakeholder interests (Inclusiveness). First, the differentdefinitions render

materiality a rather vague idea (Jones, Comfort, and Hillier 2016b) with materiality judgments

varyingbetweenorganisations.Second,sustainabilityreportingguidelinesdonotaddressthelink

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between sustainability issues, businessstrategyandpraxis (Eccles etal. 2012, Lozano2013)and

challengemanagersonhowtoidentifyandprioritisesustainabilityissuesaccordingtostakeholder

needs(Hsu,Lee,andChao2013).Third,managers inability todifferentiatebetweenmaterialand

immaterial issues results in improving performance on immaterial issues (Grewal, Serafeim, and

Yoon 2016) even among organisations with advanced sustainability management and reporting

(Miller and Serafeim 2015). Finally, organisations continue to face challenges in balancing

stakeholder interests, when reconciling the relationship between management, investors and

stakeholders(Edgley2014,Jones,Comfort,andHillier2016b).

TheincorporationoftheAA1000accountabilityprinciplesintotheBSCi)integratessustainability

managementpracticeswithintheorganisation,ii)increasesstakeholderaccountabilityduetowider

stakeholder engagement (inclusiveness), iii) capitalises on the organisation’s current reporting

efforts for determining strategy (materiality) and iv) traces the effectiveness of addressing the

sustainabilitystakeholderconcerns(responsiveness).

Integratingthesustainabilityreportingpracticeswithaperformancemanagementsystemensures

coherencebetweeninternalpractices,actionsandpublishedreports.Inaddition,theMBSCoffersan

alternative to determining what matters in sustainability by considering wider stakeholder

engagement(inclusiveness),andthroughthat,itincreasesaccountability(MoratisandBrandt2017).

Furthermore, the MBSC takes a holistic approach to defining, implementing and reporting

sustainabilitystrategy,optimisingresourcesandcapabilitiesandgainingsynergy(Calabrese,Costa,

andRosati2015,deVilliers,Rouse,andKerr2016).TheMBSCfostersanon-goingdialoguebetween

organisationsandstakeholders,exchangingsustainabilityconcernsthroughtheMA,whichgenerates

aproactiveapproachthatfavourspreventionandinnovationmeasuresoverthecorrectionoffailures.

Finally, integrating theMA results into theBSCmakes itpossible tomonitorandaccount for the

efficiencyandeffectivenessofaddressingstakeholderconcerns.

Aseriousproblemwithcurrentsustainabilitymanagementisthelackofintegrationbetweeninternal

decisionmakingandstakeholders’perspectives,whichmaytranslateintogreenwashingstrategiesin

reportingsustainability(e.g.,MoratisandBrandt2017)andsubsequentlossofstakeholders’trust

andaccountability(Calabrese,Costa,andRosati2015).TheMBSCmakesitpossibletoidentifyand

evaluate,throughcause-and-effectslinks,whetherandhowanorganisationaddressesstakeholder

sustainability concerns (responsiveness) and how it captures the benefits of these strategic

sustainabilitycommitmentsinfinancialterms.Furthermore,byintegratingtheMA,theMBSCcanbe

ausefultoolbothforassessingex-postsustainabilityinitiativesandfordevelopingfuturestrategies

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by an annual classification of internal and external stakeholder feedback. The incorporation of

principlestoguidecorporatesocialperformancemanagementandmeasurementisnotnew(Wood

1991). The MBSC introduces the inclusiveness, materiality and responsiveness principles to

formulate, manage and report a strategy that responds to both the business model and the

sustainabilitychallenges.

Conclusions

Effectivesustainabilitystrategydefinition,management,measurementandreportingrequireagood

interplaybetweendifferenttoolsandactorswithinandoutsidetheorganisationforthecollection,

analysisandcommunicationofrelevantdata(Maas,Crutzen,andSchaltegger2014).TheMBSCbrings

together ideason theoperationalisationofstrategy (KaplanandNorton1993,PorterandKramer

2006) sustainabilitymanagement (Figge et al. 2002a, Van derWoerd and van Den Brink 2004),

sustainability reporting(MurninghanandGrant2013, SASB2013,GRI2013a)andaccountability

(AccountAbility2015).ThischaptermergestheSBSCasatoolforperformanceimprovementandthe

AA1000 principles for increasing accountability, enabling effective strategic sustainability

management.Thechapterexemplifieshowtheintegrationofsustainabilityreportingpracticeswithin

the organisation performance management framework can occur, and the likely benefits to be

derivedfromaholisticapproachtodefining,implementingandreportingsustainabilitystrategy.The

MBSC is basedon strategic objectives identifiedby taking into account stakeholder expectations.

Accordingly,itisaframeworkforchangemanagementforwhich;i)stakeholderexpectationsneedto

steerperformanceimprovements,ii)sustainabilityperformancedataneedstobeusedforinternal

developmentandreporting,andiii)transparencymustbeadvancedtolegitimisetheorganisation’s

actionsthroughthewiderstakeholderengagement.

Thischapter’scontributionhasbothacademicandpracticalimplications.Ontheacademicside,tothe

author’sknowledge, theliteraturedoesnotprovidemethods for thesimultaneousandsystematic

integrationof the sustainability reporting efforts into theorganisationperformancemanagement

system. Moreover, the existing SBSCs do not include a system-level perspective managing the

organisation’s contribution to systemic sustainability transformations, nordo they derive from a

wideSEprocessthroughtheMA.Onthepracticalside,theresearcherhasdevelopedaframeworkto

integrate the concernsof key stakeholders into theBSC,whichmakes it possible tomonitor and

accountfortheefficiencyandeffectivenessofaddressingstakeholderconcerns.

ThischapterhasmadeacasefortheMBSCasaconceptualtooltostimulateamuch-neededsystemic,

structuredandintegratedapproachtosustainablevaluecreationthatcani)supporttheadaptation

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ofanorganisation’smanagementsystemtostakeholderexpectationsacrossthecriticalprocessesin

theorganisation,ii)assistinpinpointingareasrequiringmanagerialattentionandactiontoimprove

sustainabilityperformance;iii)raisethequalityofsustainabilityreportingandbringgreaterlevelsof

transparency;iv)andmanagetheneedsforsustainabilitystrategy,practices,anddisclosure.

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MethodologyChapter5outlines the researchdesign, as illustrated inFigure22.The first sectiondiscusses the

research paradigm of pragmatism, and the ontological, epistemological and axiological choices

deriving fromthis.Thesecondsectionsetsouthowtheresearchapproach isbothdeductiveand

inductive.Then,therationaleforaqualitativemulti-methodandcross-sectionalresearchstrategyis

outlined,includingthesample,andthedatacollectionmethodsused.Thesearei)contentanalysisto

assesstheexternalcommunicationofsustainability-relatedinternalprocessesfromhotelgroups,ii)

qualitative questionnaires to gather detailed factual data on the same processes, and iii) semi-

structured interviewsto investigate insights fromcorporatesustainabilitymanagersandexternal

experts on those processes. The combination of these three methods can provide a better

understandingoftheresearchproblemthantheuseofanyonemethodalone.Fourth,dataanalysis

is explained to be theoretical thematic analysis. Section five presents the evaluation criteria as

focusingontrustworthiness,whilesectionsixconcludesthechapteranddescribesthelimitationsof

thisresearch.

Figure22:ResearchdesignSource:Author,2018.

Researchparadigm,ontology,epistemologyandaxiology

Thissectionexplainstheresearchparadigmandhowit isconsistentwiththeresearcher’sviewof

reality(ontology),howshethinksthatrealityisknown(epistemology)andhowrealityistobevalued

(axiology).Theparadigmisconcernedwiththewayinwhichthingsareviewedintheworld,“the

individual’splaceinitandtherangeofpossiblerelationshipstothatworldanditsparts”(Gubaand

Lincoln1994,107).Thisresearchtakesapragmaticapproachtoanswertotheresearchaim,namely

toarriveatacriticalunderstandingofhowlargehotelgroupscandefinestrategicsustainabilityobjectives

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tocreatesharedvalue.Pragmatismarguesthatthemostimportantdeterminantofwhichpositionto

adopt inepistemology,ontologyoraxiology is theresearchquestion,sincechoosingbetweenone

positionoranotherinapurelytheoreticalway,independentoftheresearchquestion,issomewhat

unrealisticinpractice(Creswell2013).Pragmatismavoidsfoundationalboundariesandfavoursthe

use of different worldviews, divergent assumptions and multiple data collection and analysis

methods to provide the best understanding of the research problem (Creswell 2013). American

philosophers Charles Pierce (1839–1914), William James (1842–1910) and John Dewey (1859–

1952) founded pragmatism in an attempt to help American society face the problems it was

confrontingatthetime(Gray2014).Initsstraightforwardsense,pragmatismisapracticalapproach

toaproblem.

Pragmatismhasbeenusedtogaininsightsintomanagementandorganisationalresearch(Saunders,

Lewis,andThornhill2015).Forinstance,sustainabilityaccounting,discussedinthethesisthrough

socialandenvironmentalreportingandstakeholderengagement,hasatitsheartpragmatism,since

“socialandenvironmentalproblemsareinfactpragmaticproblem[s]”(BurrittandSchaltegger2010,

832).Theresearcherhasapragmaticviewofsustainability,wherebythecontinuousandincremental

pursuitofpracticalproblemsisthepathtosustainability(BakerandSchaltegger2015).Pragmatism

can promote positive forms of change, here understood as CSR-processes, that contribute to the

developmentofmoresociallyandenvironmentallyresponsiblecorporations.Researchbecomesa

wayofworkingoutwhatisusefulformakingthosechanges.Thissearchforthe‘possibility’ofchange

isknownasmelioration(Koopman2006).AsBakerandSchaltegger(2015,24)explain,“pragmatism

may be the best chance to encourage change and address the ever-growing global social and

environmentalproblemsthatweandfuturegenerationswillface.”

Thethesiscombinesdescriptive,normativeandcriticalapproachestocritiquecurrentsustainability

practices in the hotel industry. Chapter 4 takes a normative approach founded on exploring the

melioratingqualityofCSRbyproposingtheMBSC.Chapter6takesadescriptiveapproachexplaining

thecurrentCSRmanagementandreportingidentifyingmainstreamdiscourse.Chapter7discusses

thevalueoftheMBSCinthecontextof‘whatitis,'‘whatitoughttobe,'andtherestrictiveconditions

preventing change towards shared value strategies. The researcher joins scholars advocating for

positiveoutcomesresulting froma fundamental rethinkingofCSRpracticesbasedonstakeholder

engagementtoconfrontcomplexcontextualproblems(McMillan2007,ZornandCollins2007,Taneja,

Taneja,andGupta2011,KuhnandDeetz2008).

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Afterhavingintroducedpragmatismastheresearchparadigm,thissectionnowexplainsthegrounds

oftheresearcher’sknowledge(ontology),thelimitationsofthatknowledge(epistemology),andthe

validity and scope of the knowledge obtained (axiology). Ontology studies the philosophical

assumptionsaboutthenatureofreality(Easterby-Smith,Thorpe,andJackson2012).Forpragmatists,

anideologyistrueonlyifitworksinpromotingequity,freedomandjusticeandgeneratespractical

consequencesforsociety(Gray2014).Pragmatists,therefore,focusnotonwhetherapropositionfits

aparticular ontology, butwhether it suitsapurpose and is capableof creatingaction (Koopman

2006).Subjectivismisthechosenontology,whichholdsthatsocialphenomenaarecreatedfromthe

perceptionsandconsequentactionsofthosesocialactorsconcernedwiththeirexistence(Saunders

etal.2009).Forsubjectivism,meaningisimposedbythesubjectontheobjectandemergesfromthe

exchangebetweenthesubjectandtheoutsideworld.

Assumptionsabout‘whatis’thenatureandstructureofrealityaffectepistemology,whichdealswith

theorigin,natureandlimitsofhumanknowledge,thereforehowandwhatitispossibletoknow(Chia

2002,McGregorandMurnane2010).Itprovidesaphilosophicalbackgroundfordecidingwhatkinds

of knowledge are legitimate and adequate. Every researcher brings some epistemological

assumptionsintotheresearchprocess,andtheseinfluencetheunderstandingandinterpretationof

information (Klenke 2008). Given the pragmatic understanding of an ever-changing reality, the

questionofknowledgebecomessomewhatproblematic.Thetruthistentativebecauseitisonlyheld

aslongasitprovesusefulandrelativetotheendorgoaltowhichitisthoughttobeuseful(Bakerand

Schaltegger2015).Pragmatismshapestheconcernwithaninstrumentalviewofknowledge,inother

wordsknowledgethatisactivelyusedtomakeapurposefuldifferenceinpractice(Goldkuhl2012).

Itisarguedthenthatconstructiveknowledgecaninfluenceandimprovepractice,inthiscase,that

findingsfromthisresearchcanimproveCSRprocesses.

Axiologythenaddresseswhatisvaluableknowledgeintheworldandthemeansvaluedtoobtainthat

knowledge.Axiologyconsiderswhatcountsasfundamentalvaluesandwhatconsciousnessstands

forethics,normativejudgmentsandmoralchoices(McGregorandMurnane2010).Fromapragmatist

perspective, multiple forms of knowledge are valuable (Goldkuhl 2012). For example, this thesis

recognisesnormativeknowledgeexhibitingvaluesintheMBSCinChapter4;descriptiveandcritical

knowledge in respect to the explorationof sustainabilitypractices inChapter6; explanatory and

prospective knowledge when identifying barriers and suggesting possibilities in Chapter 7, and

prescriptiveknowledgewhengivingguidelines foradvancingCSRtowardsCSV inChapter8.Asa

pragmatist,theresearcheraimstocreateusefulknowledgethatcaninfluenceandimprovepractice

withinparticipantsandbeyondthroughfacilitatingknowledgetransfer.

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Thisimpliesthatthemeanstoknowinaworldofconstantchangearetotestthingsandseeifthey

work.Inthisrespect,theresearcheradherestomethodologicalpragmatism,whichisconcernedwith

how knowledge is created.Methodological pragmatism offers an epistemological justification for

combiningmethodsinsuchawaythattheycanbeusedefficientlyandeffectivelyinastudytoprovide

knowledge through tentative answers to the research questions (Saunders, Lewis, and Thornhill

2015).Thefollowingsectionshowshowthishasinfluencedtheuseofmultiplemethodstorespond

totheresearchpurpose.

Beforemovingtothatresearchstrategy,however, theresearchapproachisbrieflyexplained.The

pragmaticparadigmchosenprovidesthegroundsforcombiningdeductiveandinductivereasoning

intheresearchapproach,asthisthesisiscombinestheory-testingandtheory-building.Toanalyse

andproposeimprovementstotheCSR-processinhotelgroupstheresearcherutilisesaninductive

approach with deductive thinking as a means to tackle the real-world problems related to this

phenomenonofinterest.DeductivereasoningisappliedinthefirstparttobuildtheMBSCfromthe

literature(Chapter4),and intheanalysisof the firstandseconddatacollections,while inductive

reasoningisappliedinthethirddatacollectiontotestthevalueoftheMBSC(Chapters6and7).

Researchstrategy:qualitativemulti-methods

Becauseofherpragmaticapproach,theresearcherundertakesaninterdisciplinaryqualitativemulti-

methodmulti-phasedesignwithexploratorytriangulation,sincethisprovidesbetteropportunities

foransweringtheresearchquestionsandallowsanevaluationoftheextenttowhichtheresearch

findingscanbetrustedandinferencesmadefromthem.First,itisinterdisciplinarybecauseCSRis

groundedinseveralfields(Taneja,Taneja,andGupta2011),suchasstrategicmanagement(Molina-

Azorin 2012) or social and environmental accounting (Molina-Azorín and López-Gamero 2016).

Second,thepragmatismparadigmencouragestheuseofmultiplemethodstoanswertheresearch

questions(ClarkandCreswell2008).Theresearchdesignisqualitativemulti-methodsbyemploying

threequalitativedata collection techniques (contentanalysis, qualitativequestionnaire andsemi-

structured interviews) and their corresponding data analysis procedures. Since studies of

sustainabilityareofteninter-disciplinaryinnature,multi-methodapproachesareacommonchoice

(Lam,Walker,andHills2014).Third, it isamulti-phasedesign inwhich findings frompreceding

researchphasescontributedtothedevelopmentandquestioninginsucceedingstages,assistingin

consolidating and testing assumptions and findings (Teddlie and Tashakkori 2006). Fourth, it is

exploratory because not enough is known about the phenomenon of interest (e.g., materiality

assessmentinhotelgroups).Fifth,theresearcherusestriangulation,obtainingcomplementarydata

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onthesametopicsoastoenhancethevalidityofthefindingsthroughcomparisonbetweenresults

and thusultimately tounderstand thephenomenonbetter (Clark andCreswell2008).Theuseof

multiplemethodshas significantadvantages: overcomingmethod-specificweaknesses, increasing

thebreadthoftheresearchtopic,providingconfidenceinthefindingsandstrengtheningtheresearch

conclusion with evidence derived from independent approaches (Patton 1990, Patton 2005,

McKendrick1999).Nosinglemethodwouldhavesuitedtheexploratoryaimsoftheresearch.The

studyisalsocross-sectionalastheapproachtakentodatacollectionisatonepointintime.

ThisPhDcontributestotheCSRprocess-basedliterature,whichprovidesanin-depthunderstanding

of the ‘process’ of CSR decision-making and implementation (Wang et al. 2016). This research

complementstheexistingquantitativeresearchonboththeSBSCliterature(HansenandSchaltegger

2016)andstudiesofethicsinthehotelindustry(Köseoğluetal.2016).Qualitativeresearchimproves

theunderstandingofthecontextwithinwhichdecisionsandactionstakeplace(Myers2013).The

limitedCSRprocess-basedliteratureinthehotelindustryandtheresearchquestiondeterminethe

needtoemphasisethequalitativedata.

Thisresearchadoptsaqualitativedominantsequentialdesign,accordingtothetypologyofJohnson

and Onwuegbuzie (2004). The research requires an iterative approach to sampling and data

collection where each stage of data analysis determines subsequent means of data collection

(Palinkasetal.2015).Usingthe ‘qualitative toolkit’ suggestedbyHallandRist(1999), threedata

collection techniquesarecombinedtocreate the followingsequentialthree-stageprocess(Figure

23): 1) qualitative and quantitative content analysis, 2) qualitative questionnaires and 3) semi-

structuredinterviews.Thecontentanalysisresults(Phase1A,1B)informthequestionnairedesign

(Phase2).ThequestionnairefindingsinformtheinterviewswithCSRmanagers(Phase3A),andthese

informtheexpertinterviews(Phase3B).Thedifferentmethodsareusedfordifferentpurposesina

sequentialway.Contentanalysisisusedtocollectdescriptivedataontheassessmentofthepublic

CSR disclosure and provides an approach grounded in the organisations’ discourse. The

questionnaires and interviews then add more depth to this initial understanding by collecting

explanatory data that enables the research to address themost critical issue – the internal CSR

process.

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Figure23:Visualdiagramofthemulti-methodsapproach

Source:Author,2016.

Methodologicaltriangulationbyusingmultiplemethodsprovidescrossdatavaliditychecks(Patton

1990), and addresses the possible weaknesses of each method (McKendrick 1999). It makes it

possibletogaincompleteanddetaileddataonthephenomenon(HallandRist1999)andhighlights

themulti-layeredandcontradictorynatureofsociallife(DevineandHeath1999).Tryingtoresolve

apparentcontradictionsinfindingsleadstomorestringenttriangulationandfullercomplementarity

(Hammond 2005). Combining the content analysis of published sustainability information with

questionnairesandinterviewswithCSRmanagersandexpertsthereforestrengthenstheresearch

findings.

Inlinewithpragmatism,theresearcheraimedtofosterchangesinthehotelindustryinrespectto

social and environmental responsibility, and to this end sought the collaboration of the United

NationsEnvironmentalProgramme(henceforthUNEP)throughtheDivisionofTechnology,Industry

andEconomics.The results of the contentanalysis, questionnaire and interviews informedUNEP

planstosupport thehospitalitysector tomanageandreportsustainabilitybetteraspartof their

contributionto the2030SustainableDevelopmentandClimateAgendas.Forexample,UNEPstaff

presentedpreliminaryresultsfromthecontentanalysisin2016atCOP22inMarrakech.

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The followingsectionsexplain thedatacollectionmethodsused, thesampling techniquesandthe

dataanalysis.

Stage1A&B:Contentanalysis

ThepurposeofStage1,thecontentanalysis,wastoinvestigatethequalityofthedisclosureontheSR

processinthehotelindustryusingthethreeAA1000SESprinciples(inclusiveness,materialityand

responsiveness)andexternalassurance.Because itallowsrepeatabilityandvalid inferences from

datagathered(Krippendorff1980),contentanalysisisusedincorporatedisclosureresearchtomake

“inferences by objectively and systematically identifying specified characteristics of messages”

(Holsti1969,14).Tourismacademicshaveexaminedthecontentofsustainabilityreports (e.g.de

Grosbois2012,Bonilla-Priego,Font,andPacheco-Olivares2014),butnottheprocessofidentifying

what to report about or whom the corporation sees itself as accountable to. Earlier studies on

stakeholderengagementdidnotincludehotelgroups(Manetti2011,ManettiandToccafondi2012,

MoratisandBrandt2017)withtheexceptionofBonilla-PriegoandBenítez-Hernández(2017).Few

authorshaveresearchedstakeholderinclusiveness(Manetti2011,ManettiandToccafondi2012)and

stakeholderresponsiveness(MoratisandBrandt2017),andtheydidnotassesshowthedisclosure

of the SE andmaterialityanalysis informsthe reports’ content.Adescriptiveapproach is used to

identifymainstreamdiscourseandlateranormativeapproachisusedtocritiquetherealityofSRand

identifyimprovements.

5.2.1.1. Sampling

Anessentialstage inanycontentanalysisstudy isdecidingwhichdocumentsare tobeexamined

(Krippendorff1980).Aswithpreviousresearch,thisstudyfocusedonannualreports(Guthrieand

Parker 1989, Hackston andMilne 1996, Manetti and Toccafondi 2012, Bonilla-Priego, Font, and

Pacheco-Olivares2014).Thepurposeful sampling framewas the top50hospitality organisations

worldwidebythenumberofroomsin2014(HotelsMagazine2015)(seethefulllistoforganisations

insection10.1).Thesamplingcriterionwasthesizeofthehotelgroups,sincevisibility(duetothe

size)isthemainreasonbehindtheneedtolegitimise(GuthrieandParker1989).Outofthese50,20

organisationsissuedsustainabilityreports,10providedsomesustainabilitycontentonthecorporate

website,andtheremaining20didnotdiscusssustainabilityissuesineitherchannel.Ofthe20reports

shortlisted,tworeportswereexcluded,onefornotfulfillingthecriterionofbeingwritteninEnglish

(JinlingHotels&ResortsCorp)andoneonaccountofreportingonlyonenvironmentalissuesrather

than on all economic, social and environmental issues together (Scandic Hotels). The reports

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examinedwere themost recently availableby January2016 fromeighteenhospitality groups,as

foundontheircorporatewebsites.Table16providesthesamplecharacteristics.

Table16:Hospitalitygroupswithpublishedsustainabilityreportsfromthetop50organisationsaccordingtothenumberofroomsin2014.

OrganisationHead-quarters

Last Report Type /Applicationlevel

Number ofrooms2014

SustainabilityReport (Yearofpublication)

Experience(reportnumber)

Independent assuranceLevel

HiltonWorldwide USAG4 – In accordance –coreSelf-declared

715,062 2015 4th No

MarriottInternational USA NonGRI 714,765 2015 6th Limited

IHG(InterContinentalHotelsGroup)

England G3.1–Undeclared 710,295 2015 8th No

Wyndham HotelGroup USA G4 – In accordance -

core 660,826 2015 5th Limited/moderate

AccorHotels France G4 – In accordance -core

482,296 2015 Data not

available Limited

Starwood Hotels &ResortsWorldwide USA G4-Undeclared 354,225

2015

2nd reportingyear7th CarbonDisclosureProject

Limited

Carlson RezidorHotelGroup USA G3-Undeclared 172,234

2015 9th No

HyattHotelsCorp. USA G4 155,265

2015Scorecard2014Report 4th No

Meliá HotelsInternational Spain

Integrated Reporting(IIRC) and G4 – Inaccordance–core

98,829 2015 7th Limited

Whitbread England NonGRI 59,138 2015 3rd Limited

NHHotelGroup Spain G4 – In accordance -core 57,127 2015 5th Limited

MGM ResortsInternational USA NonGRI 46,906 2015 4th No

RiuHotels&Resorts Spain NonGRI 45,390 2015 1st No

WaltDisneyCo. USA G3.1.Self-declared(B) 39,751 2015 7th No

CaesarsEntertainmentCorp. USA G4 – In accordance -

core 37,820 2015 2nd No

Shangri-La Hotels &Resorts China

Non GRI -Communication ofprogress

36,898 2015 5th No

Eastern CrownHotelsGroupChina China G4 – In accordance -

core 33,863 2015 3rd No

Millennium &CopthorneHotels England Non GRI – Annual

Report(IIRC) 33,367 2015 Annualreport

13th Annualreport withCSRcontent

Notdeclared

Source:Author,2016.

5.2.1.2. Stage1A:Contentanalysisforthesustainabilityreportingprocess

ThestudyadoptedaqualitativeapproachtocontentanalysisaimingtoevaluatethequalityofSR.

Thisstagerespondstotheneedformoredetaileddisclosureinrespecttostakeholderidentification

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and prioritisation and the process of assessingmateriality (Eccles, Krzus, andRibot2015b). The

content analysis consisted of four themes organised in 83 research questions to analyse the SR

(Section10.2),informedbypreviousstudies(Table17).Thethemeswere:i)inclusiveness(whoare

the stakeholders,why and how the organisation engageswith them), ii)materiality (how to co-

identify stakeholderswith sustainability issues), iii) responsiveness (how do reports respond to

stakeholders’concerns)andiv)assurance(ifandhowthereportcontentisassured).Theresearch

wassettotestiftheorganisationspubliclyacknowledgedwhatandhowtheywereactingoneach

variableanalysed.

Table17:Literatureinformingtheresearchquestionsforcontentanalysis

Contentanalysisthemes LiteratureinformingthequestionsContext. Organisation and Reportprofile

(e.g.,ReportSustentabilidade2013,Eccles,Krzus,andRibot2015b)

Theme1.StakeholderidentificationandStakeholderengagement

(Green andHunton-Clarke 2003, Plaza-Úbeda, de Burgos-Jiménez, andCarmona-Moreno2010,Manetti2011,AccountAbility2015).

Theme 2. Determining report contenttrough Materiality and use ofMaterialitymatrix

(GRI2013b,KPMG2014b,Eccles,Krzus,andRibot2015a)

Theme3.Responsiveness (Painter-Morland2006,AccountAbility2015)

Theme4.Reportassurance (ManettiandToccafondi2012,Jones,Comfort,andHillier2016b)Source:Author,2016.

Thecontentanalysisfurtheradoptedaquantitativeapproachbyusingattributedratingstocompare

thedegreeoftransparencyinSR.Aplotdiagramwasusedtoexploretherelationshipbetweenthe

levelofdisclosureinrespecttoSEandMA.Also,responsivenessassessedthedegreeofadequacy

betweenthereportcontentandthestakeholderconcerns.Acodingschemewasdeveloped(Table

18)toestablishthecredibilityandvalidityofthestandardisation(GuthrieandAbeysekera2006).

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Table18:Criteriaandcodingscheme

Source:Author,2016.

Criteria Codingscheme

A.StakeholderIdentificationandEngagementa.1.Sectiondevotedtostakeholderidentification included(+1)

notincluded(0)a.2.Basisforidentification

specificcriteria(+1),genericcriteria(+0.5),nocriteriadisplayed(0).

a.3.Listofmainstakeholders clearlistprovided(+1),appearanceofstakeholdersthroughthetext(0)

a.4.Identificationapproach Broad(+1)Somewhatnarrow(+0.5)Narrow(0)

a.5.Engagementcharacteristics a.5.1.SEaimandobjectives declared(+1),

notdeclared(0)a.5.2.SEprocess explainedforallstakeholders(+1)

explainedforsomestakeholders(+0.5)notexplained(0)

a.5.3.Frequencyofengagement

fullydeclared(+1),partiallydeclaredforsomestakeholders(+0.5)notdeclared(0)

a.5.4.Methodsused declaredforeachstakeholdergroup(+1),declaredgeneral(+0.5),notdeclared(0)

a.6.OutputSE

concernsraisedbyeachstakeholdergroupdeclared(+1),concernsraisedbystakeholdersingeneraldeclared(+0.5),notdeclared(0)

B.Materialityanalysisb.1.Potentialissues declared(+1),

notdeclared(0)b.2.Criteriafordeterminingmateriality specificcriteria(+1),

genericcriteria(+0.5),notdeclared(0)

b.3.Meaningofmateriality explained(+1)notexplained(0)

b.4.Listofmaterialissues declared(+1),notdeclared(0)

b.5.Visualrepresentationofmaterialissues yes(+1)no(0)

b.6. Stakeholders for which the issues arematerial

identified(+1)notidentified(0)

C.Responsivenessc.1. The organisation communicates theresponse (actions, commitments...) given formaterialissues

aresponseforeachmaterialissue(+1)aresponseforsomeofthematerialissues(+0.5)noresponsestomaterialissues(+0)

c.2.The report followsa structure toguidetheusertoidentifyresponsesgiventoeachmaterialissue

aheading/subheadingforeachmaterialissuereported(+1)aheading/subheadingforsomematerialissuesreported(+0.5)responsesarespreadthroughoutthereport(+0)

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5.2.1.3. Stage 1B: Content analysis of the reports’ disclosure of the

EnvironmentalSustainabilityDevelopmentGoals

Asawayofcontextualisingtheinterviewdiscussions,aqualitativeandquantitativecontentanalysis

was alsodeveloped in respect to theorganisation’s environmental disclosure.The environmental

Sustainable Development Goals (henceforth SDGs) and indicators set by the United Nations

Development Programme (Table 19) informed the themes. A binary coding was applied: + 1 if

disclosedand0ifnotdisclosed.

Table19:CriteriafortheEnvironmentalSDGs

CriteriaGHGEmissionsSDGGoal13:TakeurgentactiontocombatclimatechangeanditsimpactsDirectgreenhousegas(GHG)emissions(Scope1)Energyindirectgreenhousegas(GHG)emissions(Scope2)Otherindirectgreenhousegas(GHG)emissions(Scope3)Greenhousegas(GHG)emissions(Scope1andScope2)perunitofnetvalueaddedEnergySDGGoal7:Ensureaccesstoaffordable,reliable,sustainableandmodernenergyforallEnergyconsumptionwithintheorganisationEnergyrequirementperunitofnetvalueaddedAmountsofeachenergysourcerecognisedduringtheaccountingperiodWaterSDGGoal6:CleanwaterandsanitationandGoal14:Conserveandsustainablyusetheoceans,seasandmarineresourcesTotalwaterconsumptionacrossoperationsTotalwaterwithdrawalbysourceTotalwaterconsumptionpernetunitofnetvalueaddedLocation-specificdata:Waterconsumption(e.g.inasubsidiary)Location-specificdata:Waterwithdrawalsbysourcetype(e.g.inasubsidiary)WatersourcessignificantlyaffectedbywithdrawalofwaterTotalandpercentageofwithdrawalsinwater-stressedorwater-scarceareasTotalwaterdischargebyqualityanddestinationLocation-specificdata:WaterdischargebyqualityanddestinationPercentageandtotalvolumeofwaterrecycledandreusedMaterials&WasteSDGGoal12:EnsuresustainableconsumptionandproductionpatternsMaterialsusedbyweightorvolumeDependencyonozonedepletingsubstances(ODS)pernetvalueaddedTotalweightofwastebytypeanddisposalmethodWastegeneratedperunitofnetvalueaddedEmissionsofozone-depletingsubstances(ODS)PercentageofmaterialsusedthatarerecycledinputmaterialsSource:Author,2016.

Stage2:Qualitativequestionnaires

The questionnaire adopted a descriptive approach to gather information aiming to identify

mainstream discourse about how hotel groups manage and report sustainability so as to

contextualisetheinterviewsandtriangulateresponseswithsustainabilityreports.

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5.2.2.1. Sampling

Theresearcherusedpurposivesamplingbychoosingparticipantsduetotheirspecificknowledge,as

they were considered information-rich cases and their use would thus optimise the available

resources(Patton2005).Inpurposivesampling,theresearcherdecideswhatneedstobeknownand

finds people who are willing and able to provide information based on their knowledge and

experience(Etikan,Musa,andAlkassim2016).Thepurposivesampleforthisstudywasthe50largest

hotelgroupsbynumberofroomsin2014,allofwhichhavemorethan26,600roomsaccordingto

Hotels Magazine (2015). For the questionnaires, the researcher obtained the sustainability

departmentcontactfor49outofthe50organisations,andthisthereforeconstitutedthesamplefor

thecontentanalysis.

5.2.2.2. Process

Participants were contacted through e-mail providing a cover letter (Section 10.3 and 10.4), a

participants’ information sheet and consent form (Section10.5), the questionnaire (10.6) andan

InfographicdevelopedwithUNEP (Section10.7).Thequestionnaireswere targetedbynameand

positionandwereaccompaniedbyacoverletterfromareputedorganisation,whiletheresearcher

clarifiedanydoubtsinadvancebytelephone,toincreasetheresponserate(Smith2015,Sekaranand

Bougie 2013). The infographic entitled ”Analysing the quality and credibility of Corporate Social

Reporting in the Hospitality Sector, 2016” disseminated the findings of the content analysis of

sustainabilityreports.HelenaRey(UNEP)providedthetechnicalsupervisionandeditingandaccess

toprofessionalgraphicsandlayout.

Questionswerebuiltontheliterature(Table20)andhadadirectbearingontheinformationneeded

toanswertheresearchobjectives2and3.Becausetheformat,content,appearanceandwordingof

thequestionsareessential(Coombes2001),thequestionsusedindustry-specificterminology.The

questionnaire containedamix of closed and open-ended questions. Closed questions are easy to

administer,uniforminanswersandcanbeprocessedandanalysedefficiently.Ontheotherhand,

theycanresultinmisleadingconclusionsbecauseofthelimitedrangeofoptionsavailable(Coombes

2001).Closedquestionswereonlyusedwhentherelevantrangeofanswerstoagivenquestionwas

clear,andacategorylabelled‘Other’wasaddedtogiveparticipantstheopportunitytoexpressan

opinion (Questions3, 5,9, 15and23).A6-pointLikert-scale formatwasusedwithonequestion

wherestructuringresponsescouldhaveoverlookedrelevantanswers.Theremainingquestionswere

open-ended,whichreducedbiasedresponsesbutwastime-consuming.Thecodesfromtheresponses

tothequestionnairewereusedtoconstructtheinterviewguides.

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Table20:Literatureinformingthequalitativequestionnaires

Themes Questions Literatureinformingthequestions

Sustainabilitymanagement

Doyouuseanyspecificperformancemanagementsystemforsustainability?Whichone?Whydoyouselect(ornot)aspecificperformancemanagementsystemforsustainability?How often is the sustainability strategy reviewed? And how often is thesustainabilitybudgetreviewed?Is the rewards programme linked to sustainabilitytargets? Why? Ifapplicable,towhichemployeelevelistherewardsprogrammelinked?

(Kaplan andNorton 1996b,Gondetal.2012)

Sustainabilityreporting

Doyouproduce(ornot)asustainabilityreport?Why?Whatarethekeydriversforyourorganisationtoproduceasustainabilityreport?(Ifapplicable)LikertscaleCanyoupleaseprovideanestimationof:GeographiccoverageofthesustainabilityreportNumberofstaffinvolvedinthesustainabilityreportingprocess?Number of units/departments involved in the sustainability reportingprocess?Ifpossible,pleaseoutlinedepartmentnameandinvolvementofanysubsidiariesseparately.Thefinancialcostsofthesustainabilityreportingprocess?Do you follow a particular sustainability reporting guideline/framework?Why?Doyoufollowmorethanoneguideline/framework?Why?

(GRI 2013a, b,IIRCn.d.)

Stakeholderengagement

Please indicatewhether your stakeholders fallwithin one ormore of thefollowingcategories.Do you participate in multi-stakeholder initiatives in sustainability? (e.g.InternationalTourismPartnership)Couldyouprovideanexample?Aredifficultiesencounteredwhenengagingstakeholdersforsustainability?Couldyouprovideanexample?Arethosedifficultiesdisclosedinasustainabilityreport?Whyorwhynot?Why or why not does your sustainability report indicate which set ofinformationisaimedatparticularstakeholdergroups,ifapplicable?Howdoyouengagewiththerelevantstakeholders?Pleaseindicatethelevelofengagementthatbestcorrespondstoyourpractices.

Same as contentanalysis.

Sustainabilitycommunication

Whicharethedisseminationformatsofyoursustainabilityinformation?If applicable,pleasehighlight anyparticularity/innovation intheway thatyoudisseminatesustainabilityinformation.Ifapplicable,whydoyoudisclosesustainabilityinformationinmorethanoneformat?How do you communicate the sustainability strategy internally to theorganisationmembers?Andhowdoyoucommunicateprogressonthesustainabilityinternallytotheorganisationmembers?

(Kaplan andNorton 1996b,Eccles and Krzus2014)

EnvironmentalSustainableDevelopmentGoals

IsyourorganisationawareoftheSustainableDevelopmentGoals(SDGs)?If yes, does it consider that the SDGs will have implications for itssustainabilitystrategyandreporting?How?Areyoumeasuringthefollowingindicatorsandwhy?DisgregatedindicatorsforGHGEmissions,Energy,MaterialsandWasteandWater.AreyouplanningtoreportundertheCDP’s(formerlytheCarbonDisclosureProject)ClimateChangeProgramme?Whyorwhynot?AreyouplanningtoreportundertheCDP’sWaterProgramme?Whyorwhynot?IfyoureportundertheCDP,howdoyouselecttheinformationtoincludeintheSR,sincewehaveseenyourCDPreportsprovidesmuchmoredetailedinformation.

(United Nations2016)

Assurance Do you undertake internal assurance of sustainability actions beforereporting?How?

Same as contentanalysis

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Doyouundertakeexternalassuranceofyoursustainabilityreport?Ifyes,hasaparticularassurancestandardbeenapplied?Whyorwhynot?Whatisthelevelofassuranceprovided?Pleaseexplainthereasoningforthis.Howdoesanexternalassurancecontributetoyoursustainabilityreporting?Couldyouestimatethefinancialcostsofexternalassurance?

Source:Author,2016.

The questionnaire contained questions requiring prior knowledge since an estimation of the

personnelandfinancialresourcesforsustainabilityreportingwasconsideredrelevantforprofiling

theorganisationsandtheirbehaviour.Suchquestionswerekepttoaminimum,however,soasto

avoidparticipantsabandoning the research(Coombes2001).Thequestionnairewaspilotedwith

Prof.FontandstaffatUNEP,whichhelpedeliminatedouble-barrelled,leading,hypothetical,memory-

dependentandlongquestions,thispreventingambiguityandensurethatthequestionnairewouldbe

capableofgeneratingtherequiredresponsesfromtheaudience(Smith2015).

Self-administered questionnaires were distributed electronically over a period of three months

(September-December 2016) to the sample of 49hotel groups. The research obtaineddata from

seven respondents that were distributed in the Accountability Matrix (Section 6.6.1) across

organisations that were categorised as Medium (2), Low (3) and Website reporters (2). The

questionnaire obtained a 14.3% response rate after two follow-up emails, which is 27% of the

organisations disclosing sustainability information (7 out of 26 that disclose sustainability

informationintheirreportsorwebsite),remainingslightlylowerthan30%responserateconsidered

acceptable(SekaranandBougie2013).SeeSection5.5.3foradiscussionofhighnonresponserates

andnonresponseerror.

Stage3:Semi-structuredinterviews

Informationfromthecontentanalysisandquestionnairewasusedtoestablishthestateoftheartof

CSRinthehotelindustryandthustosupportthethirdroundofdatacollection.Qualitativeinterviews

attemptedtouncoverandinterpretCSRdecisionmakingsoastobuildupapictureoftheassumptions

andexpectationsbehindmainstreamdiscourse. Semi-structured interviewshavepreviouslybeen

showntobeabletorevealknowledgefrommanagersandtoprovidearichsetofinsightsintoCSR.

Interviews also reduce the likelihood of misinterpretation between the researcher and the

intervieweeby allowing theopportunity to clarify thewordingof questions (Sekaran andBougie

2013) and to ask additional andprobingquestions (Neuman2012).Nevertheless, interviewsare

time-consumingandtheirflexibilitymayhaveanimpactonthereliabilityoftheresearch(Bryman

and Bell 2015). The interviewer bias towards the interviewee, interviewee bias towards the

interviewer, and interviewer tone of voice andmannerismsmay also affect responses (Neuman

137

2012).Amaximumoftwointerviewswereconductedperday,withcarefulattentiontothewording

andsequencingofthequestionstoavoidambiguity.

5.2.3.1. Stage3A:organisations’semi-structuredinterviews

5.2.3.1.1. Sampling

Interviewswithorganisationsweretargetedtotheheadquarters’CSRmanagersinordertogaina

deeperunderstandingofthedecisionmakingintheCSRprocessandoftheCSRbehaviourobserved

inthecontentanalysisandquestionnaires.Expertsamplingwaschosenasthemethodofpurposive

sampling,whichcallsforexpertsinaparticularfield(Etikan,Musa,andAlkassim2016),becauseof

theirknowledgeaboutthephenomenonofinterest.Participantswereassumedtoprovidedetailed

(depth)andgeneralisable(breath)informationbybeinginformation-richcases.Theywereassumed

tobe ‘representative’ of a specific role (Palinkas et al. 2015). Intervieweeswere consideredelite

becauseoftheirexperienceandpositionintheindustry.

Interviewscontinueduntilnonewsubstantiveinformationwasacquiredanddatasaturationwas

achieved regarding the understanding of the CSRdecision-makingprocess (Miles andHuberman

1994).Theresearcherundertookeightinterviewswithcorporatesustainabilitymanagersfromthe

50largesthotelgroups(Table21).The interviewedorganisationsencompassed threesubgroups:

organisations disclosing sustainability in their websites only (2) organisations publishing

sustainability reports with medium accountability (3) and those publishing reports with low

accountability (3),basedon theresultsof thecontentanalysis.Thesewere fromamongthesame

respondentsasforthequestionnaires,exceptoneextrarespondentthatdidnotparticipateinthe

questionnaire phase. Collecting data on the same organisations through content analysis,

questionnairesandinterviewsenabledcomparisonbetweensubgroups.Thesamplewasasvariedas

possible, although it was not possible to include representation of organisations with no

sustainability communication in either channel orwith high accountability results in the content

analysis.Table21:SamplecompositionofCSRmanagers’interviewsandcodes

Code Typeoforganisation Date Length Jobtitle

C1 Organisation - MediumAccountabilityMatrix 11.10.2016 1:16:28 VP Corporate Responsibility & Internal

Communication

C2 Organisation - MediumAccountabilityMatrix 8.11.2016 0:39:41 Innovation & Project Manager, Sustainable

Development

C3 Organisation - MediumAccountabilityMatrix 16.06.2017 0:35:50 CorporateResponsibilityDirector

C4 Organisation - LowAccountabilityMatrix 7.10.2016 00:39:24 Director of Corporate Social Responsibility

andSustainability

138

C5 Organisation - LowAccountabilityMatrix 07.10.2016 0:42:55 DirectorSocialResponsibilityandCommunity

Engagement

C6 Organisation - LowAccountabilityMatrix 28.11.2016 0:33:28 CorporateSocialResponsibilityDepartment

C7 Organisation-Website 20.10.2016 0:55:25 ManagerSustainability&EnergyC8 Organisation-Website 10.12.2016 1:10:55 ActingDirectorSustainableBusinessSource:Author,2017.AccountabilityMatrix:seesection6.6.1.

5.2.3.1.2. Process

The researcher established a list of themes for investigation derived from the strategy

implementation methodology of Kaplan and Norton (1996a) and the SR literature, with a

predeterminedsetofquestionslinkedtoobjectives2and3ofthisresearchtoprovidestructureto

theinterviews(Table22).Nonetheless,theinterviewsthemselvesexploredemergentideasrather

than relying entirelyon thepredefinedquestions (Saunders, Lewis, andThornhill2015,Neuman

2012).Thequestionscouldthereforebemodifiedaccordingtotheinterviewees’responses,andthe

organisationalandsituationalcontextoftheinterview,whichwastheorganisation’ssustainability

reportanditsquestionnaireresponses.Designingqualitativequestionswasaninteractiveprocess

involvingthoughttoassesstheimplicationsofpurpose,conceptualcontext,researchquestionsand

validitythreads(Wengraf2004).ThequestionswerereviewedandapprovedbytheheadoftheUNEP

unitandUNEP’ssustainabilityandreportingspecialist.Thestructuredinterviewguide(Section10.8)

helpedtokeeptheconversationfocused.

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Table22:Organisations’interviewquestionsandrationale

Themes Questionsexamples Rationale LiteratureinformingthequestionsStakeholderengagement

Whatarethecriteriaandtheprocess for identifying theexternal stakeholdersrelevanttoyourorganisation?

This question explored the stakeholderengagement, accountability approach and theunderlying values driving identification andengagement.

(Polonsky 1995, Sharma and Vredenburg 1998, Scholesand Clutterbuck 1998, Grafé-Buckens and Hinton 1998,PolonskyandOttman1998,Davenport2000,Delmas2001,MadsenandUlhøi2001,GreenandHunton-Clarke2003,PayneandCalton2004,MaignanandFerrell2004,Plaza-Úbeda, de Burgos-Jiménez, and Carmona-Moreno 2010,Manetti2011,Report Sustentabilidade2013,GRI2013b,Eccles,Krzus,andRibot2015a,AccountAbility2015)

Materiality Howistheoverallobjectiveofyour sustainability strategydefined?Whoisinvolved?

This section investigates theeffectivenessof theMAforincreasingaccountabilityandtransparencyinSR.Thequestionprovided insights as tohowhospitality groups define the content of theirsustainability report. For those undertakingMA,this section investigated how their ‘materiality’definition shaped the scope, audience andobjectivesoftheassessment.

(KaplanandNorton1996b,ReportSustentabilidade2013,GRI2013b,Eccles,Krzus,andRibot2015b,FasanandMio2017,UnermanandZappettini2014)

How do you prioritise thesignificance of sustainabilityissues to the organisation?And to its stakeholders?(Criteria, method andmembersinvolved)

This question studied the process and decisionmakingbehindtheMAoutcomescommunicatedinthe SR. It further extended to the motivationsbehind the chosen approach of communication,and the motivations for not transparentlydisclosingtheissue(s),.

(GreenleyandFoxall1998,ReportSustentabilidade2013,GreenandHunton-Clarke2003,Roloff2008,Plaza-Úbeda,de Burgos-Jiménez, and Carmona-Moreno 2010, GRI2013b,KPMG2014a,Eccles,Krzus,andRibot2015a)

Current sustainabilitymanagementpractices

Who participates inimplementing thesustainabilitystrategy?

Thisquestionfocusesontheinternalorganisationfor CSR decision-making and implementationincluding the departments, roles, andresponsibilities.

(KaplanandNorton1996b,Figgeetal.2002a)

Where do you develop thesustainability strategy andreporting?

Since the type of ownership influences theimplementation of sustainability (Melissen, vanGinneken,andWood2016),thisquestionlookedat i) where the sustainability strategy wasdeveloped(owned,managedandleasedhotels)ii)thedataselectedfromthedifferentmanagementoptions and iii) how the single report wasassembled.

Strategy andmanagement: (Figge et al. 2002a, Van derWoerdandvanDenBrink2004,vanGinneken2011,PorterandKramer2011,Sohn,Tang,andJang2013,Melissen,vanGinneken,andWood2016)Reporting:(MurninghanandGrant2013,SASB2013,GRI2013a,KPMG2014b)

How do you monitorthesustainability progresscontinuously?

Thissectioncomplementedquestionsonetothreefromthequestionnaire,byprovidinginsightsintotheuseofopenSR,datacollectionprocesses forreporting and change programmes to adapt theorganisationtothesustainabilitychallenges.

(KaplanandNorton1996b)

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Futureoutlook What are the challenges insustainabilityimplementation?

ThissectionidentifiesfutureCSRimplementationchallenges.

(Melissen,vanGinneken,andWood2016,Jonesetal.2016)

Andreporting? ThisquestionidentifiesSRindustrychallenges. What could be done to

overcomethosechallenges?The last question sought to determine the rolesandresponsibilitiesofthesectorasawhole,andof individual organisations, in addressing thechallengesidentified.ThissectionalsoaskedhowtransparencyinSRmightbeimproved.

Source:Author,2016.

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Semi-structuredinterviewswerepilottestedwithtwoUNEPrepresentatives,whoassessedoverall

wording,sequencing,thelikelyfamiliarityofthetargetedinterviewees’withthecontentandthetime

requiredtocompletetheinterview.Theprocessofassessingthedepthandrangeoftheinterview

questionsrevealedtheneedforsomere-wordingandsequencingadjustment.Pilotingensuredthat

theinformationgatheredwasrelevant,effectiveandfitforthestudy(Saunders,Lewis,andThornhill

2015).Datacollectedfromthepilotstudywasnotincludedinthefindings.

Theinterviewswereundertakenbyphone,inEnglish,andaudio-recorded.TheimportanceoftheCSR

managers’contribution,confidentialityandanonymitywereemphasised.Sinceelitesmaychallenge

theresearcheron theirsubjectand itsrelevance (Zuckerman1972), theresearcherhadcollected

informationon thehotelgroups throughthecontentanalysisandquestionnaires.Theresearcher

soughttobuildarapportwithparticipantsfromthefirstcontactandduringandbeyondtheinterview

to address the power gap (Ostrander 1993) and improve response rates (Myers 2013). In

circumstanceswhenrespondentsdidnotanswerthequestion,sheaskedanotherquestionandthen

circledbacktotheoriginalquestion.Whenrespondentscontinuednottorespondtothequestion,the

researcher made a note and moved on. At the end, the researcher asked for any comments or

criticismsregardingherresearch.Despitetheshortcomingsofphoneinterviews,thiswasthebest

optiongiventherangeofgeographicallocationsofthecorporateofficesaswellasbeingtimeefficient

forboththeinterviewerandinterviewees.

5.2.3.2. Stage3B:experts’semi-structuredinterviews

5.2.3.2.1. Sampling

Stage3BappliedthesamepurposivesamplingtechniqueaswiththehotelCSRmanagersinstage3A.

Here,individualswereinterviewedwhowereknowledgeableaboutthephenomenonofinterestand

whocouldportrayanexternalviewoftheapproaches,challengesandopportunitiesfortheindustry.

AswiththeinterviewswiththeCSRmanagers,subgroupsamplingwasapplied,whichrecognisesthe

uniquenessandcomplexitiesofsubgroupsandavoidssystematicallyaggregatingdata(Onwuegbuzie

and Collins 2007). The researcher undertook eight interviews with experts, who included two

academics,andtheCEOsofoneorganisationfacilitatingsustainabilityindustry-wideprocesses,two

reportingstandardorganisations, and three consultancieson sustainability for thehotel industry

(Table 23). Results reflect the subgroup sampling when discussing differences between the

subgroups.

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Table23:Samplecompositionofexperts’interviewsandcodes

Code Typeoforganisation Date Length Department

E1 Organisation 1.03.2017 0:58:45 DirectorE2 Reportingorganisation 5.04.2017 0:28:28 Founder&ExecutiveChairE3 Reportingorganisation 21.04.2017 0:20:35 AnalystE4 Consultant 24.03.2017 0:27:28 Co-founder&CEOE5 Consultant 27.03.2017 0:33:17 Partner&DirectorE6 Consultant 01.05.2017 0:30:40 DirectorE7 Academic 27.03.2017 0:39:21 AcademicE8 Academic 31.03.2017 0:42:29 AcademicE:Expert;O:organisation;R:reportingorganisation;C:consultant;A:academicSource:Author,2017.

Thisresearchthereforecomprised16interviewsintotal,splitbetweenCSRmanagersandexperts,

thusexceedingtheminimumsamplingsizenormallysuggestedforinterviewdatacollection,which

is12(Guest,Bunce,andJohnson2006).

5.2.3.2.2. Process

Expertswereprovidedwith theparticipants’ information sheet and consent form (Section10.9).

InterviewswereconductedinEnglishandbyphoneduetothegloballocationsoftheinterviewees.

Theresearcherestablishedalistofthemesfromtheliteraturereview,contentanalysisandinterviews

withCSRmanagers(Table24)whilequestionswereadaptedtotheexpertiseofeachinterviewee.

Section10.10setsoutthecompleteinterviewguide.

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Table24:Experts’interviewquestionsandrationale

Themes Questionsexamples Rationale LiteratureinformingthequestionsSectoroverview What are the challenges

for the hotel industry inmoving fromunsustainable tosustainable?

Thissectionexploredthechallengesfortheindustrytobecomemoresustainable,includingwhattheyare,whytheyexist,whatispreventingchangeandhowtheycouldbeovercome.

(Melissen,vanGinneken,andWood2016,Jonesetal.2016)

Sustainabilitystrategydefinition

Could you explain themainstream approachtaken by the industrywhen defining theirsustainabilitystrategy?

This section explored the mainstream approach, challenges,restrictive conditions and actors involved in definingsustainabilitystrategy.

(Kaplan andNorton 1996b, van Ginneken 2011,Porter and Kramer 2011, Sohn, Tang, and Jang2013,Melissen,vanGinneken,andWood2016)

Sustainabilityimplementation

Could you explain themainstream approachtaken by the industrywhen implementingsustainability?

This section explored the mainstream approach, challenges,restrictiveconditionsandactorsinvolvedinimplementingandmanagingsustainability.

(Schaltegger andWagner 2006, Schaltegger andBurritt 2010, Schaltegger 2011, Searcy 2012,Crutzen and Herzig 2013, Maas, Crutzen, andSchaltegger2014,BakerandSchaltegger2015,deVilliers, Rouse, and Kerr 2016, Johnson andSchaltegger2016,Georgeetal.2016,Battagliaetal.2016,MoriokaanddeCarvalho2016)

Monitoringsustainabilityperformance

Could you explain themainstream approachtaken by the industrywhen monitoringsustainability?

This section explored the mainstream approach, challenges,restrictive conditions and actors involved in monitoringsustainability, including sustainability measurement,performancemanagement systems, planning instruments andcontrol systems and integration between performancemanagementandreportingtools.

Sustainabilityreporting

Could you explain themainstream approachtaken by the industrywhen reportingsustainability

This section explored the mainstream approach, challenges,restrictive conditions and actors involved in reportingsustainability, including the reports’ audience and use,motivationsforreporting,reportingframeworksandvoluntaryvs.compulsoryreporting.

(GrayandMilne2002,Joseph2012,JankovićandKrivačić 2014, Moratis and Brandt 2017,Bellantuono, Pontrandolfo, and Scozzi 2016,KPMG2013,AdamsandWhelan2009,Morhardt2010, Hahn and Kühnen 2013, Seele 2016,Ghoogassian2015,Lydenberg,Rogers,andWood2010,GRI2013a,b,Buhr2007,Amran,Lee,andDevi 2014, Kjaergaard, Schleper, and Schmidt2016, Adams and Frost 2008, Schaltegger andWagner 2006,Perrini andTencati 2006, Adams,Larrinaga-González,andMcNicholas2007,BurrittandSchaltegger2010,Manetti2011,ManettiandToccafondi 2012, Lozano 2013, Hahn and Lülfs2014, Junior, Best, and Cotter 2014, Blanco andSouto2015,AndersonandVarney2015,Camilleri2015, Maas, Schaltegger, and Crutzen 2016, deVilliers,Rouse,andKerr2016)

Materialityassessment

Have you identifiedshortcomings on existingmaterialityassessments?

This section explored the identification of shortcomings inexisting materiality assessment guidelines and applications,

(Report Sustentabilidade 2013, Greenley andFoxall 1998, KPMG 2014b, Green and Hunton-Clarke2003,Roloff2008,Plaza-Úbeda,deBurgos-

144

including the industry and organisation materiality andtransparencyoftheprocess.

Jiménez, and Carmona-Moreno 2010, Eccles,Krzus, and Ribot 2015a, GRI 2013b, Calabrese,Costa, and Rosati 2015, Calabrese et al. 2016,FasanandMio2017)

Stakeholderengagement

How could accountabilitytowards stakeholders beimproved?

This sectionexplored thecurrent stakeholderengagement forsustainability within the industry, barriers and alternativemethods.

Sameasorganisationinterviews.

Source:Author,2016.

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Dataanalysis:thematicanalysis

Thissectionaddressestheanalysisofthethreesetsofdata.Qualitativedataanalysisisanon-going

process,involvinginductivereasoning,thinkingandtheorising(Taylor,Bogdan,andDeVault2015).

Themesand ideaswere identifiedandtrackedsince thestartof thecontentanalysisprocessand

throughthequestionnairesandinterviewphases,sinceinformationcollectionandanalysisgohand

in hand (Rallis andRossman2012). Organisational categorieswere establishedafter the content

analysis, helping to organise the questionnaire and interviews. Throughout the analysis, the

researcherattemptedtogainadeeperunderstandingofthetopicstudiedandcontinuouslyrefined

the interpretation of the data through coding. The data analysis focused on the organisational

characteristics and factors that supported or hindered the integration of sustainability into the

managementandreportingofhotelgroups.

Because of the pragmatist approach, the research question drove the method of analysis to be

thematicanalysisforthethreedatasets.Thematicanalysisinvolvessearchingacrossadataset,in

thiscase,sustainabilityreports,qualitativequestionnairesandinterviews,tofindrepeatedpatterns

ofmeaning(BraunandClarke2006).Thematicanalysisisawidelyusedqualitativeanalysismethod

that can produce an insightful analysis (Braunand Clarke2006). According to Braun and Clarke

(2006),beforeconductingthematicanalysistwodecisionsneedtobemade,oneregardingtheway

inwhichthemesandpatternswillbeidentified(inductivevs.theoretical),andanotherconcerning

thelevelatwhichthosethemeswillbeidentified(semanticvs.latent).

Theresearcherused the theoreticalanalysis typeandthesemantic level toanalysesustainability

reportsandquestionnaires.Throughtheoreticalthematicanalysis,alsoknownasdeductiveor‘top-

down,’themesandpatternsofsustainabilityreportsandquestionnairedatawereanalyst-driven,by

the researcher’s analytic interest in the area (Braun and Clarke 2006). Then, with a semantic

approach, the themeswere identifiedwithin the explicitmeaningsof thedata (BraunandClarke

2006), i.e. no attempt was made to look for anything beyondwhat was directlywritten in the

sustainabilityreportsandquestionnaires.Incontrast,theresearcherappliedtheinductiveanalysis

typeandlatentleveltotheinterviewdata.Withtheinductiveorbottom-upapproach,theresearcher

identifiedthemesandpatterns,nottrying,apriori,tofitcodesintopre-existingcodingframes(Braun

andClarke2006).Whiletheresearcher’sanalyticpreconceptionsdrovetheinterviewquestions,the

participants'voicedrovethecodesbyemployinginvivocoding.Then,theanalysisatthelatentlevel

aimed at examining the underlying ideas, assumptions and conceptualisations later theorised as

shaping thesemanticcontentof thesustainabilityreports.Bycombiningboth typesand levelsof

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thematicanalysisinthedataset,theresearcheraimedtocaptureboththesustainabilityreporting

processasexplicitlydisclosedbyhotelgroups,and,throughtheinterpretationintheinterviews,the

plausibleexplanations forsuchdisclosure.Table25explains the thematicanalysisphases for the

interviewdata.

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Table25:ThematicanalysisphasesfortheinterviewanalysisPhase Process Actions1.Familiarisingwiththedata

Transcribingdata,readingandrereadingthedataandnotingdowninitialideas.

Theresearchertranscribedandanalysedtheinterviewswithouttheuseofanysoftware.Whilequalitativedataanalysissoftwareareincreasinglypopular(Silverman2013),theydonotsubstitutefortheresearcher’sinsightandintuition(Taylor,Bogdan,andDeVault2015).Aftereachinterview,theresearchertranscribedtheinformationbyhandandtooknotesofalltheideasgenerated.Theresearcheranalysedherroleintheinterview,to improvethepracticeof thenext interview(Wengraf2004).Noting ideaswhiletranscribingprovidedagoodstarttothelatercodingandanalysis(Taylor,Bogdan,andDeVault2015)

2.Generatinginitialcodes

Coding salient features of the data insystematicallyacrosstheentiredataset,collatingdatarelevanttoeachcode.

AfterreviewingthecodingmethodsfromSaldaña(2015),theresearcherappliedholisticcoding,followedbytwofirstcyclemethods:invivoandprocesscoding.Holisticcodingappliesasinglecodetoeachlargeunitofdatatocaptureasenseoftheoverallcontentandpossiblecategories(Saldaña2015).Holisticcodingisusedasanexploratoryandpreliminarycoding.Theholisticcodeswereacombinationofinvivoandprocesscodes.Invivocoding isappropriate forcodingbeginnersandcodesprioritisingtheparticipants'voice(Saldaña2015).Invivocodingwasusedwithaninductiveapproach,inwhichthemesidentifiedstronglylinkedtothedata (Patton 1990). This code looked for salient passages and sought to capture how sustainabilityintegrationwithintheorganisationwasresolved.Then,processcodingidentifiedtheparticipants’actionstowardsstrategydefinition,implementation,monitoringandreporting,whichistheresearchconcernofthethesis.Theresearcherlookedforparticipants’transitionalindicatorssuchas“if,”“when,”“because,”sincethose give the sequence in action (Saldaña 2015). Process coding used only gerunds to capture simpleactivitiesandconceptualactions.Whilecoding,theresearcherkeptamemo,whichmadetheresearcher’sideasandanalysisvisibleandretrievable(Saldaña2015).Thememossummarisedtheideasexpressedandthereasonswhythosemattered.

3.Searching forthemes

Collating codes into potential themes,gathering all data relevant to eachpotentialtheme.

The researcher employed pattern coding, as a secondcycle coding to categorise the similar coded data.Patterncodingissuitableforthesearchforrules,causesandexplanationsinthedataandthedevelopmentof thecentralthemes(Saldaña2015).Section10.11 showsalistof themes,categoriessubcategoriesandillustrativequotes.

4.Reviewingthemes

Checking the themes with the codedextractsandtheentiredataset.

Whenreviewingthethemes, theresearchersoughtcompliancewiththetwojudgingcriteria fromPatton(1990); internal homogeneity – coherent data within themes, and external heterogeneity – clear andidentifiabledistinctionsbetweenthemes.

5.Defining andnamingthemes

On-goinganalysistorefinethespecificsofeach theme, and the overall story theanalysistells.

The researcher at this stage attempted to identify the ‘essence’ of each theme, and what aspects werecaptured.

6.Thematicreorganisationofthemes

Reorganisationofthemes. Beforeproducingtheresultschapter,theresearcherreorganisedthethemesusingatheoreticalapproachinformedbythedimensionsofsustainabilityintegration(Gondetal.2012)furtherbrokendownintothe7-SFrameworkoforganisationalvariables(Waterman,Peters,andPhillips1980).LaterthemesweremappedagainstthefourstepsofbuildingaMaterialityBalancedScorecard(MBSC).(seedetailoutsidethefigure).

7.Producing thereport

Selectionofcompellingextracts,thefinalanalysisofselectedextractsandrelatingback to the analysis to the researchquestionandliterature.

Onceallinformationwascoded,theresearcherrelateddatafromthepublishedsustainabilityreportsandwebsites,thequestionnairesandtheinterviews.BothChapter6and7aretheresultsoftheanalyticalprocess,which involvesaprogressionfromthedescription,wherethedataisorganisedandsummarisedtoshowpatterns,totheinterpretation,wherethereisanattempttotheorisethesignificanceofthepatternsandtheirbroadermeaningsandimplications,oftenrelatedtopreviousliterature.

Source:Author,2017.ThethematicanalysisprocessdescriptionhasbeenadaptedfromBraun&Clarke(2006).

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Becauseofthevolumeandbreadthofdatafromthethreedatasetsonsustainabilitymanagement

andreportingprocesses,theresearcheridentifiedtheneedtoreorganisethemes(Step6)inaway

thatwouldfacilitatetheassessmentofthevalueoftheMBSCforthehotelindustry(Objective3).To

structure the data analysis in light of the research objectives, three dimensions of sustainability

integration–cognitive,organisationalandtechnical(Gondetal.2012)–wereconsideredasameans

toidentifythecharacteristicsofthehotelsfromthesampleintheirmanagementandreportingof

sustainability.Cognitive integrationentailshowpeople thinkwithintheorganisation, theirshared

cognition,andthechangesinfocusandbeliefs.Organisationalintegrationinvolveshowprocessesare

organisedconcerningtheorganisations’formalstructureandrolestofacilitatecommonpractices.

Technicalintegrationinvolveshoworganisationsusetoolsandmethodologiesforsustainability.

These threedimensions couldbebrokendown into the7-SFramework (Table26) to enable the

identification of sustainability integration across the critical organisational variables of strategy,

structure, systems, style, skills, staff and shared values, defined as follows (Waterman, Peters, and

Phillips1980).Thecognitivesustainabilityintegrationentailsthestyle,skillsandsharedvalues.Style

includestheorganisation’scultureandabilitytochange,skillsarethecapabilitiesoftheorganisation,

and shared values are the fundamental ideas aroundwhich the organisation is constructed. The

organisational sustainability integration occurs through the structure and staff variables. The

structure isthewayinwhichtheorganisationisarranged,whilethestaffreferstotheemployees.

Finally, the technical sustainability integration entails the strategy and systems. The strategy is

understoodasactionsthatanorganisationplansinresponseto,orinanticipationof,changesinits

externalenvironment, itscustomersand itscompetitors.Systems refer tothe formaland informal

proceduresattheorganisation.The7-Sframeworkhasbeensuccessfulinidentifyingthevariables

thatdrivemanagementprocesses, including strategy formulation (GalliersandSutherland1991),

employee empowerment (Lin 2002) and sustainability reporting (Thijssens, Bollen, andHassink

2016)andtherefore,itisapertinentframeworkforthisstudy.

Table26:Synthesisofthedimensionsofsustainabilityintegrationbrokendownbytheorganisationalvariablesofthe7-SFrameworkDimensionsofsustainabilityintegration 7-SFrameworkvariablesOrganisational Structure,StaffTechnical Strategy,SystemsCognitive Style,Skills,SharedValuesSource:Author,2018.

Furthermore,thesethreedimensionsofsustainabilityintegrationandtheassociated7-Sframework

variableswerecategorisedintothefourstepsofbuildingtheMBSC.Identifyingtheorganisational

variables anddimensions of integration involved in each of the steps of building theMBSC from

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chapter,facilitatedtheresearchertoassessinlightofthefindingswhether,andifsohow,theMBSC

couldassistthehotelindustryinrealisingCSRstrategiesthatcreatesharedvalue.Accordingly,Table

27 shows the organisation of the themes identified in the three data sets into the dimensions of

sustainabilityintegrationandthe7-SframeworkvariableswithinthefourstepsofbuildingtheMBSC.

Itwasthisorganisationthatwasusedtoguidethestructureofchapter6(Steps1to3)andchapter7

(Step4).Section10.11showsalistofallthethemes,categories,subcategoriesandillustrativequotes.

After having reviewed the data analysis, the next section explains the ethical considerations and

evaluationcriteriaforthisresearch.

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Table27:Themesidentified,classifiedintothe7-SFrameworkvariables,sustainabilityintegrationlevels,andMBSCsteps.

Integratio

n

7-S 0.Strategicplanning&

strategic&operationalinformationsharing

1.IntegratingsustainabilityintotheBSC

2.Recognisingstakeholdervalue(Inclusiveness&Responsiveness)

3.Determiningenvironmentalandsocialexposureof

strategicbusinessunits(MA)

4.TheMBSC-barriersOrganisational

Structure

CorporatesizeOwnershipstructureSustainabilitygovernance-Roles&responsibilitiesCross-functionalcoordination

Industrymodel:sizeandownershipstructureOrganisationalrolesandresponsibilities

Staff

DisempowermentoftheCSRdepartments

Technical

Strategy

Strategicplanning

System

s

Performancemanagementsystems’useandsustainabilityintegrationPerformanceevaluationRewardssystems

Stakeholderengagement

ReportingguidelinesadoptedFormalityofMAExternalassurance

Reportingstandardsadopted.PerformanceevaluationEmployingreportingstandardsDegreeofformalityoftheSRprocess

Cognitive

Style

Internalandexternalcommunicationofstrategicandoperationalinformation

Skills

Knowledgeandskillsofemployees

SharedValues

Approachtoperformancemeasurementandmanagement

StakeholderorientationReportingrelatedmotivationsValueofreporting

OrganisationalcultureandvaluessystemManagerialattitudesAwarenessofsustainabilityStakeholderorientation.LegislationStakeholderpressure

Source:Author,2018.

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Ethicalconsiderationsandevaluationcriteria:Trustworthiness

Theresearcherusedtheprincipleoftrustworthinesstoassessherresearch(Table28).Fourcriteria

equivalenttocentralissuesinpositivistidealsofvalidityandreliabilityconstitutetrustworthiness:

credibility,transferability,dependability,andconfirmability(LincolnandGuba1985).

Table28:Researcher’sstrategiestoaddresstrustworthiness

Qualitycriterion

Definition Provisionsmadebytheresearcher

Credibility Presents an accurate picture of thephenomenonunderstudy.

Triangulation via the use of different methods, datasources,researchers,andtheory.Pilottestmethods.Tacticstohelpensurehonestyininformants.Iterativequestioningindatacollectiondialogues.Constantcomparativemethod.Comprehensivedatatreatment.Deviant/Negativecaseanalysis.Respondentvalidationtechniques.Debriefingsessionsbetweenresearcherandsupervisors.Examinepreviousresearchtoframefindings.Peerscrutinyofresearch.

Transferability Providesufficientdetailofthecontextof the study for the reader to decidewhetherthefindingscanbeappliedtoothersettings.

Provisionofbackgrounddatatoestablish thecontextofthestudyanddetaileddescriptionofthephenomenoninquestionforcomparisonstobemade.

Dependability Detailstheprocesseswithinthestudytoenableanotherresearchertorepeattheresearchbutnotnecessarily gainthesameresults.

Employmentof‘overlappingmethods.’In-depthmethodologicaldescriptiontoallowthestudytoberepeated.

Confirmability Demonstrate that findings emergefromthedataandnottheresearcher’spredisposition.

Triangulationtoreducetheeffectofinvestigatorbias.Admittheresearcher’sbeliefsandassumptions.In-depth methodological description to allow researchresultstobescrutinised.Recogniseshortcomingsinthestudy’smethodsandtheirpotentialeffects.

Source:AuthoradaptationfromShenton(2004)andLincolnandGuba(1985).

Credibility

Credibilitydependsontherichnessoftheinformationgathered,ontheanalyticalabilities,andthe

credibilityoftheresearcher’sinterpretations.Trustinthefindingswasenhancedinseveralways:

a) Triangulationofmethods,data,multipleresearchersandtheorywereusedasameanstovalidate

thefindings(Patton2005,Silverman2013).Thecombinationofmethodscompensatedfortheir

individual limitations and exploited their benefits (Shenton 2004). The researcher checked

informationacrossawiderangeofdocuments(sustainabilityreportsandquestionnaires)and

informants(CSRmanagersandexperts).Also,theprincipalresearcherandonesupervisorcoded

a sampleof sustainability reports (Section5.4.3),while the interpretationof thephenomena

(Chapter2,6&7)employedmorethanonetheory.

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b) Pilottestingthequestionnaireandinterviewsinadvancedetectedweaknesses.

c) Tactics to increase honesty in informants were used. The researcher emphasised her

independentstatus,confidentiality,anonymity,andinformedparticipantsaboutthepurposeand

importanceoftheinvestigation,andtherighttowithdrawfromthestudyatanypoint(ethics

formandcoverletter).

d) Iterativequestioning includedtheuseofrephrasedquestionstoreturntomatterspreviously

raisedbyparticipantssoastodetectcontradictions(Shenton2004).

e) Theconstantcomparativemethodwasemployed(Peräkylä2004,GlaserandStrauss2012),by

whichtheresearcherexaminedasmallpartoftheinterviewsfirstinordertogenerateasetof

categories,andthenexpandedtheanalysistotherestofthedata.

f) Data was treated comprehensively with the researcher generating a provisional analytical

schemefromasmallbatchofdata,andthencomparingitwithotherdata.Carewastakentoavoid

theanecdotaluseofdataextracts(Riessman2011).

g) Deviantcaseanalysiswasapplied,detectingissuesthatdidnotfitwiththeresearcher’scurrent

understandingofthephenomena.Threetypesofdeviantcaseswereidentified(Peräkylä2011):

i)exceptions to therule, ii)cases that throughtheirdifference, indicated that theresearcher

neededtochangethelabellingand,iii)differentcasesthatwhilenotsupportingthefindingsdid

requiredre-evaluationoftheresearcher’sideas.

h) Respondent validation techniqueswere used to check the validity of responses (Reasonand

Rowan1981),inwhichparticipantswereaskedtocorroboratefindingsandquotesattributedto

them(LincolnandGuba1985).

i) Recurrent debriefing sessions between the researcher and her supervisors enabled the

researcher to widen her vision through the supervisors’ experiences, perceptions, and

alternative approaches (Shenton 2004). The meetings informed developing ideas and

interpretations,andhelpedtheresearchertorecogniseherbiases.

j) Examinationofpreviousresearchfindingswasusedtoassessthedegreetowhichresultswere

congruentwithpaststudies(Shenton2004,Silverman2013).

k) Peer scrutiny of the research was welcomed in several conference presentations, research

seminars and journal articles (Table 29), which enabled the researcher to strengthen the

argumentsinthefindingsinthelightofthecommentsreceived.

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Table29:Peerscrutiny

Presentations PublicationprocessesCSRtheories(Chapter2) • Font,X.&Guix,M.Chapter37CorporateSocialResponsibilityintourism,567-

580. InCooperC.Gartner,B., Scott,N.&Volo,S.(2018)SageHandbookofTourismManagement.London,UK:Sage.ISBN:9781526461131.

MBSCframework(Chapter4)• International Conference Disclosing Sustainability; The

Transformative Power of Transparency? organised by theEnvironmental Policy Group at Wageningen University, TheNetherlands,2016.

• ResearchseminaratLaTrobeUniversity,Australia,2017.• ResearchseminaratCurtinUniversity,Australia,2017.

• Thecommentsof the reviewersthataccompaniedthe rejectionat the JournalofCleanerProductionprovidedinvaluableinsightsforimprovement(2017).

Contentanalysisresults(Chapter6)• COP22presentedbyUNEP,Marrakech,2016.• ResearchSeminaratMurdochUniversity,CentreforResponsible

CitizenshipandSustainability,Australia,2017.

• Guix,M,Bonilla-Priego,MJ.andFont,X.(2018)Theprocessofsustainabilityreporting ininternational hotel groups: an analysis of stakeholder inclusiveness, materiality andresponsiveness,JournalofSustainableTourism,12(7),1063-1084.

Contentanalysis,questionnaires,andinterviews(Chapter6&7)• 4th International CSR, Sustainability, Ethics & Governance

ConferenceorganisedbytheCentreforResponsibleCitizenshipandSustainability,Australia,2017(Preliminaryfindings).

Interviews-Materialityassessmentfindings(Chapter6&7)• EuroChrieConference,Dublin,2018. • Guix, M., Font, X. and Bonilla-Priego, M.J. (2019) Materiality: stakeholder accountability

choices inhotels’sustainabilityreports,International JournalofContemporaryHospitalityManagement(on-line)Doi:10.1108/IJCHM-05-2018-0366

Source:Author,2018.

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Transferability

Because qualitative researchers are concernedwith understanding a phenomenon that can have

implications beyond a particular setting, two types of transferability are discussed. First, the

naturalistictransferabilityfocusesongeneralisingtolargercontextsandpopulations(Bailey2007)

and depends on the similarity between the original situation and the situation to which it is

transferred (Hoepfl 1997). This research took adequate account of time issues and contextual

conditionsastheyreflectthedynamicsandchangesinthelocalenvironment.Becausetheresearcher

cannotspecifythetransferabilityoffindings,sufficientinformationwasprovidedforthereaderto

determineifthefindingsarerelevanttothenewsituation(LincolnandGuba1985).Second,analytic

transferabilityfocusesongeneralisingtothetheory(BrymanandBell2015).TheMBSCframework

formulated before the data collection attempted to verify howwell the findings fittedwithin the

establishedtheories(Chapter2)andhowfeasibleitwastoexplaincaseswithinnew(andsimilar)

contexts.

Dependability

Dependability refers to whether other qualitative researchers would detect similar information

(Silverman2013).Theresearcherreportedthedesignandimplementationindetailsoastoenablea

futureresearchertoassesstheextenttowhichproperresearchpracticeshadbeenfollowedandto

repeatthework(Shenton2004). Also, theresearcher independentlycodedall reports,whileone

supervisorrandomlycoded20%ofthemusingthesamecodinginstructionsandunitsofanalysis.A

cross-coder reliability testwas runon a sampleof twoof the reports, initially revealing an81%

agreementbetweenthe two independentcoders, improvingto95%in latertestsonce thecoders

reflected on their interpretation of coding protocols. Regarding semi-structured interviews, two

independenttranscriptionswereperformedtominimisetheconcernsaboutthereliability(Saunders,

Lewis,andThornhill2015).Thefirsttranscriptionwasmadewithoutgrammaticalorother‘tidying

up,’payingattentiontoissuesofrecordingandtranscriptionasnoisesandpauses(Silverman2013).

The second transcriptionwas informed by the analytic ideas and transcription symbols (Section

10.12),whichpresentedamoreobjectiveandcomprehensivecoding.Furthermore,LincolnandGuba

(1985) argues thatademonstrationof credibilityensuresdependability, and credibilityhasbeen

ensuredinmultipleways.

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Confirmability

Confirmabilityrequires findingstobesupportedbydata(Bailey2007),sincemostconclusions in

social research remain provisional because of the context of human values choices, norms and

institutions,workandtraditions, languageandcommunication(Korac-Kakabadse,Kakabadse,and

Kouzim 2002). Since humans design questionnaires and interviews, researcher bias is inevitable

(Patton2005)althoughtriangulationwasusedtominimisesuchbias(Shenton2004)andensurethe

findingsweretheresultoftheparticipants.Also,theresearcherprovidedin-depthmethodological

descriptionallowingtheresultstobescrutinised(Section5.3)andrecognisedtheshortcomingsin

themethods(Section5.5).

Methodologicallimitations

Thissectionoutlinesthelimitationsofthedatacollectiontechniquesusedandthestrategiestotackle

thoseconstraints.

Samplelimitations

Whileasubgroupsamplewassought,findingswerelimitedtoorganisationsdisclosingsustainability,

which hampered the understanding of the motivations and barriers for not engaging in SR.

Organisations publishing sustainability reports were more eager to participate (6) followed by

organisationswithwebinformation(2),whileorganisationswithnosustainabilitydisclosurechoose

nottoengage.

Also,purposivesamplingentailsthedisadvantageofself-selectionbias(Palinkasetal.2015,Etikan,

Musa,andAlkassim2016),sincebyselectingparticipantsthatmeetaspecificcriterionthisresearch

mayfailtocaptureothergroupsshapingtheCSRstrategyandoutcome.Nevertheless,notselecting

participantsbytheirdistinctrolescouldresultinnotengagingthemostknowledgeable(Palinkaset

al.2015).CSRexpertsweremorepertinenttocommentonCSRdecision-makingandimplementation

processes.

Limitationsofcontentanalysis

The initialstudyonly identified thepresenceorabsenceof thevariables investigatedthroughthe

contentanalysis.Sinceorganisationspublishthereports,theevidencepresentedmustbeconsidered

inthislight;anexclusivefocusonreports“mayresultinasomewhatincompletepictureofdisclosure

practices'' (Roberts1991,63).Still, contentanalysisof reportingprocessshouldnotbeneglected

since, if carriedoutatthecorrect intervals, contentanalysis isavalidinstrument forhighlighting

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progress in SR. Researching the statements on reporting steps can inform about the underlying

assumptions defining what matters in sustainability and the relevance of the information

communicated to stakeholders. Later, questionnaires and interviews provided detail into the

dynamicsofSR.

Limitationsofqualitativequestionnaires

Theconcernsinthequestionnairesarethenonresponseandthedifferencesbetweenparticipants

andnon-participants(Smith2015).Ifparticipantsareunrepresentativedoubtscanariseaboutthe

validity of the findings and the potential bias introduced. The researcher acknowledges that the

findings refer only to organisations that publish sustainability reports and do not represent the

organisationsnotdisclosingsustainability.

Limitationsofsemi-structuredinterviews

The manager’s interview responses were possibly affected by social desirability, both from a

combinationofimpressionmanagement–thecalculatedattempttobeportrayedinafavourablelight

aboutsocialnorms,andself-deception–thetendencytowardsbelievedoverlypositivetermsforself-

description(Zerbe&Paulhus,1987).Also,interviewsdeprivetheresearcherofthecontext,which

increasesthelikelihoodofmisinterpretingparticipants(BeckerandGeer1957).Despitethesocial

bias,fewresearcherswouldargueforabandoninginterviewing(Taylor,Bogdan,andDeVault2015).

Makingexplicitthelimitationsofinterviewsandensuringparticipants’anonymityintheresearch

reduces, but not eliminates, social desirability response bias (Randall and Fernandes 1991).

Additionally,datatriangulationwasemployedtominimisethesocialdesirabilityeffects.

Conclusions

Thischapterhasexaminedthemethodsusedintheresearchandtherationalefortheirselection.The

chapter explained the researcher’s stance and identified that this Ph.D. is underpinned by the

pragmatic paradigm and the derived ontological, epistemological and axiological choices. A

justificationandreviewoftheresearchapproachandmethodologyadoptedinthethesisfollowedthe

first half of the chapter. Individual sections defended the choice of multi-methods inquiry

encompassingathree-stagestrategy:thecontentanalysisofSRorwebsites,thequestionnaires,and

semi-structuredinterviews.Thechapterthendescribedeachresearchmethodemployed,sampling

and process. The qualitative and quantitative content analysis assessed the transparency of

sustainabilityreportingofhospitalityorganisationsplacingthefocusonstakeholderidentification,

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engagement,materiality,responsivenessandexternalassurance.Then,thequalitativequestionnaire

was sent to the sustainability managers of the top 50 hospitality groups to expand on the CSR

decision-makingprocess.Afterwards,semi-structuredinterviewslookedatthecurrentsustainability

management practices to identify beliefs, values and assumptions behindmainstream discourse.

Then, interviews with experts focused on identifying current challenges in sustainability

managementandreporting.Afterthis,thethematicanalysisusedwasexploredindetail,combining

deductive and inductive reasoning, and the ethical considerations andquality criteria. Lastly, the

chapterpresentedthemethodologicallimitationsofthestudy.Thefollowingchapter6presentsand

discussesthefindingsofthethreedatacollectiontechniquesregardingthedegreeofsustainability

integrationofhotelgroups.Laterchapter7returnstoobjective3‘Tocriticallyappraisethevalueof

theMBSCwithinthehotelindustry’bypresentinganddiscussingthebarriersandenablersforthe

MBSCimplementation.

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A comparative analysis of the disclosure of sustainabilityreporting processes and sustainability integration of hotelgroups

Chapter6providesacomparativeanalysisbetweenorganisations’publiclyavailablesustainability

reports(18organisations)andtheinterview1responsesofhotelgroups(8)andexperts(8)inrespect

tothestrategicplanning,measurement,managementandreportingofsustainability.Thisoffersthe

ability to make informed conclusions about whether the reporting reflects the management of

sustainability. The structure follows that of Chapter 4, whereby each step of building theMBSC

presentsthedimensionsofsustainabilityintegrationbrokendownintothe7-Sframeworkvariables

(Table27).Figure24introducesintotheMBSCstepsthesustainabilityintegrationthemesidentified

across the data. This chapter first covers the organisations’ profiles, ownership, roles and

responsibilitiesandcross-functionalcommunication.Step0reviewsthestrategicplanningandthe

informationsharingneededbefore implementinganMBSC.Step1,assessescurrentsustainability

performancemeasurementandmanagement,andthemotivationsfortheapproach.Step2evaluates

the stakeholder inclusiveness and responsiveness. Step 3 discusses sustainability reporting

guidelines, thematerialityassessment,externalassurance,andthemotivations forreporting. It is

worthnotingthatthepreviousMBSCstepsareinterrelatedandnon-linear;forinstance,theresults

instep2willinformtheevaluationinstep1,aswellasstep3.Thechapterconcludesbycomparing

the reports’ disclosure of reporting practices and environmental indicators to the degree of

sustainabilityintegrationasameanstocharacterisetheindustryinthelightoftheMBSC.

1Section10.11showsthelistofthemes,categories,subcategoriesandillustrativequotes.

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Figure24:SustainabilityintegrationthemesinhotelgroupsbyMBSCstepsSource:Author,2018.

Organisations’profiles

The findings of the structure (Figure 25), understood as theway inwhich the organisations are

arranged, include,ownership, therolesandresponsibilities,andcross-functionalcommunications

themes.

Figure25:Organisationalsustainabilityintegration

Source:Author,2018.

Ownership

The hotel groups studied ranged in size from 715,000 rooms to 26,000 rooms (based on 2014

figures),andhaddifferentownership(Table30).EasternCrown,Caesars,MGMandShangri-Laowned

allornearlyallroomsfromtheportfoliowhiletheremainingorganisationspresentedamixofowned,

leased,managedandfranchisedhotels.Sincethetypeofownershipinfluencestheimplementationof

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sustainability(Melissen,vanGinneken,andWood2016),managedandfranchisedhotelgroupswere

expectedtohavemoredifficultiesinimplementingsustainability,asaddressedinSection7.2.2.

Table30:Organisationsize(Numberofroomsby31stDecember2014)andownershipofhotelgroupsby31stDecember2015(%) Size Ownership(%) Number of

roomsOwned Leased Managed Franchised Other

EasternCrown 33,863 100 Caesars 37,820 100 MGM 46,906 100 Shangri-La 36,898 97 3 WaltDisney 39,751 65 14 17 4 Riu 45,390 62 22 11 4 Scandic 41,735 0,3 89 0,9 9 Millennium &Copthorne

33,367 55 29 3 12

NH 57,127 22 55 23

CarlsonRezidor 172,234 21 52 27 Melià 98,829 22 23 48 7 Starwood 354,225 3 54 41 2Accor 482,296 9 26 35 30 Hyatt 155,265 11 63 25 Marriott 714,765 0,2 1,2 40 55 3Intercontinental 710,295 0,4 27 73 Hilton 715,062 8 22 70 Wyndham 660,826 Whitbread 59,138 NordicChoice 30,870 Source:Author,2018basedonthecompilationfrom10-K2015(USAhotelgroups),Cohispania.com(RiuHotel),andAnnualorSustainabilityReport2015(remaininghotelgroups).NopublicinformationfoundforWyndham,WhitbreadandNordicChoice.

Rolesandresponsibilities

Interviewsandquestionnairesprovidedevidencefortheassignedrolesandresponsibilitiesamong

thehotelgroups’highestmanagementpositions,corporateofficesandproperties(Table31).Sixout

oftheeighthotelgroupsinterviewedhadsustainabilityrolesatthehighestmanagementlevels(CEO,

theboardofdirectorsandexecutivecommittees)inchargeofdefining,reviewingandapprovingthe

CSRstrategy.Atthecorporateoffices,theCSRdepartmentwastheonemostoftenresponsiblefor

definingthestrategyandtargets,managingtheperformanceandreporting(sixorganisations).CSR

departmentsoftensoughttoacquireexternalexpertiseformaterialityassessment(C1,C3,C4,C8),

butseldomfordevelopingasustainabilityperformancemanagementsystem(C5)andforverifying

sustainabilitydata(C1).OutsourcingtospecialistsoftenledtoCSRmanagersnotknowingthechoices

thataffected corporate governance and strategy, evidencedby intervieweeanswers (e.g., “I don’t

know”).Mostorganisationsalsodescribedacommittee,networkorgroupforsustainabilitybelow

senior executive level, which advanced sustainability implementation at the regional level by

involving employees from all levels of the organisational hierarchy. These committees ensured

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consistency in the implementationof theCSR strategy, similar toother industries2(e.g.,Klettner,

Clarke,andBoersma2014).Attheindividualpropertylevel,onlythreeorganisationshadroleswhose

dutiesincluded,amongothers,thelocalmanagementofCSR,beingthegeneralorresidentmanager,

a CSR champion and the maintenance/environmental manager. At the shared departments and

propertieslevel,asevidencedbyC8,thepersonsresponsibleforCSR“havelargerresponsibilitiesbut

theyalsoundertaketheCSRresponsibility.”Thecommitmentstoethicsandcorporateaccountability

ofC1andC4werereflectedinbeingtheonlytwoorganisationswithrolesandresponsibilitiesfor

sustainabilityatalloftheleadership,shareddepartmentsandpropertieslevels(seeSection6.5).

Table31:Responsibilitiesforsustainabilitymanagementfrominterviewees

Themes Categories,subcategoriesLeadershipChairman/CEO Reviewandapprovethestrategy(C4)

Definekeystakeholders(C4)Developperformancereviews(C1)

Boardofdirectors Reviewandapprovethestrategy(C1,C6,C3)Management / Executive committee orCouncil

DefinetheCSRstrategyandtargets(C1,C3,C5)Reviewandapprovethestrategy(C4)Receiveannualreports(C1)ReporttotheCEO(C5)Mentioned(C2)

Corporateoffices–ShareddepartmentsCSRdepartment Definethestrategyandtargets(C1,C4,C5,C6)

Strategyrollout(C4)Sustainabilityperformancemanagement(C1,C4)Reporting(C1,C4)Policy-making(C4)Socialprojectsandinitiatives(C4)Stakeholderengagement(C5)Assistingandadministration(C8)Mentioned(C2,C3)

Externalconsultant Materialityanalysis(C1,C3,C4,C8),Reporting(includingMA)(C5)DevelopingsustainabilityPMS(C5)Verifydata(C1)Mentioned(C2)

Expansionanddevelopmentdepartments Includecriteriaintomanagementcontracts(C1)Managementcommittee Definetargetsatregionallevel,approveandconsolidatereporting(C1)Sustainabilitygroup Setpriorities,redirectprojects(C3,C8)Country based management team /Regionalmanagers

(C8)Definecorporateobjectives(C6)

Internalnetworks Networkofcouncilsdisseminatinginitiatives(C5)Networkofprogrammecorrespondentsforhotelimplementation(C2)

CSRrepresentativeforeachchain (C7)Operationalcommittee Operationalissues(C3)Businessunits-PropertiesGeneralmanager Accountableforthestrategydevelopment(C1,E4)CSRChampion Atpropertiesandbusinessunits(C1)

2Findingsofthisstudyarecomparedthroughoutthechapterwithhotelindustrystudies.When,tothebestoftheknowledgeoftheauthor,noresearchisavailableforthehotels,findingsarecomparedtootherindustries.

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Residentmanager(C4)Maintenanceofficer Owningthesustainabilitydata(C1)Environmentalmanager Manageenvironmentalsustainability(C7)

Externalcommunication(E8)Sustainabilitycommittee/greenteam (E4)Source:Author,2017.

Cross-functionalcommunication

Notonlydidthehotelgroupshaverolesandresponsibilitiesforsustainability,buttheyalsoexhibited

cross-functionalcommunicationandcooperation(Table32).Thehotelgroupsinterviewedseemed

to expand the responsibility for reporting across departments, which allowed dispersion of the

knowledge beyond the direct person responsible for the preparation of the report to thosewho

supplied thedata, thusevidencing thecrosscuttingcomponentofsustainabilitymanagement.The

largerthehotelgroup,themoredepartmentswereinvolvedinreporting,withtheexceptionofC6

that only mentioned the CSR department. For example, C5 had more than 700,000 rooms and

involved16departmentswhileorganisationswithlessthan40,000roomsinvolvedfive(e.g.,C4)or

fourdepartments(e.g.,C7),excludingdepartmentssuchasFinanceorSales.Largerorganisationsalso

devotedmorehumanresourcetothereportingprocess,involvinghundredsofemployeesbetween

managerialandoperationallevels(e.g.,C1,C2,C5)comparedtosmallerhotelgroups(50,000rooms

orless),whoinvolvedlessthan15employees(e.g.,C4,C7,C8).Thehumanresourcescapacityfor

reporting linksto that forsustainabilitymanagement, sinceemployees involved indatacollection

wereoftentheoperationalmanagersandheldsustainabilityrolesattheproperties,asexplainedby

C2.

Whiletheinteractionbetweendepartmentsforreportingsuggestedthathotelgroupsweremoving

awayfromasilomentalityinmanagingsustainability,responsestothequestionnairesindicatedthat

sustainabilityreportingremainedanissueofcommunication,andinterviewsevidencedanincreasing

awarenessthatsustainabilityoughttobemanagedmoreformally.Table32showsthattheMarketing

Departmentwasthemostmentioned(6organisations)incoordinationwithCorporateResponsibility

(5),Procurement(5),HumanResources(5),Environment/Engineering(4)andFinance(4).Hotel

groupsmay overlook the role departments have in reachingdifferent stakeholder groupswith a

consistentsustainabilitymessage.ThelimitedinvolvementoftheSales(1),GovernmentAffairs(1)

and Investment departments (2), for instance, points towards a possible failure to integrate

stakeholderengagementacrossoperationalmanagement.Additionally,somehotelgroupsstruggled

tosecureinter-departmentalcollaboration.Forexample,“Sustainabilitydoesn’tgetenoughattention

intheorganisationbecausepeopleareworkingwithmakingmoneyandsellingandthat’simportant

forthestaff.Iftheygetalittlebitoftimetheyworkwithsustainability.Wehavetohavedepartments

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involved insustainabilitymore thanwhatwehave today”(C7).Arguablyhotelgroupswithmore

employees and diverse departments involved in CSR indicate a higher degree of sustainability

integrationwithin theirorganisationalstructureand, therefore,arebetterequippedto implement

sustainabilitysuccessfully.

Table32:Departmentsinvolvedinreporting

Departments involved in sustainabilityreporting

Organisations

Marketing (C1,C2,C4,C5,C7,C8)CorporateResponsibility (C1,C2,C4,C5,C6,C7,C8)Procurement (C1,C4,C5,C7,C8)HumanResources (C1,C2,C4,C5,C8)Environment/Engineering (C1,C2,C5,C7)Finance (C1,C5,C7,C8)Operations/Rooms (C1,C4,C5)F&BDepartment (C2,C5,C8)HotelInvest (C2,C8)Technicaldepartment (C2,C5)Diversityandinclusion (C5)GovernmentAffairs (C5)Sales (C5)Riskdepartment (C2)Development (C5)Internalaudit (C5)Law (C5)OwnerFranchisesServices (C5)CountryCSRprogrammecoordinators (C2)BusinessUnits (C1)Source:Author,2017.Note:C3didnotprovidethisinformation.

There seems to be little consistency across the sample about ownership and organisational

integration into the structure. Owning the hotel does not seem to lead to better organisational

integration for sustainability, likewise forheavily franchisedormanagedportfolios. For example,

ownedgroupshadrolesandresponsibilitiesatthethreelevelsofauthority(C1,C4),twolevelswith

nocross-departmentalcoordination(C6)oronlyonelevel(C8).Itwasonlyfoundthathotelsfrom

thesampleunder60,000roomswereheavilyownedorleased(C1,C4,C6,C8)whilelargergroups

wereheavilyfranchisedormanaged(C2,C5,C3),asinpreviousresearch(e.g.,Sohn,Tang,andJang

2013).Thenextsectionexaminesthetechnicalandcognitivesustainabilityintegrationintostrategy

asapreliminarysteptobuildinganMBSC.

Step0.Strategicplanningandinformationsharing

Step0(Figure26)presentsthehotelgroups'CSRstrategyplanningandcascadingdown,andtheir

stylesofinternalandexternalinformationsharing.Thisstepcontributestounderstandinghowthe

predominance of the ‘planning’ approach and traditional information sharing formats hinder

sustainabilityintegrationinmosthotelgroups.

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Figure26:Step0Strategicplanningandinformationsharing

Source:Author,2018.

Strategicplanningandcascadingdown

Six of the interviewed hotel groups had a formal intended CSR strategy, as they decided on the

relevancetheywantedtogivetosocialandenvironmentalissueswithintheircorporatestrategyin

five(C1,C2),three(C7)oroneyearplans(C3,C5,C8).Theseplansweresometimesformulatedby

theCSRdepartmentsincooperationwiththesustainabilitycommittee.Instead,forC4andC6,itwas

thechairman'sadhocdecisionsthatguidedtheirCSRactionsandreporting,albeitC4expecteda

changeafternewappointmentsintheseniormanagement.MosthotelgroupsreviewboththeCSR

strategyandbudgetannually (exceptC4,whichrevisionwasadhoc).CSRmanagersreferredtoa

processofstrategymakinginvolvingatop-downapproachinwhichthetopmanagementsetsgoals

from the vision and plans the strategy, which is later implemented across the organisation. The

increasinginterestinmaterialityassessment,exceptforC6(Section6.5),canstrengthentheplanning

approach througha local-levelbottom-up input,dependenton theability toelucidateandrealise

bottom-upresponsestosetstrategictopics.

Duringstrategyformulation,organisationsmayconsidertheSustainableDevelopmentGoals(SDGs)

to respond to the global sustainable agenda. Hotel groupswith an informal strategyweremore

flexibleandabletoincorporateSDGs(C4,C6),whiletheremainingorganisationsexpressedinterest

inincludingthemintheupcomingstrategicplanning.IntegrationoftheSDGsinthestrategicplansis

also awork-in-progressacross industries (PwC2015), arguablybecause theyare “quitenewand

vague”(C4,C8,E8).TheperceivedimprecisionofsomeSDGsechoesthechallengeoftranslatingthem

intoacompetitivestrategy(KPMG2015a).

Whilehotelgroupsstressedthattheirsustainabilitystrategyresultedfromaplannedformulation,

organisations with CSR champions (C1, C4) may have opportunities to advance strategic topics

bottom-up though emergent strategy development. The process of developing a sustainability

strategyisoftenamixbetweenplanningandemergencefrompractice(Neugebauer,Figge,andHahn

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2016).C1hasachampionforsocialandanotherforenvironmentalissuesineachproperty,andthose

employeesareoftenabletoinitiateandshapesustainablepracticesandprojects(e.g.,Andersonand

Bateman2000).ForC4,theCSRchampionistheresidentmanager,“theybecomefamiliarwithour

CSRstrategy,thewaysthingsaredonewithinthegroup,sowhentheymoveintoageneralmanager

positiontheyhavethatknowledgeandunderstanding.”Also,C2explained,“weexchangedalotwith

differentdepartmentsandwelaunchedworkgroupstointegratethesustainabledevelopmentbefore

thenewstrategy.”

Afterformulatingtheirstrategy,hotelgroupscascadeditdownbysettinggoalsandresponsibilities

atdifferentlevelsandacrosspropertiesthroughvariousmeans.C4employedaCSRscorecard,C6

meetingsande-mails,C7ahotel-by-hotelvisit,whileC2usedfactsheetstoinformconcreteactions,

andtoaligntheircommitmentswithstrategicpillars,stakeholdergroupsanddepartments.Despite

thevariedmeanstocascadedowntheCSRobjectives,hotelsmaynotalwayseffectivelybreakdown

thestrategyintospecificactionsforallthepropertiesbecauseofdifferentownershipstructures.For

example,C8explainedthattheownershipaffectedtheirdeploymentofthestrategy:“Weareinthe

middleoflaunchingthe[CSR]strategy.Wehavedifferenthotelsthataremanagedindifferentways;

thefranchisedhotels,forexample,aremoreorlessexcludedinourstrategyrollout.”

Internalandexternalinformationsharing

SinceinternalcommunicationaffectstheabilitytoachievetheCSRobjectives,thehotelgroupsused

multiple channels to inculcate sustainability values, spreadawarenessof issues andmaintain the

employees’ commitment (Table33).Organisations communicated their strategy throughone-way

communicationchannelssuchasthewebpages(6),internalnewsletters(5),weeklynews(2)ore-

mails(2).Two-waycommunicationchannelsthatcanprovideopportunitiesfordialoguewereused

less often, such as training (3), and meetings and conferences (2). Channels used by only one

organisationweresustainabilitynetworks,CSRblogsandsocialmedia.Resultsshowedadominance

ofinternalcommunicationtoemployeesbeingone-wayanddownwardsfromtopmanagement,asin

othersectors(WelchandJackson2007).Theeffectivenessofinternalcommunicationcouldarguably

beimprovedbyinvolvingemployeesmoreactivelyinmanagingCSR.Forinstance,C2undertakesa

consultationabouttheproposedsustainabilitystrategythroughsustainabilityworkinggroupsbefore

itsdeployment.

Mostorganisations(5)usedthesamechannelslistedabovetocommunicatetheirCSRperformance

internally.Two-waycommunicationwasusedthroughemployeetraining(4)andmeetingswiththe

executivemanagement(1)ortheboardofdirectors(1).Anotherwaytocommunicatewasthrough

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open reporting systems thatmakeperformance results available to everyone in the organisation

(KaplanandNorton2001c).C4andC7usedopenreportingforsustainabilityissues,whileC2usedit

for water and energy consumption only, and C8 expressed a wish to implement in the future.

Intervieweesarguedthatopenreportingfosteredinternalbenchmarkingandcompetition,evidenced

byC4“youcanseehoweveryhotelperformspergeographicarea,perhub,perCSRfocus,”andC7

“noonewantstobeatthebottomofthatlist.”Itcanarguablycontributetoacultureinwhichaccess

toinformationempowersemployeestodotheirjobandfacilitatesemergentstrategyformulation.

Instead,fourorganisationshadclosedreporting(C1,C2,C6,C8),whichtranslatesinto“individual

hotelsnotseeingtheperformanceoftheotherhotels”(C1);hotels“needtowaitforthereport”(C6).

Thosegroupsusedupwardsreportingfromthepropertytotheheadquartersandmaybereluctant

to engage with open reporting because employees may access information irrespective of their

hierarchyandpower,andasC2explained,“itiscomplicatedforconfidentialinformation.”

Table33:Disseminationformatsofsustainabilityinformation

Internal strategycommunication

Organisations External disseminationformats

Organisations

Intranet C2,C4,C5,C6,C7,C8 Website C1,C2,C4,C5,C6,C7,C8Internalnewsletter C1,C2,C4,C5,C8 Sustainabilityreport C1,C2,C4,C5,C6,C7Trainings C4,C6,C7 On-linePDFreport C1,C2,C5,C6,C7Meetings &conferences C1,C5 Summaryreport C1,C5

Weeklynews C4,C5 Sustainabilitymicrosite C2,C4E-mails C2,C4 Site,themeorproject C2,C5 Integratedreporting C3,C8 Intranet C2,C6 Reportdirectmailing C1Source:Author,2017.Note:NoinformationwasprovidedbyC3.

To communicate CSR efforts externally organisations face issues such as howmuch information

should be disclosed, throughwhatmeans, andwhether it should be targeted towards particular

stakeholders.Theformatsmostused(Table33)aresimilartootherindustries(e.g.,Klettner,Clarke,

and Boersma 2014), and included thewebsite (7organisations) and the sustainability report on

paper (6) and online (5). Four hotel groups adapted the information to the stakeholder groups’

preferences(C2,C4,C5,C8),forexample,C2said“employeesaremorelikelytofollowthenewson

theintranetthaninthesustainabilityreport”.C8explainedhowithada“differentformatfordifferent

objectives as different stakeholders want the information in different ways.” Four interviewees

claimedthemixofchannelsmaximisedtheimpactandreachtodifferentstakeholdergroups,which

was evidenced inorganisationswith innovative approaches for the industry. C5produced twelve

topic-specific infographics shareable in socialmedia; an approach foundtobeusedby small and

medium size organisations (Cohen 2017). C7 published an interactive report website similar to

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interactivematerialitymatricesfromotherindustries(EcclesandKrzus2014).Meanwhile,C3and

C8 adhered to integrated reporting, which is still anecdotal across sectors (Pistoni, Songini, and

Bavagnoli2018).

Irrespectiveoftheownershipandorganisationalsustainabilityintegration,sixhotelshadaformal

strategy reviewed annually, deployed with a top-down approach and somewhat traditional

informationsharingpracticesbothinternallywithclosedreporting(5)andexternallybytheuseof

websitesandsustainabilityreports (8).Albeitevidencewasnotprovided,organisationswithCSR

champions (2) andopen reporting systems (3)were arguablymore equipped for amixbetween

plannedandemergentstrategydevelopmentsince theiremployeeswere empoweredby theease

with which they were able to access information. Nearly all (7) pointed to a shift towards the

increasinguseofMAto informstrategicplanningbecause theyunderstoodthatmaterialitycould

focustheorganisationonthecriticalsustainabilityissues.Thenextsectionreviewshowhotelgroups

monitorstrategyimplementationandmanagetheirperformance.

Step1.IntegratingsustainabilityintotheBSC

Becausesustainabilityperformancemeasurementandmanagementareinterrelated(Moriokaandde

Carvalho2016),andessentialforevaluatingsustainabilityintegration(Georgeetal.2016),Step1

(Figure27)presents thehotelgroups'environmentalperformancemeasurement,3relatedsystems

andthereasoningfortheirchoices(sharedvalues).Overall,thesectioncontributestounderstanding

how sustainability integration could lead to better management and control, exemplified with

environmentalperformance;andwhyintegrationdoesnotoccurinmosthotelgroups.

Figure27:Step1IntegratingsustainabilityintotheBSC

Source:Author,2018.

3 While sustainability encompasses economic, social and environmental performance of organisations, theenvironmentalperformancewasselectedtocontextualisetheCSR-processesandtheMBSCdiscussions)(seeSection5.5).

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Environmentalperformancemeasurement

Thissectionexploresthehotels’definitionofindicatorstoassessperformanceandtheirdisclosure

inCarbonDisclosureProject(CDP)reports.Sixorganisationsuseddifferentmetricstotargetcountry

requirementsandstakeholders’informationneeds(C1,C2,C4,C5,C7,C8,E7),whilefourconsolidated

theinternalindicatorsforexternalreporting(C1,C2,C4,C7).Noinformationwasprovidedonwhy

organisationschosecertainmetricsinsteadofothers.

The content analysis and questionnaire explored 24 indicators used to track progress against

EnvironmentalSDGs–GHGEmissions(Goal13),Energy(Goal7),Materialsandwaste(Goal12)and

Water(Goal6and14),andtheirdisclosureinCDPreports(Table34).CDPwasnotawidespread

practice compared to other industries, where “most organisations recognise it is a reasonable

activity”(E2).OnlyfivehotelgroupsemployedCDP(C1,C2,C3,C4,C5)whileC8wasplanningto

implementit.CDPWaterwasamorelimitedpractice(onlyC5),andC1andC4claimedtobereporting

shortly.Nevertheless,allgroupsinterviewedhadreducedenergyandwaterconsumptioninkeeping

with COP21 targets to remain below 2ºC of global warming. Also, the content analysis revealed

reportingagainstCDPstandardsincreasedhotels’transparencyonGHGemissionsfrom31%to72%

oftheindicatorsstudied,energyfrom31%to33%andCDPwaterfrom7%to17%,arguablybecause

CDPinformationaimsatinvestorsandshareholderswho“askforit”(E4)and“pressure[hotels]to

delivertransparentreporting”(E5).

Table34:Environmentalindicatorsmeasuredfromquestionnairesand%disclosurefromcontentanalysis

Interviewdata Contentanalysisdata

Environmentalindicators C1 C2 C4 C5 C6 C7 C8

%Disclosuresustainabilityreport(18)

%DisclosureClimateChange CDP(16) andCDP Water(3)

GHGEmissions4(Goal13) 31,25 71,88Direct greenhouse gas (GHG) emissions(Scope1) ✓ ✓ ✓ ✓ ✓ ✓ ✓ 50 100

Direct greenhouse gas (GHG) emissions(Scope1)perunitofnetvalueadded

✓ ✓ ✓ ✓ 0 0

Energy indirect greenhouse gas (GHG)emissions(Scope2)

✓ ✓ ✓ ✓ ✓ ✓ 50 100

4TheGHGProtocolCorporateStandardclassifiesanorganisation’sGHGemissionsintothree‘scopes’(HummelandSchlick2016).Scope1isdirectemissionsfromownedorcontrolledsources.Scope2accountsforindirectemissionsfromthegenerationofpurchasedenergy.Scope3isallindirectemissions(notincludedinscope2)thatoccurinthevaluechain,includingupstreamanddownstreamemissions.

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Energy indirect greenhouse gas (GHG)emissions (Scope 2) per unit of net valueadded

✓ ✓ ✓ ✓ 0 0

Other indirect greenhouse gas (GHG)emissions(Scope3) ✓ ✓ ✓ 25 87,5

Energy(Goal7) 31,48 33,33Energyconsumptionwithintheorganisation ✓ ✓ ✓ ✓ ✓ ✓ 55,56 0Energy requirement per unit of net valueadded

✓ ✓ ✓ ✓ 0 0

Amounts of each energy source recognisedduringtheaccountingperiod ✓ ✓ ✓ F ✓ ✓ 38,89 100

Materialsandwaste(Goal12) 3,7 0Materialsusedbyweightorvolume ✓ ✓ 0 0Total weight of waste by type and disposalmethod

✓ ✓ ✓ ✓ 0 0

Wastegeneratedperunitofnetvalueadded ✓ ✓ 16,67 0Dependency on ozone depleting substancespernetvalueadded

✓ 0 0

Emissionsofozone-depletingsubstances ✓ 0 0Percentageofmaterialsusedthatarerecycledinputmaterials ✓ ✓ 5,56 0

Water(Goal6and14) 6,94 16,67Totalwaterconsumptionacrossoperations ✓ ✓ ✓ ✓ ✓ ✓ 50 66,67Totalwaterwithdrawalbysource ✓ ✓* ✓ ✓ 5,56 66,67Totalwaterconsumptionpernetunitofnetvalueadded

✓ ✓ ✓ ✓ 0 0

Location-specific data: Water consumption(e.g.inasubsidiary)

✓ ✓ ✓ ✓ 0 0

Location-specificdata:Waterwithdrawalsbysourcetype(e.g.inasubsidiary)

✓ ✓ 0 0

Water sources significantly affected bywithdrawalofwater

0 0

Total and percentage of withdrawals inwater-stressedorwater-scarceareas

✓ 8,33 0

Total water discharge by quality anddestination

✓ ✓ 5,56 33,33

Location-specific data: Water discharge byqualityanddestination

✓ 0 0

Percentage and total volume of waterrecycledandreused ✓ ✓ 0 0

Total indicators claimed to bemeasured(outof24) 6 19 11 8 13 13 7

Source:Author,2017.Note:*Partialmeasurement.F:Futuremeasurement.C3didnotprovidedata.

The tendency identified in the industry was to reportmostly GHG emissions and energy, which

evidencedapositivetrendcomparedtoearlierstudiesinwhichfewhotelsdisclosedrelatedgoals,

initiativesandperformance(deGrosbois2012).FiveindicatorswerereviewedinrespecttoGoal13

‘Takeurgentactiontocombatclimatechangeanditsimpacts’.AllintervieweesmeasuredDirectGHG

emissions(Scope1)and,allexceptC1measuredEnergyindirectGHGemissions(Scope2),whilethe

contentanalysisrevealeddisclosureofthosetwoindicatorswaslimitedto50%ofthesamplehotels.

With regards to indirect GHG emissions (Scope 3), even though the industry relies heavily on

outsourcingactivitiesandasC7pointedout,“manycustomersareaskingaboutthecarbonfootprint

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oftheirstay,”onlythreeorganisationsinterviewedmeasureditand25%ofhotelgroupsfromthe

content analysis reported the indicator. Hotels often used different GHG intensitymetrics,which

makesbenchmarkingdifficult(Table35).Absoluteemissionindicators,whicharepartofGRI,were

usedonlybyC8,perhapsbecausetheyonly“reflecttotalvaluesbutdonotrepresenttheefficiencyof

theconsumption”,asC4acknowledged.

LessfrequentlymeasuredwereindicatorsconcerningGoal7,‘Ensureaccesstoaffordable,reliable,

sustainableandmodernenergyforall.’Internalconsumptionwasmeasuredthemost,withintensity

indicators, bynearlyall hotel groups interviewedand reportedby56%ofhotel groups from the

contentanalysis.Evenifmostintervieweesclaimedtomeasureenergyrequirementperunitofnet

valueadded,thecontentanalysiswasunabletodiscernthedisclosureofsuchinformationbyanyof

thehotelgroups.Instead,allinterviewedorganisationsmeasuredorplannedtomeasureamountsof

each energy source recognised during the accounting period, while only 39% of organisations

disclosedthisindicator(fromthecontentanalysis).

Table35:Intensitymetricsused

GHGemissionsmetric(G4-3N18) Organisations

EnergyIntensitymetric(G4-EN5) Organisations

KgCO2

Marriott, Accor, Shangri-La, Riu, Intercontinental,Hyatt, NH, CarlsonRezidor

kWh

Accor, NH, CarlsonRezidor, Marriott,Riu

TonnesCO2MillenniumEasternCrown

MJ

Eastern Crown,Melià,Hyatt,Shangri-La

% Wyndham,Caesars kBTU Hilton,StarwoodPounds Hilton GJ Caesars % WyndhamOrganisation-specificmetricused

Organisation-specificmetricused

perm2Marriott, Hyatt, EasternCrown

perm2

Eastern Crown,Hyatt, CarlsonRezidor,Marriott

persquarefoot Wyndham,Hilton perstayorguest/night Melià,Riuperoccupiedroom Hilton,Intercontinental persquarefoot Wyndhamguest/night CarlsonRezidor,Riu perassociate Wyndham

room/night NH perairconditioned1000sq.

ft. Caesarsper 1000 air conditionedsq.ft. Caesars

peravailableroom Accor

peravailableroom Accor perbuildhotelroom Starwoodperrooms Millennium perroom/night NHper$EBITDA EasternCrown peroccupiedroom CarlsonRezidorperassociate Wyndham perbusinessunit Shangri-Laperbusinessunit Shangri-La per$EBITDA EasternCrownper1,000guestrooms Starwood per1,000squaremeters Starwood Source:Author,2017.

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ThemeasurementanddisclosureofmaterialsandwasteforGoal12‘Ensuresustainableconsumption

andproductionpatterns’wasanecdotal.Fourorganisationsinterviewedmeasuredthetotalweight

ofwaste by type anddisposalmethod. Two hotel groupsmeasuredMaterials used byweight or

volume,Waste generated per unit of net value added and Percentage ofmaterials used that are

recycled input materials, while C2 was the only one reporting Dependency on ozone-depleting

substances per net value added, and Emissions of ozone-depleting substances. From the content

analysis, itwasconsistentlyevidentthatorganisationsonlydisclosedtwooutofthesixindicators

used; 17% disclosed Totalweight of waste by type and disposal method, and 6% disclosed the

Percentageofmaterialsusedthatarerecycledinputmaterials.

Watermeasurementwasaslightlymorewidespreadpracticecomparedtowasteandmaterials.From

thetenindicatorstotrackprogressagainstGoal6‘CleanwaterandsanitationandGoal14‘Conserve

andsustainablyusetheoceans,seasandmarineresources’,allorganisationsinterviewed,exceptC5,

measuredTotalwaterconsumptionacrossoperations.ThreeorganisationsmeasuredTotalwater

withdrawalbysource.FourhotelgroupsmeasuredTotalwaterconsumptionpernetunitofnetvalue

added,buttheyuseddifferentmetrics;forexample,bytheovernightstayorguestcount.Also,four

organisationsmeasuredlocation-specificdataonwaterconsumptionineachhotelwithC4breaking

itdownbydepartments.Themeasurementoftheremainingwater-relatedindicatorswasminimal,

similar todisclosurerates.While50%oforganisationsdisclosedTotalwaterconsumptionacross

operations,only8%disclosedTotalandpercentageofwithdrawalsinwater-stressedorwater-scarce

areas,and6%communicatedTotalwaterwithdrawalbysourceandTotalwaterdischargebyquality

anddestination.Theremainingindicatorswerenotreported.Hotelgroupsthereforeunder-reported

on location-specific,water consumption,withdrawals,anddischarge indicators.Overall, the scant

disclosureimpliesexposuretoclimatechangeremainshiddentoinvestorsandexternalstakeholders,

who“are interested in this information”(E2).Expertsarguedthathotelgroupsshouldshift their

effortstotacklecarbonfootprint,waste,andwatermanagementmoreprominentlybylinkingthem

totheirbusinessactivity.

Performancemanagement

Environmental performance measurement contributes to performance management by helping

defineobjectivesandtocontrolsystemsandpracticestoimproveperformance.Findingssuggestthat

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hotel groupsdonothaveaholisticapproach tomanagingperformance sincenone5of thehotels,

irrespectiveoftheirsize,hadanorganisation-widePerformanceManagementSystems(PMS)into

whichsustainabilitycouldbeintegrated.HotelsusedanarrayofPMStomanagedifferentbusiness

aspects, such as the reservations, revenuemanagement, forecasting or procurement systems. C2

explained,“Wedon’thaveageneralsystemweonlyhavemanysystems.”Similarly,sustainabilitywas

managed using multiple tools, and hotels showed limited motivation to adopt more systematic

management systems, as has been previously reported in respect to environmentalmanagement

systems (Bonilla Priego, Najera, and Font 2011). Exceptionswere C1 and C4,who integrated all

sustainabilityissueswithinadedicatedsystem.C4’ssustainabilityPMSwasnotlinkedtothehotel’s

operationalandfinancialcontrolsystems,however,sincethesustainabilityperformancemeasures

did not feed into the corporate system (similar to Parker and Chung 2018). C4 explained, “the

scorecardisseparate;itisacompletelyseparatetoolbecausetheamountofdetailthatgoesintoit

wouldjustnotbeapplicableontheorganisation[PMS],whichhasthekeyindicatorssuchasrevenue

and colleague engagement.” C4alsousedMicrosoftExcel, asdidC5andC6, in linewith common

practiceinotherindustries(e.g.,Neely,Yaghi,andYouell2008,Bennett,Schaltegger,andZvezdov

2013). Using spreadsheets generated duplication and increased the need for control systems to

ensurecoherenceandaccuracyofdata,suchasinternal(C2,C5,C6,C7,C8)andexternalaudits(C1,

C2,C6,C7).Thoseusinganadhocspreadsheetwerewillingtomovetoautomatedsoftware.Overall,

hotelspresentedvaryingdegreesofsophistication.

HotelsusedthesustainabilityPMSstodevelopaneffectiveandcoherentCSRstrategy(C2),cascade

it down (C2, C4), collect data and track performance (C1, C2, C4), review for performance

improvements(C1,C2,C7)andcommunicateprogress(C2,C4).Accordingtointerviews,integrating

sustainabilityintosystemsmakes itpossible towork towards fulfilling thestrategy,ensuringdata

accuracyamonggeographic locations,understanding thebaselineandperformance,havingeasier

managementandprotectingsustainabilityfrombeingside-linedfromthemainstrategy(C5,E5,E7,

E8).Becauseofincreasedawarenessofthesebenefits,someorganisationswereeitherworkingon

(C7),orthinkingtowards,integratingsustainabilityintoanorganisation-widesystem(C1,C2,C3).

Overall, despite the fact that members of the industry are moving towards greater technical

integration,mostofthehotelgroupsinterviewedlackedformalisedinternalsystemstosupporttheir

5C8 interview and questionnaire answerswere contradictory; further clarification evidenced a lack of anoverallPMSintowhichsustainabilitycouldbeintegrated.

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sustainabilitymanagementandreporting,asisalsothecaseinotherindustries(e.g.,DobbsandVan

Staden2016),andwhenthosewere inplace, theydidnot integratewith the traditional financial

controlsystem,riskingthemarginalisationoftheCSRstrategyandprogramme.OnlyC1,C5andC7

discloseddeficienciesintheirsustainabilityPMS.Othersmaynothavedeclaredthemduetosocial

desirability responses. The barriers to the widespread use of an organisation-wide PMS and a

sustainabilityPMSareassessedinSection7.2.3.

Rewardssystems

Rewards systems that strengthen the employees’ sustainability orientation and organisational

performance are part of sustainability performance management as one of the outcomes of

performanceevaluation.AsC2explained,“welaunchedsomeCSRbonussowehopethatitwillhelp

toimplementsomeactionsalloverthegroup.”Lessthanhalfoftheorganisationsinterviewedlinked

theachievementsoftargetstoemployees’incentiveplans(Table36),similartootherresearchonthe

industry(ParkerandChung2018).C1usedtohaveincentiveswhentheylaunchedtheirfirstCSR

strategy,butnowthatsustainabilityispartofthedailyoperationstheydonotemployitanymore.

Organisationswith incentivesdirected those, frommore to lessoften, toseniormanagers,middle

management,operationalmanagers,generalhotelmanagersandtheCEO.C2’sprogrammeadapted

to the different managerial levels and departments and related to climate change, which may

contribute to explain why C2 stood out by measuring and reporting the most environmental

indicatorscomparedtotherestoftheorganisationsstudied.Financialrewardssystemshavebeen

proventosupportariseinsustainabilitygovernance(e.g.,Dutta,Lawson,andMarcinko2013),foster

operationalexcellence(Ecclesetal.2012)andexecutionofstrategy(MadsenandStenheim2014a).

These benefits echo those identified by interviewees as necessary to drive performance and

accountability,toengageemployeesinsustainabilitydevelopment,andcascadedownthestrategy.

Instead, C8 argued that sustainability was achieved under profit-maximising behaviour, and

therefore, theirrewardsprogrammewasbasedonlyon theeconomicperformance.Overall,hotel

groupsseldomholdtheboardandseniormanagementaccountableforsustainabilityimplementation

throughrewardssystems,despiteincreasinglyputtinginplacegovernancestructurestoensuretheir

participationinstrategydevelopment(Section6.1.).Theselimitedeffortstobalancesustainability

performance with financial performance in the hotel industry can be better explained by their

motivationsformeasurementandmanagement.

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Table36:Rewardssystems

Themes OrganisationsUserewardssystems C2,C4,C5+C7inthefutureRecipientsofincentives:

CEO C2Seniormanagers C4,C5,C7-inthefutureMiddlemanagers C5,C7-inthefutureOperationalmanagers C5Generalhotelmanagers C1previously

Source:Author,2017.

Motivationsforthemeasurementandmanagementofsustainabilityperformance

Regardingthemotivationtomeasureandmanagesustainabilityperformance,organisationsmaytake

eithertransparencyoraperformanceimprovementperspective(AdamsandFrost2008,Klettner,

Clarke, and Boersma 2014). In contrast to previous research that found that most hotels were

internallydriventoimplementenvironmentalmanagementsystems(BonillaPriego,Najera,andFont

2011),onlyC1andC5statedthattheirmotivationforsustainabilitymanagementwasperformance

improvement. C2, C6 and C7 hadmixed approaches, and while C8 started with the intention of

improving their performance, now GRI influenced their approach. Knowing the organisations’

motivation tomanage sustainability is relevant because the proposedMBSC takes a “twin track”

approachwithatransparencyperspective(AA1000Accountabilityprinciples),andaperformance

improvement perspective (SBSC) (see Section 4.5). Overall, the organisations’ approach to

performancemeasurementandmanagementdidnot lead todifferentconfigurations inrespectto

PMS,performanceevaluationandrewardssystems,duetotheboundaryorganisational,technicaland

cognitivebarriersidentified(seeSection7.2).

Performancemeasurement,managementanddisclosure

Having better technical integration into systems, such as having a PMS, tracking indicators or

identifyinganissueasbeingmaterial,didnotleadtoahighernumberofindicatorsbeingtrackedor

disclosed. Organisations employing Microsoft Excel as one among multiple tools to manage

sustainability issues measured 8 (C5), 11 (C4) and 13 (C6) environmental indicators, while

organisationsworkingtowardsafutureorganisation-widePMSmeasured6(C1),13(C7)and19(C2)

indicators.Also,organisationswithgreatercorporateenvironmentalmeasurementdidnotpresent

greaterlevelsofenvironmentaldisclosures(

Table37).Instead,resultspointtoanegativeassociationbetweenthenumberofindicatorsmeasuredandindicatorsdisclosedforGHGEmissions,Energy,Water,andMaterialsandWaste.C2wasthehotel

groupfromthesamplemonitoringmostindicators(19outof24),arguablybecauseofitsmorethan

5-yearexperienceinCDPreporting;evenit,however,didnotreportCDPWater.C6andC7measured

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mostof theenvironmentalSDG-related indicatorsbutdidnotdiscloseperformancewithanyCDP

report.Instead,C1andC4,whoweremonitoringtwoandthreewater-relatedindicators,explained

thattheywouldshortlybereportingCDPWater.Regardingmateriality,mostofthoseorganisations

whoconsideredwastetobeamaterialissueconcealedtheindicatorsstudied(5outof6),whereas

mostorganisationswhoconsideredtheissueimmaterialdisclosedoneindicator(3outof5)(Table

38).Thedifferencewasespeciallysignificantwithwaterdata,seldommeasuredbyintervieweesand

onlydisclosedby6.94%of reportsbutdeemedas relevantby44%of thehotel groups from the

contentanalysis,accordingtotheirmaterialityresults.

Table37:DifferencebetweenenvironmentalindicatorsmeasuredanddisclosedOrganisations GHG(5indicators) Energy(3) Water(10) MaterialsandWaste(6)

C1 0 -1 -2 -1C2 -3 -1 -5 -4C4 -5 -3 -3 -1C5 -4 0 0 -1C6 -2 -2 -8 -1C7 -4 -3 -4 -2C8 -3 -3 -1 -1

Source:Author,2018.C3hadincompletedataforthecomparison.Boldindicatestheorganisationconsiderstheissueasmaterial.Table38:Comparisonbetween%identificationofenvironmentalmaterialissuesanddisclosureofperformance

Materialissues%ofhotelsdeemingissuesasmaterial

(18)%Disclosuresustainabilityreports

(18)*GHGEmissions 38,89 31,25Energy 50,00 31,48Materials andwaste 33,33 3,70Water 44,44 6,94Source:Author,2017.*Percentagerelatedtothenumberofindicatorsdisclosedoverthetotalindicatorsstudiedforeachissue.

Technicalandcognitivebarriersofferaplausibleexplanation for thegapbetweenenvironmental

measurement and disclosure (see Section 7.2). The limited technical integration of the industry

regardingsustainabilityperformancemeasurementandmanagementseemstorestricttheuseofthe

MBSC.Hotel groups expressing intentions to employ anorganisation-widePMStended tohave a

rewards system (C1, C2, C3, C7), which demonstrates a stronger commitment to advancing

sustainability. For the remaining hotel groups, the use of multiple sustainability systems that

remainedperipheralorinparallelmaynotbeenoughtofullydeployaCSRstrategyintegratedinto

the core business because sustainability can be decoupled from the primary corporate strategy,

especiallywhennoincentivesareinplace.Thechapterrevisitsthesustainabilityreportingprocesses,

performanceindicatorsandperformancemanagementsystems.Thechapterinvestigateshowhotel

groups identify and engage stakeholders and with what purpose, which provides a better

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understandingoftheorganisations’inclusivenessandresponsiveness–twoofthethreeMBSCpillars.

Step2wouldalsoinformstep1regardingthestakeholderpriorityissuestomeasureandmanage.

Step2.RecognisingstakeholdervalueStep2(Figure28)presentsresultsabout the identificationof therelevantstakeholders, selection

criteria and internalprocesses, the organisations'methods and reasons for engagement, and the

transparency of stakeholder engagement (SE) practices through the content analysis of reports

(systems). Secondly, the section deals with the stakeholder orientation, which articulates the

organisations'valuesandposturetowardstheirstakeholdersandprioritisation(sharedvalues).

Figure28:Step2Recognisingstakeholdervalue

Source:Author,2018.

Stakeholderidentification

Organisationsfacearangeofstakeholdersthat,tosomeextent,haveconflictinginterests.Theyneed

to clarifywhichof those stakeholders and interests they considermore relevant, themethodsof

engagementandthespecificgoalsandoutcomesdesiredfromengagingwiththem.Table39shows

thecontentanalysisresults.Foreachstatement,a1–0codewasapplied.A0.5scorewasaddedto

markissuesdeclaredinthereportsbutnotofferingconclusiveanswers.

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Table39:Quantitativecodingscoresforstakeholderidentificationandengagement

Criteria EasternCrown

Wyndham

Accor

Hilton

Intercontinental

Starwood

Hyatt

Caesars

Melià

CarlsonRezidor

NH

MGM

WaltDisney

Millennium

&

Copthorne

Marriott

Whitbread

Shangri -La

Riu

Scoreper

criteria

(outof18)

Stakeholder

identification

Sectiondevoted tostakeholderidentification

1 1 1 1 1 0 1 0 1 1 0 0 0 0 0 0 0 0 8

Basis foridentification

0.5 0 0 1 0 1 0 0.5 0 0 0.5 0 0 0 0 0 0 0 3.5

List of mainstakeholders

1 1 1 1 1 1 1 1 1 1 0 1 0 0 0 0 0 0 11

Identificationapproach

1 1 1 0.5 1 1 1 0.5 1 0.5 0.5 0.5 1 0.5 0 0 0 0 11

Stakeholder

engagement

SEobjectives 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 14

SEprocess 0.5 0 0.5 0.5 0 0.5 0.5 0.5 0.5 0 0.5 0.5 0.5 0 0.5 0.5 0 0 6

SEfrequency 0 0.5 0.5 0.5 0.5 0.5 0 0.5 0 0 0 0 0 0 0 0 0 0 3

SEmethods 1 1 0.5 1 1 0.5 1 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 11.5

SEoutputs 1 1 1 0 0.5 0.5 1 1 0.5 0.5 0.5 0 0 0 0 0 0 0 7.5

Score perorganisation(outof9)

7 6.5 6.5 6.5 6 6 6 5.5 5.5 4.5 3.5 3.5 3 2 1 1 0.5 0.5

Source:Author,2016.

Intheirsustainabilityreports11outof18organisationsidentifiedtheirstakeholdersascustomers,

employees, suppliers, local communities andNGOs. Interviewees,meanwhile, recognisedmultiple

stakeholders,allofwhichwereprimarystakeholdersexceptNGOs.Thefullarrayofstakeholdersare

listedinTable40.Amongtheinterviewees,C4andC5listedall14stakeholdergroups,C1andC2

listed 13, C6 and C7 listed 12 and C8 listed nine. The stakeholdersmost engagedwere owners,

shareholders,businesspartners,employees,suppliers, localcommunitiesandnationalauthorities

(bysevenorganisations).Then,sixhotelgroupsengagedwithinvestors,franchises,NGOs,customers

andlocalauthorities,whilefiveengagedwithindustrypeersandregionalauthorities.

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Table40:Stakeholdersengagedinsustainabilityfromthequestionnaires

Stakeholdersengaged Nº OrganisationsOwners 7 (C1,C2,C4,C5,C6,C7,C8)

Shareholders 7 (C1,C2,C4,C5,C6,C7,C8)Businesspartners 7 (C1,C2,C4,C5,C6,C7,C8)Employees 7 (C1,C2,C4,C5,C6,C7,C8)Suppliers 7 (C1,C2,C4,C5,C6,C7,C8)Localcommunities 7 (C1,C2,C4,C5,C6,C7,C8)Nationalauthorities 7 (C1,C2,C4,C5,C6,C7,C8)Investors 6 (C1,C2,C4,C5,C7,C8)Franchises 6 (C1,C2,C4,C5,C7,C8)Non-governmental organisations(secondarystakeholder)

6 (C1,C2,C4,C5,C6,C7)

Customers 6 (C1,C2,C4,C5,C6,C7)Localauthorities 6 (C1,C2,C4,C5,C6,C7)Industrypeers 5 (C1,C4,C5,C6,C7)Regionalauthorities 5 (C2,C4,C5,C6,C7)Source:Author,2017.

According to sustainability reports, most hotel groups seldom identified derivative legitimate

stakeholders as industry peers (competitors), advocacy groups, trade unions or themedia. They

mostly,therefore, identifystakeholderstowhomtheorganisationhasamoralobligationbasedon

contractualrelations,callednarrowapproach(DonaldsonandPreston1995),andnotthosethatcan

affecttheorganisationanditsnormativestakeholders,calledabroadapproach(Figure29)(Mitchell,

Agle,andWood1997).Theindustrymayperceivetheaforementionedgroupstohavelittlepowerto

affecttheirorganisationandassumethattheydonotholdlegitimateclaims,ortheymaynotconsider

themtobestakeholderssincetheorganisationsdonotholdanymoralobligationtowardsthem.Four

of the hotel groups presenting a ‘narrow’ approach according to reports, instead, had a ‘broad’

approach according to the questionnaires and interviews (C1, C4, C5, C6). They identified and

engaged NGOs and industry peers, but they failed to disclose such information in their reports,

arguablybecausethosestakeholdersmaynotbethereportaudience.Threehotelgroupsrecognised

thepotentialforbroaderengagementbyexpandingthestakeholderstheymightbeworkingwith(C1,

C5,C7),whiletwocouldnotidentifymorestakeholdersthantheonestheyengagedwith(C6,C2).C5

believedthemoretheSEprocessgetsformalised,themoreorganisationscould“identifyanextended

circle,”asservingbroaderstakeholdergroupsentailsmorecomplexmanagement(Greenwood2007).

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Figure29:Matrixof thedisclosureofnarroworbroadstakeholder identificationandsymbolicor substantivestakeholderengagementSource:Author,2017.Note:Narrowidentificationstandsfornormativestakeholders,Broadstandsforderivativelegitimatestakeholders, Symbolic engagement stands for informativeand consultative engagement, and Substantive engagementstandsfordecisionalengagement.

The criteria used for stakeholder identification often related to economic concerns, arguably

indicatingahiddencommercialagendaofCSRdialogue,asrevenue(C2)or“theamountofbusiness

thatwehavewiththem”(C1),andthebusinessmodel(C8,C2)orinfluenceorimpacttothebusiness

(C8).Othercriteriawerealignmentwithorganisationalprojects(C6),relationshipwithstakeholders

(C7)andstakeholders’commitment tosustainability (C1).Onlyone intervieweeexpressednot to

knowtheprocess(C4)whiletheothernon-respondentseitherdeflectedthequestion(C5)orclaimed

confidentiality (C3). Similarly, publishing the criteria for selecting stakeholders was a limited

practice, only done in the sustainability reports of five organisations, in line with a widespread

omissionidentifiedinthisindustry(Bonilla-PriegoandBenítez-Hernández2017)aswellasinother

industries(MoratisandBrandt2017).Threeorganisationsgavegenericreasons:i)themanagement

judgmentonfeedbackduringtheyear(Caesars,EasternCrown)andii)groupsthatarepartofthe

business environment (NHHotel). Twoprovidedmore specific criteria: i) based on the feedback

receivedandthematerialissues(Starwood)andii)stakeholdersthatcanhelpenhancethebusiness

strategy(Hilton).

Thecontentanalysisresultsevidencedareluctancetodisclosewhoweretheprioritystakeholders,

the criteria used to identify them as relevant interested parties and themechanisms adopted to

facilitatetheirinput.Communicatingwhoarelegitimatestakeholders,whatmakesthemsuch,and

how the organisation balances conflicts between their claims remained for interpretation,

underminingstakeholderaccountability.

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Stakeholderengagement

Accordingtothedisclosureinthereports,almostthree-quartersofthe18organisationsseemedto

not engage with all the stakeholders identified in the reports (Table 41). Exceptions were

InterContinental,whoexplainedintheirreporttheaimandmethodforeachstakeholderidentified,

andWyndham,whoprovidedspecificgoalsandoutcomesofSE.Whilefiveorganisationsinvolvedall

stakeholders, the results suggested that the engagement was insufficient,with onlyWalt Disney

explaining the response to stakeholders’ feedback. Guests and suppliers were the stakeholders

engaged most often throughout the reports. Information and consultative engagement levels

indicated symbolic engagement while decisional engagement levels indicated substantive

engagement (Green andHunton-Clarke 2003). Engagement at a decisive level was visible in the

sustainabilityreportswithcollaborationinmulti-stakeholderinitiatives(e.g.,CDP),withtheindustry

peersandNGOs(e.g.,InternationalTourismPartnership),withouthoweverprovidingtheresultsof

these partnerships. Instead, interviews showed that organisations engaged decisively only with

owners(5hotelgroups),shareholdersandinvestors(4)withwhomthereisafinancialtie.Atthe

consultativelevel,hotelgroupsengagedwithNGOs(7),suppliers(5),localcommunities(5),industry

peers(5)andbusinesspartners(4).Theassessmentofthereportssupportedthecontentionthat

consultative mechanismswere used with local communities and sustainability supplier policies,

sometimes complementedwith audits. Informative engagement took place via the organisation’s

board,themedia,andcommunicationwithtime-shareowners,whileinterviewedorganisationsused

thiswithsuppliers(5)andclients(4).Findingsimplythatorganisationshesitatetoengageintwo-

way communication, in line with earlier evidence in the hotel (e.g., Bonilla-Priego and Benítez-

Hernández2017)andotherindustries(e.g.,MorsingandSchultz2006).

Table41:Stakeholderengagementlevelsfromthequestionnaires

Informative Consultative DecisiveOwners C1,C5 C1,C5 C1,C2,C4,C6,C7Shareholders C1,C5,C7 C1,C4 C1,C2,C6,C8Investors C1,C5,C7 C1,C4,C5 C1,C2,C6,C8Franchises C1,C5,C7 C5,C6 C2,C8Suppliers C1,C4,C5,C7,C8 C1,C2,C5,C6,C7 C5Businesspartners C1,C4 C5,C6,C7,C8 C2,C7Clients C1,C4,C5,C7 C1,C5 C2,C6Localcommunities C1,C5,C8 C1,C4,C5,C6,C7 C2,C5,C6Nongovernmentalorganisations C1,C5,C7 C1,C2,C4,C5,C6,C7,C8 C5Local, regionaland nationalauthorities C1,C5 C4,C5,C7,C8 C2,C6,C7Industrypeers C4,C5,C8 C1,C2,C5,C6,C7 C5Source:Author,2017.Note:Aquestionnaireerrorhinderedtheassessmentofemployeeengagement.

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Regarding SE methods and the frequency of engagement, these were disclosed in six cases.

Aggregating engagement methods for all organisations and all stakeholder groups showed that

consultation(28.8%),transacts(22.3%)andinformation(17.4%)werethedominantengagement

levels(Table42).Percentageswereobtainedbydividingthespecificmethodsineachlevelbythe

totalnumberofSEmethodsused.ThedifferencesbetweenreportedSElevelsperstakeholdergroup

andtheoutputsofsuchengagementshowedthatreportingwasincomplete.

Table42:Levelofengagementandmethodsofengagementbystakeholdergroup

Levels

Methods

Stakeholders

Shareholders/

Investors

Owners/

Franchises

Customers

Suppliers

Media

Localcommunity

Industrypeers

Authorities

Regulators

Academics

Organisation

Board

Employee

NGO

TotalSEmethods

across

organisation

%

25.7%

Informative

Remain Passive(Formal marketresearch/ industrybenchmarks)

0 0 0 3 0 0 0 0 0 0 0 0 0 0 3 0.5

Monitor (Requestsfor proposals/feedback channels,Service and loyaltytracking,CRMs)

0 0 0 7 1 0 0 0 0 0 0 0 2 0 10 1.8

Advocate (Socialmedia and on-linetools, OrganisationUniversity)

2 1 0 12 0 0 3 0 0 0 0 0 14 0 32 5.9

Inform(Training/Mentoring, Conference andpublicpresentations,Reports, Onlineportal, Websites,Bulletins andnewsletters)

7 11 9 4 6 0 12 5 1 0 0 2 38 0 95 17.4

62.8%

Consultative

Transact (Cause-related-marketing,Code ofconduct/policy,Awards,Recognitionprogrammes,Assessments,Auditsand reportingsystem, Contractrequirements andMemberships)

0 0 2 13 27 0 32 0 1 1 0 0 31 15 122 22.3

Consult (Meetingswith selectedstakeholder/s,Surveys e.g.satisfaction,engagement,

21 18 5 13 11 1 8 8 8 4 1 0 53 6 157 28.8

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Workshops, Focusgroups, AnnualGeneral Meeting ofShareholders)Negotiate(Collectivebargaining)

0 0 0 0 0 0 0 0 0 0 0 0 1 0 1 0.2

Involve (Onlineengagement tools,Multi-stakeholderinitiatives, Publicrelations,Events)

3 1 0 0 5 0 1 15 2 0 3 0 8 1 63 11.5

11.5%

Decisional

Collaborate(Partnerships, Jointprojects, Jointventures)

7 1 1 4 8 1 4 3 3 0 9 0 0 19 60 11.0

Empower(Communitychampions,Wellness-committee,Councils)

0 0 0 0 0 0 0 0 0 0 0 0 3 0 3 0.5

Total SE methods acrossorganisations for eachstakeholdergroup

40 32 17 56 58 2 60 31 15 5 13 2 150 41 546

Source:Author,2016.

Intervieweesprovidedfurtherinformationabouttheengagementmechanismsmostusedwitheach

stakeholdergroup,sometimeswithincoherencebetweenengagementtoolsandlevels(

Table 43). For instance, hotel groups used partnerships as a process of information giving andgathering, rather than a genuine stakeholder dialogue –even though partnerships are generally

assumedtoindicatedecisionalengagement(e.g.,AccountAbility2015).Hotelgroups’reportsdidnot

disclosetheoutcomes,andintervieweesplacedpartnershipsasaconsultativemechanism(C1,C7,

C8).Otherexamplesweresocialmediaplacedasdecisive(C5,C6,C8),andwebpagesandcodesof

conductasconsultativeanddecisiverespectively(C6,C7).

Table43:Stakeholderengagementmechanismsbystakeholdergroupandorganisationfromthequestionnaires

Owners

Shareholders

Investors

Franchises

Suppliers

Business

partners

Clients

Local

communities

Nongovernment

alorganisations

Local,regional

andnational

authorities

Industrypeers

Informative

Meetings C1,C5 C1,C7 C1,C7 C1,C5,C7 C1,C5 C1 C5 C8 C5,C7 C1 C5

Code ofconduct

C1,C7,C8

Socialmedia C5 C5 C5 C5 C5 C1,C5,C7

C1,C5,C8 C1,C5 C5 C8

Marketresearch

C1

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Events C1 Newsletter C7 Conferences C5 Issuebriefings

C5 C5

Consultative

Meetings C1,C5 C1 C1 C5,C6 C1,C5,C6

C5,C6,C8 C5 C1,C6,

C7C1,C5,C6,C8 C8 C1,C6,

C7Surveys C1,C7 C1 Events C1 Internalcouncils C5 C5

Conferences C5 Collaboration C5 C5Telephones C6 C6 C6 C6 E-mail C6 C6 C6 C6 Socialmedia C6 C5,C8 C5,C6 C6,C8

Partnerships C1,C7,C8

C7

Marketresearch

C1

Issuebriefings C5 Webpage C6 C6 Code ofconduct

C7

Councils

C7

Decisive

MeetingsC1,C4,C6,C7

C1,C6,C8

C1,C6,C8

C5 C6 C5 C6 C5

Counciloutreach

C5

Partnerships C8 Telephones C6 C6 C6 C6 C6 E-mail C6 C6 C6 C6 C6 Socialmedia C8 C6 C6 Webpage C6 C6 Code ofconduct

C7

Annualreport C8 C8 Source: Author, 2017. Note: Italics indicate the engagementmechanismsmisplaced according to the AA1000SES. NoinformationwasprovidedbyC2andC4.

Indicating which stakeholder groups might be relevant to particular management decisions is

effectivelyanimplicitdisclosureofwhichexpectationstheorganisationispayingmoreattentionto.

Onoccasionswhereorganisations’ownreportsandintervieweesdididentifyderivativelegitimate

stakeholders, those stakeholderswere engaged substantively compared to primary stakeholders

(Figure29).Forexample,allintervieweesandorganisationsidentifiedNGOsintheirreports,either

formally(10)orinformally(8),andnearlyall(exceptDisney)claimedtousepartnershipswiththem

as a method of engagement. Also, C2, C3 and C5 presenting a ‘symbolic’ engagement (mainly

informativeandconsultative)accordingtotheirreports,instead,hada‘substantive’engagementat

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decisional level with stakeholder groups beyond financiers (e.g., local communities, authorities,

suppliers,NGOsandindustrypeers).

EventhoughcommunicatingSEmethodswasmorecommonthandisclosingthecriteriatoidentify

and prioritise stakeholders, it was the lack of disclosure about how engagement took place (i.e.

proceduralqualityaccording toZadekandRaynard2002) thatledtodoubtsabouthowusefulor

informativethedialoguecouldbe,asisalsoevidenceacrossotherindustries(e.g.,Høvring,Andersen,

andNielsen2016,MoratisandBrandt2017).Additionally,theoutcomesofengagementwereseldom

disclosed in the reports (10organisations),which furtherquestions thehotels’ SE exercise, since

engaging stakeholders does not ensure that the organisation acts in the interests of legitimate

stakeholders(MoriokaanddeCarvalho2016,deVilliers,Rouse,andKerr2016).Noticeably,noreport

disclosed SE challenges, and interviewees acknowledged not reporting difficulties, with only C5

planningtodisclosethisinthefollowingreport.Onlyoneorganisationsubstantiatedthereasonsfor

nondisclosure;“itisnotappreciatedasapriority”(C2)whileC7didnotknowthereasons.Disney

was the only organisation disclosing some feedback from stakeholders, while no organisation

clarifiedtowhatextentsuchfeedbackwasinfluentialontheorganisation’sdecisionmaking.Ifthey

diddoso,itwouldimplicitlyrevealwhichstakeholders’demandsareprioritised(i.e.responsiveness

quality according to Zadek and Raynard 2002). Similarly, the interviewed organisations seldom

disclosedthefeedbackfromthepreviousyear’sreport(onlyC1)andwhichinformationwasaimed

at each stakeholder group (C1, C2), arguably because revealing stakeholder feedback was not a

priority.TherewasnoevidenceofhowSEcontributedtotheorganisation'sbehaviour,throughthe

disclosureofthescope,breath,andoutcomesfromtheengagement(i.e.outcomequalityaccordingto

Zadek and Raynard2002), since neither the content analysis nor interviews could tell how or if

stakeholderdialogueimpacteduponthehotelgroups'strategyandpolicy.

The majority of reports, despite adhering to G4 Sustainability Reporting Guidelines, whether

reportingaccordingtothe“core”or“comprehensive”options,didnotcomplywiththemajorityof

stakeholder-relatedindicators,inparticularreportingthebasisforidentificationofstakeholders(G4-

indicator 25), the frequency of engagement by type and by stakeholder group (G4-26), the

stakeholdergroups thatraisedeachof thekey topicsandconcernsandhowtheorganisationhas

respondedtoeachofthem(G4-27).Onlythelistofidentifiedstakeholdergroupswasclearinmost

reports(G4-24).Thislackofdisclosureunderminesthehotelgroups’accountabilitytostakeholders,

which in turn weakens their legitimisation, since both transparency and accountability “are the

essentialcomponentsinthelegitimatingofanorganisation”(BendellandLake2000,226).

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Stakeholderorientation6

StakeholderorientationisassessedherebasedonthedegreeofsophisticationoftheSEprocess,the

organisations’responsivenessandapproachtowardscollectiveandindividualstakeholders,which

contributedtoexplainthelimitedamountofdisclosureaboutSE.TheSEforC1,C4,C5andC8was

intuitive,ad-hoc,basedonaninformaldiscussionwithstakeholders,andundertakenwithanexternal

consultantaspartoftheirMA.OnlythreeorganisationsdemonstratedmoreadvancedSEpractices;

C3hadformalcommitments,channelsandtoolsforSE,andbothC1andC8usedastakeholdermap.

More formalSEseemedto influencebetterdisclosureon inclusiveness(stakeholder identification

andengagement)whenorganisationsproducedasustainabilityreport(C2,C3,C1)ratherthanwhen

they just reported through their websites (C7, C8-M), since websites only included non-specific

information. Instead, having more formal SE did not lead to broader identification and more

substantive engagement. Organisations with ad hoc and intuitive practices also presented broad

identification and substantive engagement (C4, C5) while, for example, C1, which employed a

stakeholder map and criteria for engagement, mostly showed only symbolic engagement.

Additionally, irrespectiveof the formalisationofSEpractices, thecontentanalysissuggestedonly

mid-to-lowSEdisclosurescoresforthehotelgroups.ThelimitedinformationsharedonSEpractices

through interviews and reports suggested that hotel groupswere a longway from best practice

concerningSE,whiletheirlowdisclosurelevelsweresimilartootherindustries.

Responsiveness (Table 44), assessed through the content analysis, included i) whether the

organisation communicated the response given for material issues, and ii) whether the report

followedastructure toguide theuser to identifyresponsesgiventoeachmaterial issue.Caesars,

Hilton,HyattandNHwerethemostresponsive,obtainingthehighestscorepossibleinthecontent

analysis.Wyndham,EasternCrown,IntercontinentalandCarlsonobtained1.5points,sincealthough

theycommunicatedtheresponsegivenformaterialissues,thereportstructuremadeitdifficultto

identifytheresponsesgiventoeachmaterialissue.Fromtheremaininghotelgroups,onlyAccorand

Meliàhadlimitedresponsivenesswhiletherestdidnotdisclosehowtheyaddressedtheconcerns

raisedbystakeholders.Mosthotelgroupshesitatedtodisclosehowtheydealtwithandrespondedto

theissuesraisedbystakeholders,similartoearlierevidencebyMoratisandBrandt(2017)whofound

6Stakeholderorientationis“theorganisationalcultureandbehavioursthatinduceorganisationalmemberstobecontinuouslyawareofandproactivelyactonavarietyofstakeholderissues”(Ferrelletal.2010,93).

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low levels of responsiveness across 18 sectors. Overall, there was a gap between engaging with

stakeholdersandusingtheirinsightstoinformtheCSRstrategy.

Table44:Responsivenessfromcontentanalysis

CriteriaCaesars

Hilton

Hyatt

NH

CarlsonRezidor

Wyndham

EasternCrow

n

Intercontinental

Accor

Melià

Starwood

MGM

WaltDisney

Marriott

Whitbread

Shangri-La

Riu

Millennium

Totalpoints

Average(%

)

C. Responsiveness (Sizeof the dot in theAccountability MatrixFigure31) 2 2 2 2 1.5 1.5 1.5 1.5 1 1 0.5 0 0 0 0 0 0 0 0.9 45.8c.1. The organisationcommunicates theresponse given formaterialissues 1 1 1 1 1 1 1 1 0.5 1 0.5 0 0 0 0 0 0 0 0.6 55.6c.2.Thereportfollowsastructure to guide theuser to identifyresponsesgiven toeachmaterialissue 1 1 1 1 0.5 0.5 0.5 0.5 0.5 0 0 0 0 0 0 0 0 0 0.4 36.1Source:Author,2016.Note:Theresponsivenessscoreisoutof2points.

Anothercharacteristicwascross-sectorcollaboration,insteadofcompetition,whichwasincreasingly

assumedtobenecessaryforaddressingsustainabledevelopmentchallenges(C1,C2,C3,C5,C7,E1,

E4).ThestatementfromE1“we’reallfacingtheseissues”possiblyreflectsthisincreasedawareness.

Collaborationwithcompetitorshasseenanincreasedfocusintheindustryonbothenvironmental

andsocialissues.Inthesampleforthisresearch,thiswasreflectedininitiativessuchastheHotel

CarbonMeasurementInitiativein2012(mentionedbytwoorganisations)and,in2016,theWater

Measurement Initiative (also mentioned by two organisations), and the Youth Career Initiative

(mentioned by one organisation). Collaboration most often occurred through voluntary multi-

stakeholder initiatives and, therefore, according to Bryson et al. (2006), they would have likely

emergedovertimeinsteadofbeingdeliberate.Anexampleistheindustrymaterialityassessmentled

bytheInternationalTourismPartnership,whichisleadingmuchoftheindustryengagement(C1,E1,

E4),deflectingcriticism,andallowingorganisationstoreceivehonestfeedback(E1).Thispartnership

represents the industry members’ needs and has become an agent for creating subject-specific

dialogue in the industry. Hotel groups’ motivations for participating in such a non-competitive

platformfocusedonrespondingtothedemandsofkeystakeholdersandgraduallyimprovingtheir

sustainability responses. Specific motivations included to: develop legal policies (C2) and set

consistent standards (C5), improve innovations (C6), share good practices and create solution-

orientedactions(C1), increasestakeholderdialogue(C6)andenhanceawarenessofsustainability

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challenges (C2). Instead of seeking differential competitive advantage, large hotel groups

collaboratedtosecureresourcesandcompetenciesnototherwiseavailabletothem,inthesameway

assmallandmediumsizedhotels(Chan2011).Thismaytransformtheirpracticesandenablethem

tobetterrespondtothedemandsofcriticalstakeholders.

Hotelgroupspredominantlyhadaperformanceimprovementorientationtostakeholderdialogue,at

least according to the SE objectives that they disclosed (14 organisations). Objectives were: i)

establishingpoliciesandactions(8reports),ii)establishingreportcontentandrelevantinformation

(7), iii) establishing or reviewing strategic objectives (5), iv) improving the business (4), and v)

buildinglong-termrelationships(3).TheseSEobjectivesweresimilartothosefoundbyMoratisand

Brandt(2017) inother industries.Theseobjectivessuggestthathotelgroupsare increasingtheir

commitmenttointegratestakeholderconcernsmorestrategically(objectivei,iii,iv)andtostartto

implementeffectivesustainabilityreportingpractices(objectivesii,v).Reports,questionnairesand

interviewstogethersuggestedthatSEinthehotelindustryisaninstrumenttoconsult(andinfluence)

stakeholderswitha ‘hidden’ commercialagenda,SI andMAcriteria arepredominantlydrivenby

economics,andtherewasnoevidencetheyinvolvedstakeholdersindecisionmakingandreporting

processesforbroadersocialpurposes.Moreover,SEobjectiveswereseldomsupportedbyoutcomes,

underminingstakeholderaccountability.

Boththeinterviewsandreportssuggestedthattheorganisationswerenotattemptingtoinfluence

stakeholderbehaviour,butinsteadwerereactingbasedonpredictingthefutureenvironmentsoas

tobeable tomatch theorganisation'scapabilities to that.Hotelgroups thereforehadreactiveSE

strategies to answer external pressures from society, competitors, NGOs and requests from

customers,investorsandshareholders(C1,C5,C6,C7,E1,E4,E5,E2,E3,E7,E8),evidencedinthe

statement:“[Stakeholders]aresuggestingwedothingslikethis”(C7).Also,E1explainedthattheSE

was inward lookingbecauseorganisationswere searching for feedbackon “howgood they look”

instead of broader engagement. The somewhat vague descriptions of SE and the expert input

indicatedthatmosthotelgroupsmayapproachSEasanadhocandone-offexercise,incontrastto

othersectors(e.g.,MoratisandBrandt2017).

Inconclusion,hotelgroupsseemtohaveaperformance-orientedapproachtoSEwithreactive,ad

hocandinformalprocesses.Hotelgroupsalsohavelimitedtransparencyoftheirstakeholder-related

practicesandseldomrespondtostakeholderconcerns.Thismayleadtoissueswiththeirlegitimacy,

which might have influenced their recent engagement in collaborative multi-stakeholder

partnershipsasameanstobothimproveinternalpracticesandsafeguardcorporatereputation.Few

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of the interviewed organisations presentedmore formal internalprocesses (C1, C3, C8) ormore

transparency intheirreports (C5,C3).Therewasnoclearlinkbetweenorganisationswithbetter

processes inplace alsohaving greaterdisclosure, except forC3.Thismainstreamapproach to SE

couldhamperthepotentialbenefitsoftheMBSC,whosepillarisinclusiveness.Thefollowingsection

continueswiththeSRprocesses,includingnowtheMA,asthesecondMBSCfoundation,whichbuilds

intotheengagementofstakeholders.

Step3.Determiningtheenvironmentalandsocialexposureofstrategicbusinessunits

Step3(Figure30)reviewstheremainingsustainabilityreportingprocesses(systems),includingthe

reporting guidelines adopted that influence the materiality approach and external assurance,

finishingwiththemotivationsforreportingandtherationalebehindtheirspecificreportingchoices

(sharedvalues).

Figure30:Step3Determiningenvironmentalandsocialexposureofstrategicbusinessunits

Source:Author,2018.

Reportingguidelines

Sustainabilityreportingis“notatallanextendedpracticewithintheindustry”(E5);only18outof

the50largesthotelgroupsreportsustainability,andthismainlyfollowsGRI,whichisadominant

guidelineacrossindustries(LandrumandOhsowski2018,DobbsandVanStaden2016).Fromthose

intervieweesinorganisationsproducingsustainabilityreports,onlyC6didnotuseanyguidelines,C8

usedtheGRIsolely,whiletherestusedacombinationofguidelines,arguablybecausetheyarenot

integrated;asC4explained,“theyshouldbestreamlined.”Outofthe18organisationspublishinga

sustainabilityreport(Table45),ninefollowedtheGRIG4,twousedG3.1,andoneG3.Rigourranged

fromproducingreports ‘inaccordance–comprehensive’ to thestandards, to the lessrigorous ‘in

accordance – core’ that disclosed fewer material indicators, to ‘undeclared’, where the level of

applicationoftheGRIwasnotdisclosed.Evenifthereisno“industryGRIdefinition”(C1)andthere

is“theneedtoalignindicatorsbetterforeachindustry”(C5),GRIisthemostwidelyusedbecauseit

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“helpstoidentifythekeychallengeassociatedwithmainstakeholders”(C2)and“itisagoodsystem

to comparewith other entities, eliminate asymmetries, and establish criteria formonitoring and

standardisationaccordingtotheacceptedinternationalreportingtrends”(C3).

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Table45:Hotelgroupswithpublishedsustainabilityreportsfromthetop50largestbynumberofroomsin2014

Organisation Headquarters

Last Report Type/ Applicationlevel

Sustainability Report(Yearofpublication)

Experience (reportnumber)

CDP* Climatechange2015

CDPWater2015

(HiltonWorldwide) USA G4–Inaccordance–coreSelf-declared 2015 4th B97 Yes

(MarriottInternational) USA NonGRI 2015 6th C97 Yes(InterContinental HotelsGroup) England G3.1–Undeclared 2015 8th B98

(WyndhamWorldwide) USA G4–Inaccordance-core 2015 5th A98 (Accor) France G4–Inaccordance-core 2015 Datanotavailable C96

(StarwoodHotels&Resorts) USA G4-Undeclared 20152ndreportingyear7th Carbon DisclosureProject

Notdisclosed Yes

(Carlson Rezidor HotelGroup) USA G3-Undeclared 2015 9th /

(Hyatt) USA G4 2015Scorecard2014Report 4th B95

(MeliàHotelsInternational) SpainIntegratedReporting(IIRC)andG4–Inaccordance–core

2015 7thA99

(Whitbread) England NonGRI 2015 3rd B98 (NHHotelGroup) Spain G4–Inaccordance-core 2015 5th A99 (MGMResortsInternational) USA NonGRI 2015 4th D80 (RiuHotelsandResorts) Spain NonGRI 2015 1st / (WaltDisney) USA G3.1.Self-declared(B) 2015 7th C93 (CaesarsEntertainment) USA G4–Inaccordance-core 2015 2nd A-100 (Shangri-la Hotels andResorts) China Non GRI - Communication of

progress 2015 5th D96

(EasternCrownHotels) China G4–Inaccordance-core 2015 3rd C93 (Millennium & CopthorneHotels2015) England Non GRI – Annual Report

(IntegratedReportingFramework) 2015Annualreport 13th Annual report withCSRcontent

E74

Source:Author,2016.*Note:CDP2015,anumericaldisclosurescore(1-100),andletter(A-E)forperformance,wereassignedtoeachrespondingorganisation.Forthe2016cycleandbeyond,thescoringmethodologywassimplifiedandreflectedinaletterdesignationfordisclosure,awareness,managementandleadership.

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Particularlyforclimatechange,hotelgroupsmostlyusedtheCDP,albeitithasremainedaresidual

practice,asseeninTable45.Whenused,however,CDPincreasedtransparencysinceorganisations

providedmoredataonGHGemissionsthaninsustainabilityreports(C1,C2,C4,C5,C8),similarto

otherindustries(e.g.,Depoers,Jeanjean,andJérôme2016).CDPis“theonlyplatformwhereyouhave

toreportdirectlytoapublicdatabase”(E2).Investorsareincreasinglytakingaccountofclimaterisks

whendecidingoninvestmentportfolios(Gianfrate2018),whichisarguablyalsothecaseforthehotel

industry;“hotelswithmoreactiveshareholdersneedtodemonstratethatCO2emissionsareunder

control”(E5).C5forexample,said,“welookforinputofwhatinvestorsmaybeinterestedin,aswhat

they’reaskingfortheCDPresponse.”

Integrated Reporting (IR) is an emerging guideline driven by investors’ needs that, as in other

industries(e.g.,Klettner,Clarke,andBoersma2014),remainsinanexperimentalstage,beingused

onlybyMeliàfromthe50largesthotelgroupsandC3fromtheinterviewees.WhileC8claimedto

undertake integratedreporting,evidencewasnotprovidedat the timeof theresearch thatcould

supportthisclaim.Whileintegratedreportingoffers“greatertransparency,quality,andreliability”

(C3)barrierstoitsadoptionweremultiple;limiteddemand(“notenoughinvestorsareaskingforthis

yet”C5),poorrigourofsustainabilityreports,complexity,andtimediscrepancybetweenissuingthe

annualversussustainabilityreport(C1,C2,C5),allofwhichcontributetotheframeworkbeingoflow

qualityandnotbeingfullyimplemented,asseeninearlierresearch(Pistoni,Songini,andBavagnoli

2018).

Lastly,hotelgroupsdidnotmentionSASBintheirsustainabilityreportsorinterviews,eventhough

somewereregisteredintheUnitedStates,possiblybecause,asE3described,it“looksatinformation

for investors thatwould be disclosed at the annual security filing.” Also, only C4mentioned the

regionalstockexchangerulesforreportingsoastoprovideastrategiccontextthatfacilitatedthe

hotel chain sustainability orientation. Indeed several governments recently ratified sustainability

reportingregulations(e.g.,Gattietal.2018),andthoseappearedasamotivationforreporting(see

Table51).

The intended audience of sustainability reports was a multitude of stakeholders, as evidenced

elsewhere(e.g.,Kolk2008).Stakeholderstargetedwereinvestorsandshareholders(4interviewees),

customers(4),NGOsandcommunities(3),employees(2),suppliers(2),thegeneralpublic(2),and

government(2).Accordingtoexperts,theaudiencedependedonthebusinessmodel,thenatureof

thebusiness,andthereportingguidelinesused(E3,E4,E5).Expertsechoedaconcernabouthow

sustainabilityreportscouldsatisfyallthestakeholders’ informationrequestswhentheymayhave

192

conflictingdemands(apointalsoraisedbyMargolisandWalsh2003).E3explained,“thedifferent

frameworkshavedifferentaudiencesandgoals,”butbytargetingtoomanystakeholders,reportsend

up“nothavingaclearaudienceinmind”(E1).Forexample,“mostsortofinvestorsorpeoplefrom

financewouldsaysustainabilityreportingisverynice,butIdon’tknowwhatthismeanstome”(E1).

Havinghigherorganisationalintegrationdidnotseemtobelinkedtotheproductionofsustainability

reports. Also, having better technical integration was not linked to the adoption of particular

reporting guidelines, albeit organisations declaring intentions to use an organisation-wide PMS

reportedunderGRI“Inaccordance-Core”andCDP.Thereportingmaturity,aninternaldeterminant

ofsustainability integration(MoratisandBrandt2017),wasalsonot foundtoaffectstakeholder-

related disclosure for GRI or CDP in this study. Some experienced reporters provided limited

disclosure (e.g., Marriot, Walt Disney) while some beginners offered extensive disclosure on

inclusiveness,materiality, and responsiveness (CaesarsEntertainment, EasternCrown). Similarly,

someorganisationswithmorereportingexperienceobtainedlowerCDPscores(MGHscoresDand

MillenniumE) than organisationswith less experience (NH,Wyndham andMelià scored A). The

reportingstandardfollowed,notablytheG4“Inaccordance–core”option,likelyinfluencedhigher

transparency levels, as G4 requiresMA. The reportingmaturity also did not translate into using

stricterreportingstandards,unlikeinothersectors(e.g.,MoratisandBrandt2017).Organisations

used G4 both with two-years (Caesars and Starwood) and seven-years of reporting experience

(Melià), while other experienced hotel groups applied earlier GRI versions (Carlson,

Intercontinental),andorganisationsreportingwithoutusinganyguidelineswerebothexperienced

(Millennium, 13th report) and beginners (Riu, 1st). Reporting experience among interviewed

organisationsalsodidnotleadtomoresophisticatedSRprocessesormoretransparentdisclosure,

exceptforC3,whichhadsevenyears’experienceofreportingusingIR.C1andC6echoedconcerns

abouthowtheirlimitedreportingmaturityhamperedtheiruseofIR.

Thedifferentchoicesinrespecttosustainabilityreportingframeworksentaileddifferentapproaches

tomateriality,whichresultedintheidentificationofvaryingmaterialissues.

Materialityassessment

Thelackofexperienceinconductingmaterialityassessment–formallyintroducedinthe2014G4

guidelines–coupledwiththeheterogeneityofdefinitions,guidelinesandapplicationsofmateriality

increased the need to disclose what organisations understand as material, their processes for

identifyingissuesandthecriteriatheyusedtoevaluatethem(

193

Table46).FourofthehotelgroupsinterviewedperformedMAformally(C1,C2,C3,C8),threehad

done it informally and intended to formalise it in the future (C4, C5, C7), and only onewas not

interestedinperformingtheassessment(C6).Intervieweesclaimedtoemploymaterialityinorderto

redefinetheirsustainabilitystrategy,butthedisclosureoftheirreportssuggestedotherwise.While

MAemergedtodetermineathresholdatwhichaspectsaresufficientlysignificanttobereported(GRI

2013a),onlytwointerviewees(C4,C5)usedittoinformtheirreports.Fromthecontentanalysis,only

11 out of 18 organisations referred to MA, even though all 18 identified sustainability issues

(indicatorG4-19).TherewasonlypartialevidencethatorganisationswithbetterSEdisclosurehad

betterMAdisclosure.OnlyWyndhamhadboththehighestscoresinSEandMA.Thisstudysupports

previous research suggesting that materiality is not treated comprehensively within the hotel

industry(Jones,Hillier,andComfort2016).

Table46:Quantitativecodingscoresformaterialityassessment

Criteria Wyndham

Caesars

Accor

EasternCrown

Melià

Hilton

Intercontinental

NH

Hyatt

CarlsonRezidor

Starwood

MGM

WaltDisney

Millennium

Marriott

Whitbread

Shangri-La

Riu

Scorepercriteria

(outof18)

b.Potentialissues 1 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 4b. Criteria for determiningmateriality 1 1 0 1 1 1 1 0.5 0 0 0 0 0 0 0 0 0 0 6.5b.Meaningofmateriality 0 1 0 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 6b.Listofmaterialissues 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 11b. Visual representation formaterialissues 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 4b.Stakeholdersforwhichtheissuesarematerial 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4Scoreperorganisation 5 5 4 4 4 3 3 2.5 2 2 1 0 0 0 0 0 0 0 Source:Author,2016.Note:Thescoreperorganisationisoutof6points.

IntervieweeswereunabletodetailtheMAprocessandaggregationofstakeholderfeedback,alleging

thattheydidnotknowthedetailsbecauseanexternalconsultantundertooktheprocess(C1,C8),not

being at the organisation when the consultation happened (C2) or confidentiality (C3). Only C3

explainedthattheysentaquestionnaireofaselectionoftopicstorepresentativesofallstakeholder

groups. Reports about actions to determinemateriality were somewhatmore transparent (G4 -

indicator18).Thoserangedfromreviewinginternaldocumentationandexternallybenchmarking

their performance or sustainability policies, estimating sustainability impacts, risks and

opportunities,tousingmaterialitymatrices(Table47).Markedvariationsintheassessmentwere

alsofoundinotherindustries(Jonesetal.2017).

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Table47:Materialityassessmentstepsdisclosed

Actionsfordeterminingmateriality Companies• Review internal sources of information, e.g. organisational values, policies, strategies,

operationalmanagementsystems,goals,andtargetsNH,Melià

• Identifykeyissues,prioritiesandopportunities Hyatt• Review social, environmental and economic issues associates with the business

operationsHyatt

• Measurehowthestakeholders’expectationsimpactontheorganisationfinanciallyandreputationally

ACCOR

• Benchmarkorganisationperformanceagainstindustrypeers ACCOR• BenchmarkCSRpoliciesandpracticesofpeerorganisations EasternCrown• GRIMaterialityDisclosureServices NH• Revising significant strategic laws, regulations and international and voluntary

agreementsNH

• Estimatesustainabilityimpacts,risks,oropportunities Melià• IndustryMaterialityMatricesusedasabasistointegratetheorganisationpriorities NH,Wyndham

• UseofMaterialityMatricestoassessimportanceofissuesInterncontinental,ACCOR

Source:Author,2016.

Mostorganisationsrecognisedtheroleofstakeholdersinmaterialitydecisionsintheirsustainability

reports,similartoothersectors(Jonesetal.2017).TheMAwasperceivedasapowerfulstakeholder

engagementtoolbythehotelindustry.Forexample,C5explained,“Iamtryingtodomoreintermsof

formalisingstakeholderengagement,startingwiththematerialityassessmentin2017.”Table48lists

theSEactionsdisclosedtodeterminemateriality.Forinstance,AccorexplainedthatMAconsistsof

“identifying stakeholder concerns and expectations and determining their degree of importance”

(2015,25).The contentanalysis indicated thepracticesofWyndham,Accor,CaesarsandEastern

Crownweremoretransparentthanthoseoftheother14organisations,inthattheyidentifiedwhich

sustainability issueswerematerial towhich stakeholder groups. Notably, only the previous four

groupsdisclosedindicatorsG4-20andG4-21abouttheentitiesforwhichtheaspectswerematerial,

despiteninehotelgroupsadheringtoG4guidelines.Intervieweesarguedtheywerenotdisclosing

which set of informationwas aimedatparticularstakeholdersbecause “each stakeholder canbe

interestedintheentiresustainabilityprocessandnotonlyabouttheprograms/actionsinwhichhe

isinvolved”(C2,similarlyexpressedbyC1).

Table48:DisclosedSErelatedactionsforMA

Genericstakeholdermethods Organisations• Engagewithstakeholderstodefineanddeterminewhatissuesweremost

importanttoreportandtohelpdeterminewhereeachissuewasrelevanttotheorganisation

EasternCrown

• Identify stakeholder concerns and expectations and determine theirdegreeofimportance

ACCOR

SpecificMethods• Participateinindustrymulti-stakeholderinitiatives Carlson Rezidor, NH, Starwood, and

Wyndham• On-goingSE Accor, Caesars, Hilton and

Intercontinental• Surveystointernalandexternalstakeholders Melià

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• Interviewswithexternalinterestedparties Hyatt,Wyndham• Internalworkshops Hyatt• Onlinetoolenablingstakeholderstoassesspredefinedissues Melià• Onetooneconversationswithstakeholders Wyndham

Source:Author,2016.

An example of SE actionwas participation in multi-stakeholder initiatives such as International

Tourism Partnership’s industry MA (4 organisations). Interviewees saw the industry MA as

complementarytotheorganisations’MA(C5,C1,E1,E3);as“astartingpoint”(C1).Theorganisational

MAwasamoreintrospectivepiece,tiedto“howyouoperatedyourbusiness”(E1)andprovideda

perspectiveonthelocalissues(E1,E8).Nevertheless,hotelgroupsfailedtodisclosetheintegration

oftheoutcomesofITPintheirstrategies.EvenwhenNHandWyndhamattemptedtocommunicate

theresults,therewereconsiderabledifferences(e.g.,whiletheITPidentified‘water’asmaterial,this

wastranslatedas‘environment’byNH).QuestionsofhowSEmeaningfullyinformsdecisionmaking

remained,therefore.

The conceptualisation of materiality by hotel groups can be inferred from their definitions of

materiality,orintheabsencethereof,bycomparingthecriteriaemployedtodeterminemateriality

according to theGRIdefinition. Intervieweeswere invited todefinemateriality,andyetonly two

providedadefinition.ForC8,materialitymeantthat “differentstakeholdersgivetheiropinionon

whatmattersaremost important to them regardingourbusiness,”while, forE7,materialitywas

about“identifyingstakeholdersthatareaffectedthemostandtheissuesthatareimportantforthose

stakeholders.”Inbothdefinitions,theintervieweesreferredtotheimportanceoftheinformationfor

stakeholders,thusechoingthesecondpartoftheGRImaterialitydefinition.Whentheremainingsix

hotel groups were asked to define materiality, two used a combination of organisation and

stakeholderfocuscriteria,whichresonatedwiththedualityoftheGRIdefinition;C7included“where

weaffecttheenvironmentmost”and“[issues]ofinteresttotheowner”;C5included“issueshelping

ourbusinesstothrive”and“issuesthathavebeenbroughttoourattentionbyourstakeholders,in

somecases,inanegativeway.”Thelasttwohotelgroupsinterviewedusedonlyoneapproach,either

theorganisationimpact(C1-"frequencyoftheissueandimportanceorimpactforthebusiness")or

the stakeholder impact (C2 - “the impact on stakeholder expectations from the hotel business

financiallyandonreputation”).Particularlynoteworthywasthefactthatmostoftheinterviewees

werenotwillingtodisclosethecriteriatheyusedtodeterminemateriality.Thisreticencetorespond

toquestionsrelatedtoscoringmechanismsaffectedthecompletenessofthedataandisassessedin

Sections5.5.4and7.3.

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Similarly,thecontentanalysisrevealedthateightoutof11organisationsperformingMAdisclosed

thecriteria,ofwhichfourusedacombinationoforganisationandstakeholderfocus.Hilton,Accor

and Caesars used ‘level of stakeholder concern’ and ‘of importance for the organisation’ (Hilton,

Accor) and ‘relevant to our business’ (Caesars). Melià used ‘strategic,’ ‘significant risk to the

organisation’ and ‘materiality to stakeholders.’ InterContinental used ‘of importance for the

organisation’ and ‘stakeholder impact.’ Instead, the remaining organisations employed only

stakeholder-relatedcriteria;NHandWyndhamused‘materialitytostakeholders,’andEasternCrown

used ‘stakeholder influence,’ and ‘substantively influence the assessment and decisions of

stakeholders.’Thesevariouscriteriaevidencedthesubjectivityofjudgmentsembeddedinmateriality

decisions. Inall18reports,evenwhencriteriawere included, the transparencyof theunderlying

method and the scoring mechanisms were poorly explained, and the weighting systems were

concealed,whichsupportstheevidencefromBonilla-PriegoandBenítez-Hernández(2017).Gaining

a further understanding of the subjectivity inmateriality assessmentwould advance progress in

copingwiththechallenges.

Intercontinental, Wyndham, Accor and Melià also used a materiality matrix to compare the

importanceofeach issue for theorganisationandsociety;anapproach increasinglyused inother

industries (e.g., Jones, Comfort, and Hillier 2016b, a). These matrices, however, varied across

organisationsinrespecttobothaxes-namesandscoringmechanisms,whichincreasedcustomisation

for communicating organisation-relevant information but made benchmarking more difficult. In

adaptingtheirmatrices,hotelgroupsfavouredcorporateratherthansustainabilitygoals,similarto

otherindustries(e.g.,Jonesetal.2017,JonesandComfort2017),since“choosingtheissuestoreport

oncanbeaveryquestionableprocess” (E7). Inaddition, includingwordssuchas ‘significance’or

‘strategic’inthematriceswithoutexplainingthemeaning(asfoundelsewherebyEccles,Krzus,and

Ribot 2015a), can allow them to posture; “hide things that they don’twant to show but defend

themselveswiththefactthattheyconductedmaterialityanalysis”(E7).

Furthermore,evidenceoftheoutcomeofengagementwasnotprovided,sincereportsdidnotclarify

towhatextentthestakeholderviewsinfluencedstrategicdecisionmaking.Whilefiveorganisations

claimedtoinvolveallstakeholders,thecontentanalysisoftheirreportsshowedthatevidenceofthe

outcomeswas limited.Nearly all the reports that identified stakeholder concerns explained their

plannedresponsestothematerialissuesingeneralterms.Instead,respondingtostakeholderclaims

seems commonplace across industries (e.g., Manetti 2011,Moratis and Brandt 2017). OnlyWalt

Disney explained the response to stakeholders’ feedback. Interviewees argued that they did not

communicatethefeedbackofstakeholderstothepreviousreportbecause“itwasnotapriority”(C2),

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“Idon’tknowifwegetanyfeedback”(C7)or“ITPandtheWorldTravelandTourismCouncilhave

convenedstakeholdergroupswithinthelastfewyearsonbehalfoftheindustry.”

Therewasagreementonthestrategicimpactofthestakeholderrelationship(e.g.,“informationfrom

ourstakeholdersarevitalforourcomingpriorities”C8)andhotelgroupsidentifiedandimplemented

actionstoengagewithstakeholdersatdifferentstages(Section6.4),however,severalelementsatthe

operationallevelindicatedprevailingpracticesofstakeholdermanagementratherthanengagement.

The integration of stakeholders in corporate governance was lacking; there was no adoption of

standardsforengagement(e.g.,AA1000AssuranceStandard),engagementlevelswerelow(limited

decisionalmechanisms), and stakeholder involvement indefining the report contentwas limited

(onlyC4,C5referredtotheuseofMAforsuchapurpose).Therewasapredominanceofadhocand

reactivepracticeswithlowlevelsofformalisation(e.g.,onlyC1,C8hadastakeholdermap).Theyalso

failed to demonstrate how consultation influenced engagement outcomes,withoutwhich theMA

exercise remained just a means to legitimise the reports. No specific instances were offered by

interviewees to substantiate how hotel groups undertook stakeholder engagement. Instead,

interviewees’ answers suggested that hotels mostly adhered to the instrumental approach of

stakeholdertheory,therebyusingsustainabilityreportstomanagethestakeholders’perceptionsof

theorganisationandtogaintheirsupport.Forexample,“knowwhatthestakeholders'expectations

are,whattheythinkweshoulddo”(C3),“theimpactonstakeholderexpectationsfromthehotel”

(C2), or “fulfil their expectations” (C7). Rather than involving stakeholders in decision-making

processes,making them participants in the businessmanagement, sharing information, engaging

dialoguingandcreatingmutualresponsibility(stakeholderengagement),intervieweesoftenreferred

tomanaging stakeholder expectations (stakeholdermanagement). Stakeholdermanagement was

alsopreviously foundtobemorecommonthanengagementacross industries (e.g.,Manetti2011,

Belal2002),includingthehotelindustry(GessaPereraandJiménezJiménez2015).

Materialityincreasedthedisclosurewithinthereportingprocessonlywhenorganisationsproduced

a sustainability report (C3, C2, C1), but seemed not to influence disclosure when organisations

reportedontheirwebsites(C8)sincewebreportersdisclosedonlyperformanceinformation.The

compulsorydisclosureoftheactionstodeterminematerialityforthosefollowingGRI(G4-indicator

18) may explain this result. Still, none of the reports examined, nor any of the hotel groups

intervieweddisclosedencounteringanydifficultiesinMA,despitereportingguidelinesnotproviding

any structured approach (e.g., “some serious fundamental flaws” E4) and organisationsmay face

challengesinpractice(e.g.,Howdoyouprioritiseyourstakeholders?Whatdoesitmeantoprioritise

energymorethanwater?E4).Thisstudyfoundanabundanceofpositiveinformationbutalackof

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voluntaryadversedisclosureinthereportingprocess(organisationsdonotreportonfailedattempts

to introduce practices, or where stakeholders have identified issues as significant, but the

organisationhasfailedtoaddressthemsofar),similartobiaseddisclosureinrespecttosustainability

performance(e.g.,HahnandLülfs2014).E7explained,“Wehadforyearscompaniesreportingon

thingsthattheywereperformingwellonandamendingtheinformationwheretheywerenotdoing

sowell." Furtherdisclosure could allow report readers tomake their assessmentofwhether the

‘dialogue’ stakeholders are encouraged to participate inmeaningfully informs the organisation’s

decision making. For example, “It’s critical that they make the process transparent, identify the

methods,andhowtheyengagedstakeholders”(E7).Otherwise,limiteddisclosuremaytranslateinto

greenwashingstrategiesinreportingsustainability;“materialitycanbeinanegativesenseusedto

hidethingstheydon’twanttoshow”(E7).

Externalassurance

In order to provide increased confidence in the quality of sustainability performance data

organisationscanundertakeexternalassurance.Thisstudy,however,foundlowlevelsofassurance

acrossthesample(asreportedelsewherebyJonesetal.2017,JankovićandKrivačić2014)andlow

assurance quality (as Manetti and Toccafondi 2012). Ten out of 18 organisations assured their

sustainability reports (Table 49), but characteristics of assurance (Table 50) suggest the quality

remainsunderquestion,whichdependedonthescopeandobjectives,thecriteriaused,theassuror

providerandthelevelofassurancegiven.

Table49:Assuranceofsustainabilityreports

Organisation IndependentassurancelevelHiltonWorldwide NoMarriottInternational LimitedIHG(InterContinentalHotelsGroup) NoWyndhamHotelGroup Limited/moderateAccorHotels LimitedStarwoodHotels&ResortsWorldwide LimitedCarlsonRezidorHotelGroup NoHyattHotelsCorp. NoMeliáHotelsInternational LimitedWhitbread LimitedNHHotelGroup LimitedMGMResortsInternational NoRiuHotels&Resorts NoWaltDisneyCo. NoCaesarsEntertainmentCorp. NoShangri-LaHotels&Resorts NoEasternCrownHotelsGroupChina NoMillennium&CopthorneHotels NotdeclaredSource:Author,2016.

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Theassurancestatementsreferredtoverifying;i)thereportingprocessagainstthestandardsand

requirements(Melià),ii)theconsistencybetweenthereportandtheinternaldocuments(e.g.,Accor),

iii) the financial information (e.g., NH), iv) the accuracy and robustness of obtaining facts (e.g.,

Whitbread),v)therelevanceandmaterialityprinciples(e.g.,Melià)andvi)theSEcarriedout(e.g.,

NH).Assurorsfollowedseveralstandards,suchastheISAE3000(4organisations).Allinterviewees

alsoclaimedtouseassurancestandards,exceptC8,butallfailedtoidentifywhichones.Nostatement

or interviewee referred to the AA1000SES, which is the standard focused on SE. Possibly as a

consequence,while the stakeholders' role in the accountabilityprocess emerged innearly all the

assurance statements, the stakeholders who were engaged effectively were internal employees,

through interviews or meetings ,while external stakeholders were kept at a distance from the

consultation,which arguablyundermines thequality and credibility of theassurance results (see

ManettiandToccafondi2012).

Table50:Sustainabilityreportassurancecharacteristics

QuantityAssuranceprofile Externalassurance 10Assurancestatement 6Contactoftheassuror(name) 5Assuranceprovider(accountant) 7Assuranceprofessionalopinion Thereportexplaintherelationshipbetweentheorganisationandtheassuranceprovider 2Thegovernancebodiesoraseniorexecutiveinvolvedinseekingassurance 5Qualifiedprofessionalopinion 6Publishedindicationsforimprovementprovidedbyassuranceprovider 3Unpublishedindicationsforimprovementprovidedbyassuranceprovider 1Intrinsiccoherenceandqualityoftheassurance Aimsandlimitsofthemandateareclearlydefined 8Theassurancescope-specifiedsections 7Theassurancescope-financialstatementsonly 1Levelofassurance: Limited 5Reasonable(onlyfinancialstatements) 1Notstated 4Assurancestandardsused AA1000AS 0ISAE3000 4InternationalFinancialReportingStandards 1InternationalStandardonQualityControl 1CodeofEthicsissuedbytheInternationalEthicsStandardsBoardforAccountantsIESBA 1Othernationalsustainabilitystandard 5Othernationalstandardorgeneralstandard 1Other,internationalstandard 1Stakeholderroleintheassuranceprocess Stakeholder consultation during verification process by assurance provider: Internal stakeholdersinterviews 3Stakeholderconsultationduringverificationprocessbyassuranceprovider:Internalstakeholdersmeetings 3Visittoheadquarters 1Stakeholdercategoriesdidtheassuranceproviderconsult:Employee 6Nomentionofdifficultiesmetinconsultingstakeholdersduringassuranceprocess 6

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Nosectionsofreportarededicatedtostakeholderopinionsonpreviousreports 6Assurancecontent:verifying… Reportingprocessagainstthestandardsandrequirements 4Consistencybetweenreportandinternaldocumentation 3Reliabilityofinformationofquantitativeandqualitativedata 3Relevanceandmaterialityprinciplesofinformationdisclosed 2Stakeholderengagementcarriedoutbyorganisation 2Financialinformationreflectedonthereporthasbeenverifiedbythirdparties 2Theprocessforobtainingspecifieddata 2Others 1Assuranceprocess Difficultiesorimprovementsmetarestatedinthereport 4Source:Author,2016.

Fourorganisationspublishedtheassurors'indicationsforimprovement,explainingthedifficulties

that were met in the assurance, with problems relating to different criteria and measurement

techniques.NH,however,concealedtherecommendations.Noneofthereportscontainedasection

that communicated stakeholder opinions on previous reports. Since corporate management

appointedtheassuranceproviders, iftheyreportedtoanyone,itwastothesameconstituency.In

Marriott,MeliàandNHthedirectionoftheorganisationitselfwasacknowledgedastheassurance

audience;inWhitbreadandWyndhamitwastheBoardofdirectors,andinAccor,theshareholders.

OnlyMarriottandMillenniumdescribedtherelationshipbetweentheorganisationandtheassurance

provider.

The content analysis identified the limited assurance level across the ten reports, which was

consistentwiththelevelofassuranceoptedforbyC1,C2,C3,andC5.Theassurancewaslimitedto

specificsectionsofthesustainabilityreports,suchasGHGEmissionsInventoryandEnvironmental

Performance Indicators(Marriott)orspecificGRIenvironmental indicators(Wyndham).Also, the

assurancestatementsdidnotrefertothescopeofthedataassured(e.g.,managed,owned,franchised

orleasedhotels),asharedshortcomingwiththereports.Similarly,externalassuranceamongsectors

waslackingand,whenpresent,limitedinitsscopeandmaterialissues(e.g.,Jones,Hillier,andComfort

2017, Jones and Comfort 2017). This research, therefore, confirmed that hotel groups made

insufficientuseofassurancetoimprovethecredibilityofreports,andalsothattherewasalowlevel

of engagement with those reports and limited levels of assurance, thereby remaining a weaker

practicewhencomparedtootherindustries(e.g.,ManettiandToccafondi2012,GürtürkandHahn

2016).Also,somerespondents(C1,C8)couldbemisinterpretingtheconcept.Notably,nointerviewee

brought up assurance when discussing sustainability reporting, despite all the interviewed

organisations,whenexplicitlyasked,explainingthattheyundertookit.

FouroutofsixhotelgroupsfromthesamplethatproducedreportsinlinewiththeG4Inaccordance

–coreprinciples,andCDP,assuredtheirreports;arguablybecausebothframeworksencouragebut

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donotrequireexternalassurance.Thequalityofthedisclosureaboutthereportingprocess,however,

did not seem to improve for reports being assured, arguably because assurancewas focused on

specificperformanceindicators.Fromtheinterviewedhotels,thosethatoptedforexternalassurance

were the ones that presented higher transparency in respect to inclusiveness, materiality and

responsiveness.Fromthecontentanalysis,theorganisationswithbetterprocessdisclosuredidnot

alwaysundertakeassurance;fromtop-10disclosures,onlyfourhotelgroupsassuredtheirreports.

Priorresearchfoundtheuseofauditingstrengthensthelegitimacyoforganisations,butithasno

impactonthequalityoftheinformationdisclosed(TalbotandBoiral2018),andthisstudyalsofinds

thatassurancedoesnotincreasethedisclosureofthereportingprocess.Althoughtheinterviewed

organisationsconsideredassuranceasacontrolmechanism(C1,C2,C4,C5,C7),deficienttechnical

sustainabilityintegration(e.g.,C5’suseofMicrosoftExcel)orawarenessofdeficiencies(C1,C5)did

notleadtoarelianceonexternalassurancetoincreasethereliabilityandrobustnessofdata.The

limitedassuranceoptionand the low levelsof transparencywithin theassurancestatementsand

interviewsrepresentasignificantshortcoming,bothforperformancemanagementandreporting.

Motivationsforreportingsustainabilityperformance

Inordertoenableabetterjudgementoftheresultsdiscussedsofar,thissectionexploresthehotel

groups’motivationsforreportingsustainability,basedonthequestionnaireandinterviewdata.An

“inside-out”approachwasneededbecause,fromtheorganisations’disclosure,behaviourssuchas

impressionmanagementandopportunisticlegitimacycannotbedistinguishedfromaddressingthe

needsof stakeholders (seeDobbs andVanStaden2016). Participantswere asked to rank factors

influencingthedecisiontoreport,whichwerebasedonthetheoriesrevisitedinSection2.1.2,from

unimportant(1)tohighlyimportant(6)(Table51).Thetransparencyperspectiveappearedmore

prominent,beingindicatedbyreputation-linkedmotivationstoansweringstakeholderpressuresand

regulations.Inmostcases,themotivationsforsustainabilitypracticeswereacombinationofinternal

andexternaldrivers.

Table51:Keydriverstoproduceasustainabilityreport

Drivers C1 C2 C4 C5 C6 C7 C8 AverageReputation 4 6 6 3 6 4 6 5,0Stakeholderpressure 5 5 3 4 6 6 4 4,7Assessmentof sustainability risksandopportunities 4 5 4 6 5 5 3 4,6Strategicdecision-making 5 5 4 5 5 4 3 4,4Source:Author,2017.Note:C3didnotprovideananswer.

Reputation was the most chosen answer (5 on average), ranked highest by C2, C4, C6, and C8.

Reputation referred to the search for leadership and recognition, best practice, maintaining or

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achievingrankingpositions, fulfillingexpectations,andaspublicrelationstoavoidnegativepress

(C1,C5,E1,E2,E4,E7,E8).E4described,“Organisationswanttobeknownamongcertaincircles.”C1

explained,“Itisbetterifyoudoitbecauseifyoudonotdoitisbad.”Seemingly,C4said,“itseemsjust

to be a game of who is able to produce the better reports or disclose the most information.”

Motivations for MA also arose from concerns about stock exchange recommendations (C4).

Intervieweeshighlightedthe importanceofcommunicatingperformance improvementsunderthe

CDP(C1,C5,C8)and itsuseasacommercial tool(C1,C3).C3explained theattempts to linkNet

PromotedScoreoncorporatereputationwithCSRactionsasameanstocreateabusinesscase.Others

referred to the use of external assurance to increase brand reputation directly (C2) or through

rankingpositions(C5).Forinstance,havingexternalassuranceprovidedtenextrapointsontheCDP,

whichwasoneofthereasonswhyC5was“abletogetfundingapproval.”Earlierresearchalsopointed

to reputation as themost prominent reason for hotels to contribute to sustainable development

(Persicetal.2013)andotherindustriestoreport(DobbsandVanStaden2016).Thefrequentcross-

functional communication and coordination between the CSR and the Marketing Departments

(Section6.1)alsosuggestedthatreportingmaybeusedmoretomanagetheorganisations’imageas

opposedtoimprovingsustainabilityperformance.

Stakeholderpressurewasthenextmostfrequentlycitedmotivation(4.7average),rankedhighestby

C6andC7.Thislinkstothestakeholderandlegitimacytheoriesthatareoftenfoundasmotivations

forCSRdisclosure(e.g.,Persicetal.2013).Organisationsengagedinreportinginordertoanswer

stakeholder requests about the sustainability performance (C1, C2), either from investors and

shareholders(E1,E2,E5)orexternalstakeholders(C3,C6,C7,E4).AsC7stated,“itisademandfrom

partners.” Particularly for the CDP, C5 answered investor and customer requests. MA was also

undertaken to respond to corporate clients, who were “asking for sustainability criteria on the

requestforproposals”(C1).Similarly,externalassuranceaimedatincreasingstakeholdertrustinthe

provision of honest and reliable data (C3, C4). Previous researchers also found stakeholder

accountabilityandtrusttobeasignificantreasonforreporting(e.g.,DobbsandVanStaden2016).On

theotherhand,insomeresearch,thereporteddatawasfoundtobeunlikelytomeetstakeholder

informationneeds(e.g.,AdamsandFrost2008),andthiscouldalsobethecaseforthehotelgroups

studied,duetotheirlimiteddisclosureofSEoutcomes,MAprocessandresponsiveness.

Another external motivationwas regulation for sustainability reporting (C3, C4, C8, E4, E5) and

externalassurance(C1,C3),whichmaybeseenasadefensivemeasureforliability-reduction(see

BrammerandPavelin2004).Forinstance,C3said,“weareobliged;therearelegalrequirements.”

Similarly, C4 argued that having to comply with rules from listings had “given a push” (C4). E4

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explained, reporting has become "something the organisation has to do.” C2 communicated

sustainabilityperformancebeforeitshomecountryintroducedalegalobligationinordertomitigate

theeffectsoffuturemandatorydisclosure.Whileexistingandprospectiveregulationsinfluencedthe

adoptionofreportingpracticesandexternalassurance,thelegalenvironmentdidnotseemtoplay

anysignificantrole indeterminingmaterialitydisclosure(similartoDobbsandVanStaden2016,

Fasan andMio 2017), arguably because regulations focus on disclosure of performance and not

reportingprocesses.

Internal drivers from seeing sustainability reporting in the context of strategic decision-making

follow closely behind the externaldrivers (see FasanandMio2017). Performance improvement

drivers included the assessment of sustainability risks and opportunities, which was cited at an

averageof4.6timesandwasthehighestrankedoptionforC5,andstrategicdecision-making(4.4),

whichrankedhighlyacrossseveralorganisations.Reportingfocusedhotelgroupsonperformance

measurement(C4,C5,C6,C7,E2),employeeengagementbranding(C3,C4,C5,E7),andtheirstrategy

(E7).Hotelgroups’drivers foradhering toCDPalso includedcollectingGHGemissionsdata(C2),

measuringperformance (C4), and improving the strategy (C2). External assurancewas a control

mechanismtoensuredatawasaccurate,consistent,verifiedandvalid(C1,C2,C4,C5,C7).Particularly

for assurance, the performance-oriented responses linked to enhancing the credibility of data,

coincidingwithmotivationsreportedinothersectors(SearcyandBuslovich2014).

Overall, C1 and C5 had amore performance improvement perspective where the assessment of

sustainability risks and opportunities and strategic decision-making seemed to influence the

managementand reportingof sustainability. Instead, C3, C6, andC8referred to the transparency

perspectivewherebyreputation, regulationandstakeholderpressure influenced themanagement

andreportingofsustainability.Organisationswithatransparencyperspectiveandnoformalsystems

to ensure the disclosure was accurate and comprehensive were most likely using sustainability

reporting to create the impression of being concerned about sustainability, and thus to increase

legitimacy, similar toother studies (e.g.,Kolk2008,Dobbs andVanStaden2016).The remaining

organisationshadamixedapproachwherebothinternalandexternaldriversequallyinfluencedthe

managementandreportingofsustainability(C2)orwithatendencytowardstransparency(C4,C7).

Ineachhotelgroup,themotivationtoengageinsustainabilityreportingdiffered,butseemednotto

influenceanyparticulardisclosure,sinceorganisationswithaperformanceimprovementperspective

bothdisclosedmore(C2)andless(C5),comparedtoorganisationswithatransparencyperspective

(C3).Still,organisationsfromthesamplemostlymotivatedbyreputationandstakeholderpressure

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produced less robust reporting, by not employing any framework (C4, C6) or by reporting only

through their websites (C7, C8). Also, organisations with stronger commitments to performance

improvementsdidnotpresentmore formalanddevelopedorganisationalor technical integration

comparedtothetransparencymotivatedorganisations.

TheleastdominantdriverforCSRdisclosurerelatedtotheimportanceoftheorganisation’sethics

and corporate accountability commitment, which links to a normative approach to stakeholder

engagement. C1 explained, “reporting is part of your commitments for being transparent, for

communicating your efforts, for communicating your results and your success stories.” Others

explainedthatthecommitmentfromtheowners(E5)ortheleadership(C4),whetherdrivenbyethics

orefficiency,acommitmenttotransparency(C1)oraboutcommunication(E6),motivatedthem.The

less frequent appearance of commitment as motivation seems to be in line with results across

industries (Dobbs and Van Staden 2016), as well as with the previously identified instrumental

approachtoSEandtherolereportingmayplayintheconstructionofthehotelgroups’externalimage.

In continuing to unveil the fundamental ideas through which hotel groups construct their

sustainability reporting decisions, the next paragraphs explore the perceived value attached to

reporting.

Valueofsustainabilityreporting

The value of sustainability reporting remains contested and this means that the justification of

reportingcanbeanobstaclewithinorganisations(SolomonandLewis2002);aswasevidentalsoin

thesampledhotels.Thiscanarguablyexplainthelowlevelsofreportingacrosshotelgroups,wherein

only18outofthe50largestreported.Someexpertsexplainedthatreportscontributedtolegitimacy

becauseorganisationsdisclosedinformation(E3),justifieddoingsomethingonsustainability(E6),

anddid“thebareminimumbyaddressingtheissuesthatthepublicandthecustomersweremore

concernedabout”(E7).ForC3andE7,reportingaddedvaluetoorganisations“similarly,asthere’s

value in financial reporting.”E4 andE7alsobelieved reporting reflected a change in sustainable

behaviour; otherwise, “it would undermine the whole exercise.” Other interviewees had amore

criticalview,asinpreviousresearch(DobbsandVanStaden2016).Somequestionedthevalueof

reportingbecauseoftheway itwasundertaken,thescopeoforganisationsparticipatinginit,the

contextualcircumstances,andthelowreadershipofreports.E4didnotseeanyvaluebecause“[hotel

groups]seemtohavegreatperformancesomehoweveryyear.”E6alsoarguedthatreportswerenot

giving more than a representation of the way organisations wanted to be seen, and therefore,

organisationsreportedinordertoappeartohaveavaluessystemcongruentwiththatofthesociety.

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Indeed,themainmotivationsforsustainabilityreportingexpressedbyCSRmanagers(reputational

andstakeholderpressure),coupledwiththelimiteddevelopmentofinternalmanagementpractices

forreporting(deficientPMS,informalSEandquestionableMA),mayindicatethathotelgroupsdraw

onadiscursivearticulationofthesustainabilityvaluesofthesocietywithoutfullyembracingthem.

SRisdrivenfromlargeorganisationsforlargeinvestorstolargecorporatebuyers(E4,E5,E6,E7),

andasE4explained,“itdoesnottripledownandadaptaswelltoanindividualpropertyforthebasic

reasonsthatnobodyisaskingforreportsattheproperty.”Previousresearchershaveshownthatthe

lowlevelofpressurefromstakeholderswasareasonforlowaccountabilityconsiderationsleading

tolowreportinglevels(Stubbs,Higgins,andMilne2013).Additionally,withthetrendofmandatory

reporting,organisations“mightnotevencarefortheirsociallicensetooperate”(E4).Severalquotes

alsoevidencedthatthebusinesscaseargumentforreportingisunconvincingbecauseofthe“belief

that it’s just extra costs; the value isnot corresponding to it” (E6-C), and “nobody is reading the

reports”(E1,E4,E7).Thefactthatthereadershipofthesereportswasperceivedtobelow(similar

toStubbs,Higgins,andMilne2013,Unerman2008),andthetendencyfororganisationstosimplybe

“pointing to the fact that [the report] is there” (E1)means that reportsdo not serve to increase

accountabilityorlegitimisetheorganisation'sactions.AsE1explained,“it isnot100%oneorthe

other;itdependsonwheretheneedlefalls,…[it]maywellbeawasteoftime.”Thecontentanalysis

results showing limited disclosure in respect to inclusiveness,materiality and responsiveness also

seemedtoquestionthereports’contributiontoaccountabilityandlegitimacy.

Insummary,Step3hasrevealedvaryingsustainabilityintegrationintothehotelgroups'systemsand

sharedvaluesforsustainabilityreporting.Findingsindicatethatthehotelindustrymostlyusedthe

GRIandCDPreportingframeworks,withlimitedembracementofthematerialityapproach(byonly

11outofthe50largesthotelgroups).Nonetheless, intervieweespointedtoanincreasedtrendto

embracemateriality(fouruseit,andthreeplantouseitshortly).Theexternalassurancewasalso

very seldom used (by only ten hotel groups), and the level opted for was limited assurance.

Transparencyinrespect tothematerialitydeterminationandexternalassurancewas foundtobe

poorinthemajorityoforganisations,andonlynoticeablyaboveaverageinthecasesofC3,C2andC1

fromamongtheinterviewees,andinthecasesofWyndhamandCaesarsfromthecontentanalysis.

Motivationsforreportingweremostlyexternal,arisingfromreputationalandstakeholderpressure,

exceptfortwohotelgroupsthatpresentedhighercommitmentstoperformanceimprovementand

strategic choice (C1, C5). Results so far may indicate that hotel groups draw on a discursive

articulation of the sustainability values of societywhen reporting,without fully embracing these

values,andthat thismay lead togreenwashingstrategies.Noclearpatternswere foundbetween

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organisationalintegrationandtechnicalintegrationregardingthemotivation,approachandquality

of reporting by the sample of hotel groups. The next section explores the relationships between

sustainabilitydisclosure,environmentalperformanceandsustainabilityintegration.

Acomparativeanalysisbetweensustainabilitydisclosure,environmentalperformanceandsustainabilityintegration

Thedatagatheredallowedforacomparisonbetweenthequestionnaireandinterviewresponsesof

thehotelgroups,and theirpubliclyavailablesustainabilityreports.Thissection firstpresents the

AccountabilityMatrix as ameans to evidence how hotel groups assumed responsibility for their

impacts,andhowtheyweretransparentabouttheirreportingprocesses(fromthecontentanalysis

and interviews).Later, thesectionexaminestherelationshipbetweenthesustainabilityreporting

process disclosure (Accountability matrix), sustainability performance (CDP A-E score),

environmental quantity disclosure (nº of environmental indicators) and environmental quality

disclosure 7 (quantitative indicator, the comparison with previous years and progress against

targeted objectives). Lastly, the section introduces the Sustainability Integration Matrix, which

identifiesthedegreeofsustainabilityintegrationwithinthehotelgroupsinterviewed.

TheAccountabilityMatrixThe Accountability matrix underlines the hotels’ orientation towards being transparent with

stakeholders. The results on responsiveness quality – i.e. how the organisation responds to the

stakeholderconcerns(e.g.,Hohnen2012),indicatedbythesizeofthedot(Figure31),wereplotted

withtheorganisations’scoresforSI/SE(Table39)andMA(Table46)soastorepresenttheoverall

transparencypositionforeachorganisationincludedinthecontentanalysis.

7 This study uses multiple variables to assess the quality of the disclosure, in line with previous studies(HammondandMiles2004).Externalassuranceandadoptionofreportingguidelinesarerevisitedinothersectionsofthestudyinrelationtotheoveralldisclosureofreports,whileforthedisclosureofthe performanceon each environmental issue the study assesses the use of a quantitative indicator, the establishment ofappropriatetargetsandthereportingprogressagainsttargetsincomparisonwiththepreviousyears.

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Table52:TransparencypercriterionandorganisationtobuildtheAccountabilityMatrix

Criteria Wyndham

Caesars

EasternCrown

Accor

Hilton

Intercontinental

Melià

Hyatt

NH

CarlsonRezidor

Starwood

MGM

WaltDisney

Millennium

Marriott

Whitbread

Shangri-La

Riu

Responsiveness(Size of the dot inthe AccountabilityMatrixFigure31) 1.5 2 1.5 1 2 1.5 1 2 2 1.5 0.5 0 0 0 0 0 0 0The organisationcommunicates theresponse given formaterialissues 1 1 1 0.5 1 1 1 1 1 1 0.5 0 0 0 0 0 0 0The report follows astructuretoguidetheuser to identifyresponses given toeachmaterialissue 0.5 1 0.5 0.5 1 0.5 0 1 1 0.5 0 0 0 0 0 0 0 0Table 39 -Stakeholderidentification andEngagement(AxisY) 6.5 5.5 7 6.5 6.5 6 5.5 6 4 4.5 6 3.5 3 2 1 1 0.5 0.5Table 46 -Materiality Analysis(AxisX) 5 5 4 4 3 3 4 2 2.5 2 1 0 0 0 0 0 0 0Percentage ofdisclosure of allcriteria 76 74 74 68 68 62 62 59 50 47 44 21 18 12 6 6 3 3

Source:Author,2016.Note:TheResponsivenessscoreisoutof2points,theSEscoreisoutof9pointsandtheMAscoreisoutof6points.

TheAccountabilityMatrix,apictureofthedegreeofdisclosurewithinthesustainabilityreporting

process,visualisesSRunderthecategoriesofhigh,mediumandlow(Figure31).Thehighdisclosure

groupincludedfourorganisationsthatcommunicatedbetween69%and75%ofallthestakeholder

Identification/Engagement,MaterialityandResponsivenesscriteriaemployedinthecontentanalysis

of theirreports.Theorganisationsdemonstratedhigh transparencywhenpresentingaconsistent

report content aligned with the findings from the engagement and materiality, with Wyndham

showcasing best practice followed by Caesars, Eastern Crown, Hilton and Intercontinental. In

contrast, the low disclosure category gathered organisations with the lowest scores in all three

variablesstudied(24.8%).MostnotablyRiu,Shangri-la,MarriotandWhitbreadproducedopaque

reports that did not disclose materiality and that contained limited stakeholder

identification/engagement evidence, meaning that these organisations’ published claims were

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unsubstantiated.WaltDisney,Millennium,MGMandStarwoodhadhigherstakeholderengagement

transparencybutwerecategorisedaslowbecausetheyfailedtoreportonmateriality.

Figure31:AccountabilityMatrixbasedonthedisclosureonInclusiveness,MaterialityandResponsivenessSource:Author,2016.Note:Themaximumscoreforinclusivenessis9points,while6forthematerialityprincipleand2forresponsiveness(sizeofthedot).

Themediumtransparencygrouprepresentedorganisationsatthecentreofthematrix.Itwaslow

responsivenessthatputMeliàandAccorinthismiddlegroup:Meliàinformedaboutperformancebut

failedtolinkittostakeholderdemands,andAccoridentifiedconcernsaccordingtoeachstakeholder

groupbutdidnotrespondtoalltheconcernsidentified,nordidithaveastructurethatguidedthe

reader.Theabsenceofresponsivenessunderminedthesetwoorganisations’positiveinformationon

howstakeholderswereengagedandwhatinformationwasrelevant,sincethereportsdidnotaddress

explicitlytheconcernsraisedbythestakeholders.ThemediumgroupalsoincludedHyatt,Carlson

Rezidor and NH, each of which had high responsiveness but low disclosure of stakeholder

engagement and materiality. They disclosed less detailed information about the process behind

sustainabilityreporting,buttheirreportsprovidedagoodaccountoftheinformationprovided.

The stakeholder identification approach (narrow or broad) did not seem to constrain the

organisations’transparencyoninclusiveness(seeTable39),nordiditinfluenceaspecificmateriality

or responsivenessbehaviour. For instance, organisations identifyingonlynormative stakeholders

presented low (Shangri-la, Riu), medium (Hilton) and high (Caesars) transparency in respect to

stakeholder identification/engagement andmateriality. Alternatively, groups that identified both

normative and derivative legitimate stakeholders also showed low (Disney), medium

(Intercontinental)andhigh(Accor)transparency.Thisstudycannotidentifyaclearlydifferentiated

behaviour towards transparently communicating stakeholder concerns for either of the two

approaches.

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Instead,theorganisation’sresponsivenessandmaterialityeffortsmaybetterexplainissuesthrough

theengagementbetweentheorganisationandthestakeholders.Theengagementmethodsadopted

shaped both the materiality assessment and its outcome. Organisations with a substantial

engagementpresentedhighormedium-highmaterialityandhighresponsiveness,arguablybecause

theyhadmore robust stakeholder engagementpractices andpressure toprovide answers to the

stakeholders theyengagedwith.Organisationsemphasised the listofstakeholdersandmadesoft

claims of SE objectives, while more complex issues such as the outcomes of engagement, the

difficultiesencounteredorstakeholderfeedback,werelessprominent,withsomeexceptions(e.g.,

Disneyexplainedsomefeedbackfromstakeholders).Someorganisations,mostnotablyWyndham,

devoted significant space todescribing SE, but even in these cases, the reader could only get an

impressionoftheextenttowhichsuch“dialogue”influencedcorporatepolicyandpractice.

Therelationshipbetweensustainabilitydisclosureandenvironmentalperformance

Hotel groups thatweremore transparent about their SR processes (High Accountability group –

Wyndham,Caesars,EasternCrownandIntercontinental)alsoprovidedmorequalitydisclosureabout

their environmental indicators (Table 53, Figure 32). Hilton was the exception, since despite

presentinghighdisclosureonInclusiveness,MaterialityandResponsivenessitwasfoundtobeless

transparentregardingitsimpactontheenvironment;onlydisclosingthreeoutofthe24indicators

studied,allwithabsolutemeasuresandwithnocomparisontothepreviousyearsortargets.Hyatt

andCarlsonRezidoralsopresentedlowertransparencyonenvironmentalindicatorsthantheother

hotelsfromtheMediumAccountabilitygroup,disclosingtwoandnoindicators,respectively.

Table53:Comparisonofdisclosureonsustainabilityreportingprocessandenvironmentalindicatorsbyquantityandquality

Caesars

EasternCrow

n

Wyndham

Intercontinental

Melià

Accor

NH

Millennium

Marriott

Hilton

Starwood

Hyatt

MGM

WaltDisney

CarlsonRezidor

Whitbread

Shangri-La

Riu

ReportingprocessdisclosureInclusiveness,Materiality,Responsiveness 12,5 12,5 13 10,5 10,5 11,5 8,5 2 1 11,5 7,5 10 3,5 3 8 1 0,5 0,5Quality of theenvironmentalindicatorsdisclosure* 15 15 12,5 8,5 8 8 7,5 6 5 3 3 2 1,5 1 0 0 0 0Amount ofdisclosure on 7 8 7 6 5 6 3 3 3 3 3 2 1 1 0 0 0 0

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environmentalindicators (outof24)Ratio: quality /quantity 0,7 0,6 0,6 0,5 0,5 0,4 0,8 0,7 0,6 0,3 0,3 0,3 0,5

0,3 0 0 0 0

CDP2015A-100

C93

A98

B98

A99

C96

A99

E74

C97

B97 /

B95

D80

C93 /

B98

D96 /

Source:Author,2018,basedonCDPreports2015(lettersforperformance,1-100scorefordisclosure).Note:Thehighestqualityforeachindicatorwas3points;+1pointforthedisclosureoftheindicator,+1pointforthecomparisonwithpreviousyears,and+1pointforthecomparisonwithatarget.

Ifthefocusofinquiryisshiftedfromthequantityofsustainabilitydisclosuretoitsquality,measured

throughthedisclosureofthequantitativeindicator(+1point),thecomparisonwithpreviousyears

(+ 1 point) and the comparisonwith targeted objective (+1 point). The quality-quantity ratio is

obtainedbydividingthetotal‘Qualityoftheenvironmentalindicatorsdisclosure’overthe‘Amount

of disclosure on environmental indicators.’ Results revealed that organisations disclosing more

environmentalindicatorswerenotdisclosingthemwithhigherquality.Forinstance,NHhotelonly

disclosedthreeindicatorsatthehighestqualityratio(0,8),followedbyMillennium(threeindicators,

0,7ratio)andMarriott(threeindicators,0,6ratio).Instead,organisationsdisclosingsevenindicators

hadaratioof0,7(Caesars)and0,6(Wyndham).

Figure32:Comparisonofdisclosureinthesustainabilityreportingprocessandenvironmentalindicators

Source:Author,2018.

Whilevoluntarydisclosuretheoryexplainsapositiverelationshipbetweensuperiorsustainability

performance and highdisclosure quantity and quality, and legitimacy theory explains a negative

relationship between poor sustainability performance and low quantity and quality disclosure

(HummelandSchlick2016),somefindingsofthisstudyarenotconsistentwiththesetheories.Most

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results are consistent with voluntary disclosure theory since better sustainability performers

disclosedmore in order to signal their superior performance to themarket (Greenwood 2007);

organisations scoring A received higher disclosure scores than B performers, then B performers

receivedbetterdisclosurescoresthanCperformersandsoon.Also,mostresultsareconsistentwith

legitimacy theory since the low sustainability performers (scoring D - MGM or E - Millennium)

presentedlowerqualitydisclosuresthanbetterperformers,inordertoprotecttheirlegitimacyby

disguisingtheirperformance(Clarksonetal.2008).OneexceptionwasShangri-La,which,despiteits

lowperformance(Dscore),showeddisclosurescoressimilartoBperformers.

When moving the focus to the 24 environmental indicators studied, however, the results are

inconsistent with voluntary disclosure theory. For instance, most C performers (Crown, Accor,

Marriott)out-disclosebothonquantityandqualitymostBperformers(Whitbread,Hyatt,Hilton).

Also, superiorenvironmentalperformers(e.g., scoringAontheCDP2015)didnotalwayschoose

high-quantitydisclosure(e.g.,NHwiththreeindicators)norhigh-qualitydisclosure(e.g.,Meliàwith

0,5 ratio). Consistent with legitimacy theory, low performers disclosed limited numbers of

environmentalindicators(MGM,Shangri-LaandMillennium),however,inconsistentwiththistheory,

they did not always disclose them with poor quality (e.g. Millennium presented high quality

disclosure0,7ratio).

Neither CDP nor CDP Water seemed to lead to better disclosure on environmental indicators

(quantity or quality) in the sustainability reports, regardless of experience. Some experienced

reportersprovided limiteddisclosure(e.g.,Starwood–ninthreport, three indicators)whilesome

beginners offered extensive disclosure (Caesars – fifth report, seven indicators). Also, some

experiencedreportersscoredlowquality(e.g.,Starwood-ninthreport)whilesomebeginnersoffered

more informationon the indicatorsdisclosed (NH– fourth report, 0,8 ratio;Millennium– fourth

report,0,7ratio).Organisationsscoringhigh(A)onCDPpresented limiteddisclosure;Hyatt(two

indicators,0,3qualityratio),WaltDisney(oneindicator,0,3qualityratio)andIntercontinental(six

indicators, 0,5). Similarly, organisations reporting on CDPWater presented both limited quality

disclosure,suchasAccor(sixindicators,0,4)orHilton(threeindicators,0,3),andlimiteddisclosure,

butwithhighquality,suchasMillennium(threeindicators,0,7).

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TheSustainabilityIntegrationMatrixHaving reviewed the disclosure of the sustainability reporting processes and environmental

indicatorsbyhotel groups, the interviewswithCSRmanagers couldonly shed some light on the

internalCSRprocessbecauseoflackofknowledgeorconfidentialityreasons.Table54identifiesthe

criteria,scoringandassumptionsforassessingthecommonalitiesanddifferencesbetweenthethree

dimensionsofintegration(organisational,technicalandcognitive)andfive8ofthe7-SFramework

variables(structure,strategy,systems,style,sharedvalues).

8 Chapter 7 introduces the characteristics of the hotel groups’ variables of staff and skills as barriers tointegration.

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Table54:CriteriaandscoresfortheSustainabilityIntegrationMatrix

Level 7-S Theme Variables Scoring Assumptionsandreferences

Organisational

Structure

Structure

Governance

(+1)Structured:Corporate,shareddepartments,properties(+0.5)Semi-structured:twoofthethreelevels(0)Separatemanagement:shareddepartments

Sustainability governance, evaluated as the formalisation of theorganisationrolesandresponsibilitiesacrossorganisationallevelswasproventoaffectsustainability integration inpreviousstudies(e.g.,Georgeetal.2016,Thijssens,Bollen,andHassink2016).

Crossfunctional

(1)Coordinationmorethan5departments(+0.5)Coordination5departmentsorless(0)Nocoordination

Therangeandcoordinationofdepartmentsandemployeesinvolvedin reporting was previously used for assessing sustainabilityintegration(e.g.,Thijssens,Bollen,andHassink2016,Georgeetal.2016).

Rewards(+1)Yes(+0.5)Pastuseorfutureuse(0)No

Rewardssystemsareusedtomotivateindividualstoaligntheirowngoalswiththoseoftheorganisation(Hopwood1972)andtheirusewas proven fruitful for integrating the sustainability strategy(Georgeetal.2016).

Technical

Strategy

Strategy

Planning

(+1)Mixed(plannedandemergent)(+0.66)Plannedonly(+0.33)Emergentonly(0)Adhoc

Because of the nature of sustainability issues, some are bettertackledthroughstrategicplanningwhileothersthroughemergentstrategies (Neugebauer, Figge, and Hahn 2016). Accordingly, a'Mixed'approachreceivedthehighestscore.‘Plannedstrategyonly’was considered better than ‘Emergent strategy only’ since in thelatter the organisation does not have a comprehensive corporatestrategy for sustainability implemented top-down, but strategyemerges from local practiceat the different organisational levels,whichcouldresultinuncoordinatedactionsacrosstheportfolio.‘’Adhoc’referredtoalackofanoverallsustainabilitystrategy.

Systems

Measurement&management

PMS

(+1)Integratedorganisation-widePMS(+0.5)SustainabilityPMS(0)Multipletoolsnotintegrated(e.g.Forsomeenvironmentalorsocialissues)

Corporate sustainability requires integrative measurement andmanagement of sustainability issues rather than isolatedapplicationsofdifferenttoolsintheorganisation(Maas,Schaltegger,andCrutzen2016).PreviousstudiesfoundsustainabilityintegrationintoPMSsleadtobettermanagementandcontrolofsustainabilityperformance(Georgeetal.,2016).

Verificationprocesses

(+1)Internalandexternalaudit,andexternalassuranceofreport(+0.5)Onlyoneofthetwomechanisms(0)Noverificationofdata

This section encompasses control mechanisms as internal auditsthat check the efficiency of internal management systems, andindependent external assurance that as an integral part ofsustainabilityreportingprocessenhancescorporateaccountabilitytostakeholdersandbuildscredibilityandtrust(JonesandSolomon2010). They provide important means to asses CSR integration(Maon,Lindgreen,andSwaen2009).

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SE

Process(+1)Formalandstructured(proactiveengagement)(+0.5)Somewhatformal(0)Reactiveengagementadhocengagement

As SE informs stakeholder sustainability priorities useful forformulating the strategy and defining the relevance of theinformation communicated. Formal and structured SE processesdenote greater sustainability integration (e.g., Maas, Schaltegger,and Crutzen 2016). Through proactive engagement formalprocesses allow stakeholders to raise their concerns consistentlyrather than ad hoc practices to react to external demands andpressure.

Reporting

Guidelines(+1)Useoftwoormorereportingguidelines(+0.5)Useofatleastonereportingguidelines(0)Nouseofreportingguidelines

Organisations adopt reporting frameworks to increase thecredibilityofreports(HammondandMiles2004).Forthisstudy,thereporting frameworks considered are CDP as the dominantframework for climate change reporting (Depoers, Jeanjean, andJérôme 2016) and GRI, IIRF and SASB, as the ones dominatingsustainabilityreportingacrossindustries(LandrumandOhsowski2018).

Process-MA(+1)UndertakeMA(+0.5)FutureuseofMA(0)NouseofMA

Since materiality assessment determines the relevance andsignificanceofan issue toanorganisationandits stakeholders toinform the organisation’s sustainability strategy and report(AccountAbility 2015, GRI 2013a), organisations currentlyundertakingmateriality denoted higher sustainability integrationthantheonessimplyacknowledgingintentionsornotusingit.

Cognitive

Style

Style

Informationsharing

(+1)Openreporting(+0.5)Movingtowardsopenreporting(0)Closedreporting

Open reporting systems make available performance results toeveryoneintheorganisation(KaplanandNorton2001c).Accordingtotheinterviewees,theyfosteredinternalcompetitionreflectingaculture inwhich access to informationempowered employees tocontributebettertothesustainabilitystrategy.

Sharedvalues

Sharedvalues

Motives(+1)Performanceoriented(+0.5)Mix(+0)Transparency

Integratedapproachestosustainabilityperformancemeasurement,management and reporting take either transparency or aperformance improvement perspective, basedon themotivationsfor establishing the tools and processes (Maas, Schaltegger, andCrutzen 2016, Thijssens, Bollen, and Hassink 2016). While bothorientations may lead to improved sustainability processes andperformance,theperformanceperspectivedenotesanawarenessofsustainability being strategic, and positions the internalimprovements of processes and systems at the centre beforereporting.Instead,reputation,regulationandstakeholderpressuredrive the transparency perspective, whereby sustainabilityperformance measurement, management and reporting rely onsocietal expectations, reporting requirements and standards andlessontheorganisationalstrategyandinternalmeasurementneeds.

Stakeholderorientation

(+1)BroadandSubstantive(+0.5)Broadandsymbolic/Narrow&substantive(0)Narrowandsymbolic

An inclusive organisation “accepts its accountability to those onwhom it has an impact and who have an impact on it”

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(AccountAbility2015,11),whichencompassesboththebroadandnarrowidentificationofstakeholdersfromFreeman(1984).Whilethelevelofengagementdependsonthepurposeandextentofstakeholderinvolvementdesired,“qualitystakeholderengagementmust create opportunities for dialogue” (AccountAbility 2015, 5).Accordingly, substantive engagement (use of decisionalmechanisms) is rankedhigher than symbolic engagement (use ofinformativeandconsultativemechanisms)becauseofitspotentialfor collaboration with, and empowerment of, stakeholders fortacklingsharedsustainabilitychallenges.

Source:Author,2018.

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Table55showsthescoresforeachhotelgroupinterviewedthatwereusedtobuildtheSustainability

Integrationmatrix. Thematrix itself is shown in Figure 33, illustrating the hotels’ sustainability

integrationinorganisational(X-axis),technical(Y-axis)andcognitivelevels(sizeofthedot)(Figure

33).

Table55:Interviewees’scoresfortheSustainabilityIntegrationMatrix

Organisational(3) Technical(6) Cognitive(3) Averagescores

Structure Strategy Systems Style Sharedvalues

Governance

Crossfunctional

Rewards

Planning

Measure&manage SE Reporting

Informationsharing

Motives

Stakeholderorientation

Organisational

Technical

Cognitive

Organisations PMS

Verificationprocesses

Process

Guidelines

MA

C1 1 1 0,5 1 0,5 1 0,5 1 1 0 0,5 0,5 0,83 0,77 0,3C2 0,5 1 1 1 0 1 0,5 1 1 0 0,5 1 0,83 0,69 0,5C3 0,5 0,66 0 0,5 0,5 1 1 0 0,5 0,50 0,56 0,25C4 1 1 1 0 0,5 0 0 0 0,5 1 0,5 0,5 1,00 0,15 0,7C5 0,5 1 1 0,66 0 0,5 0 0,5 0,5 0,5 0,5 0,83 0,33 0,5C6 0,5 0 0 0 0 1 0 0 0 0 0 0 0,00 0,15 0C7 0,5 0,5 0,5 0,66 0 1 0,5 0 0,5 1 0,5 0,5 0,50 0,41 0,7C8 0 1 0 0,66 0 0,5 0,5 0,5 1 0,5 0 0,5 0,33 0,49 0,3Average 0,5 0,8 0,6 0,6 0,1 0,7 0,3 0,5 0,7 0,4 0,3 0,5 0,62 0,4 0,4Source:Author,2018.Note:blankcellswerenon-responses,andthosemissingvalueswerenotincludedinthecalculationofaveragescoresforeachlevelofintegration.

C1,C2,andC3hadamixedorplannedstrategyinformedbythematerialityresults,andpresenteda

governancestructurewithrolesandresponsibilitiesatleastforcorporateandsharedbusinessunits,

andwithcoordinationforsustainabilityamongmorethanfivecorporatedepartmentsandarewards

systeminplace.9WhiletheypresentedlowintegrationintoPMSwithclosedreportingandmultiple

non-integrated tools for sustainability management, they used internal and external verification

processestomitigatetheimpactofmultipleinternalsystems.Theywereproactivewithstakeholders,

with a broad identification approach but varied in their engagement – C2 exhibited substantive

engagement, butC1 andC3 just exhibited symbolic engagement.Despite employing twoormore

9Notethatthenon-responseofC3onorganisationalvariablesaffecteditspositioninthematrix,but itwasgroupedwithC1andC2duetomultiplesimilaritiesonthetechnicalandcognitivevariables.

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reportingguidelines,andundertakingformalstakeholderengagement(e.g.,astakeholdermap)and

materiality; they had low disclosure on stakeholder engagement and materiality or low

responsiveness,whichpositionedtheminthemediumaccountabilitymatrix.Also,whiletheyhada

PMS for measuring and managing environmental issues, they presented somewhat poor

environmental performance (ranging from D to B CDP scores), which influenced their medium

quantity environmental disclosure (ranging from six to three indicators disclosed) and medium

quality-disclosure(rangingfrom0,8to0,4qualityratio).EvenC2,whichstoodoutbymeasuringmost

environmental indicators in contrast to the other organisations studied (13 according to the

interviewee),hadlowquantity(sixindicators)andqualitydisclosure(0,4ratio).Perhapsbecause

theirmotivationformanagingandreportingsustainabilitywasamixofperformanceimprovements,

reputationandstakeholderpressure,theypresentedhighorganisationalintegrationandthehighest

technical integration fromthesampleand,albeitbeing inthemediumaccountabilitymatrix, they

were,fromtheinterviewees,themosttransparentwhenreportingbothprocessesandenvironmental

performance.

Figure33:Sustainabilityintegrationmatrix

Source:Author,2018

Whilemedium accountability reporters (C1, C2, C3) presented similarities in their sustainability

integration, the low accountability reporters, although all producing an opaque report on

inclusiveness,materialityandresponsivenesswithsimilarscores,weredistinctintheirinternalCSR

management.Notably,C4presentedthehighestscoresfororganisationalsustainabilityintegration

out of the sample and for cognitive integration (alongwithC7), but its effective governancewas

hamperedbyitslowtechnicalintegration,albeittheorganisationwasworkingtowardsimproving

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this.C4didnothaveanexplicitstrategy,butitshowedanintentiontoformaliseoneinthefuture,and

tointegrateMA.C4hadopenreportinginternallywithasustainabilitybalanced-scorecard,butitdid

not employ any verification process for sustainability data or any reporting guideline. It also

presented reactive and ad hoc stakeholder engagement processes, but had a broad identification

approachandcurrentlyseemedtobeintransitiontowardsmoresubstantiveengagement(similarto

C5).C4presentedpoorenvironmentalperformance(scoredD,CDP2015)andwhileitmeasured11

environmentalindicatorsfromtheonesstudieditdidnotdiscloseany.

C5 showed similarities in organisational integration with C1 and C2, by having semi-structured

governance, coordinating more than five departments for sustainability reporting and having a

rewardssysteminplace.Itslowertechnicalintegrationdifferentiatesitfromthemediumreporters.

WhileC5alreadyhadanintendedstrategy,itstillusedExceltomanagesomesustainabilityissuesbut

it had internal auditing and external assurance to surmount the shortcomings. C5 committed to

undertakeMAshortly, showing technicalchange towardsmore integration.Atthecognitive level,

performance improvement and transparency motivated C5's reporting. C5 reported three

environmentalindicators(outoftheeightmeasuredaccordingtointerviewdata)withhigh-quality

disclosure(0,7),whichdifferentiatesitfromC4andC6,thatdidnotreportanyindicatorstudied,even

though,accordingtotheinterview,theymeasured11and13indicators,respectively.

C6 produced an opaque reportwith similar scores as C4, but its internal characteristicsmade it

distinctivewithoveralllowsustainabilityintegration.Ithadnearlynoorganisationalintegrationwith

only roles and responsibilities for sustainability at the corporate and shared business units, no

coordinationof departmentsandno rewardssystem for sustainability.Technical integrationwas

non-existent,withonlytheuseofinternalandexternalaudits,andtheintervieweedidnotprovide

any expected actions towards increasing integration. C6 presented an informal strategy,with no

intentions in the future to employ materiality or adhere to reporting guidelines. Its drivers for

managing and reporting sustainability were stakeholder pressure and reputation while its

stakeholder orientationwas narrow, symbolic and reactive, whichmeant that it scored zero for

cognitiveintegration.

For website reporters (C7 and C8) their sustainability integration and their accountability to

stakeholdersseemedtangentialtotheirmaincorporatestrategyandcommitments.Theyhadlow-to-

mediumorganisationalandtechnicalintegration,varyingwidelyintheircognitiveintegration(C7

scoredhighestfromthesample).C8coordinatedmorethanfivedepartmentsbutdidnothaveroles

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and responsibilities at the corporate and property levels, and no sustainability rewards system.

Instead,C7hadrolesatthecorporateandsharedbusinessunits,withcoordinationoffiveorfewer

departments and planned future use of a rewards system. Both had an intended sustainability

strategy, with somewhat formal stakeholder engagement practices with broad identification but

symbolicengagementaspartofthemateriality(C8)orintendedmateriality(C7).Theyusedmultiple

non-integrated tools tomanage sustainabilitybutemployedverificationprocesses to ensuredata

reliability.C7hadopenreporting internally inorder to fostercompetitivebehavioursandthusto

increasesustainabilityperformancebetweentheproperties,whileC8arguedthatitwasconsidering

this for future implementation.WhileC7hadamixedmotivationtoreporting,withatendencyto

transparency,forC8thedriversweremainlyexternalreputationandstakeholderpressure.Noneof

thewebreportersdisclosedCDPin2015,withC8-WhavingaCDPscoreofBin2016.

ConclusionsThis chapter has brought together central CSR topics from across the literature, including

sustainability planning, measurement, management and reporting, and compared them in the

organisationalcontextandthedisclosureofhotelgroups.Keyfindingsemergedwithinthedatathat

characterisethehotelindustryCSRprocessesanddisclosurerelevantforassessingthevalueofthe

MBSCintheindustryinthefollowingchapter7.

The interviewees provided insights into the strategy development, showing that hotel groups

prioritised having a formal intended strategy usingmateriality assessment and deploying it top-

down.ThissuggestedthatemergentstrategydevelopmentwasabsentevenamonggroupswithCSR

champions and open reporting systems. Most hotel groups favoured top-down, one-way

communication with employees regarding strategy and progress, and accordingly used closed

reporting systems, which limited the opportunities for dialogue, critical feedback, internal

benchmarking and emergent strategy development. The different ownership structures also

hamperedtheapproachtostrategydevelopmentanditsdeployment,withlargehotelsbeingmore

franchisedormanagedandoftenexcludedfromsustainabilitytargetsandreports.

The analysis also showed that the integration of sustainability roles and responsibilities was

widespreadacrosstheleadershipandcorporateofficelevels.Whileitmaybeasignalofthegrowing

prominenceofsustainabilityincorporations,thelimiteduseoffinancialrewardssystemstoholdthe

boardandseniormanagementaccountable forsustainabilityobjectivesunderminedtheseefforts.

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Despiteawarenessofthebenefitsarisingfromarewardssystems,lessthanhalfoftheorganisations

interviewedlinkedtheachievementsoftargetstoemployees’rewards.Therewasalsoanoveralllack

ofrolesandresponsibilitiesattheoperationallevelsontheproperties,andsomeintervieweesnoted

thattheystruggletosecureinter-departmentalcollaboration.

Despite hotel groups having a performance-oriented approach to stakeholder engagement, the

analysisshowedthattheymostlyapproachedtheengagementasanadhocandone-offexercisewith

informalprocessesasameanstoanswerexternalpressures.Therewasnoclearlinktosuggestthat

organisationswithbetterprocessesinplacehadgreaterdisclosure.Theindustryalsohadamostly

narrow approach to stakeholder identification, focusing on stakeholders with whom they had a

contractual relationship, whichmay explain why the criteria for stakeholder identification often

related to economic concerns. The specific nature of stakeholder involvement varied widely.

Organisationshesitatedtoengageatthedecisivelevels,exceptforstakeholderswithwhomtheyhad

afinancialtie.Consultationwasthemostfrequentengagement;however,theanalysisshowedmisuse

of engagement channels, for example, websites for consultation. Collaborative multi-stakeholder

partnerships were used often as a means both to improve internal practices and to safeguard

corporatereputation,butreportsconcealedtheoutcomesofsuchengagementexercises.Theanalysis

evidenced that stakeholder management prevails rather than engagement in the industry, since

organisationsaremoreconcernedwithmanagingstakeholderexpectationsthaninvolvingthemin

decisionmaking.

Mosthotelgroupsinterviewedusedmultipletoolstomanagesustainabilityperformance,andlacked

formalisedinternalsystemstosupporttheirsustainabilitymanagementandreporting(e.g.,useof

Excel),and,evenwhenthosewereinplace,theydidnotintegratewiththetraditionalfinancialcontrol

system,riskingamarginalisationoftheCSRstrategy.Morewidespreadwastheuseofcontrolsystems

as internalandexternalaudits toensure theaccuracyofdata for thehotelgroupsawareof their

deficiencies in performance management. While most hotel groups acknowledged the multiple

benefits of having a sustainability PMS to implement a coherent strategy, collect and track

performanceandcommunicateprogress,theanalysisrevealedmanychallengesindevelopingsucha

system,includingtheavailabilityofsoftware,costsassociated,awarenessofitsneedandknowledge

required(seeSection7.2.3).ThestudyfoundthathavingaformalsustainabilityPMS,orusingExcel,

employing internal and external audit, measuring environmental progress with the indicators

studied,or identifying issuesasbeingmaterial,didnot lead to the trackingofmore indicatorsor

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disclosingmoreonenvironmentalissues.Lowmeasurementlevelsinrespecttospecificissuestended

tocorrelatewiththoseissuesbeingalowpriorityinthecountryorintheorganisation,whilefearof

exposurecontributedtoexplainthegapfoundbetweenmeasuredindicatorsanddisclosedindicators

(seeSection6.6).

The research also showed that sustainability reporting remained a limited practice in the hotel

industry,withorganisationsmostlydisseminatingCSReffortsthroughawebsite(28organisations)

andresiduallyproducingsustainabilityreports(18).Notably,CDPClimatechange(16)andGRI(12)

werewidelyfollowedbyparticipants,whileCDPWater(3)andIR(2)werestillintheirinfancy.CDP

increasedtransparencyonGHGemissions,energyandwatercomparedtoGRI,whichindicatesthe

influenceofstakeholdertheoryinexplainingthereportcontent,sinceadherencetoCDPisinvestor

and shareholderdriven. Reportingmaturity and organisational integrationdid not translate into

greaterdisclosureonreportingprocessesnorCDP.Instead,organisationswithtechnicalintegration,

suchashavingaPMSorintendingtohaveone,reportedonGRIatthemorebasic‘Inaccordancecore’

levelandCDP.Despitethedifficultyincollectingandaggregatingdataacrossproperties,theanalysis

showedatendencytoreportmostlyGHGemissionsandenergy,followedbyenergy,arguablyasa

result of efforts towards harmonising thosemetrics.Water was seldom disclosed because of its

complexmeasurementandthehighcostofdatacollectionsystems,whiledisclosureofwasteand

materialswasanecdotal,againbecauseoftheinconsistentuseofmetrics.Thevalueofsustainability

reportingremainedcontestedamongexpertsbecauseofthewayreportingwasundertaken,thescope

oforganisationsparticipating,thecontextualcircumstances(voluntaryvs.mandatoryreporting),the

lowreadership,andtheweakbusinesscase,whichledtothejustificationofreportingbecomingan

obstacleamonghotelgroups.Thismayexplainthelimitedreportingoftheindustry.

Theresearchalsoshedlightontheprocessofsustainabilityreportingbyhotelgroups.Collectionof

dataforreportingwasmost frequentlyledbythesustainabilitydepartment incollaborationwith

Marketing,ProcurementandHumanResources,meaning thatanumberofpeople throughout the

organisationwere involved(cross-functionalcommunication).Thecontentanalysisevidenced that

organisationswere eager to communicate stakeholder engagementmethods, reluctant todisclose

whichweretheprioritystakeholdersandthecriteriaused,andtheymaskedthechallengesthrough

theengagementandthestakeholderfeedbackofthepreviousreport.Hotelgroupswithsubstantial

stakeholder engagementweremore transparent about theirmateriality and responsiveness, and

scoredhigher intheAccountabilityMatrix.Overall,however, lowresponsiveness characterisedthe

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industry,withonlyafewexceptionsthatcommunicatedtheoutcomesofengagement,whichresulted

inalackofevidenceforhowSEcontributedtotheorganisation’sbehaviour.Thecomparisonbetween

reports and interviews showed that some organisations underreported their stakeholder

identification (narrow insteadof broad) andothers their engagement levels (symbolic insteadof

substantive), undermining stakeholder accountability. The analysis showed widespread

underreportingofstakeholder-relatedG4indicatorsdespitemostreportsadheringtothehighestGRI

option: ‘Inaccordancecomprehensive’.Theoverall lackofdisclosureoninclusivenessconcealsthe

stakeholderexpectationstheorganisationispayingmoreattentionto.

Thefindingsonmaterialityassessmenthelpfurtherexplainwhythereissuchawidevariationinthe

reports, as a result of the inherent challenges in dealingwith the assessment of the ambiguous

sustainabilityterm,magnifiedbythedifferentapplicationsofthematerialityguidelines.Materiality

isnottreatedcomprehensivelywithinthehotelindustryand,whenundertaken,thevariouscriteria

andprocessestoassessitevidencedthesubjectivityofthejudgmentsembeddedinitsdecisions.The

GRI non-prescriptive definition ofmaterialitywas frequentlymodified,with organisations taking

eithertheorganisationfocusorthestakeholderfocus,whichmodifiedtheassessmentresults.

Assurancewas thereforeperceived as a controlmechanism;however, awarenessof sustainability

performancemeasurement,management and reporting deficienciesdid not lead to a reliance on

externalassurance,withsomerespondentsmisinterpretingtheconcept.Indeed,externalassurance

wasalimitedpractice,perhapsbecausevoluntaryguidelinessuchasGRIandCDPencouragebutdo

notrequireexternalassurance.Evenwhenpresent,therefore,itwaslimitedinitsscope,qualityand

disclosure.Having thereportassuredhadno impacton thequalityandquantityofdisclosureon

sustainability reporting processes, namely inclusiveness, materiality and responsiveness, even in

organisationsthathascarriedoutanassuredmaterialityassessmentorstakeholderengagement.

The research also shed light on the sustainability reporting contribution to accountability and

legitimacy.Reputation-linkedmotivationstoansweringstakeholderpressuresandregulationswere

the most common for reporting and led to those organisations producing not only less robust

reportingbutalsopossiblegreenwashingwhentheyhadnoformalsystemstoensuretheaccuracyof

discloseddata.Thosehotelgroupsmaydrawonadiscursivearticulationofthesustainabilityvalues

of societywithout fully embracing them; they have embraced the sustainability rhetoric in their

discourse and external reporting, but interview findings suggested integration of sustainability

withinthesampleremainedlow.Indeed,thelimiteddisclosureinrespecttoinclusiveness,materiality

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and responsivenessseemed toquestion the reports’ contribution to accountabilityand legitimacy.

Hotelgroupsfavouredcorporateratherthansustainabilitygoalswhenassessingtheimportanceof

sustainabilityissues,reportedanabundanceofpositiveinformationandlackedvoluntaryadverse

disclosure on the reporting process, and concealed critical aspects of the assessment (e.g., the

methodsandmechanismsforaggregatingstakeholderviews,theoutcomesoftheengagement,and

theorganisation’sresponse).The research thereforeprovided insights into theuseofmateriality

assessment to legitimise sustainability reports, posture and greenwashing (further discussed in

Section7.3).

Othergroups’motivationsforsustainabilitypracticeswereacombinationofinternalandexternal

drivers, since hotel groups revealed internal benefits from reporting. For those, the process of

producingthereportwasmoreimportantthanthefinalproduct,becauseitenabledthemtoraise

awarenessandbuildsupport,andtofocusonsustainabilityperformancemeasurementsandstrategy

whenusedasaninternalreferencetool.Still,someparticipantsrecognisedtheneedtoimprovethe

use of the report, since theywere seen as something additional and separate from performance

management, therefore, remaining underutilised. The effect of motivations for reporting on the

disclosureofthesustainabilityreportingprocessandenvironmentalperformanceledtoinconclusive

results.

Overall,thecomparisonbetweentheAccountabilitymatrixandtheSustainabilityintegrationmatrix

providedananswerastowhetherthereportingreflectedthemanagementofCSR,andsuggestedthat

reports from the hotel industry did not reflect the internal CSR processes and the degree of

sustainabilityintegration.Thecomparisonofbothmatricescouldnotindicateanyclearrelationship

between higher organisational, technical or cognitive sustainability integration, with better

disclosure of SR processes and responsiveness. For instance, C6 and C4,with low accountability

scoresandlowenvironmentaldisclosure,differedsignificantlyintheirinternalmanagement;C6had

thelowestoverallsustainabilityintegrationacrossthesampledhotels–evenlowerthanthewebsite

reporters,andC4scoredthehighestonorganisationalandcognitiveintegrationandcurrentlywas

takingsteps towards increasing technical integration.Themediumaccountability representatives

onlypresentedhigh technical integrationbutnotorganisational or cognitive integration, and the

websitereportershadlow-to-mediumorganisationalandtechnicalintegration,butvariedwidelyin

theircognitiveintegration(C7scoredhighestfromthesample).Thedata,therefore,doesnotsupport

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thecontention that theHighAccountabilityreporters thatwerenot interviewedwouldhavehigh

sustainabilityintegration.

Additionally,howtheorganisationsandinternalprocesseswerearranged forCSR(organisational

integration),howtheyusedtoolsandmethodologiesforCSR(technical)andhowtheiremployees

thought about CSR (cognitive)didnot seem to affect the hotel groups’ choices of CSRdisclosure

(reportorwebsite)orthequalityoftheirdisclosure,bothforthereportingprocess(accountability)

andenvironmentalperformance.Also,reportingmaturityandCDPexperiencedidnotleadtobetter

disclosureonenvironmental indicatorsofsustainabilityreports,norreportingprocesses. Instead,

greaterdisclosureofthereportingprocessparalleledgreaterenvironmentaldisclosure(quantityand

qualityindicators),whereassuperiorenvironmentalperformance(CDPscore)didnotleadtogreater

environmentaldisclosureamonghotelgroups,andmoredisclosureofenvironmentalindicatorswas

notnecessarilylinkedwithbetterquality–whichwasinconsistentwithvoluntarydisclosuretheory

andlegitimacytheory.

Thenextchapterfurtherexploresthebarrierstosustainabilityintegrationandreportingidentified

byinterviewees,anddiscussestheminlightoftheMBSC.

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The value of the MBSC towards transitioning from reactiveCSRtosharedvalue

Building on the previously identified sustainability integration and accountability of large hotel

groups,thischapterturnstothepossibilityofimplementingsharedvaluestrategiesandtheMBSCin

theindustry.First,itdiscussessomeexamplesofhotels’CSRpracticesinlightofthethreepathways

forcreatingsharedvalue;namelyreconceivingproductsandservices,reimaginingthevaluechain

and enabling cluster development. Afterwards, the chapter turns to the internal cognitive,

organisational and technical factors shaping thehotel groups’CSRpractices and the likelihoodof

implementingtheMBSCintheindustry.Then,thechapterdiscussesthehotelgroups’approachto

engaging stakeholders, identifying material issues and responding to those, as a result of the

determinantsforCSRmanagementandreporting,andtheimplicationsforthemismanagementof

sustainability and the symbolic adoption of reporting guidelines; thereby contributing to the

literatureonCSRmanagementandsustainabilityaccounting.Thereportsandinterviewscollatedas

partofthisresearchrevealanoveralllackofCSRactivitiesthatcontributetosharedvalueinlarge

hotel groups, and it is preciselyhowhotel groups choose to adopt inclusiveness,materiality and

responsivenessthatperpetuatesthereactiveCSRintheindustry.Hotelgroupssymbolicallyadopt

reportingguidelineswithoutembeddingstakeholderandmaterialityconsiderationsintotheircore

businesspractices,whichlimitstheadoptionoftheMBSCwithintheindustry.Thechapterconcludes

byrefiningtheMBSCfromChapter4,includingnewguidanceontheAccountabilityprinciplestofit

the shared value purpose, which adds to the limited literature developing guidelines for

implementingsharedvalue.

Arehotelgroups’actionsresponsiveCSRorsharedvalue?

ThissectiondiscussestheCSRactivitiesoflargehotelgroupsinordertocontextualisetheindustry

withinthecontinuumfromresponsivetomorestrategicCSR(seeSection2.3),inlightoftheshared

valueapproachforwhichtheMBSChasbeendeveloped.ItdiscusseswhethertheirCSRactivitiesare

representativesofresponsiveCSR(i.e.,addressinggenericsocialissuesandvaluechainimpactswith

aninward,oftenshort-termfocusthatdoesnotaffectthelong-termcompetitiveness).Orwhether,

instead, their activities belong to strategic CSR (i.e., addressing factors in the value chain or the

organisation’sexternalenvironmentthataffecttheunderlyingdriversofcompetitiveness)(Porter

andKramer2006).StrategicCSRactivitiesaretheonesabletocreatesharedvalue,andorganisations

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can undertake three pathways for such a purpose (Porter andKramer 2011), each ofwhich are

discussedbelowthroughexisting,orintheirabsence,hypotheticalcaseswithinthehotelindustry.

Reconceivingproductsandmarkets

Reconceiving products andmarkets is about improving the competitiveness of the organisation,

usuallyintermsofincreasedrevenuegrowth,marketshare,marketgrowthorprofitability,when

developingnewproductsandservicestargetingunmetneedsthatdeliverenvironmental,socialor

economicbenefitstosociety,suchasreducedcarbonfootprint,improvednutritionoreducation.

Acrossthelargehotelgroupsstudied,someofwhichsitwithinthetop100CSRorganisations(e-CSR

2017),eco-friendlybrandshaveflourished,yetarethosenewbrandsrepresentativeofthispathway

tosharedvaluecreation?Somebrandstargettravellersinsearchofauthenticity;CanopybyHilton

bringsinelementsoftheneighbourhoodandcapitalisesonemployees’localknowledge,orIndigoby

Intercontinental brings in the local story, design and ingredients. Others target travellerswith a

lifestyle ofwellness, asElementbyMarriottwith its eco-consciouspractices anddesign, orEven

Hotelsby Intercontinentalwith fitnessandhealthy food choices.Thosebrandsbenefit customers

(guest experience) and the organisation (increased market growth and market share from new

customersegments).Yet,isbrandinghotelsforsustainabilityenoughtotargettheunmetneedsof

today'stravellersinawaythatalsotacklessignificantsocietalandenvironmentalglobalchallenges?

WhilethedisclosedaggregatedCSRoutcomesinsustainabilityreportshamperaformalassessment

ofthedifferentcontributionstoSDGsbybrands,itisarguedherethatbrandingisnotenough;thatif

hotel groups were to achieve the shared value claimed by Porter and Kramer, more radical

innovationsintheproductsandservicesthemselveswouldbeneeded.

Nonetheless, the sustainability reports and interviews collated for this thesis did not provide

examplestoindicatethatlargehotelgroupscreatedsharedvaluethroughtheirproductsandservices.

Thus,acaseofasmallhotelisputforwardthatexemplifieshowasocietalorenvironmentalissueis

atthecentreofthevaluepropositionofthenewproductifitistocreatesharedvalue.TheMagdas

HoteloperatesinEurope,whereasylumapplicationsareraisingtomorethanamillioneveryyear

(Eurostat2018).Toaddressthissocialissue,two-thirdsoftheMagdas’employeesarerefugees,and

asylum-seekersundertheageof18livinginAustriawithoutfamilyareofferedanapprenticeship

(Magdas hotel 2018). The social dimension of the organisation’s strategy becomes part of the

customervalueproposition, as “asylumseekersbringmany skills, languages, talentsand cultural

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backgrounds”(Magdashotel2018).TheMadgas’ improvesitsmarketpositioningandprofitability

fromthesocialbenefitsofitsproductandservice;acharacteristicofthere-conceivingproductsand

markets pathway (Porter et al. 2012). Engaging fringe stakeholders such as refugees provides a

sourceforcompetitiveadvantageatMagdas,andleadsthem,consistentwiththeliterature,toidentify

creativeandcompetitivebusinessideas(HartandMilstein2003,HartandSharma2004).Through

theexplorationofsocietalneeds,namelySDG8(decentworkforrefugees)andSDG10(reductionof

inequalities)theMagdascapitalisesonanewopportunityfordifferentiationintraditionalmarkets.

Thus,itevidenceshowanorganisationcancreateacompetitiveadvantagewhenplacingasocietalor

environmentalissueasthevaluepropositionofitsproductsandservices,whichentailsrathermore

significantchangesintheproductorserviceitselfthanthosefoundineco-friendlybrands.

Reimaginingthevaluechainandproductivity

Redefiningproductivityinthevaluechainisaboutimprovingtheinternaloperationsthatbothaffect

the performance of the organisation and at the same time have social and environmental

consequences.Thiscanbringaboutbenefitstotheorganisationfromimprovedproductivity,reduced

logistical and operational costs, secured supply, improved quality or improved profitability, and

societalvaluethrough,forexample,reducedenergyuse,wateruse,rawmaterials,improvedjobskills

oremployeeincomes.

Early examples of shared value in the value chain include the Green Engage programme from

Intercontinentalthathelpedimproveenergyefficiencyby25%(Porteretal.2012,Camilleri2012).

Butisitenoughtostriveforincrementalenergyefficiencytocreateacompetitiveadvantagewhile

tacklingclimatechange?Asevidencedinthesustainabilityreports,thecompetitivecontextoverthe

lastfewyearshaschanged.Nearlyalllargehotelgroupshaveanenvironmentalmanagementsystem

and public targets varying between 2% to 30% energy efficiency gains (from baselines ranging

between 2007 to 2015). Reports and interviewees highlight efficiency programmes and carbon

offsettingschemesasthebestinitiatives,butthoseareincrementalinnovationsfor‘businessasusual’

that do not reach the entire portfolio, often excluding franchised properties. The competitive

advantageislimitedbecausethoseprogrammesaresharedwithandadoptedbycompetitors(Porter

andVanderLinde1995).Theindustryrequiresareductionofgreenhousegasemissionsperroom

peryearof66%from2010levelsby2030,and90%by2050ifitistocontributetomeetingthe2ºC

thresholdoftheCOP21ParisClimateAgreement(InternationalTourismPartnership2017).Hotel

groupsthereforeneedtostepuptheircommitmentswithambitioustargets;onlyfouroutofthe50

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largest(NH,Hilton,Caesars,Melià)havescience-basedemissionsreductiontargets(ScienceBased

Targets2018).Industryeffortsaremostlymitigationactionstoreduceorpreventemissionsthatdo

not lead to the necessary adaptation mechanisms and thus only contribute in a limited way to

mitigatingclimatechange(SDG13).

Thequestionis,howcanwecreateahotelthatisprofitablefortheowners,efficientfortheoperators,

appealing to itsguests,healthy for itsworkers,beneficial to the localcommunity,andkind to the

environment (e.g., stayswithin the limits of the Paris Agreement)? There is a need tomove the

industrytowardscarbonneutralbuildingsinlinewiththeDirective2010/31/EUthatrequiresthat

by31December2020allnewbuildingsarenearly zero-energybuildings(EuropeanCommission

2010).Witharateof18newhotelopeningsperdayworldwide, if thesedonotstrive forcarbon

neutrality,theybecomeaburdenfortheindustry,asbuildingsareastaticassetfor30to40years

until renovations(Legrand2017).Furthermore, howcanwe create ahotelwith climate-adaptive

solutionsthatdrivesclimateconsciousnessamongitsguests,employeesandoverallstakeholders?

Thatis,ittacklesnotonlySDG13(climatechange)butalsoSDG7(affordableandcleanenergy)and

SDG12(responsibleconsumptionandproduction).Theenergy-plushotelswithaninvestmentof8%

higherthanconventionalbuildings,loweroperatingcoststhrougha70%reductioninenergydemand

and produce more energy than they consume (Legrand 2016). They exemplify how redefining

productivityinenergyuseimprovesinternaloperationsresultinginbetterresourceconsumption,

improvedcostsandincreasedproductivity(Porteretal.2012).Whentheyengagestakeholdersto

cultivatetheecologicalvaluesbeyondtheorganisation,thisgenerateshighersharedvalue(Maltzand

Schein 2012). Establishing new openings with carbon neutral buildings in countries with less

stringentregulations,andinvestmentinenergy-plusbuildingsintheEUmayprovetobeasourceof

competitive advantage and position in themarket,more so than certifying the existingportfolio

incrementally.

Waterisalsoarecognisedmaterialissueinthehotelindustry(InternationalTourismPartnership

2016),yet,onceagain,largehotelsmaynotbecreatingsharedvalue.Forecastsindicateanincrease

inwaterdemandof1%peryear(UnitedNations2018)withtheexpectedwithdrawalsbetween40

and80%morethanthesupplyinmanycountries(Maddocks,Young,andReig2015).Tenoutofthe

18reportsstudieddisclosetargetsforwaterintensityuse,varyingfrom1to20%reductions.Acting

onwater-relatedriskssuchinsecurityandconflict,aswellasgender-relatedinequalitiesintheaccess

to and control of water resources (Gleick and Iceland 2018), however, entails action beyond

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incrementalimprovements.Instead,waterstrategiesdisclosedinsustainabilityreportsmostlyrefer

to‘towelreuse,’internalauditsandwatersavingdevices.Propertiesinwater-stressedlocationsmay

implementsustainableoperationalmanagementoffreshwaterresourcesthroughradicalinnovations

thatprovidenature-basedsolutionsusingorsimulatingnaturalprocesses(UnitedNations2018).It

is here where the collaborative work withmultiple stakeholders needs to converge to generate

innovativesolutionsamonguniversities,professionalsandorganisationsacrosssectors.Forinstance,

collaboration with destination stakeholders is of paramount importance in tackling the gender

inequalitiesthatpersistaroundtheworldinrespecttotheprovision,managementandsafeguarding

ofwater(UNESCO2017)orintacklingthe80%oftheworld’swastewaterbeingreleasedintothe

environmentwithouttreatment(UnitedNations2017).Hotelscanplayarolebeyondefficiencyin

respect towater use by creating shared value at the value chain (improving operations through

technologydevelopment)andatthedestinationsinwhichtheyoperatethroughmulti-stakeholder

partnerships,making amore substantial contribution to cleanwater and sanitation (SDG 6) and

havingaknock-oneffectonSDG5(genderequality),SDG10(reductionofinequalities)orSDG16

(peaceandjustice).

Enablingclusterdevelopment

Byenablingclusterdevelopment,wheremultiplestakeholdersinageographicallocationinteractto

achievelocaldevelopmentgoals(PorterandKramer2006,2011),anorganisationcanimproveits

externalenvironmentbycollaboratingwithmultiple-stakeholdersthrough,forinstance,community

investment,strengtheninglocalsuppliers,localinstitutionsorlocalinfrastructure.Theorganisation

thereby improves itscompetitivenessby, forexample, reducingcosts, securingsupply, improving

distribution infrastructure, improvingworkforce access,while it creates societal benefits such as

improvededucation,jobcreation,healthorincomesoflocals.

Nonetheless,identifyingactionsforsocialsustainabilitywithapotentialtocreatingsharedvalue(e.g.,

human rights, diversity or inclusion) is harder in reports thatdo notpublish commitmentswith

quantified targets.An exampleof hotelgroups’ efforts in the clusterdevelopmentpathway is the

YouthCareerInitiative(InternationalTourismPartnership2018).Hotelgroupsaimtoincreasethe

employability of low-income youth by capitalising onmobilising partners and collaboratingwith

stakeholders across profit and non-profit boundaries, which a number of studies have been

demonstrated to improve social performance (Anh et al. 2011,Maltz andSchein 2012). ITP, and

similarcross-sectoralliances,contributetotheimplementationofnewstandardsandbestpractice,

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whichcanbringaboutsharedvaluecreation(Maltz,Thompson,andRingold2011).Yet,thescaleand

significance of the initiative remain limited, and there is no apparent contribution to the hotels’

competitiveadvantage.Forexample,Hilton iscommitted“to impactingatleastonemillionyoung

peopleby2019”(HiltonWorldwide2015,10),andreportstohaveofferedapprenticeshipsandafirst

formalworkto60underservedyoungpeopleacrosshotelsinBrazil,Mexico,RomaniaandVietnam

(HiltonWorldwide2015).Takingintoaccount,however,thatHiltonhasover4,000hotelsandover

700,000 rooms (Hotels Magazine 2015), the scale and significance of the positive impact of the

initiative,tobothsocietyanditsbusinessvalue,canbequestioned.WhileHiltonisinvolvedinmany

otherinitiativestacklingyouthemploymentworldwide,thereportfailstoarticulatehowsuchactions

contributetoHilton’svaluepropositionofproductsandservices,tothevaluechain,orimprovements

initscompetitiveenvironment.

Forsharedvalue,itisnotenoughtohaveaprogrammedealingwithanissue,butitneedstobedone

inawaythatcreatesasignificant,scalableimpactonsocietythroughradicalchangeandinnovation.

Hotelgroupscouldprovideapprenticeshipstoasubstantialnumberofyoungwomenatriskinthe

communitiesinwhichtheyoperate.This,forexample,couldenablethesewomentobecome,inthe

long term, either hotel workers or micro and small enterprises that could supply the hotel.

Organisationalbenefitswouldcomefromincreasedcommunitygoodwillandneighbourhoodsecurity

(clusterdevelopment pathway), lowered costs of local versus imported goods and efficiencies of

logisticsandprocesses(valuechainpathway),andincreasedproductquality(productsandservices).

ValuetosocietywouldberelatedtoSDG1(nopoverty),SDG4(qualityeducation),SDG5(gender

equality),SDG8(decentworkandeconomicgrowth)andSDG10(reducedinequalities).

Anexampleofacross-sector,multi-stakeholderpartnershipistheBarcelonaForumDistrict,inwhich

a institutions, associationsandhotels (includingMelià andHilton studied in this research) share

commonvalues,actionsandstrategiestoadvancetheneighbourhood(BarcelonaForumDistrictn.d.).

TheyarelocatedinoneofthepoorerdistrictsofBarcelona,SantMartí,whichin2017had40%long-

term unemployment, 55% of residents who had not dropped out of education, not completing

mandatorystudies,andinsecurityandcleanlinessasthemainproblems(AjuntamentdeBarcelona

2018). In this environment, they tackle insecurity through employability programmes based on

trainingandinternshipsinorderto;i)offerafirstformaljobtopeopleatriskofsocialexclusion,ii)

reduceabsenteeismandearlyschoolleavingamongsecondaryschoolstudents,andiii)incorporate

refugees, asylum-seekers and immigrants into the labour market. They address the issues of

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cleanliness through environmental programmes such as educative recycling and beach and sea

cleaning(BarcelonaForumDistrictn.d.).Philanthropicactionsbenefit residentsof theSantMartí

district.Residentsbenefitfromimprovededucation(SDG4),accesstothelabourmarketthatreduces

inequalities(SDG10),decentjobcreationandincomethatwouldotherwisebedenied(SDG1,8).

Further investment to community, local institutions and local infrastructure,which are strategies

commonintheclusterpathway(Porteretal.2012),contributetoasustainablecityandcommunity

(SDG 11). Hotel benefits include improved workforce access, neighbourhood security, employee

senseofbelonging/pridetotheorganisation,andinfrastructuresurroundingthehotels.Thisexample

ofclusterdevelopmentshowcaseshowtacklingpersistentchallengeswithinthelocalneighbourhood

bringsaboutbenefitsfororganisations,residentsandtouristsalike.

ThissectionhasprovidedsomeinsightsintohowtodeveloptheCSVconceptforthehotelindustry,

exploringthethreepathwaysofcreatingsharedvalue.Whilethepreviousarejustafewexamplesof

howthehotelindustryistakingresponsibilityforitsenvironmentalandsocialimpacts,andarenot

isolatedcases,moresystemicandcontinuedmulti-stakeholderpartnershipsonmaterialissuesare

necessarytomakemoreradicalchangesintotheproductorserviceitself,thevaluechain,andthe

destinations inwhich theyoperate.Assuch, thisdiscussionhasaddedto theonly threeprevious

studiesresearchingtheapplicationsofsharedvalueinthetourismandhospitalityliterature(Font,

Guix,andBonilla-Priego2016,Camilleri2016,Serra,Font,andIvanova2017).

Thefollowingsectionexplorestheinternalorganisationalarrangementsanddecision-makingthat

leadtosuchactions,sincethatisusefulinformationforexplicatingwhylargehotelgroupshavenot

yetcreatedsharedvalue.

Internal factors shaping thehotels’ CSRpractices and the likelihoodofimplementingtheMBSCintheindustry

Itisbyunderstandingthe'blackbox'ofhotelgroups'decision-makingonhowtoengagestakeholders,

howtoidentifyandselectmaterialissues,howtochoosetheforwardactions,andhowtoreporton

those, that one can shed light on 'why' the industryhasnot yet operationalised sharedvalue.As

Adams(2008:368)said,“bringingaboutchangerequiresanunderstandingofwhathappenswithin

organisations,ofthecomplexityandinterdependencyoforganisationalprocessesandstructuresand

organisational participants.” Following prior work to understand sustainability in action and

obstaclestochange(Moon,Gond,etal.2011,Gondetal.2012,HoffmanandBazerman2007),this

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section examines barriers within the cognitive, organisational and technical dimensions of

sustainabilityintegrationtodiscussthefeasibilityofsharedvalue(Chapter3)andtheMBSC(Chapter

4)(Figure34).

Figure34:EffectofsustainabilitybarriersontheMBSCSource:Author,2018.

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Cognitivebarriersbasedonorganisationalcultureandvalues

Iftakingresponsibilityforasustainablefutureisgoingtobecomeaserious,sharedconcernforthe

hotelindustry,whatdothepeoplewithintheindustrythinkaretheconstraintsaffectingtheadoption

ofCSV?Thecognitivedimensionentailssharedcognitioninrespecttothechangesinfocusandbeliefs

(seeHoffmanandBazerman2007,Gondet al. 2012); therefore, the individual andsharedvalues

within theorganisation.Aheavily instrumentalapproach tosustainability,and limited leadership

awareness,commitmentandsupport,explainthereactiveCSRidentifiedinsection7.1.

Interviewees described a mix of motivations for sustainability, evidencing that reputational,

legitimacyandstakeholdertheoriesaremutuallyreinforcing(Table51).Forexample,hotelgroups’

adherencetoGRIarisesfromamixofreputationalconcerns(wheremaincompetitorsreportonit),

legitimacy concerns (meeting the expectations of social norms), and stakeholder concerns

(respondingtopressures).ThissupportsthetheoreticaldiscussionofRezaee(2016)inthatthethree

theoriescanbetakenasintegrated,tailoredtothemission,strategy,businessmodelandreportingof

eachorganisation.Yet,are thesedifferentmotivations likely to lead tosharedvaluestrategies?A

stakeholderapproachmaycontributeintransitioningtowardsCSV,whilereputationalorlegitimacy

concernsmay lead towhatPorterandKramer (2006) call ‘responsiveCSR’ focusedonachieving

short-termprofits.

Reputation,themostcitedmotivationacrossthesample,canbegainedthroughactionsaddressing

issuesnotrelatedtotheorganisation’soperations,suchasthecorporatedonationsandvolunteering

seen in reports. ForCSV, those actionsought tobe strategic, in that they leverage capabilities to

improve salient areas of competitiveness (Porter and Kramer 2006). Reputational concerns also

explainthereportingcharacterisedbyi)notbeingcomprehensiveacrossthehotelgroup’sportfolio,10

ii)abundanceofpositive information,and iii) lackofvoluntaryadversedisclosure.Hotelsmaybe

avoidingfactorsthatnegativelyinfluencecorporatebrandsandselectivelydiscloseinformationto

advance their image. Similarly, underreporting stakeholder inclusiveness (Sections 6.4, 6.6.1 and

10Reportsreviewedmostlyaccountformanaged(15reports)andowned(14)properties.Forinstance,Hilton’senvironmental data is limited to themanagedhotels (22%of its portfolio)and excludes the franchisedpropertiesthatmaypresentpoorerperformance(seeMelissen,vanGinneken,andWood2016).

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6.6.3) may be a strategy to manage reputational expectations, since stakeholders develop

expectationsovertime(Mahon2002),anissuethatcameacrossintheinterviews.

Complyingwithregulationsisanotherprominentmotivation,that,whileitmayadvancehotelgroups’

practices,doesnotleadtoCSV,sincesharedvalueisaboutexceedinglegalcompliance(Porterand

Kramer2011).Someactionsfromsection7.1legitimisethehotel’soperationsbutaddlittletothe

corporate competitive advantage. Similarly, experts explained that hotel groupsprovide only the

information they are obliged to; reflected in the disclosure seen in the reporting process and

environmental performance (Section6.6). Thus hotelsmay be following a legitimacy strategy by

complyingwith regulationsandpolitical, socialandeconomicnorms (DowlingandPfeffer1975).

Sharedvaluealsoleadstocorporatelegitimacy(FaracheandPerks,2010;Leavy,2012),butisnotthe

primaryobjectiveoforganisationspursuingCSV.

Stakeholderpressurewasthesecondmostchosenmotivation,andthelevelofproactivityinengaging

stakeholders leads to either responsive or more strategic CSR. CSV assumes the instrumental

stakeholdertheory,inthatstakeholdermanagementbringstheachievementoftraditionalcorporate

objectives(DonaldsonandPreston1995).Examplesinsection7.1evidencethatcollaborationswith

externalstakeholdersprovideopportunitiesfordevelopingproducts,thevaluechainandclusters.

Yet, it is the proactive attitude towards stakeholders that brings success and creation of value

(Wheeler, Colbert, and Freeman 2003). Instead, reports and interviews show a short-term,

instrumental,processofstakeholderengagement(Sections6.4,6.6.1and6.6.3)thatconstrainstheir

CSR;managers favour economic concerns, bothwhen identifying stakeholders, evidenced by the

criteriaused(e.g.,revenue),andwhenassessingmateriality(e.g.,amountofbusiness).

Theinstrumentalapproachalsoreachesacrossalldecisionsonsustainability,fromtheinitiativesto

pursue, to internal judgmentonhowtostrategise(stakeholderselectionandmaterialitychoices),

manage (organisationalarrangements),monitor (performancemanagement and control systems)

andreport(frameworksandassurance).Forinstance,thehierarchicalrelationshipbetweenthenon-

financialandfinancialcontrolsystemsaffectsseveralhotelgroupsfromthesample,beyondanearlier

firstcasestudyintheindustry(seeParkerandChung2018).Thepre-eminenceofparallelratherthan

integratedfinancialcontrolsexplainstheprioritisationofeconomicoutputsaheadofenvironmental

or social ones (Section 6.3). Short-termeconomicprofitabilitydominatesdecisionmaking in the

interviews,confirmingresearchamonghotelmanagers(StylosandVassiliadis2015,MakandChang

2019).Becausedecisionsarebasedonfinancialprofitability,managersseemboundedinstrumentally

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(HahnandFigge2011),whichrestrictsthebreadthofsharedvalueinitiativestoadopt(Maltzand

Schein2012).Hotelsareinclined,asseeninreports,toadoptactionsthatareeasytomeasure,with

short-termandtangibleresultsonprofitability.

IntervieweesalsothatperceivedtopmanagersdisbelievethebusinesscaseforCSR,whichexplains

the persistence of looking for short-term economic profits as a means to scale up actions. They

acknowledgehavingto ‘battle,’ ‘fight,’and‘knockondoors’toconvincetopmanagementastothe

need for and importanceofCSR-processes.11For example, they focuson cost-reduction and cost-

benefitstrategies,similartopreviousfindingsforahotelgroup(seeParkerandChung2018).While

thesestrategiesleadtofinancialgains,CSRmanagersknowthattheydonotcontributetolong-term

success.Expertsarguedthathotelsarenotusingsustainabilityasatransformingforce,suchasthe

onerequiredforCSV(Porteretal.2012),butasseparatefromthevaluepropositionoftheirproducts.

Assuch,acollectionofprogrammesanddisjointedactivitiesforalimitedpartofoperationscannot

lead to sharedvalue (Baumüller,Husmann, andVonBraun2014), evidenced in thehotel groups

studied(seeSection7.1).

Also,theknowledgegapandlowsustainabilityawareness12oftopmanagementastotheneedforand

usefulness of processes such as stakeholder engagement, materiality and external assurance,

contributetotheratherreactiveCSR.Thislackofawarenessearlieridentifiedinthehotelindustry

(MakandChang2019)explainsthelimitedadoptionwhencomparedtoothersectors(e.g.,Moratis

andBrandt2017,Jonesetal.2017).ThelackofcapacitybuildinginrespecttoCSR13constrainsthe

futureadoptionofCSV,sinceacriticalstepinthelatterisleveragingassetssuchasknowledgeand

skills(BockstetteandStamp2011).Forexample,accordingtotheexpertsinterviewed,thead-hoc

stakeholderengagementcanbetheresultofalackoftrainingtosupportrobustengagementanda

lackofconnections,bothofwhichthesharedvalueisdependenton(e.g.,MaltzandSchein2012).

Consistentwithotherindustries(e.g.,Albelda-Pérez,Correa-Ruiz,andCarrasco-Fenech2007),when

organisations fail toplaceCSRhighenoughonthepriority list theymissoutontheknow-howto

adoptimprovements.

11ThereisalackofseniorendorsementforCSR-processes(C1,C2,C5,C8,E5,E7,E8).12Intervieweesseetheindustryashavinglessmaturedprocessescomparedtoothersectors(C1,C5,E2,E5,E6,E7).13ThelackofknowledgeandskillsonCSRaffectssustainabilityimplementationandreporting(C1,C2,C5,C6,C8,E1,E4,E5,E6,E7).

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If, as contended here, cognitive factors hinder the adoption of CSV, what is their effect on the

implementationoftheMBSC?Theindustryhasaninstrumentalapproachtosustainability,asitdoes

theCSVandtheMBSC.Yet,itisthestrongshort-termfocusthatcreatesamisfitbetweentheMBSC

and the hotel groups’ organisational culture, and this lack of alignment is a challenge when

implementinganyBSC(Butler,Letza,andNeale1997).SinceorganisationschooseanSBSCdesign

basedonpre-existingornewvalues(HansenandSchaltegger2017),hotelgroupsmayeithermodify

theMBSC perspectives tomatchwith their current organisational culture ormaintain theMBSC

structureinordertoimplementanewvaluesystem.

OnepossibilityisthathotelsmodifytheMBSCtomatchtheirinstrumentalapproach,leadingtothe

adoption of an SBSC. The MBSC has a strict hierarchy, and while it can support sustainability

transformation,thisdependsonthelevelofsustainabilityintegrationoftheorganisation,similarto

theBSC(HansenandSchaltegger2017).Themanagement,concurringtotheorganisationalvalues,is

likelytomodifythehierarchyoftheperspectivestoemphasisethefinancialones,followingitsshort-

term economic concerns, or limit the stakeholder value, following its narrow stakeholder

identification.Usedassuch,theMBSCcouldendupsupportingtheinstrumentalismofsustainability,

aswithpreviousSBSCs(HahnandFigge2018).Thefinancialperspectiveislocatedsecond-to-topin

theMBSC(Chapter4)soastoavoidthemarginalisationofCSRobjectivesinthepursuitofprofits,

andachangeinpositionmaystabiliseunsustainablepractices.

Alternatively,withthegoaloffurtheringstrategicCSRhotelgroupsmayimplementtheMBSCwithout

changesinitsdesign.TheymayadopttheMSBCaspartofanorganisationalchangeefforttoadvance

into a more sustainability-oriented value system. The MBSC then becomes a lever for strategic

renewal,whichmaycreateatemporaryandintendedmisfitbetweentheMBSCarchitectureandthe

strategyandorganisationalvalues.Withitshierarchydominatedbylong-termsustainabilitygoals,

theMBSCprovides theopportunity tomeasure theeconomicrelevanceof theenvironmentaland

socialimpactsofthesegoals,andtheircontributiontolong-termsustainabledevelopment(asystem-

levelperspective).Theextendedarchitecture,togetherwiththecause-and-effectchains,clarifythe

linksbetweenthevaluecreationprocessesandbuildthebusinesscaseCSRmanagerssomuchneed

iftheyaretoconvincetopmanagement.

Insummary,thecognitivebarriersarecapturedintheLearning&Growthperspectiveandaffectnot

onlyspecificelementswithineachperspectivebuttheentireMBSC.Itisthroughtheimprovements

in learning and growth as part of a shift towards a sustainable culture, commitment from top

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management,andCSRskillsdevelopment,thatinternalprocessescanbeimproved.Betterprocesses

leadtocustomervalue,whichinturnbringsfinancialvalueandprotectslong-termobjectives.For

hotelstoembracetheMBSC,thereistheneedforincreasedawarenessofastrategicapproachtoCSR,

tobecomeatopmanagementpriority,andtoprovidethenecessaryknow-how.Similarly,moving

towardssharedvaluerequireschangesinthetopmanagement’swayofthinkingandactingabout

sustainability,beyondthepositiveeffectsoftheCSRmanager'sabilitytoexercisediscretion.14

Organisationalbarriersbasedonstructure

Cognitivebarriersarenottheonlysourcesofdecisionmakingdetrimentaltotheenvironmentand

society.Theorganisationalarrangementsuchasownershipstructure,constrainedCSRdepartments,

unclear roles and responsibilities, lack of internal accountability and limited cross-departmental

coordinationareinternaldeterminantsofCSRadoptionandreporting(Figure34).TheLearningand

GrowthperspectiveoftheMBSCcapturesthesecharacteristicsthataffecttheentireframework.

Results show the ownership structure affects sustainability performance and processes focusing

thoseonportfoliogrowthandprofitmargins,providingqualitativeevidencethatcomplementsthat

ofMelissenetal. (2016).Theownershipmayconstrain thedeploymentofCSVstrategiesand the

MBSC (Section 6.1.1), which ought to be implemented first in the owned properties to lead by

example, since according to interviewees, those have decision-making control, effective strategy

rolloutandsustainabilitydatatracking.OwnedpropertiesmaybethebesttotestaCSVinitiativeand

buildthebusinesscaseforconvincingtopmanagement.Then,asthecorporationhascontrolover

sustainability criteria, rented properties could follow, but sustainability investment becomes a

challengebecauseofconflictsofinterestbetweentheownerof thebuildingandthemanagement

organisation.15Lastcometheheavilymanagedandfranchisedportfoliosinwhichsustainabilityisnot

abrandstandard,16becausetheystruggletoapproveandroll-outthestrategy,partiallyimplement

theirPMS,andhave limitedcontrolanddatasharing.Partial implementationofCSVor theMBSC

14ThebackgroundoftheCSRofficeratthecorporationandatthepropertyisarguedtoshapethesustainabilityfocus,echoingthemanagers’discretioninrespecttoCSR(HemingwayandMaclagan2004).

15ThisisaconcernforC3,C7,C8,E4,E5. 16ThisisaconcernforC1,C2,C3,C4,C5,C7,C8,E8.Whilesomegroupsmayhavesustainabilityasabrand

standardthosewerenotrepresentedintheinterviews.

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likely leads to the same incomplete reporting found in those reports that distort the overall

performancewhentheyselectivelydisclosedatafromsome,butnotall,properties.

This study is also the first identifying that large hotel groups with CSR public statements and

reportingoftenhaveCSRdepartmentsthatlackresources17andpower.18CSRmanagersareoften

constrainedbyalackoflegitimacyintheirwork,similartoothersectors(TamsandMarshall2011).

Forexample,theleanhumanandfinancialcapacitylimitstheirabilitytoengagewithstakeholders,

toundertake a formalmateriality assessmentandto respondto stakeholder feedback,which are

essentialintheMSBC.Moreover,budgetarylimitationsmaybeanobstacletoacquiringsoftwareto

measureperformancewithanorganisation-widePMS,aswithearlierBSCs(MadsenandStenheim

2014b).Alongsidethecorporatevalues,therelativelymarginalpositionsofCSRdepartmentswithin

theorganisational structures constrain their efforts, andas a result, the likelihoodofprogressing

towardsstrategicCSR.

Theunclearresponsibilitiesandblurredaccountabilityregarding the implementationofdecisions

alsoobstructtheexecutionoftheCSRstrategy.Interviewresultsechofindingsinotherindustrieson

strategyimplementationingeneral(e.g.,Hrebiniak2006)andsharedvalueinparticular(Spitzeck

andChapman2012).Similarly,theabsenceofCSRchampionswithinthepropertiesisexpectedto

affectnotonlytheprogresstowardsCSVbutalsotheMBSC,sincethelackofanemployeeresponsible

for the PMS is a barrier to implementing a BSC (Madsen and Stenheim 2014b).While roles and

responsibilitiesneedtobemoreclearlydefined,thereisalsotheneedforaccountabilitymechanisms,

sincemosthotelgroupsdonotenforceconsequences for thepropertiesnotreachingCSRtargets

(Section6.3.3).

Onesuchmechanismmaybearewardssystem(Section6.3.3),howevermosthotelgroupswitha

formalCSRstrategyhavenotyetincorporatedCSRmeasuresinperformanceevaluation,addingto

thelimitedevidenceforhowhotelgroupsemployrewardssystemsforsustainability(seeEpstein

and Buhovac 2010, for information on ScandicHotels). This lack of sustainability criteria in the

rewardssystemhastwoconsequencesforthehotels’transitiontoCSV.Oneisthatitencouragesthe

management to focus on traditional short-term financial performance (as seen in the cognitive

17Intervieweesrefertoleanhumanresourcesandfinancialcapacity(C1,C2,C4,C5,C6,C8,E1,E5,E6).18C7,E7andE8areconcernedaboutthelackofaccountabilitymechanismsandtheCSRdepartmentsbeingdisempowered.

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barriers).Thisisaclearlimitationforsharedvaluestrategies,thebenefitsofwhichtakelongerto

realise.Theotheristhechallengeofengagingmanagersfromawiderangeofdepartments,suchas

accounting,financeandmarketing,whosepracticesaffectCSRtargets.Yet,employeeunderstanding

ofthesharedvalueapproachiskeywhenoperationalisingCSV(Pfitzer,Bockstette,andStamp2013,

Porteretal.2012).RewardssystemsalsoinfluencethedegreeofapplicationofaBSC(Madsenand

Stenheim2014a),andtherefore,thelackofsuchsystemsinhotelgroupsmayconstraintheadoption

oftheMBSC.

Besides, CSR managers see the way in which they communicate sustainability internally as an

obstacle to strategy execution, in line with earlier findings (Weernink andWillemijn 2014). The

predominance of one-way and downwards communication from top management to employees

limitsthelatter’sinvolvementinmanagingCSR(Section6.2.2),withoutwhich,strategiclearningis

hampered(Nørreklit2003).Anexample is theabundanceofclosedreportingwhichweakens the

cross-departmentalcollaboration(Section6.1.3)thatadvocatesofsharedvaluearguetobeofhigh

importance (e.g., Bockstette and Stamp 2011, Pfitzer, Bockstette, and Stamp 2013). The internal

communicationcanalsohaveanadverseeffectifitdoesnotpromotetheindividualandcollective

reflectionsnecessaryforadoptinganewstrategicmanagementframework(MadsenandStenheim

2014b,Zingales,O'Rourke,andHockerts2002),thusaffectingtheMBSC.

Insummary,underthecurrentorganisationalstructure,mosthotelgroupsarelikelytocontinueto

managesustainabilityseparatelyfromotherbusinessactivities.Nonetheless,therearesomeleaders

in the industry. Two hotel groups have formal roles across all managerial levels, and their CSR

managersareawarethatsustainabilityoughttobemanagedmoreformally.Twohotelgroupsalso

usemechanismstosanctionpropertiesnotreachingsustainabilitytargets.Further,somehotelsadopt

openreporting,whichempowersemployeestocontributemorefullytoCSRgoals.Thesechangesin

the organisational structure can facilitate both theMBSC implementation and themove towards

sharedvalue.

Technicalbarriersbasedonsystemsandprocesses

Thecognitiveandorganisationalbarriersoutlinedabovehaveaknock-oneffectonthesystemsand

process of managing and reporting sustainability, in the form of technical barriers. These are

evidencedintheabilityofhotelgroupstodefineindicatorsandcollectandmonitorsustainability

data(Figure34)andhindertheprogresstowardssharedvalue.

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Currently,sustainabilityperformancemanagementtoolsdonotconsistentlyintegratesustainability

issues into the overall business management. Hotel groups’ reports disclose quantified

environmentaltargets,forwhichtheyhavedevelopedenvironmentalmanagementsystems;instead,

social commitments tend not to be quantified (see Section 7.1) and are oftenmanaged through

MicrosoftExcel.Similartoorganisationsinotherindustries(Maas,Schaltegger,andCrutzen2016),

hotelgroupshavedifferentPMStohandlevariousissuesinsteadofhavinganintegratedapproach

(Section 6.3.2). It is this development of specific systems tomanage environmentalmatters that

exemplifiesthatperformancemeasurementandmanagementsystemschangetoaccommodatethe

CSRstrategy(echoingresultsfromPeregoandHartmann2009).Accordingly,shouldhotelsadopt

sharedvaluestrategiestheirPMSwouldneedtoadapttotracktheorganisationalperformanceand

the social value created in tandem, as has been observed also by previous scholars (Pfitzer,

Bockstette,andStamp2013,Porteretal.2012).

Nonetheless, becausehotel groupshavenot resolved the appropriateorganisationalperformance

measures, they areunlikely tobe able to implement aPMSwith system-levelmetricsmeasuring

shared value. The industry is struggling to define organisational performance metrics and

methodologies (Section 6.3.1), which hinders the availability and quality of CSR information for

decisionmaking.Forexample,despitetheindustryeffortstowardsstandardisingthemeasurement

of hotels’ environmental performance (e.g., Hotel Carbon Measurement Initiative, the Hotel

FootprintingTool),theirguidanceremainscomplexandoftencontradictory(Ricaurte2012).Evenin

environmentalperformance,despiteeffortsforahotel-specificbaselineonGHGemissionsandenergy

(Ricaurte 2017), quantified targets and the use of specific systems, data collection is not

comprehensive and both systems andmetrics are used differently across the properties and the

corporateoffices(Section6.3.1and6.6.2).ThroughcompilingtheperceptionsofCSRmanagersand

expertsthisstudyaddstothelimitedresearchontheperformancemanagementofsustainabilityof

hotelgroups(e.g.,Bohdanowicz-GodfreyandZientara2015).

TwodirectchallengesfollowfromthisfortheMBSC.First,theuseofisolatedsystemsforspecific

sustainabilityissues,whicharealsonotyetdeployedconsistentlyacrossproperties,suggestthatthe

adoption of an integrated system is unlikely. If this lack of organisation-wide PMSarises from a

shortageofsoftware,asintervieweesindicated,thenthisabsenceisalsoadifficultyfortheMBSC,as

ithasbeenwiththeBSC(KaplanandNorton1996b).Second,thecomplexityofmanagingconsistent

anddata-sensitivemetricsacrossproperties,evenintheenvironmentalorganisationalperformance

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(forwhichsystemsaremoredevelopedthansocialperformance),highlightsthechallengeofadopting

the system-level metrics necessary to measure shared value. While system-level measures are

encouragedintheMBSC,intervieweesexpectedthattheywouldbemorechallengingtoincludeinthe

hotelgroups’generalmanagementandcontrolsystems,whichmayleadtotheMBSConlyincluding

organisationalperformancemeasures,ashasbeen thecasewith thepreviousSBSCs(Hansenand

Schaltegger 2017). These technical challenges threaten the adoption of shared value. Without

adequate indicatorsandsystemsto trackprogressandquantify theresultsofCSVinitiatives,CSR

managers will struggle to build the business case to gain support from top management in

organisationsfocusedonshort-termeconomicgains.

Insummary,whilemostgroupslackformalisedsystemstosupporttheirsustainabilitymanagement

and reporting, and evenwhen those are in place, they are of varied sophistication, and remain

separatetothefinancialcontrolsystem,therearesignsofafutureshifttowardsgreatertechnical

sustainabilityintegration.Someintervieweesexplainedthattheywereworkingonanorganisation-

widesystem.Suchasystemwouldintegratesustainability,thusminimisingtherisksofmarginalising

theCSRstrategyarisingfrommanagingitseparatelyfromtherestofthebusiness.Itcouldalsoensure

thecoherence,accuracyandrobustnessofdataacrossproperties,andtherefore,makemorefeasible

theplanningand control ofCSR initiatives fordecisionmakingand reporting.Also the increased

effortsincross-sectorcollaborationtoaddressmeasurementchallenges,suchastheHotelCarbon

MeasurementInitiative(Section6.4.3),representathirdwayofcreatingsharedvalue,andprovidea

positiveoutlookthathotelgroupsmaybeabletotransformtheirinternalsystems,methodologies

andmetricstomeasureandreportsharedvaluegradually.

Overall, this section has provided new knowledge on the determinants of CSRmanagement and

reportingthatconstraintheadoptionofsharedvalueinthehospitalityindustry,providinganinsight

fromtheperspectiveoflargehotelgroupsthatcomplementstheonlyotherstudyonsharedvaluefor

the industry,which looked into small-scale accommodation establishments (Camilleri 2016). It is

throughdiscussingthesecognitive,organisationalandtechnicalarrangementsthatthesectionhas

beenabletoidentifytheireffectintheimplementationoftheMBSCintheindustry.Thefollowing

section further discusses the effect of these determinants to the adoption of the Accountability

principlesofinclusiveness,materialityandresponsiveness,whicharecentraltotheMBSCframework

foradvancingtowardssharedvalue.

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Thehotels’ approach to Inclusiveness,MaterialityandResponsiveness:Consequencesforsharedvalue

This section explores the consequences of the previous cognitive, organisational and technical

characteristicsofthehotels’sustainabilityintegrationintheirabilitytoengagestakeholders,identify

materialissuesandrespondtothose.TheeffectivenessoftheMBSCinassistingorganisationalchange

towardsproactiveCSRdependsonthestrategybehindit,aswithothersustainabilitymanagement

tools (Hansen and Schaltegger 2017). In this context, inclusiveness (Section 6.4.1 and 6.4.2),

materiality(Section6.5.2)andresponsiveness(Section6.4.3)becomerelevantbecausetheyshape

the strategy and are the input for theMBSC. This is the first study examining qualitatively how

different internal organisational factors affect the adoption and disclosure of accountability

principles.Researchhasfocusedonanalysingthecontentofreportsaboutinclusiveness(e.g.,Manetti

2011),materiality(Jones,Comfort,andHillier2016a,b,JonesandComfort2017,Jones,Hillier,and

Comfort2017),andresponsiveness(MoratisandBrandt2017)orthethreetogetherinassurance

(Jonesetal.2017).Thedecisionmakingthatshapesthesereportshasseldombeenresearched,with

onlysomecasestudies(e.g.,BT2014/15,AdamsandFrost2008).Thissectionexploreshowthe

industry'sapproachtotheseprincipleshindersprogresstowardssharedvalue.

The predominantly narrow and symbolic stakeholder engagement identified in reports, and the

limitedstakeholdermanagementcapabilityidentifiedintheinterviews,helpexplaintheindustry's

reactive CSR. Hotels mostly engage stakeholder groups that can control resources vital to their

operations,andpaylessattentiontothosestakeholderswithoutpower(e.g.,reportsshowlimited

inclusion of derivative legitimate stakeholders). This narrow approach limits the potential for

identifyingstakeholderswithwhomtocreatesharedvalue;forinstance,engagingwithNGOshasa

highinstrumentalvalueforstrategicmanagement(VanHuijsteeandGlasbergen2008)orengaging

‘fringe stakeholders’ is regarded as a source for competitive advantage based on the capacity to

generate disruptive innovation (Hart and Sharma 2004). While hotel groups’ stakeholder

engagementrespondstotheassumptionthatmanagingstakeholdersleadstoimprovedbusiness(as

withCSV),itistheshort-termeconomicconcernsthatleadtonarrowstakeholderidentificationand

thatlimitthepotentialforcreatingsharedvalue.

Itisnotonlythestakeholdersidentified,butalsothechosenlevelofengagementwhatdrivesor,in

the case of hotel groups, restricts, their CSR actions. Bymostly employing symbolic engagement

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(informative followed by consultative mechanisms) hotels disregard the power of decisive

consultationbywhichtheorganisationinvolvesstakeholdersindecisionmakingthataffectsthem

(Green and Hunton-Clarke 2003). Similar to the way the strategic management of sustainability

buildsonapartneringmentality(HarrisonandSt.John1996),thethreepathwaysofcreatingshared

valuehaveattheircorecollaborationwithstakeholders:customerswhenreconceivingproductsand

markets, suppliersandresearcherswhenreimaginingthevaluechain,and localcommunitiesand

NGOswhendeveloping clusters.Although, overall, hotel groups still seem tobe a longway from

effectivelydelegatingdecisionstostakeholders,therearesomesignsofthemstartingtoemployat

leastadegreeofdelegationofpower,whichcouldbecategorisedasaformofdecisiveconsultation

(AccountAbility2015).Thiscanbeseen,forexample,withtheBarcelonaForumDistrict(learningand

acting together) or the Hotel Carbon Measurement Initiative (jointly learning but working

separately).

Theneedtoengagestakeholdersinidentifyingtherelevantissuesliesatthecoreofsharedvalue

guidelinesandisadeterminantoftheabilitytoformulateandimplementthestrategy.Identifying

stakeholders and managing a relationship with them requires a certain level of stakeholder

managementcapability(e.g.,Freeman1984).Themanagementcapabilityofmosthotelgroupsislow

in thattheyhaveno formalprocesses to identifyandengagestakeholders;engagementisad-hoc,

informal and reactive to external pressures, which suggests they are at the very early stages of

stakeholder engagement (AccountAbility 2015). The identified lack of resources, knowledge and

capabilityforengagingstakeholders,alongwithfearofexposure,seemtobethemainbarriersto

adopting the necessary approach for shared value. Three hotel groups have more planned and

systematic engagement that includes formal stakeholder mapping, and defined processes and

channels, possibly representing more advanced levels of stakeholder engagement from

AccountAbility (2015). While their higher stakeholder management capability enables them to

undertake formal materiality assessment, they have not yet integrated stakeholders into their

governance.Oneexplanationforthisisthelackofpower,resourcesandlegitimacyofthecorporate

sustainabilitydepartments,asperceivedbytheCSRmanagersinterviewed.

Alackoftopmanagementawarenessoftheneedfor,andvalueof,stakeholderengagementconstrains

thefinancialandhumanresourcesdedicatedtoitandthus,also,theknowledgeandskillsneededto

undertake the robust engagement required formateriality assessment. Indeed, the inclusiveness

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approachchosenislikelytohaveaknock-oneffectontheprocessofimplementingmateriality,since

alargepartoftheassessmentisaboutengagingstakeholderstodeterminematerialissues.

Theresultsofthisstudymakeanovelcontributiontotheexistingliteratureinthattheysuggestthat

the extent of management control over themateriality assessment affects the inclusiveness and

responsiveness principles. ‘Managerial capture’ is a notion borrowed from the social auditing

literaturethatrefersto"themanagementtakingcontrolofthewholeprocess(includingthedegree

ofstakeholderinclusion)bystrategicallycollectinganddisseminatingonlytheinformationitdeems

appropriate to advance the corporate image” (Owen et al. 2000, 85). This research extends the

managerialcaptureidentifiedinsocialauditing(Owenetal.2000)bycharacterisingfivefactors,some

ofwhichhavebeenstudied in isolation inpriorresearch(ZadekandRaynard2002).The limited

stakeholderrepresentativeness(stakeholdersengagedandnumbers), thepoorproceduralquality

(issuesof power through the engagement), and thequality andquantityof stakeholder feedback

collected(the focusof the engagementandnumberofresponses)allaffectthe inclusiveness.The

remainingfactor,thequalityofstakeholderoutcomesattributabletotheconsultationprocess(the

outcomeoftheengagement)affectstheresponsiveness.

Stakeholderrepresentativeness’referstowhether thestakeholdersinvolvedarerepresentativeof

thebroaderstakeholdercommunity.Inthecaseofhotelgroups,priorityseemstobegiventothose

stakeholderswiththecapacitytoinfluencetheorganisation(Bonilla-PriegoandBenítez-Hernández

2017); thus legitimate stakeholder needsmay remain unheard, and consequently, missed in the

materialityassessment.The feedbackgatheredmaynotberepresentativeof theheterogeneityof

concerns from each stakeholder group, but it may respond to the agenda of the individual

stakeholdersengaged,andtheiraimtoinfluencetheorganisations’sustainabilitypractices(Collins,

Kearins,andRoper2005);an issue thathasreceived limitedattention in thereporting literature.

Hence, stakeholders invited in the consultationprocessmay capture andmisrepresent the list of

issuestoaddresssharedvaluestrategies.

Similarly, it is unclear whether the engagement undertaken is consistent with the purpose of

materiality. ‘Procedural quality’ concerns how the organisation conducts the engagement and

whetherornotthisisconsistentwiththedeclaredpurpose(seeZadekandRaynard2002).Reporting

guidelinessuggestthatorganisationsshoulddevelopalistofpotentialmaterialissues(KPMG2014b),

buttheyalsoexplainthata“properstakeholderengagementprocessistwo-wayinnature,systematic

andobjective”(GRI2013b,36).Whileguidelinesdonotdetail‘how’toengagestakeholders,theydo

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statethatorganisationsshould:i)considerexisting,ongoing,andspecificstakeholderengagement

formateriality; and ii) determine themethods and levels of engagement (AccountAbility 2015).

Despitetheseguidelines,thehotelgroupsinterviewedusedmostlypre-specifiedsurveysthatlimit

the stakeholders’ ability to bring up new issuesmaterial to them. Hence, it is unlikely that this

engagementresultsintheidentificationofunmetsocialandenvironmentalneeds,whichwouldbe

central to formulating a CSV strategy (Bockstette and Stamp 2011, Porter et al. 2012). It is also

unlikely that thereports “reflectall issuesof importance tokeystakeholdergroups if there isno

dialogue”(Adams2002,244).

One possible explanation for such behaviour is that CSR departments are constrained in their

resources,andtherefore,stakeholderengagementmay'putpeopleoff'sinceitentailsan'obligation

toact'ontheissuesidentified.Thisechoesthefearof'openingup'seeninotherindustries(Searcy

andBuslovich2014).Pragmatically,someCSRmanagersacknowledgedthatitismoreimportantto

identifyissuesmaterialtotheorganisationandthenengagestakeholdersontacklingthosethanto

identify issuesmaterial to stakeholders, but not be able to solve them. For example, materiality

analysestoidentifystrategicrisksandopportunitiesusedcriteriatoassessmaterialitysolelyrelated

to theorganisation’sperformance.Organisations thatmodify thepurposeof the engagement and

lessen the stakeholder logic of the GRIdefinition (despiteproducing GRI reports) take a narrow

approachtomaterialitythatconstrainstheunderstandingofthesocietalimpactonstakeholdersand

the effect of social issues on the organisation’s competitiveness, necessary for shared value

(BockstetteandStamp2011).

Also,thequalityandquantityofstakeholderfeedbackaffecttheresultsofthematerialityassessment.

‘Qualityofthefeedback’referstothefocusoftheengagement,whichwasfoundtobeintrospective.

Instead of focusing on identifying important sustainability issues for the stakeholders, the

engagement focuses on canvassing opinions about the sustainability performance. Stakeholder

inclusionshouldnotbeaboutcanvassingviewpointsoncorporatesocialperformance,similarlyto

thecontextofauditing(Ball,Owen,andGray2000).Also,thestateddifficultyofgettingstakeholders

to participate in the consultation process suggests issues around the ‘quantity of feedback.’ It

indicates the “dialogue fatigue” found in other industries (Burchell and Cook 2013), whereby

stakeholders are inundated with requests for consultation. Inevitably, this most likely limits the

breadthof stakeholders engagedandworsens the issueof representativeness, thus, affecting the

inputforCSV.

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The final issue affects the responsiveness of hotel groups, and is the ‘outcome quality’ of the

materialityassessment;thetangibleevidenceofmaterialitydecisionsadoptedasaresultofengaging

stakeholders (see Zadek and Raynard 2002). Organisations are expected to apply their values to

interpretthereportingprinciples(Edgley,Jones,andAtkins2014)becausereportinglacksagreed

guidelines (Edgley 2014) and implementation (Behnam and MacLean 2011). Inevitably,

interpretative frames influence the process of filtering information (Finkelstein, Hambrick, and

Cannella2009)andtheinstrumentalimportanceofissuestothepursuitofrationalobjectivesmay

beaframeforinterpretingthesalienceofthoseissues(Bundy,Shropshire,andBuchholtz2013).This

study exemplifies these points by showing how the decisions involved in defining and

operationalising the thresholds for materiality, and negotiating conflicting demands among

stakeholderswhenaggregatingtheirfeedback,areexpectedtobebiasedbytheinstrumentallogic.

Thatis,managersdeterminetheissues’saliencebasedonwhetherornottheyareconsistentwiththe

abilityoftheorganisationtoachieveitseconomicgoals.Thismayalsoexplainthecommonadaptation

thatorganisations,includinghotels,maketotheirGRImaterialitymatrix,whichistofavourcorporate

rather than sustainability goals (Jones, Comfort, andHillier2016a, Font,Guix, andBonilla-Priego

2016,Morrós2017,Guix,Bonilla-Priego,andFont2018,Guix,Font,andBonilla-Priegoforthcoming).

Thisresearchshowsthatinclusivenessandmaterialitydecisionsinsustainabilityarejustasopaque

inthehotelsectorasinotherindustries(MoratisandBrandt2017,JonesandComfort2017,Jones,

Comfort, and Hillier 2016a, b, Morrós 2017). Some interviewees concealed the aggregation of

stakeholderfeedback, arguingconfidentiality,whileothersjustifiedthatusingconsultantsmakes

materialityanobjectiveandsystematicprocess.Outsourcingtheprocesstoaconsultant,however,

mayaffecthowtheresultsoftheassessmentareincorporatedwithintheorganisation’sgovernance,

strategy,performancemanagementsystems,andoveralldecision-making.Italsodoesnotdiminish

the potential for capture; the experts interviewed were sceptical and argued that the lack of

disclosureoftheprocessesmaybeanintentionalstrategytolegitimisesustainabilityreportswithout

providingtoomanydetails.

Atthispoint,duetothesubjectivityofthematerialityassessment,thebarriersencounteredbyhotel

groups,andtheimportanceofsuchaprocessforoperationalisingsharedvalue,twosetsofissues

meritfurtherdiscussionandreflection,namely:i)unintendedversusintendedmisclassificationof

materialissues,leadingtomismanagement;andii)substantiveversussymbolicadoptionofreporting

guidelines.

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First, with regard to mismanagement, arguably, the barriers identified can lead to unintended

mismanagementofsustainability,particularlyforthosehotelgroupsthathavelimitedstakeholder

managementcapability, resourcesandknowledge tomanage theprocess.Thesehotelsundertake

materialityassessmentinformally,andmaymisclassifymaterialandimmaterialissues,resultingin

strategiesthatomitimportantstakeholderissues.Alternatively,intendedmismanagementmaylead

totheuseofmaterialitytofurthertheinterestsofthehotelgroup,ratherthanthoseofsustainability

orthestakeholders.Expertsinterviewedsuggestthatsomehotelgroupsdeliberatelymanipulatethe

process. Because of the limited disclosure of decisions, this research is unable to differentiate

between the hotels’ management or mismanagement of material issues based on the corporate

managers’interviews.Likewise,andpertinently,anyonereadingthefinalsustainabilityreportwill

beunabletodifferentiatebetweenunintendedorintendedmismanagementofmaterialissuesbased

onthereportedinformation.

Second,theadoptionofreportingguidelinesmaybesubstantive,whichrequiresorganisationstobe

willing to make significant organisational changes and embed stakeholder and materiality

considerations into their core business practices; or it may be symbolic, bywhich organisations

subscribeformallytotheguidelinesbutdecoupletheprinciplesofthoseguidelinesfromtheirday-

to-daypractices.ReportingguidelinessuchasGRI,withtheirprinciplesofstakeholderinclusiveness

andmateriality, can be a driver for shared value strategies when organisations adhere to them

substantively.Interviewresults,however,suggestthatfewhotelgroupsaretakinganactiveapproach

toreportingaccordingtoGRI; themajorityaremorereactive, toavoidbeingperceivedas lagging

behindindustrypeers;thisissimilartofindingsinotherindustries(MacLeanandRebernak2007).

Reasonsgivenwere: i)unwillingnesstodisclosemore thancompetitors;and ii) inability toreach

stakeholder-agreedtargets.The“non-specifictime-frameforcomplianceopensthedoortodecouple

theGRIfromactualworkpractices”(BehnamandMacLean2011,58).Thestakeholderengagement

andmaterialitypracticesevidencedinthereportsandinterviewssuggestsymbolicadherencetothe

reportingguidelines,whicharguablypreventstheprogresstowardsmorestrategicCSR.

There is a significant gapbetween signingup to, andadhering to, voluntary reporting guidelines

(Adams2004).First,becausethereisnosanctioningfornon-complianceand,second,becausethere

islimitedassuranceofcompliance(BehnamandMacLean2011).Moreover,organisationscanreport

underGRIwithoutfollowingtheGRIguidelines.Forexample,althoughstakeholderandmateriality

processesareaddressedinG4indicators,mostinternaldecisionsremainhiddenfrompublicscrutiny

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(as in Morrós 2017) yet hotel groups can still obtain the highest GRI score (‘In accordance-

comprehensive’)fortheirreports.Also,GRIrequireslittleassurancethatareportmeetsitsprinciples,

externalassuranceisvoluntaryanditsscopeislefttotheorganisation’sdiscretion.Organisations

assurethatthedisclosedinformationiscorrectbuttheydonotauditthecompleteness,orscope,of

theirreports(Adams2004,2002).Externalassurance,therefore,doesnotenlightenthemateriality

principle,sinceitdoesnotassesstheadequacyofissues(Edgley,Jones,andAtkins2014).Asaresult,

voluntaryreportingdoesnotcurrentlyleadtoaccountableandtransparentreporting,neitherforthe

content(e.g.,HahnandLülfs2014,Adams2004)norfortheprocessofreporting(e.g.,Moratisand

Brandt2017,Manetti2011).Thislackofenforcementmechanisms,arguably,leadstohotelgroups

adaptingtheguidelinestotheirownpurpose,withoutanyneedtojustifytheirchoices.Inturn,this

lackoftransparencyoforganisationalactivitieshindersanorganisation’saccountabilitybecauseit

limits the ability of their stakeholders to make reasonable judgments, based on the materiality

disclosure,aboutwhetherornottheorganisationisaddressingtheirneeds.

Insummary,thisstudyrevealsthathotelgroupssymbolicallyadoptreportingguidelines,without

embedding stakeholder and materiality considerations into their core business practices. The

predominanceofadhocstakeholderengagement,and instrumental logic, to judge thesalienceof

issues show a narrow application of the concept of materiality. Opaque sustainability reporting

preventsstakeholders frombeingable toassess theresponsivenessofhotelgroups: i)howhotel

groupsmakedecisions;andii)towhatextentthehotelsmakeacredibleattempttotackletheimpacts

thataresignificanttotheirstakeholders.

Taking into account that the characteristics of how hotel groups choose to adopt inclusiveness,

materialityandresponsivenessperpetuatethereactiveCSRintheindustry,thenextsectionproposes

specificguidelinesinrespecttothesethreeprinciplesthatwillsupportthepurposeofsharedvalue.

Conclusions:TheMBSCasavehicleforsharedvalue

Thisstudyprovidesthefirstpublishedaccounttodetailhowthehotelsectorestablishes,justifiesand

operationalisesitssustainabilityagendaregardingwhothesehotelgroupschoosetobeaccountable

to. The study has identified internal determinants affecting CSR management and reporting, as

perceived by experts and those managing and preparing sustainability reports, which provide

insightsintothei)somewhatreactiveCSR,andii)symbolicadoptionofreportingguidelinesinthe

hotelindustry.Cognitivefactors(suchasmanagerialattitudesandorganisationalculture)areseen

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as critical barriers to the substantive adoption of the principles of inclusiveness,materiality and

responsiveness.ThiscomplementsexistingresearchthathasfoundthosesamefactorsaffectingCSR

managementandreportinginotherindustries(e.g.,Pistoni,Songini,andBavagnoli2018,Weaver,

Trevino, and Cochran1999). Furthermore, this study identified that organisational determinants

(suchasahotel’sownershipstructure,resourceallocationandstakeholdermanagementcapability)

seemedtoinfluenceCSRdecisionmakingwithinhotels;again,someofhavepreviouslybeenfoundto

constrain sustainability reporting (Melissen, van Ginneken, andWood 2016, Moratis and Brandt

2017).Thesevariableshaveaknock-oneffectonthelackofsharedvalueidentifiedintheindustry.

TheMBSChasbeendevelopedtocontributetothelimitedliteratureonguidelinesthatcansupport

theadoptionofasharedvalueapproach(seethefewexistingguidelinesinsection2.2).Inevitably,

thehotelgroupsstudiedstruggledtoputsharedvalueinpractice.Goingforward,thereisaneedto

establishmoreexplicitcriteriaforfacilitatingdecisionmakingleadingtosharedvalue.Basedonthe

datacollectedandthepreviousdiscussion,thischapterconcludesbyexpandingtheMBSCdeveloped

in chapter 4 to take account of the changes needed in the existing principles of inclusiveness,

materiality and responsiveness if hotelgroups are tobe assisted in transitioning towards shared

value-creatingstrategies.

Inclusiveness:Howtodeterminewithwhomanorganisationcancreatesharedvalue

CreatingsharedvaluedemandsadifferentsetofassumptionsthanreactiveCSRastowhoarehotel

groups’ stakeholders andhow these shouldbe engagedwith and responded to.The guidanceon

inclusivenessaimstorespondtothesequestions,complementing“Step2:Recognisingstakeholder

value” fromtheMBSC(Chapter4).Forsharedvaluestrategies,aninclusiveapproachneedstobe

taken,bywhichtheorganisationidentifiesstakeholdersonwhomithasanimpactandwhohavean

effectonit,andengageswiththemsubstantivelytodevelopandachieveanaccountableandstrategic

response to sustainability that also creates value for the stakeholders involved. Contrary to the

predominantly narrow and symbolic stakeholder engagement identified in the reports of hotel

groups, organisations require a broad identification and substantive stakeholder engagement to

operationalisesharedvalue.

Itisimportantheretoconsiderthestakeholderculture,sinceitisthisthatprovidestheinterpretative

framethroughwhichmanagerscanidentifystakeholdersbeyondprimarygroups,suchasthosethat

are often ignored by hotel groups reports. Without a consideration of the stakeholder culture,

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therefore,theidentificationofderivativelegitimatestakeholdersislikelytobelimited.Thatsaid,not

all stakeholder cultures are likely to guide managers’ decisions towards recognising that all

normative and derivative legitimate stakeholders are 'instrumentally useful;' an assumption

fundamentalforCSV.Stakeholderculturesdifferintheirassumptionsaboutcollecting,screeningand

evaluatinginformationaboutstakeholderattributesandissues(Jones,Felps,andBigley2007).For

instance,self-regardingstakeholderculturesthatonlyrecogniseshareholdersareinoppositionto

the assumption of CSV that all stakeholders may hold opportunities for achieving competitive

advantage (Porter and Kramer 2006). An instrumental and strategic approach will recognise

shareholders, and only other stakeholders such as those that can affect the organisation and its

normative stakeholders (universities, peers, and NGOs) to the extent that it is economically

advantageoustodoso;thusechoingthe‘win-win’approachofCSV.Nonetheless,itwilltakeabroad

approachtostakeholderidentificationonlyasameanstoimprovefinancialprofitability.Instead,a

stakeholderculturethattakesanormativestanceinwhichlegitimacyisthekeyquality,aimsforthe

welfareofsociety,andmaybemorepronetoidentifyfringestakeholders(e.g.,poorruralcitizensor

femaleyouth-at-risk)thatarealsoasourceofsustainedcompetitiveadvantage(e.g.,MaltzandSchein

2012).

While the stakeholder culture influences the cognitive adoption of the inclusiveness principle,

identifyingstakeholderswithwhomtocreatesharedvalueorganisationsalsorequiresahighlevelof

stakeholdermanagementcapability.Thisincludestheabilityofthemanagementtomapandprofile

stakeholders and to understand their concerns and expectations, their level of influence and

legitimacy,andtheirwillingnessandcapacitytoengage(Freeman1984).Thiscapabilityalsoaffects

how an organisation defines the processes to include stakeholders in the organisation’s actual

strategicdecision-making,asseeninsection7.2.Sharedvaluebuildsonthepremisesofcollaboration

and partnerships, evidenced in the three pathways of creating shared value in section7.1. Thus,

organisationsneedtogobeyond informingorconsultingstakeholdersonwhatarethe important

matters insustainabilitybutengagedecisivelywith them. Inordertodetermine themethodsand

levels of engagement, the capability to negotiate, implement, and execute ‘win-win’ transactional

exchangeswithstakeholdersbecomesrelevant.Accordingly,thehigherthestakeholdermanagement

capability,themorepreparedanorganisationwillbetoidentify,engageandmanagetherelationship

with its stakeholders. In this situation, it ismore likely tohave thenecessaryorganisational and

technicalarrangementsforoperationalisingtheinclusivenessprinciple.

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All the previous requires the allocation of the resources necessary to undertake a process of

stakeholderengagementthatensureshigh-qualityscanning.Thatis, itensuresi)thestakeholders

engaged are representative of their groups, ii) the number of participants is reasonable tomake

informeddecisions,andiii)themethodsofengagementareappropriatetogatherqualityfeedback.

Overall,decisionswithin“Step2:Recognisingstakeholdervalue”whenconstructingtheMBSCneed

tobebasedonthepremiseofbroadstakeholder identificationandsubstantiveengagementifthe

frameworkistoservetooperationaliseaCSVstrategy;andtheyalsoneedtoconsiderthestakeholder

culture and the capacity building in respect to CSR processes (such as stakeholdermanagement

capability)thatinfluencethisnecessaryapproach.

Materiality:Howtodetermineimportanceofissuesforsharedvaluestrategies

Identifyingissuesforsharedvaluecreationislikelytorequireathoroughprocess,thedetailsofwhich

may vary for each organisation. This section proposes a definition of materiality and evaluation

criteriatosuitthesharedvaluepurposethatisadaptedfromtheexistingreportingguidelines.As

such,itcomplementstheMBSCfromChapter4,particularlyinrespecttothe“Step3:Determining

environmentalandsocialexposureofstrategicbusinessunits.”

Thedefinitionsofmaterialityfromreportingguidelinesarenotsuitableforsharedvaluebecause,i)

theyarenarrowlyconstructedontheimpactoftheissuetotheorganisation’sperformanceandthe

effectofthedisclosurefortheinvestors’decisions(SustainabilityAccountingStandardsBoard2016b,

International Federation of Accountants2015), or ii) they consider the issuematerial only if the

impactoftheissueissignificanttotheorganisationorthestakeholders(GRI2013b,AccountAbility

2015). Instead, shared value is about connecting the interests of stakeholders with those of the

organisation(PorterandKramer2011).Thus,thereistheneedtoidentifytheissuesimportantto

stakeholders,actingonwhich improves theorganisation’sperformancewhilecreating large-scale

social benefits. Accordingly, for shared value, materiality assessment is the process of engaging

stakeholdersforidentifyingeconomic,environmentalandsocialmattersthataffecttheorganisation's

abilitytocreatesimultaneousvaluefortheorganisationanditsstakeholdersintheshort,medium

andlong-term.ThisdefinitionbuildsontheGRIandIIRCdefinitionsofmaterialityandextendsitto

internalandexternalstakeholders.Materialissues,therefore,arethosethatinfluencethedecisions,

actions,behaviourandperformanceofanorganisationanditsstakeholders(notethechangefrom

"or"to"and"inthedefinitionofmaterialityfromAccountAbility2015,11).

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Buildingonthenewdefinitionformaterialityassessmentandmaterialissues,whatarethecriteria

for assessing materiality for shared value? Based on the data collected, and earlier theoretical

research,stakeholders,suchasorganisations(Collins,Kearins,andRoper2005),havetheirownself-

interests. Accordingly, two criteria are suggested to be used jointly as evidence-based tests for

determiningthematerialityofissues:thecongruenceoftheissuewiththestrategicframeandwith

theexpressivelogic.First,theissue’scongruencewiththestrategicframeassertsthattheissueis

materialifitcarriesinstrumentalimportancetothepursuitofrationalobjectives(Bundy,Shropshire,

andBuchholtz2013).Thestrategicframebuildsontheinstrumentallogic;whetherthemanagement

ormismanagementoftheissuemayaffectthestrategicgoalsoftheorganisation.Thiswasseeninthe

hotel groups when assessing the outcome quality of materiality assessment (Section 7.3).While

issuesinterpretedasconsistentorconflictingwiththeabilitytoachievethestrategicgoalsmaybe

material,itisthestrategicgoalthatsetsapartorganisationsthatfocusonshort-termgainsfromCSR

(identifying issues leading to reactive CSR) from those that focus on long-term competitiveness

(identifyingissuesleadingtoCSV).

Second, the issue’s congruencewith the expressive logic asserts that the issue ismaterial if it is

perceivedashavingimportancefortheexpressionofthecorevaluesandbeliefs(Bundy,Shropshire,

andBuchholtz2013).Ifanissuecontributestotheorganisationalself-expression,managingtheissue

serves toexpress identitytoexternalconstituentsandstakeholders,whilemismanaging the issue

negativelyaffectsitsself-perceptionandhowstakeholdersperceivetheorganisation;thus,inboth

cases, the issue is material to the organisation. Since expressive logic was not evidenced in the

interviewsheldwiththesampledhotelgroupsahypotheticalexampleisputforward.Forinstance,

anorganisationalidentitystronglyrootedinconceptsofjusticeorfairnessmayinfluencemanagers

to give salience to justice-related requests from stakeholders, such as diversity or human rights.

Acting on those issues then is perceived as strengthening the organisational identity. These two

criteriaareframedslightlydifferentlyfortheassessmentofissuesfromtheperspectiveofmanagers

andstakeholders(Table56).

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Table56:Criteriaforidentifyingmaterialissues

Criteria Materialitytotheorganisation MaterialitytostakeholdersStrategicframe The economic, social or environmental

issue is significant to the organisation’sability to create short, medium or long-termcompetitiveadvantage.

Theeconomic,socialorenvironmentalissueissignificant to the stakeholder’s current orfuture decisions, actions, behaviour orperformance.

Expressivelogic The economic, social or environmentalissueisperceivedashavingabearingontheexpressionof theorganisation’scorevalues and beliefs, and acting on itcontributestotheorganisationalidentify.

Theeconomic,socialorenvironmentalissueisperceived as having a bearing on theexpressionofthecorevaluesandbeliefsofthestakeholder,andactingonitcontributestoitsidentify.

Source:Author’sadaptationfromBundyetal.(2013).

Issuesconsistentorconflictingwiththestrategicframeandtheexpressivelogicareofhighsalience.

Inotherwords,issuesthatcarrybothinstrumentalimportanceandallowforidentityexpressionare

giventhehighestprioritybybothmanagersoftheorganisationandalsobystakeholdersthemselves.

These issues are therefore the ones that, if acted on, are likely to create shared value. Through

comparingtheresultsoftheirrespectiveassessments,themanagementcanlisttheissuesthatare

heldincommonacrosstheorganisationandeachstakeholdergroup,helpingtonarrowdownthe

materialissues.

Oncematerialissuesareidentifiedandgroupedaccordingtothesalienceofeachstakeholdergroup

and the organisation, three non-prescriptive criteria are presented to filter the issueswithmost

potentialtocreatesharedvalue;i)disruptiveness,ii)intensityofchanges,andiii)systemicimpact.

Thesecriteriaarebynomeansexhaustive,buttheybuildfromtheexamplesacrosssection7.1and

serve toprovideamoregranularapproach to identifying issues foroperationalisingsharedvalue

thantheonegiveninearlierpublishedwork.Sincematerialityinthesharedvaluecontextisintended

toinformstrategicCSR,thesecriteriaareputforwardfromPorterandKramer(2006)toassessthe

likelycompetitiveadvantagefromaddressingthematerialissuesidentifiedinthethreepathwaysfor

CSV.

First,thedisruptivenessofaproductorvaluechain,orthemarket’ssusceptibilitytodisruption,refers

towhetherthereispotentialtointroduceanewvaluepropositionbasedonauniquesetofattributes

tackling thematerial issue.This criterion assesses the ability of theorganisation todevelopnew

productsandservices,ortoredefinethevaluechainwithcharacteristicsatthecoreofwhicharethe

issuesmaterialtotheorganisationanditscustomers(product)orsuppliers(valuechain),andthat

modify the prevailing value proposition in a way that appeals to old or new market segments.

Disruptiveinnovationsintroduceanewvalueproposition(Christensen2013),thetypicalattributes

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ofwhich include cheaper, simpler, smaller,more convenient,more reliable ormore comfortable

(Guttentag and Smith 2017). For shared value, the attributes have to revolve around the shared

material issue. For instance, by tackling the unemployment of refugees theMagdas hotel’s value

propositionisanopen-minded,fresh,boldandeasy-goingexperienceforguests(Magdashotel2018).

Thisvalueproposition isbasedonauniquesetofattributesbroughtby thoseemployed from14

nationalitiesthatspeak23languagesandcreateamulticulturalenvironmentwithmanyskillsand

talents.Thewayinwhichtheytackleunemploymentiswhatgivesthishotelauniquepositioninthe

hotelmarketinVienna.

Second,theintensityofthechangesintroduced,andtheirimpact,referstowhethertheissuescanbe

addressedbeyondsimplyprogressiverefinementofpreviouslyusedsolutionsthatallowanefficiency

increase.Inotherwords,cantheissueberesolvedbyradicalratherthanjustincrementalinnovation?

Radicalinnovationis“theapplicationofasolutionforaproblemthathadsofarnotbeensolved,or

hadbeensolvedinasignificantlyinefficientmanner”(Orfila-Sintes,Crespí-Cladera,andMartínez-Ros

2005,854).Whilethemanagementofthesolutiontothematerialissuesmaycarryhighcosts(e.g.,

derivedfromadjustmentsintheinternalorganisationorpurchases),thepotentialpositiveimpacton

the organisation’s performance is also high, and the contribution in tackling the issue is also

significanttothemagnitudeoftheissue.Instead,incrementalinnovationsimplylowercostsandthe

benefitsaccruedareaccordinglylower,arguablybothtotheorganisationandthestakeholders.For

instance,thewaterefficiencystrategiesdisclosedbyhotelgroupsbelongtoincrementalinnovations,

whileexamplesofradicalinnovationswouldbetoadoptnature-basedsolutions.Whilethelaterhave

higher costs of adoption, they are also able to tackle the issue of water (value to society)more

substantively,andthusoffermorepotentialforcompetitiveadvantage(valuetotheorganisation).

Similarly, in the case of climate change, energy-plus buildings are an example of more radical

innovation than zero energy buildings, while traditional efficiency programmes exemplify

incrementalinnovations.

Third,systemicimpactreferstowhetherthereispotentialforthemanagementofanissuetoleadto

positive impacts, and formismanagement to lead to negative impacts across various sustainable

developmentgoalswhenundertakingactionstacklingtheissueattheproductorservice,valuechain

or competitive context. This criterion builds on the premise that sustainable development is a

systemicconcept, in thatacomplexsetof interconnectedand interdependent issuesdetermine it

(Seiffert and Loch 2005). To understand the potential systemic impact of an action addressing a

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materialissue,therefore,oneneedstostudythesystem,andthustheinteractionsofallthemulti-

dimensionalaspectsoftheissue.Theexamplesdiscussedinsection7.3evidencedhowhotelgroups

may produce a systemic impact. For instance, implementing climate-adaptive solutions in hotels

providesaffordableandcleanenergyfortheorganisation(SDG7),fostersresponsibleconsumption

amongguestsandemployeesandresponsibleproductionamongotherstakeholders(SDG12),while

overall tackling climate change by reducing GHG emissions (SDG 13). Similarly, water can be

addressed not only at the organisational level with water efficiency programmes but also at a

destination level,addressingwatersupplyandqualitywithnature-basedsolutions.Thisprovides

cleanwaterandsanitation(SDG6),addressesgenderequality(SDG5),reducesinequalities(SDG10)

and enhances peace and justice (SDG 16) since water scarcity is linked to these other social

dimensions.

AfinalconsiderationofparticularrelevanceforadvancingtowardsCSVisthestakeholderinfluence

capacity;anintangibleresourcethatcandriveorlimitthescopeandprofitabilityoffutureactionsin

respecttotheidentifiedissues.Sincestakeholders’reactionstonewCSRinitiativesdependonthe

prior engagement with each stakeholder group, this influences the range of CSR initiatives the

organisationcanpursue(seeBarnett2007). In thecaseof thehotelgroupsstudied, theprevious

investment in stakeholder relationships, such as the symbolic engagement found in prior CSR

activities,limitshowstakeholderswillnotice,interpretandbewillingtoengageinfutureactions.The

managementmay further shortlist the issues for the shared value strategy using criteria held in

common with the traditional materiality assessments, as with any new investment, such as the

potentialfinancialcapitalorriskimplications,currentorfuturenon-financialimplications,andthe

degreeofuncertaintyrelatedtoimplications.

Itisevident,therefore,thattoanswerthequestionofhowimportantitisthattheorganisationacts

oneachissuerequiresinternalconsiderationsbeyondsimplythepotential impactonshareholder

valueandnon-financialimplicationssuchasreputationandlegislation.Instead,itimpliesbroadening

thematerialityapproachand,therefore,thematerialitytestsfromGRI(2013),SASB(2013)andIIRC

(2015).First,toidentifytheissuesmaterialtoboththeorganisationandeachgroupofstakeholders

(thecongruenceoftheissuewiththestrategicframeandwiththeexpressivelogic).Then,torefine

those, based on their potential to lead to shared value (disruptiveness, intensity of change and

systemicimpact),beforefinallytakingintoaccounttheconstrainingfactorofstakeholderinfluence

capacity.Becausehowmanagersandstakeholdersperceive the issues isdynamic, themateriality

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resultsmustbe revisited andupdated according to the changes in the external environment and

stakeholderrelationships.Theperceivedoutcomequalityofthematerialityassessmentwilldepend

thenonthedisclosureoftheorganisation’spreviousassessmentsandfinaldecision.

Responsiveness:howtotranslateattentiontoactionandsubsequentdisclosure

Responsiveness in the context of CSV requires both themanagement of material issues and the

substantiveadherencetoreportingguidelines.Theorganisation’sresponsesdifferdependingonthe

priorityoftheissue(i.e.,salience),becausethemanagementofanygivenorganisationhaslimited

resources to devote stakeholder issues (Carroll 1979, Bundy, Shropshire, and Buchholtz 2013).

Sharedvaluestrategiesrevolvearoundtheissuesthatareinterpretedashighlysalientopportunities,

thus the response given needs to be substantive and accommodative. Substantive, in that the

organisationcommitssubstantialresources,time,energyandefforttotheissue,andaccommodative

in that itembraces the issueandengageswiththesponsoringstakeholder inapositiveandopen

manner. For example, in the case of Magdas Hotel, refugees receive managerial attention in a

meaningfulandsignificantway,beingengagedintheproductdevelopmentandservicedelivery.

Nonetheless,anorganisationseekingproactiveCSRcannotrespondonlytothemostmaterialissues

forcompetitiveadvantagewhilemismanagingtheremainingissuesofmoderate-to-lowmateriality.

Stakeholdersexpectittoprovideareasonableresponsetothetotalityoftheissuesraisedduringthe

consultationprocess,especiallyifCSVistohelporganisationsgainlegitimacy(PorterandKramer

2006).TheresultsoftheInternationalTourismPartnershipstakeholderdialogue(Tupen2014)are

usedbelowtoexemplifythevariationsinresponsivenesstootherissuesaccordingtotheirsalience.

Issuesperceivedashighlysalientthreatsreceiveasubstantivedefensiveresponsebecausetheyare

perceived as conflicting with the organisation’s goals. For example, labour standards are highly

salientissuesthecriticismofwhichhotelgroupsmayperceiveasathreatandthustakeaproactive

approachtodistancethemselvesfromtheissue.Thus,nearlyallhotelgroups’reportsdedicateafair

amountofspacetoemployeetrainingandwellbeing.

Whenstakeholderissuesareperceivedasmoderatelysalient,theyenjoysomelevelofpriorityand

are more likely to receive a symbolic response, defensive when perceived as a threat, and

accommodativewhenperceivedasanopportunity.Forexample,childlabourandsextraffickingare

moderatelysalientthreatsinthesupplychain(Tupen2014)suchthathotelgroupstakeasymbolic

approachtodistancethemselvesfromtheissue.Asseeninreports,theysetinplacecodesofconduct,

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human rights policies and international agreements such as ECPAT. Similarly, by seeing local

economic development as amoderately salient opportunity, the hotels engage in symbolic youth

employment programmes (see section 7.3.) and local purchasing of a limited range of produce

without necessarily substantially amending internal processes. Similarly, it is likely that

organisationsoptnottorespondtoissuesthat,althoughmaterialtostakeholders,donotalignwith

theorganisation’sinstrumentalgoals(e.g.,Bundy,Shropshire,andBuchholtz2013).Forexample,for

preservation of local heritage that has little-to-no importance in ITP’s materiality matrix to the

organisationyetmediumimportancetostakeholders,onlythreehotelgroupsfromthe18publishing

sustainabilityreportsmentionsomeactionstaken,andeventhenonlybriefly.

Second,responsivenesscloselyrelatestothesubstantiveadoptionofreportingguidelinesbecauseof

theneedfortransparencyaboutthedecisions,actionsandperformance(AccountAbility2015).Inthe

CSV context, the disclosure of information is aimed at holding organisations to account for their

impacts, and empowering stakeholders by providing access to information about how the

organisationhaschosentorespond,ornot,totheirconcerns.Becauseresponsivenessacknowledges

anaccountabilityrelationshipbetweentheorganisationanditsstakeholders,transparentreporting

bothontheprocessandcontentisencouragedwithintheMBSC.Nonetheless,itisrecognisedhere

thattheinternaldeterminantsidentifiedinsection7.2mostlikelyconstrainfurtheraccountabilityin

largehotelgroups.

Inconclusion,theMBSChasbeenproposedasastrategicframeworktooperationalisesharedvalue,

andguidanceontheAccountabilityprincipleshasbeendevelopedtofitthepurpose.AchievingCSV

inthehotelindustryisratheridealisticintheshort-termbasedontheCSRactionsandorganisational

determinantsrevised.Similarly,mosthotelgroupsfromthesampleseemill-preparedtoadoptan

MBSC.Yet,someindustryleadersdenotehighercognitive,organisationalandtechnicalsustainability

integration andare thusmore likely touse theMBSC for transitioning from reactiveCSR toward

sharedvalue.

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ConclusionsThisfinalchapterreflectsontheattainmentoftheaimandobjectivesofthePh.D,andconsidersits

significanceforacademicknowledgeandmanagementpractice,especiallyforthehotelindustry.It

endsbysurveyingtheresearchlimitationsanddirectionsforfutureresearch.

8.1. ConclusionswithregardstotheaimandobjectivesThisresearchaimedtoarriveatacriticalunderstandingofhowlargehotelgroupscandefinestrategic

sustainabilityobjectivestocreatesharedvalue.

Tofulfilthisaimtheresearchercombinednormative,descriptiveandcriticalapproachestopropose

anewstrategicmanagementframeworktotheoriseandthencriticallyappraiseitsvaluewithinthe

hotelindustry.Theresearchfocusedontheidentificationofdeterminantstowardsthedevelopment

of more socially and environmentally responsible hotel groups. With that in mind, the study

addressedthreeresearchobjectives:

Objective1.Toproposea strategicmanagement framework, theMaterialityBalancedScorecard, to

design,communicate,andrealiseCSRstrategiesthatcreatesharedvalue.

Theliteraturereviewshowedthatthereislimitedguidancefororganisationstooperationaliseshared

value,withonlythreerathervagueguidelines(seeSections2.2and2.3),andthereisalsoacallfor

moreintegrationbetweenperformancemeasurement,managementandreportingtoolsinorderto

improve sustainability performance (Maas, Schaltegger, and Crutzen 2016, Battaglia et al. 2016)

(Sections3.1and3.2).Inordertofillthisresearchgap,thethesishasbuiltontheworkfromearlier

scholarson theBalancedScorecard(KaplanandNorton1996c)and itssustainabilityadaptations

(e.g.,Figgeetal.2002a)byaddingthereportingprinciplesoftheAA1000StakeholderEngagement

Standard (2015). Thismodification to the previously existing Sustainability Balanced Scorecards

(SBSC)contributestothenascentliteraturethatintegratesperformancemanagementsystemswith

sustainability reporting (de Villiers, Rouse, and Kerr 2016). The research first took a normative

approach to develop the Materiality Balanced Scorecard (MBSC) in Chapter 4, as a conceptual

framework for change management to advance the strategic repositioning of sustainability in

corporatepractice.

TheMBSCistheorisedasatoolwithwhichtodesignandimplementsharedvaluestrategies,which

includesmakingsustainabilityaformalelementwithintheoverallstrategyoftheorganisation.The

MBSC is underpinned by instrumental stakeholder theory closely following the shared value

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approachproposedbyPorterandKramer(2006,2011),basedontheassumptionthattherecognition

of a broader set of sustainability issues and stakeholders leads to superior performance.

AcknowledgingthatthetypeofstrategyadoptedhasimplicationsforthestructureofanSBSC,the

MBSCtakesanextendedandhierarchicaldesign(similartoFiggeetal.2002a,ChalmetaandPalomero

2011, Hansen, Sextl, andReichwald2010). This is because an extended design includesmaterial

sustainabilityissuesacrossallperspectivesoftheMBSC(financial,customer,processesandlearning

and growth), recognising that sustainability permeates all day-to-day business activities. This

extendeddesignenlargesthescorecardwithaSystem-levelperspective,whichdiffersfromprevious

SBSCs that fail toaccountbeyondorganisational sustainabilityperformanceoutcomes (Hahnand

Figge2018).TheextendedMBSCresultsinamorecohesiveapproachtosustainabilitymanagement

integratedintothecoreorganisation’sactivitiesandimpacts.

Then,thehierarchicaldesignclarifiesthecausalrelationshipstotracetheeffectivenessofaddressing

thesustainabilitystakeholderconcernsasanimportantcontributortocompetitiveadvantage.This

makestheMBSCappropriateforprofit-drivenorganisationsthatneedtocontinuouslybuildtheCSR

businesscasetosecuretopmanagementsupport.Byadoptingatop-downapproachconnectingthe

System-levelandFinancialperspectives,theMBSCovercomesthetendencyforpreviousSBSCstobe

used purely reductively (e.g., Figge et al. 2002a). Operationalising the strategy in a process that

cascades from the System-level perspective across the remaining four perspectives aligns all the

strategically relevant aspects towards long-term value creation in a win-win approach with

stakeholders. Chapter4 theorisedhow the integrationof sustainability reportingpractices in the

organisation’sperformancemanagementframeworkcanoccur,andthelikelybenefitsderivedfrom

aholisticapproachtodefining,implementingandreportingasustainabilitystrategy.

The MBSC proposes a structured approach to strategic sustainability planning, performance

managementandexternalreporting,bytakingbothaperformanceandtransparencyapproachthat

setsitapartfrompreviousSBSCsthattakeoneofthetwoapproaches(Maas,Schaltegger,andCrutzen

2016). The performance approach assesses the relevance of stakeholder relations, their

environmentalandsocialconcerns,andtheirstrategicrelevanceforaneffectivecorporatestrategy.

The inclusion of the materiality determination process for shared value strategies provides

structuredandsystemicguidanceonsuchmatters.Indoingso,itdiffersfrompreviousliteraturethat

assumesthatsustainabilitystrategiesaredevelopedbeforebuildingthescorecardandthusprovide

onlylimitedguidance,despitebeingacknowledgedasafirststeptobuildinganSBSC(e.g.,Biekeret

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al.2001,Figgeetal.2002a,SchalteggerandWagner2006).Thisiscomplementedbyatransparency

approach to define measurement and select strategically relevant indicators for sustainability

accounting, building on industry- reporting guidelines to improve external communication and

comparability. As such, the MBSC constitutes a theoretical contribution to the sustainability

performance management literature (e.g., Schaltegger andWagner 2006, Maas, Schaltegger, and

Crutzen2016).

Chapter7 argued that theMBSC is a suitable strategicmanagement framework tooperationalise

shared value strategies. Within the MBSC, the principles of inclusiveness, materiality and

responsivenessareusedasamethodologytooperationalisesharedvalue,somethingmissinginthe

current literature (e.g.,Matinheikki, Rajala, and Peltokorpi2017, de los Reyes, Scholz, and Smith

2017).Section8.2,below,furtherextendstheMBSCasacontributiontotheoreticalknowledge.

OncetheMBSChadbeendevelopedasanormativestrategicmanagementframeworkthatsetouta

‘whatitoughttobe’idealmodel,theresearcheraddressedthefollowingobjective2:

Objective2.TocharacterisetheCSRmanagementandreportingoflargehotelgroupsandidentifythe

internaldeterminants.

TheresearcheraimedtoidentifytherealityofCSRinlargehotelgroups,thus‘whatit is’,andthe

contextual conditions preventing the adoption of shared value strategies. The literature review

revealedthatalthoughmuchresearchhasfocusedonunderstandingCSRactivitiesandmotivations,

therehasbeenlimitedworkonthestrategiesandprocessesthatsupportCSRdecisions(Chapter2).

Similarly,whilepriorresearchhascoveredthedisclosureofperformanceinsustainabilityreports,

therewas limited understanding of the process of how such reportswere developedandwhose

prioritiestheyreflected(Chapter3.3).Thus,theshortageofavailableinformationonhowlargehotel

groupsstrategised,implementedandmonitoredsustainability(management),andtowhomandin

whatwaystheywereaccountable(reporting),requiredtheadoptionofanexploratoryqualitative

multi-methoddesign(Chapter5).Thisqualitativeapproachenabledanexaminationofthechoicesof

largehotel groups in respect to strategic sustainabilityplanning,measurement,managementand

reportinginorderto,i)characterisetheirdegreeofsustainabilityintegration,andii)touncoverthe

complexityandinterdependencyofinternaldeterminantsthatconstrainedprogresstowardsshared

value.

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Thisstudywasthefirsttoconductacomparativeanalysisbetweenthelargehotelgroups’publicly

availablesustainabilityreportsandinterviewresponsesfromcorporateCSRmanagersandindustry

experts;aqualitativemethodwhichenabledtheinterpretationofthemeaningof,andmotivations

for, differences between an organisation’s symbolic and substantive adherence to sustainability

reporting.Itrespondstotheneedtoconsideranorganisation’scontextandprocesseswhenassessing

thedisclosureofCSRinformation(e.g.,UnermanandZappettini2014).

It first investigated the stakeholder-related practices disclosed by the 50 largest hotel groups

worldwide, according to Hotels Magazine (2015), by testing how hotels followed the AA1000

StakeholderEngagementStandard(2015) throughcontentanalysis.Buildingonearlierwork that

researchedinclusiveness,materialityorresponsivenessinisolation(e.g.,MoratisandBrandt2017,

Jones,Comfort,andHillier2016a),theGuixetal.(2018)study(Chapter6)becamethefirsttoassess

the interrelationships between these three principles, and their effect on the organisations’

accountability.Thethree-stepapproachofstudyinginclusiveness,materialityandresponsivenessis

visible in the AccountabilityMatrix (Section 6.6.1), and has proven to be a valuable explanatory

framework to observe the layers of how organisations engage with their stakeholders, and to

interpret the stakeholder accountability of sustainability reports. The Accountability Matrix

evidencedthewaysinwhichhotelgroupsassumedresponsibilityfortheirimpacts,andtheextentto

whichtheyweretransparentabouttheirreportingprocesses.Thematrixevidencedthathotelsrarely

reported theirsustainabilityprocesses, and that theirdisclosurewasoftenopaque, adding to the

recentliteraturesuggestingthelimitedaccountabilityofthereportingprocesses(MoratisandBrandt

2017,Morrós2017).

Thecontentanalysisresultsinformedfurtherqualitativedatacollection,i)togaininsightsintothe

rationalebehindthelargehotelgroups’decisionmakinginrespecttoCSRprocesses,andii)toexplain

theCSRbehaviourobservedinthecontentanalysis.Semi-structuredinterviewswitheightcorporate

sustainability managers (from eight of the world’s 50 largest hotel groups) explored their

understandingof,anduseof,CSRprocessesandreportingprinciples,andanybarrierstoitsuptake.

Additionally,eightindustrysustainabilityexpertsassessedthegeneralindustry-wideapplicationof

CSRprocesses,andassociatedchallenges.Guixetal.(forthcoming)(fromSections7.2and7.3)was

thefirstarticletoassesstheinternaldecisionmakingshapingCSRpracticesandtheirsubsequent

reportsacrossasector,atopiconlypreviouslystudiedthroughindividualcasestudies(e.g.,Adams

andFrost2008).

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This thesis addressed the overall lack of studies assessing CSR integration into organisational

practices,processesandstrategies,sincepreviousresearchhasdescribedCSRactions,impactsand

reporting (Serra-Cantallops et al. 2018), with only recent articles identifying factors driving the

adoptionofenvironmentalstrategies(MakandChang2019).ThisthesisproposestheSustainability

IntegrationMatrix(Section6.6.3)asadiagnostictoolthatdifferentiatedthehotelsrepresentedinthe

interviewsaccordingtotheirsharedunderstandingandbeliefsaboutsustainability(cognitive),their

formalstructuresandrolesforfacilitatingcommonpractice(organisational)andtheirmethodologies

and processes for CSR (technical). The matrix thereby incorporated into the study of CSR the

classificationofcognitive,organisationalandtechnicaldimensionsofsustainabilityearlierusedin

thecontextofsustainabilitymanagementcontrolsandorganisationalstrategy (Moon,Gond,etal.

2011,Gondetal.2012).Theadditionofthe7-Smodel,associatedwiththestrategicmanagement

literature (Waterman, Peters, and Phillips 1980) that had only been used before with regard to

sustainabilityresearchinthecontextofreporting(seeThijssens,Bollen,andHassink2016),provided

asystematisationofkeydeterminantsofCSRmanagementandreporting.

Whatbecameapparent,withsomeexceptions,isthatthecurrentunderstandingof,andstructures

andprocessesfor,CSR,contributedtoexplaintheratherreactiveCSRidentifiedinreportsandexpert

interviews.TheresearchidentifiednewcognitivedeterminantstostrategicCSRinthehotelindustry

(thestakeholderculture,thestakeholdermanagementcapability,thestakeholderinfluencecapacity

and the capacity building in respect to CSR processes such as stakeholder engagement and

materiality),andconfirmedpreviously identifiedvariablessuchasashort-termand instrumental

orientationtosustainability(MakandChang2019)andleadershipawareness(WockeandMerwe

2007).Organisationaldeterminantspreviouslyacknowledged in the industrywere theownership

structure (Calveras 2015), and budget-constrained CSR departments (Garay and Font 2012). In

addition,thisthesisidentifiedunclearCSRrolesandresponsibilities,lackofinternalaccountability

andlimitedcross-departmentalcoordination.Thetechnicaldimensionindicatedalackofintegration

of CSR with the overall business management, with issues related to the accuracy and

comprehensivenessof theperformancemanagementsystems, therebycontributing to the limited

research on performance management of sustainability within hotel groups (e.g., Bohdanowicz-

Godfrey and Zientara 2015). Changes in the cognitive factors are essential for a holistic

implementationofCSRsince,withoutthese,changesintheorganisationalandtechnicaldimensions

arelesslikely.Nonetheless,becauseofthelimiteddisclosureaboutdecisionmakingduringCSRstaff

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interviews, this research could not differentiate between unintentional and intentional

mismanagementofsustainability.

The comparisonbetween sustainabilitydisclosure, environmental performance and sustainability

integrationshowedthatthesustainabilityreportsdidnotreflectthemanagementofsustainability

(earlieridentifiedinotherindustriesThijssens,Bollen,andHassink2016).Thus,theseresultsaddto

thebodyofknowledge thatsuggests thatsustainabilityreporting isrhetorical, in that itdoesnot

deliveraccountabilitytostakeholders(e.g.,BehnamandMacLean2011).Strategiestoaddressthis

canbederivedfromthefindingsconcerningchangesinvoluntaryreportingguidelines:i)extending

thecontenttoincludeinternalorganisationalfactorssuchasprocess-basedindicators,ii)adopting

compliance mechanisms and sanctions for non-compliance, and iii) addressing the limited

independentexternalassuranceanditsscope.

Overall,thethreedatacollectiontechniquesshedlightintotheblackboxofCSRprocesseswithin

largehotelgroups,andatthesametime,identifiedtheneedformorein-depthresearchabouteach

of the internaldeterminantsofCSR, theircomplexity, interrelationsand implications for thevital

ongoingtaskoftheconstantandincrementalpursuitofsustainability.

Thedatacollected,nonetheless,wassuitabletofulfilobjective3:

Objective3.ToofferacriticalappraisalofthevalueoftheMaterialityBalancedScorecardwithinthe

hotelindustry.

TheMBSCframeworkprovidesatheoreticalstartingpointtounderstandtheprocessofdesigning,

implementingandmonitoringsharedvaluestrategies.AnMBSChasthesamecomplexityasallSBSCs,

withtheaddeddifficultyofrequiringthecorporatestrategytocreatesharedvalue(CSV).Thisstudy

contributed to identify the internal organisational factors that largely condition the somewhat

reactiveCSRidentifiedamonglargehotelgroups,andconstrainthefutureadoptionofCSVand,as

such,theimplementationoftheMBSCasthetoolforitsdeployment.Ifweacceptthatsharedvalueis

themoststrategicformofCSR,ahighdegreeofsustainabilityintegrationisneededinthecognitive

andorganisationalstructuresandtechnicalsystemsandprocesses.Thethesispointstotheneedfor

additionalurgentandfar-reachingchangesintheorganisationalculture,structureandprocessesof

hotelgroupsiftheyaretobecomesignificantagentsofsustainabledevelopmentbyestablishingand

operationalisingsharedvaluestrategies.

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First,asharedvalueapproachentailsaculturethatfostersacommitmenttosustainabledevelopment

andstakeholderaccountability.Theadoptionof thesharedvalueapproachrequireshigh internal

awareness and top management commitment to sustainability to enable managers to pursue

sustainable objectives, the benefits of which may have a medium-to-long-term effect on the

organisation’s competitiveness, while addressing sustainability performance in relation to

stakeholder expectations. Instead, the current decisions based on a short-term instrumental

approachtosustainabilitycanleadtoareductiveuseoftheMBSCframeworkthatcanfailtosupport

progress towards shared value. One needs to be cautious inmodifying theMBSC since different

rationalitiescandrivethenatureoftheframework,resultingindifferentoutcomes.

Second, successful management of a CSV strategy with the MBSC requires an appropriate

organisationalstructure,coordinationbetweentheorganisation’sdepartmentsandnon-traditional

partners, and resources for adopting the necessary processes. The processes to manage the

relationshipwithstakeholders(stakeholdermanagementcapability),whichwasfoundtobeadhoc

andreactive in thisstudy,and thepreviousrelationshipwithstakeholders(stakeholder influence

capacity),foundtobemostlynarrowandsymbolic,limitedthefutureCSRactivitiesthehotelgroups

couldpursue.Thefactthatonly11outof50hotelgroupsassessedmateriality,andthattheformal

assessmentslessenedthestakeholderlogic,denotedalackofcapabilitiesthatfundamentallylimit

the potential adoption of theMBSC. Stakeholder concerns should become an integral part of the

organisation.Keytothiseffortisincreasingstakeholderandmateriality-relatedcapabilitiessoasto

enablethebroadidentificationandsubstantivestakeholderengagementinordertoidentifyshared

materialissuesandaddressthem.

Lastly, operationalising shared value also demands having systems in place such as information

managementtoolsandcontrolsystemstosupportthecollectingandmonitoringofactionstothen

reportbacktostakeholdersontheorganisationalperformanceanditscontributiontosustainable

development.Nonetheless,hotelsusedisolatedsystemsnotdeployedconsistentlyacrossproperties

andnotintegratedwiththefinancialcontrolsystemsthatlimitedtheirabilitytocollectaccurateand

robustdataonorganisationalperformance,suggestingfurtherchallengesformeasuringsharedvalue

with system-level metrics in the MBSC. The MBSC requires a substantial change in established

accountingsystemstoincludeenvironmental,socialandfinancialissuesinasingleandoverarching

strategic management tool, which becomes a struggle for organisations without an overall

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performancemanagementsystem.Thisallsuggeststheneedfortakingfutureresearchintoshared

valueinnewdirectionsbyfocusingonthepreviousdeterminantsforchangemanagement.

TheMBSC’swhole-heartedadoptionofCSVstrategiesmakesitsbroadimplementationseemrather

infeasiblegiventhecurrentrealityofthehotelindustry.Whileadvancesfromsomeleadersinthe

industryhaveseemedpromising,thisresearchshowstheystillaresomestepsawayfromthetipping

point.ThelikelyadoptionofaframeworkthataimstoenactprogresstowardsmoreproactiveCSRis

directedtothosefewindustrymembersthatevidencemoreadvancedapproachestosustainability

management. Those that have broad stakeholder identification and symbolic engagement,

empoweredCSRdepartments,formalrolesandresponsibilities,andaccountabilitymechanisms,and

arekeenonadoptinganorganisation-wideperformancemanagementsystem,willbemoreprepared

to adopt anMBSC. It is evident that in the case of hotel groups that have higher sustainability

integration,environmentalandsocialissueswillplayamoreprominentroleintheMBSC.

Still,theMBSCisdesignedinsuchawaythatitsstep-by-stepguidewidensitsapplicabilityfrommore

activeCSRplayerstomainstream,reactive,organisations,aslongastheyarewillingtocommitto

shared value and to engage openly with the principles of inclusiveness, materiality and

responsivenessasameanstooperationalisethiscommitment.Hence,theMBSCcanhelplargehotel

groupstomovetowardsamoresubstantialcontributiontosustainabledevelopmentaslongasthey

arewillingtochangethepremisesthroughwhichtheyengagewithsustainabilityandthusarealso

preparedtoinvestinthenecessaryorganisationalchangesintheirstructureandprocessesforits

consecution.

8.2. TheoreticalcontributionOverall,thisresearchisinterdisciplinarybecauseCSRisgroundedinseveralfields(Taneja,Taneja,

and Gupta 2011), as such, this research adds to the body of knowledge regarding the strategic

managementofsustainabilityandsustainabilityaccountingspecificforthehotelindustry.Itmakes

threecontributions;i)itidentifiesinternalorganisationaldeterminantsdrivingCSRmanagementand

reporting, ii) it establishes their implications for the mismanagement of sustainability and the

symbolicadoptionofreportingguidelinesand,iii)itproposesastrategicmanagementframeworkto

operationalisesharedvaluebetweenanorganisationanditsstakeholders.

First,thethesisidentifiesinternaldeterminantstoCSRmanagement,perceivedbythosemanaging

andpreparingsustainabilityreportsandindustryexperts,suggestingthatanorganisation’slevelof

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sustainabilityintegrationmaycontributetoitsmanagementormismanagementofmaterialissues.

Cognitivefactors(suchasmanagerialattitudesandorganisationalculture)arecriticalbarriersfor

substantiveadoptionof theaccountabilityprinciples; thiscomplementsexistingresearch thathas

foundthatthosesamefactorsaffectCSRinotherindustries(e.g.,Pistoni,Songini,andBavagnoli2018,

Weaver, Trevino, and Cochran 1999). Furthermore, this study identifies that organisational

determinants (such as a hotel’s ownership structure, resource allocation and stakeholder

management capability) that have previously been found to constrain reporting (Melissen, van

Ginneken,andWood2016,MoratisandBrandt2017),seemedtoinfluenceCSRdecisionmaking.The

cognitiveandorganisationalfactorsoutlinedabovehaveaknock-oneffectonthesystemsandprocess

ofmanagingandreportingsustainability,evidencedintheabilityofhotelgroupstodefineindicators

and collect and monitor sustainability data, which complements the limited research on the

performance management of sustainability within hotel groups (e.g., Bohdanowicz-Godfrey and

Zientara2015).Byidentifyinginternalorganisationaldeterminantsthathavereceivedinsufficient

attentioninpriorstudiesinhotelgroups,thisresearchcontributestotheliteratureinsearchofanin-

depthunderstandingofthe‘process’ofCSRdecisionmakingandimplementation(e.g.,Wangetal.

2016). The study identifies factors influencing the adoption, the extent and the quality of CSR

management and reporting, in the light of which the proactivity of large hotel groups’ CSR and

stakeholderaccountabilityhasbeeninterpreted.

Inparticular,thisresearchdirectlyaddressescallswithintheliteratureforagreaterunderstanding

ofdeterminantsunderpinning theadoptionand implementationofsharedvalue (see forexample

Corazza,Scagnelli,andMio2017).Notably,itisthefirststudythatprovidessuchknowledgeinthe

hospitalityindustry,sinceonlyonepriorstudyhasinvestigatedthebenefitsofadoptingsharedvalue

initiatives insmall-scaleaccommodationestablishments (Camilleri2016).CSVdemandsprofound

changeswithinorganisations(Matinheikki,Rajala,andPeltokorpi2017),andhotelgroupsarenotan

exception:theyneedtoembraceaholisticapproachtocatalysedriversforthisstrategicchangethat

underlines the inclusion of stakeholders’ requests. Internally, hotel groups need to shape the

commitmenttogenuinelyembracethesharedvalueapproachandinvestinthenecessarycapabilities,

toconsidertheappropriatenessoftheirorganisationalstructure,andtorevisittheirperformance

measurement and management systems. Externally, they need to forge relationships with

stakeholdersbasedonbeingtransparentindisclosureandresponsivetotheirconcerns.Thus,the

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studyshedslightontheneedtoimproveCSRmanagementanddisclosureprocessesiftheyareto

movetowardssharedvaluecreatingstrategies.

Second,thestudyprovidesinsightsintotheimplicationsoftheinternalorganisationaldeterminants

to CSRmanagement and reporting for themismanagement of material issues, and the symbolic

adoptionofreportingguidelinesfoundintheindustry;thus,itaddstotheliteratureonsustainability

accounting.Ithasrespondedtotheneedtogainamorein-depthunderstandingoftheinclusiveness

andmaterialityassessmentthanthatavailablefromdisclosureinsustainabilityreports(Unerman

and Zappettini 2014), thus complementing earlier research on the reporting processes based on

information disclosed (e.g., Manetti 2011, Moratis and Brandt 2017) and case studies (e.g., Lai,

Melloni, andStacchezzini 2017).This thesis answers the calls for evidenceonhoworganisations

conceptualiseandapplythematerialityprinciple,thusextendingearlierconceptualresearchinthe

hotelindustry(Jones,Hillier,andComfort2016).Itconstitutesthefirstempiricalstudyconductedon

thedisclosureofmateriality(Guix,Bonilla-Priego,andFont2018)andtheapplicationandbarriersto

itsuptake(Guix,Font,andBonilla-Priegoforthcoming).Notably,theresearchextendsthemanagerial

capture earlier identified in social auditing (Owen et al. 2000) by characterising five factors:

stakeholderrepresentativeness;proceduralquality;thequantityandqualityofstakeholderfeedback;

andthequalityoftheoutcomesofthematerialityassessment(someofwhichhavebeenstudiedin

isolation in previous research (Zadek and Raynard 2002)). The characterisation of managerial

capture suggests methodological issues in getting the materiality principle implemented in

organisations,whichhas relevant implications for the interpretationof reporting contentand for

furtherdevelopmentofreportingguidelines.

The investigation of the materiality determination, and the evidence on its managerial capture,

providemorerobustinformationonwhetherand,ifso,towhatdegree,andhow,hotelgroupsare

integrating stakeholder engagement into their sustainability reporting process, and thus abusing

such processes to mismanage material issues and symbolically adopt reporting guidelines. The

identificationofmanagerialcaptureopensnewopportunitiesforstudyingtheunderlyingdecisions

determining materiality that can lead to the intentional or unintentional misclassification of

sustainability issues and the associated internal and external consequences and, as such, it

contributestorecentacademicdiscussionsintothemismanagementofsustainability(e.g.,Maniora

2018). Also, the factors leading tomanagerial capture, together with the study of inclusiveness,

materiality and responsiveness, add to the literature concerned with the symbolic adoption of

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reportingguidelines(seeBehnamandMacLean2011,Adams2004),bypinpointingcritical issues

thatcancontributetoperpetuatingintentionalmismanagementofmaterialissuesandgreenwashing

tactics.Thisresearchthereforestrengthenstheconcernabouthowvoluntaryreportingdoesnotlead

toaccountableandtransparentreporting,neitherforthecontent(e.g.,HahnandLülfs2014,Adams

2004)norfortheprocessofreporting(e.g.,MoratisandBrandt2017,Morrós2017,Manetti2011,

Guix,Bonilla-Priego,andFont2018,Guix,Font,andBonilla-Priegoforthcoming).Thenovelapproach

tostudyingthethreeprinciplesofinclusiveness,materialityandresponsivenessaltogetheropensthe

“blackbox”oftheprocessbywhichstakeholdersareengagedtodefineanddeterminematerialityin

asustainabilityreportingcontext.Itoffersinsightsintotheassessmentofthequalityofreporting,

andprovidesamorerobustinterpretationofthecontentofthesustainabilityreportsasbeingthe

outcomeofsuchprocesses.

Third, this thesisalsocontributestoknowledgebydevelopingtheMaterialityBalancedScorecard

(MBSC),anintegratedframeworkthatextendstheconceptsoftheBalancedScorecard(Kaplanand

Norton1993)andtheSustainabilityBalancedScorecard(Figgeetal.2002a)forthecreationofshared

value(PorterandKramer2011).Thisstrategicmanagementframeworkcontributestotheliterature

addressing the relationship between sustainability performancemanagement and reporting that

remains inan explorative stage (e.g.,MoriokaanddeCarvalho2016,deVilliers,Rouse, andKerr

2016).By introducing theAA1000SESprinciples (2015), andproposingmodifications to suit the

shared value framework, the MBSC addresses several shortcomings from earlier performance

managementsystems,suchas;thelimitedguidanceonstakeholderidentificationandengagement

(inclusiveness),theprioritisationofsustainabilityissuesbeforebuildingthescorecard(materiality

assessment),andthemonitoringoftheorganisation’sresponsetomaterialissues(responsiveness).

TheMBSCrespondstothecallsformoreintegrativemeasurementandmanagementofsustainability

(e.g., Maas, Schaltegger, and Crutzen 2016). The MBSC is proposed to assist organisations in

overcomingthechallengeofdefiningthestrategycontentandaudiencewhenbalancingsustainability

andstakeholder trade-offs, clarifyingthe linksbetweenthe tangibleand intangibleresults forthe

organisationandsociety.Inaddition,bybeingaparticipativeprocess, itcanempoweremployees,

stimulatelearningandreducetheresistancetochange.Despiteitslimitations(seesection4.5),the

MBSC contributes to the theoretical development of SBSC in line with the work of previous

researchers(e.g.,Figgeetal.2002a,VanderWoerdandvanDenBrink2004,NikolaouandTsalis

2013).

269

AspartoftheMBSC,thisthesisalsocontributestothelimitedliteratureprovidingorganisationswith

guidelines forimplementingsharedvalue(e.g.,Porteretal.2012,BockstetteandStamp2011)by

proposingmodificationsintheexistingprinciplesofinclusiveness,materialityandresponsivenessof

reportingguidelines(InternationalFederationofAccountants2015,AccountAbility2015,SASB2013,

GRI 2013a). For the shared value approach, stakeholder expectations need to steer performance

improvements;thus,abroadidentificationandsubstantivestakeholderengagementisproposedfor

whichstakeholderculture,stakeholdermanagementcapabilityandstakeholderinfluencecapacity

areidentifiedasdeterminants(inclusiveness).IssuescentraltotheCSVstrategyneedtobematerial

tostakeholdersandtheorganisationandbringaboutcompetitiveadvantage.Thisstudytherefore

proposesanewdefinitionofmaterialityinthecontextofsharedvalue,andanassessmentprocess

withnon-prescriptivecriteriabasedonthecongruenceoftheissuewiththestrategicframeandwith

theexpressivelogictodeterminemateriality,andalsoonthepotentialdisruptiveness,theintensity

ofchange,andsystemicimpact.Then,transparencymustbeadvancedtolegitimisetheorganisation’s

actionsthroughthesubstantiveadoptionofreportingguidelinesandtheprovisionofasubstantive

and accommodative response tomaterial issues (responsiveness). Through these guidelines, the

MBSCisproposedasastrategicframeworkthatcanbeusedasanintermediatestageassistingthe

profit-drivenorganisationtomovetowardsbeingmoremission-drivenandholisticallysustainable.

Thus,thisstudyfitswithintherecentuptakeofresearchonapplicationsofsharedvalue(e.g.,Kramer

andPfitzer2016,de losReyes,Scholz,andSmith2017,Matinheikki,Rajala,andPeltokorpi2017,

Corazza,Scagnelli,andMio2017).

8.3. Practicalimplications

The research findingshave several practical implications forCSRmanagers, organisations setting

sustainability reporting standardsand stakeholder facilitatorsofCSRmanagement and reporting

processes.

ThestudycallsattentiontothreelevelsCSRdeterminantshavingimplicationsformanagerswhen

implementing strategic change towards shared value. The study proposes the Sustainability

IntegrationMatrixasamethodtoassessthesophisticationoftheCSRprocessesofanorganisation

bygraphicallyrepresenting thesustainability integration.Through itsapplication it ispossible to

revealtheexistingstrengthsandweaknessesoftheorganisationatthecognitive,organisationaland

technicallevels,whichcandeliverimportantinformationtohelprevisetheexistingmanagementof

270

CSR.Notably, theadvances incognitivesustainability integrationhavethepotentialto leadto the

long-lastingformalisationoftheorganisationalstructureforsustainabilityandassociatedtechnical

systemsandprocesses.Inaddition,animprovedunderstandingofthedeterminantsofCSRinhotel

groupsmayservetodevelopindustryguidelinesforfurthersharedvalue.

Theresultsonreportingprocesseshelpreportreaders todevelopamorecriticalviewof,andbe

cautiouswheninterpreting,thereportedinformation,basedonanimprovedawarenessofhowthe

principlesofinclusivenessandmaterialityareinterpretedandappliedbyanorganisationandhow

thisdirectlyimpactsthequalityofthesustainabilityreport.ThestudyproposestheAccountability

Matrixasatooltoassessanorganisation’saccountabilitytostakeholdersbasedonthedisclosureof

inclusiveness,materiality and responsiveness.The alignmentbetweenthedegreeofdisclosure in

respect to these three principles is more important than presenting any of the three as being

accomplished in full, while still ignoring the others; hence the importance of acknowledging the

interrelation of the three steps. For example, having a broad stakeholder identification (high

inclusiveness) and substantive engagement as a process to surface stakeholder concerns (high

materiality), not accompanied by the disclosure of the final distribution of the output (no-

responsiveness),isundesirableformaximisingtheroleofsustainabilityreportsasamechanismfor

accountability.Altogetherthesetwodiagnostictoolscansupportadiscussionofthechangesrequired

intheinternalmanagementandexternaldisclosuretoembedfurtherprogressinthecontinuumfrom

reactivetoproactiveCSR.

The study has contributed with information of interest to organisations setting sustainability

reportingstandards.Ithasraisedconcernoverthesymbolicadoptionofreportingguidelinesandthe

opaque disclosure that limits the external stakeholders’ ability to distinguish between the

management and mismanagement of material issues. It has also illustrated a gap between CSR

practices and corporate disclosure for the hotel industry, since reporting does not reflect the

variability of the organisational structures, systems and processes with which they manage

sustainability.Thestudysuggeststheneedtointroduceenforcementmechanismsandsanctionsfor

non-complianceinvoluntaryreportingandtoaddressthelimitedadoptionofindependentexternal

assurance,anditsscope.Theinclusionofmoreinternalorganisationalfactorsthantheonescurrently

requiredinsustainabilityreportingguidelinesmaybevaluableinformationtoexternalstakeholders.

Similarly,theresultscontributetoabetterunderstandingofthedeterminantsofmaterialityadoption

271

inhotelgroups,whichcanfurtherinformstakeholderfacilitatorsofthematerialityprocessinthe

developmentofindustryguidelines.

Finally,theMBSCoffersastrategicroadmapformanagersonhowtointroducethenecessarysteps

for shared value creation. The specific guidelines to operationalise inclusiveness,materiality and

responsivenessforsharedvaluemaybeofinteresttoorganisationswillingtoadopttheproactive

managementofstakeholderinterestsbymeansofcreatingcompetitiveadvantage.

Overall,thefindingsoffermultipleopportunitiesforengagingtheindustry,eitherdirectlyorthrough

non-governmentalbodiessuchastheUnitedNationsEnvironmentalProgramme,theInternational

TourismPartnershiportheWorldTravelandTourismCouncil.Inthisstudy,industryengagement

was limited to the collaborationwith UNEP, proving aplatform for knowledge transfer from the

research article (see Guix, Bonilla-Priego, and Font 2018) to the industry on the disclosure of

sustainabilityreportingprocessesandenvironmentalindicatorsofhotelgroupsataparallelsession

ofCOP22(seeSection10.7).Furtherengagementcouldprovideanopportunityforconversationson

bridgingsustainabilityperformancemanagementandreportingthatcanbringaboutthenecessary

examplesandconfidencetoencourageothermembersoftheindustrytoadvancetowardstheholistic

managementofsustainability.Similarly,engagementwithregulatorybodiesandreportingguidelines

canprovidetheopportunityforfurtheringchangestoencouragesubstantiveratherthansymbolic

adoptionofbothmandatoryandvoluntaryreportingframeworks.

8.4. LimitationsanddirectionsforfutureresearchTheexploratorynatureofthisresearch,coupledwithitslimitations,helpstolaythefoundationsfor

newlinesofinquiryconcerning:i)empiricallytestingthetheoreticalcontributions,ii)qualitatively

researchingtheorganisationaldeterminantsidentified,ii)employingcomparativeandlongitudinal

studiesovertime,andiv)involvingstakeholdersintheassessmentofCSR.

First,theMBSCandtheguidelinesforinclusiveness,materiality,andresponsivenessforsharedvalue

have been developed theoretically. The research is limited by itsmethodology. In particular, the

currentstateofresearchonCSRmanagementandreportinginthehotelindustryrequiredaninitial

explorativequalitativeapproach.Furthermore,theresearcherwasunabletosecureanorganisation

totesttheMBSCempirically,despitemultipleattempts.Consequently,furtherresearchisneededto

engagewith the industry andoperationaliseandempirically test theMBSCand its guidelines for

sharedvalue.Furtherresearchisneededtodemonstratethepracticabilityoftheframework.

272

Second, because of the interdisciplinary topics being researched, the data collection prioritised

breadthoverdepthofinformationabouteachofthedeterminants.Furtherempiricalresearchinto

the interaction between performance management systems and sustainability reporting would

increasetheunderstandingofcomplementarities,preventersandenablersforincreasedintegrative

measurement,management and reporting of sustainability. Because of the small sample size (18

sustainability reports reviewedand16 semi-structured interviews), and the limiteddisclosureof

informationbytheinterviewees,conclusionsfromthisresearcharetentative.Forexample,dueto

dataavailabilityacrossthesampledhotelstheSustainabilityIntegrationmatrixincorporatesfiveout

ofthe7-Svariables;thusfurtherresearchmayexploretheremainingtwo(staffandskills).Acase

studyapproachmayalsoprovideopportunitiestoelucidatefurthertheinternalfactorsthatinfluence

decisionmaking,leadingtothemanagementormismanagementofmaterialissuesandthesymbolic

orsubstantiveadoptionofsustainabilityreporting.Extendingthesampletoincludeorganisationsnot

reportingsustainabilitymaybefruitfulinbroadeningtheidentifieddeterminants.Furtherqualitative

research could also shed light on the relationship between sustainability integration, CSR

performanceandCSRdisclosure,sincethecomparisonbetweentheAccountabilityMatrixandthe

SustainabilityIntegrationMatrixledtomixedresults.Inthisline,itmaybeofinteresttoexaminethe

stakeholders’perceptionsofinformationasymmetrybetweenmanagementandreportreaders.

Third,thestudybuildsonacross-sectionalanalysisofasubsetofhotelgroupsataspecificpointin

time,whichprovidesstate-of-the-artinformationaboutCSRprocesses.Thus,furtherstudiesmayalso

considerresearchinginternalorganisationalfactorstodeterminetheinterrelationofsustainability

performancemanagementandreportingthroughalongitudinalresearchdesign,complementedwith

theanalysisofthedisclosureofCSRactionsandperformance.Suchastudycouldinformabouttrends

andpathwaystowardsCSRinthehotelindustry.

Finally, the opaque materiality considerations in sustainability reports, and the interviewees’

responsesduring thisresearch,suggestamethodologicalchallenge inrespectto thepossibilityof

researchingthequalityofmaterialitydeterminationprocessesbyorganisations.Furtherqualitative

research in sustainability accountingmayprovideanunderstandingof the issues contributing to

managerial capture, including the judgment process and the power dynamics of materiality

determinationfromtheperspectivesofbothmanagersandstakeholders.

273

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Appendices Appendix1:Listofthe50largesthospitalitygroupsintheworld(Hotels

Magazine,2015)

Ranking2014 Organisation Location

Sustainabilityreports

1 HiltonWorldwide USA2 MarriottInternational USA3 IHG(InterContinentalHotelsGroup) England4 WyndhamHotelGroup USA6 AccorHotels France8 StarwoodHotels&ResortsWorldwide USA13 CarlsonRezidorHotelGroup USA14 HyattHotelsCorp. USA17 MeliáHotelsInternational Spain24 Whitbread England25 NHHotelGroup Spain28 MGMResortsInternational USA29 RiuHotels&Resorts Spain33 WaltDisneyCo. USA35 CaesarsEntertainmentCorp. USA36 Shangri-LaHotelsandResorts China38 EasternCrownHotelsGroupChina China39 Millennium&CopthorneHotels England37 JinlingHotels&ResortsCorp China

Corporatewebsite

31 ScandicHotels Sweden5 ChoiceHotelsInternational Rockville,Maryland,USA10 BestWesternInternational Phoenix,Arizona,USA26 NewCenturyHotels&Resorts Hangzhou,China30 FRHIHotels&Resorts(Fairmont) Toronto,Canada32 RedRoofInn Columbus,Ohio,USA34 TravelodgeHotels Thame,England43 ViennaInternationalHotels&ResortsViennahouse Austria44 NordicChoiceHotels Oslo,Norway48 AscottLtd. Singapore49 IberostarHotels&Resorts PalmadeMallorca,Spain

Nodisclosureintheweborreport

7 PlatenoHotelsGroup Guangzhou,China9 ShanghaiJinJiangInternationalHotelGroupCo. Shanghai,China11 HomeInns&HotelsManagement Shanghai,China12 ChinaLodgingGroup Shanghai,China15 GreenTreeInnsHotelManagementGroup Shanghai,China16 G6Hospitality Carrollton,Texas,USA18 MagnusonHotelsWorldwide Spokane,Washington,USA19 WestmontHospitalityGroup Houston,Texas,USA20 LQManagement(LaQuinta) Irving,TexasUSA21 InterstateHotels&Resorts Arlington,Virginia,USA22 ExtendedStayHotels No23 VantageHospitalityGroup CoralSprings,Florida,USA27 ToyokoInnCo. Tokyo,Japan40 AimbridgeHospitality Plano,Texas,USA41 ZhuyouHotelsGroup Hangzhou,China

319

42 BarceloHotels&Resorts PalmadeMallorca,Spain45 HKCTSHotelsCo. Beijing,China46 99-InnManagementCo. Shanghai,China47 BTG-JianguoHotels&Resorts Beijing,China50 APAGroup Tokyo,Japan

Source:AuthorcompilationfromHotelsMagazine,2015.

320

Appendix2:Contentanalysisthemesandresearchquestions

Thequestionsinitalicswereeliminatedafterthepilottest.

Context.OrganisationandReportprofile(A)OrganisationprofileA1.What’stheorganisationname?A2.Wherecanbethereportfounded?Website/reportlinkA3.Whatistheyearofpublicationofthelastreport?A3.1.Whatisthereportingperiodfortheinformationprovided?A4.Whatisthesizeoftheorganisation?A5.Whataretheorganisationownershipandlegalform?A6.Whatisthereportingcycle?A7.Doesthereportprovideacontactpointforquestionsregardingreportcontent?A8.DoesthereportexplicitlymentionCorporateSocialResponsibilityindexes,standardsandcertifications?(B)ReportingGeneralInformationB1.WhichversionofGRIorIRFguidelinesfollowsthereport?B2.WhatistheapplicationlevelofGRIguidelines?B3.Whatisthereporttitle?B4.Whatisthereportlength?B5.Isthereevidenceofexplicitintentiontoproduceanintegratedreport?B6.Whatisthestructureofthereport?

Theme1.StakeholderidentificationandStakeholderengagement(C)StakeholderidentificationC1.HasapropersectionbeendevotedtoSIinthereport?C2.Doestheorganisationdescribethestakeholderstowhomitconsidersitselfaccountable?Ifyes,whicharethestakeholdergroupsidentified?C3.Howmanystakeholdergroupsareidentifiedasmainstakeholders?C4.Doesthereportexplainthebasisforidentification?(D)StakeholderengagementD1.WhataretheaimsandobjectivesofSE?D2.IstheSEprocessexplained?D3.WhicharethestepstakenintheSEprocess?D4.DegreeofstakeholderrepresentationD4.1.Haveallstakeholdersidentifiedinthereportbeenengaged?D5.Arestakeholdersengagedasapreventivestrategyintheearlierstagesofplanningandaccounting(informationgathering)orstakeholdersareaddressedtoreviewthefinaldocumentreadytobereleased?D6.Whichisthefrequencyofengagementbystakeholdergroup?D7.Istherestakeholders’perceptionofthepreviouseditionofthesustainabilityreport?D8.Ifso,arestakeholdersrequiredtoexpresstheiropiniononthematerialityandreliabilityoftheinformationdisplayed?D9.EngagementchannelsandmethodsD9.1.Arethechannelsandmethodsusedtoreachthestakeholdersidentified?D9.2.Whicharethemethodsusedforeachstakeholdergroup?D10.Whicharethelevelsofstakeholderparticipationused?D11.AredifficultiesmetinSEstated?D12.Ifyes,whicharethedifficulties?(Time,humanresources,others)D13.Arethecommitmentandobjectivestoreportcontinuousimprovementsdeclared?D14.ArespecificguidelinesusedinSE?Ifyes,whichones?D15.Doesthereportevidencethesearchforobtainingfeedbackontheorganisation'srepercussionsonstakeholders?D16.Doesthereportclaimthesearchformeasuringtheimpactofstakeholders'expectationstotheorganisation?D17.Doesthereportexplainaorganisation'sgovernancestructurespecificallyforthestakeholderengagement?

Theme2.DeterminingreportcontenttroughMaterialityanduseofMaterialitymatrix(E)Definingreportcontent:Materiality(GRI,2013c)E1.Doesthereportexplainthemeaningof‘significance’or'material'?E2.Ifyes,howisthemeaningof'significance'or'material'explained?

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E3.Arematerialissuesidentified?E4.HowmanyissuesaretakenintoaccountfortheMA?E4.1.Howmanyoutofthemarematerial?E5.Whicharetheissuesidentified?E6.Aretheentitiesforwhichtheaspectsarematerialidentified?E7.Doesthereportexplainthetimeandresourcesdedicatedtoassessingandprioritizingthedemandsof thedifferentstakeholders?E8.Doesthereportexplainhowtheorganisationhasrespondedorplanstorespondtothestakeholdersconcerns?E8.1.Ifyes,towhichones?E9.Doesthereportexplainwhytheaspectsarematerial?E10.Whatistheprocessofidentifyingmaterialissues?StepstakenE10.1.SpecificstakeholderengagementformaterialityE10.2.OtherprocessE11.Whatarethevaluecriteriatodeterminemateriality?E12.Aredifficultiesmetindeterminingmaterialitystated?E13.Ifyes,whicharethedifficulties?(F)Definingreportcontent:theMaterialityMatrixF1.DoesthereportincludeavisualMaterialityMatrix?F2.Fromthelistbelow,howaretheissuesdescribedintheMM?F3.WhichisthenameoftheX-axisoftheMM(horizontal)?F3.WhichisthenameoftheY-axisoftheMM(vertical)?F5.DoestheMMincludecomponentsoftime?F6.DoestheMMhaveweightintheevaluationofissues?F7.Fromthelistbelow,howaretheissuesscoringrepresentedintheMM?F8.Fromthelistbelow,howarethematerialityboundariesidentifiedintheMM?F9.WhichlevelofinteractivitydoestheMMhave?F10.WhichistheuseoftheMM?F11.Doesthereportexplainhowstakeholders’viewsareweightedtodeterminematerialityintheMM?F12.Ifyes,how?F13.AredifficultiesmetinbuildingtheMMstated?F14.Ifyes,whicharethedifficulties?

Theme3.ResponsivenessG.1.Theorganisationcommunicatestheresponse(actions,commitments...)givenformaterialissuesG.2.Thereportfollowsastructuretoguidetheusertoidentifyresponsesgiventoeachmaterialissue

Theme4.ReportassuranceH.ReportassuranceH1.AssuranceprofileH1.1.Doesthereportprovideanassurancestatement?H1.2.Whatisthelengthoftheassurance(Nºofpages)?H1.3.Isacontactpersonforfurtherinformationprovided?H2.AssuranceprofessionalopinionH2.1.Whatistheassurancetype?H2.2.Whichtypeistheassuranceprovider?H2.3.Whoistheassuranceprovider?H2.4.Doesthereportexplaintherelationshipbetweentheorganisationandtheassuranceprovider?Ifyes,whichone?H2.5.Arethegovernancebodiesoraseniorexecutiveinvolvedinseekingassurance?H26.Whichprofessionalopinioniscontainedintheassurancestatement?(Expertinput)H.3.IntrinsiccoherenceandqualityoftheassurancestatementH3.1.Aimsandlimitsofthemandateareclearlydefinedinassurancestatement?H3.2.Whatistheassurancescope?H3.3.Isthelevelofassuranceclearlystated?H3.4.Doestheassurancestatementreferexplicitlytoassurancestandards?H4.CooperationwiththirdpartiesbyassuranceproviderH4.1. Does the assurance statement contain a reference to consultation with third party individuals or bodiescoordinatedbytheassuranceprovider?H5.Stakeholderroleintheassuranceprocess

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H5.1.Whoareintendedusersofassurancestatement?H5.2.Doestheassurancestatementreferexplicitlytostakeholderconsultationduringverificationprocessbyassuranceprovider?Ifyes,how?H5.3. If the previous answer was affirmative, which stakeholder categories did the assurance provider consult?(Referencetoinclusivity)H5.4.Doestheassurancestatementmentiondifficultiesorproblemsmetinconsultingstakeholdersduringassuranceprocess?(Nodifficultiesinidentifyingsignificantrepresentativesofcategories,orinfinding/researching.H5.5.Doesassuranceproviderreferstoanysectionsofreportdedicatedtostakeholderopinionsonpreviousreport?H6.AssurancecontentH6.1.Whatreportcontentandreportingprocessareassuredbytheassuranceprovider?H7.AssuranceprocessH7.1.Aredifficultiesorimprovementsmetinreportassurancestated?H7.2.Ifyes,whicharethedifficultiesorimprovements?

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Appendix3:Coverletterforhotelgroupswithsustainabilityinformationpubliclyavailable

2016SUSTAINABILITYREPORTINGINTHEHOSPITALITYINDUSTRY

Dearhospitalityindustrystakeholder,

TheUniversityofSurreywithsupportoftheUnitedNationsEnvironmentProgramme invitesyoutoparticipateinaresearchstudyonsustainabilityreporting.

Asoneofthe50largesthotelgroupsintheworld,wewouldliketolearnhowyourorganisationisengaging in sustainabilitymanagementand reporting. Sustainability reportand reporting is usedhereforanyformofdisclosureofcorporatesustainabilityinformationregardlessofitsdisseminationformat(fullprintedreport;website;onlinePDFreport;sustainabilitydedicatedmicrosite;summarysustainabilityreports;site,themeand/orproject-specificreports,etc.).

Thestudyiscomposedofasurveyandaninterview,toproduceasituationanalysisoftheexistingsustainability reporting priorities, needs, and barriers. Could you please complete the surveyattached,andreturnittoussuggestingsuitabledatesandcontactnumberforanhourinterview.Bothcontributetobetterunderstandhowyourorganisationincludesstakeholderneedsintoyoursystemsforsustainabilitymanagement.Aftertheinterviewwewillsendourreport:AssessingSustainabilityReportingintheHospitalitySector:ChallengesandOpportunities.Wehaveattachedasneakpreviewofthedataincluded,basedontheanalysisofthesustainabilitydatafromthe50largesthotelgroups,includingyours.

TheresultsofthissurveyandinterviewwillinformtheUNEPplanstosupportthehospitalitysectortobetterreport,inordertocontributetothe2030SustainableDevelopmentandClimateAgendas.TheresultswillbepresentedduringanofficialsideeventonTourismandClimateChangeatthe22ndConferenceofthePartiestotheUNFCCC(COP22)thattakesplaceinMorocco(Marrakesh)betweenthe7and18thNovember2016.Anonymousdatawillalsobeused foracademicpurposes toaddrigourandqualitycontrol.

WekindlyaskyoutorespondbySeptember30th,2016.

Foradditionalinformation,pleasecontact:x.font@surrey.ac.ukandtourism@unep.org

Withthesupportof:

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Appendix 4: Cover letter for hotel groups without sustainabilityinformationpubliclyavailable

2016SUSTAINABILITYREPORTINGINTHEHOSPITALITYINDUSTRY

Dearhospitalityindustrystakeholder,

TheUniversityofSurreywithsupportoftheUnitedNationsEnvironmentProgramme invitesyoutoparticipateinaresearchstudyonsustainabilityreporting.

Asoneofthe50largesthotelgroupsintheworld,wewouldliketolearnhowyourorganisationisengaging in sustainability management and reporting. We are particularly interested in yourorganisation because we have not been able to find publicly available information on yoursustainabilityefforts.Sustainabilityreportandreportingisusedhereforanyformofdisclosureofcorporate sustainability information regardless of its dissemination format (full printed report;website;onlinePDFreport;sustainabilitydedicatedmicrosite;summarysustainabilityreports;site,themeand/orproject-specificreports,etc.).

Thestudyiscomposedofasurveyandaninterview,toproduceasituationanalysisoftheexistingsustainability reporting priorities, needs, and barriers. Could you please complete the surveyattached,andreturnittoussuggestingsuitabledatesandcontactnumberforanhourinterview.Bothcontributetobetterunderstandhowyourorganisationincludesstakeholderneedsintoyoursystemsforsustainabilitymanagement.Aftertheinterviewwewillsendourreport:AssessingSustainabilityReportingintheHospitalitySector:ChallengesandOpportunities.Wehaveattachedasneakpreviewofthedataincluded,basedontheanalysisofthesustainabilitydatafromthe50largesthotelgroups.

TheresultsofthissurveyandinterviewwillinformtheUNEPplanstosupportthehospitalitysectortobetterreport,inordertocontributetothe2030SustainableDevelopmentandClimateAgendas.TheresultswillbepresentedduringanofficialsideeventonTourismandClimateChangeat the22nd Conference of the Parties to the UNFCCC (COP 22) that takes place in Morocco(Marrakesh)between the7and18thNovember2016. Anonymousdatawill alsobeused foracademicpurposestoaddrigourandqualitycontrol.

WekindlyaskyoutorespondbySeptember30th,2016.Foradditionalinformation,pleasecontact:x.font@surrey.ac.ukandtourism@unep.org

Withthesupportof:

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Appendix5:Participantinformationsheet(CSRmanagers)

ProjectTitle:2016SUSTAINABILITYREPORTINGINTHEHOSPITALITYINDUSTRY

Institutionsparticipating:UniversityofSurrey

PhD.Title: Aligninga company’s needs and its stakeholders’ requests:The role of theMaterialityBalance

Scorecardanditseffectonperformance.

NameofResearcher:MireiaGuix

NameoftheSupervisor:ProfessorXavierFont

Invitationtoparticipate

Youhavebeen invited to takepart in this researchproject.Beforeyoudecidewhether to takepart in this

research,pleasetakethetimetoreadthisinformationsheet.Ifyouhaveanyqueries,pleasedonothesitateto

contacttheresearcher.

Purposeoftheresearch

ThisresearchisbeingconductedaspartofaPhDthesisforastudentofUniversityofSurrey.Thepurposeof

theresearchistounderstandhowahospitalityorganisationcandefinesustainabilitystrategicobjectivesto

create shared value, translate them into action,measure outputs and reporting. You have been chosen to

participate,asyouareoneofthe50largesthotelgroupsworldwide.

WhatwillIbeaskedtodointhisresearch?

Dataforthisresearchprojectwillbecollectedviatwostages:1)aquestionnairetoproduceasituationanalysis

oftheexistingsustainabilityreportingpriorities,needs,andbarriersand2)asemi-structured,phoneorSkype

interview with the sustainabilitymanager of the organisation between October and November 2016. The

interviews contribute to better understand how your organisation includes stakeholder needs into your

systemsforsustainabilitymanagement.

Howwillmyinformationbeused?

Theinformationprovidedintheinterviewswillinformpractitionersandacademicpublicationsasaresultof

thisPh.D.projectatLeedsBeckettUniversity.

Willmyinformationbeconfidential?

All answers will be treated with the strictest confidence, and the researcher will hold all gathered data

confidentially.Theinformationwillbeusedsolelyforitsintendedpurposebytheresearcher.Allparticipants

willremainanonymous,andinformationthatcouldleadtotheidentificationofindividualswillbeconcealed

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withinthefinalreport.Organisationnameswillbereferredbyapseudonymwhilejobtitleswillbedisclosed.

TheresearcherandLeedsBeckettUniversitywillcomplywiththeDataProtectionAct1998.

CanIwithdrawfromtheresearch?

Participationinthisresearchprojectisvoluntaryandparticipantscanchoosetowithdrawfromthestudyat

anystage.

ContactDetailsforFurtherInformationResearcherdetails:MireiaGuix E-mail:guixnavarrete.m@gmail.comSupervisordetails:XavierFont E-mail:x.font@surrey.ac.uk

Thankyoufortakingthetimetoreadthisinformationsheetandforcontinuingbytakingpartintheresearch.

PARTICIPANTINFORMEDCONSENTFORM:

I,[NAME]_________________,oflegalage,withID[IDnumber]_______________,actingonbehalfandoutofself-interest

DECLARETHAT:

IhavereceivedinformationabouttheresearchstudyentitledAligningacompany’sneedsanditsstakeholders’

requests:TheroleoftheMaterialityBalanceScorecardanditseffectonperformance.Ihavebeenprovidedwith

aninformationsheetattachedtothisconsentformforwhichmyparticipationisrequested.Iunderstandits

meaning;Ihaveclarifieddoubts,andtheprocedurehasbeenexplainedtome.Ihavebeeninformedofallaspects

relatingtoconfidentialityanddataprotectionregardingthemanagementofpersonaldatathatisinvolvedin

theresearchincompliancewiththeLaw15/1999onProtectionofPersonalData.

Mycollaborationintheprojectisentirelyvoluntary,andIhavetherighttowithdrawfromitatanytime,revoke

thisconsent,withoutnegativelyinfluencingmeinanysense.Inthecaseofwithdrawal,Ihavetherighttohave

mydatacancelledintheresearch.

Likewise,Iwaiveanyeconomic,academicoranyotherbenefitthatmayarisefromtheresearchoritsresults.

Forthis,ICONSENTTO:

Participate in the research studyAligning a company’s needs and its stakeholders’ requests: The role of the

MaterialityBalanceScorecardanditseffectonperformancewithintheaboveterms.

Give permission for the interview to be voice recorded. (Please note that thiswill be destroyed following

submissionoftheresearchpapers).

Givepermissionfordisclosingthejobtitleanduseapseudonymtorefertotheorganisation.

327

The researcher Mireia Guix and Xavier Font, as principal researcher, to manage my personal data and

disseminatetheinformationtheresearchgenerates.Myidentityandprivacyareguaranteedtobepreservedat

alltimes,asestablishedbylaw15/1999ofdataprotectionandsupplementaryregulations.

In[INCLUDECITY]to[INCLUDEDATE/MONTH/YEAR]

Name:Organisation:

Signature:Date:

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Appendix6:Questionnairequestions

Doyouuseanyspecificperformancemanagementsystemforsustainability?Yes/NoWhichone?Whydoyouselect(ornot)aspecificperformancemanagementsystemforsustainability?Howoftenisthesustainabilitystrategyreviewed?Andhowoftenisthesustainabilitybudgetreviewed?Istheincentiverewardsprogrammelinkedtosustainabilitytargets?Yes/NoWhy?Ifapplicable,towhichemployeelevelistherewardsprogramlinked?

Boardofdirectors Seniormanagement

Middlemanagement

Operational Others:__________

SustainabilityreportingDoyouproduce(ornot)asustainabilityreport?Yes/NoWhy?Whatarethekeydriversforyourorganisationtoproduceasustainabilityreport?(Ifapplicable)Pleasehighlightyour degree of accordance. 1=Extremely low, 2=Very low, 3=Somewhat low, 4=Somewhat high, 5=Very high,6=Extremelyhigh.Regulation 1 2 3 4 5 6Stakeholderpressure 1 2 3 4 5 6Assessmentofsustainabilityrisksandopportunities 1 2 3 4 5 6Strategicdecision-making 1 2 3 4 5 6Other: 1 2 3 4 5 6Canyoupleaseprovideanestimationof:GeographiccoverageofthesustainabilityreportNumberofstaffinvolvedinthesustainabilityreportingprocess?Number of units/departments involved in the sustainability reporting process? If possible, please outlinedepartmentnameandinvolvementofanysubsidiariesseparately.Thefinancialcostsofthesustainabilityreportingprocess?Doyoufollowaparticularsustainabilityreportingguideline/framework?Yes/NoWhy?Doyoufollowmorethanoneguideline/framework?Yes/NoWhy?Stakeholderengagement:Pleaseindicatewhetheryourstakeholdersfallwithinoneormoreofthefollowingcategories.Owners Shareholders Investors

Franchises Suppliers BusinesspartnersClients Localcommunities Nongovernmentalorganisations

Localauthorities Regionalauthorities Nationalauthorities

Industrypeers Others:_________

Doyouparticipateinmulti-stakeholderinitiativesinsustainability?(e.g.InternationalTourismPartnership)Yes/NoCouldyouprovideanexample?

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Whyareyou(orareyounot)participatinginamulti-stakeholderinitiativesinsustainability?Aredifficultiesencounteredwhenengagingstakeholdersforsustainability?Yes/NoCouldyouprovideanexample?Arethosedifficultiesdisclosedinasustainabilityreport?Yes/NoWhy?Doyoucommunicateinthesustainabilityreportthefeedbackofstakeholdersfromthepreviousreport?Yes/NoWhy?Why or why not does your sustainability report indicatewhich set of information is aimed at particularstakeholdergroups,ifapplicable?How do you engage with the relevant stakeholders? Please indicate the level of engagement that bestcorrespondstoyourpractices.

StakeholdersHow(e.g.marketresearch,socialmedia,codeofconduct,meetings,surveys,partnerships,councils)

Level ofengagement

Informative

Consultative

Decisive

Owners Shareholders Investors Franchises Suppliers Businesspartners Clients Localcommunities Nongovernmentalorganisations

Local, Regional andNationalauthorities

Industrypeers: Others: SustainabilitycommunicationWhicharethedisseminationformatsofyoursustainabilityinformation?Sustainabilityreport Integratedreport

On-linePDFreport

Website Sustainabilitydedicatedmicrosite Summarysustainabilityreport

Site, theme or project specificreport

Interactivereport Others:_________

If applicable, please highlight any particularity/innovation in the way that you disseminate sustainabilityinformation.Ifapplicable,whydoyoudisclosesustainabilityinformationinmorethanoneformat?Howdoyoucommunicatethesustainabilitystrategyinternallytotheorganisationmembers?Andhowdoyoucommunicateprogressonthesustainabilityinternallytotheorganisationmembers?

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EnvironmentalSustainableDevelopmentGoalsIndicatorsIsyourorganisationawareoftheSustainableDevelopmentGoals(SDGs)?Yes/NoIfyes,doesitconsiderthattheSDGswillhaveimplicationsforitssustainabilitystrategyandreporting?Yes/NoHow?Areyoumeasuringthefollowingindicatorsandwhy?

Indicators MeasuringWhy(OpportunitiesChallenges)

GHGEmissionsDirectgreenhousegas(GHG)emissions(Scope1) Yes/No Directgreenhousegas(GHG)emissions(Scope1)perunitofnetvalueadded Yes/No Energyindirectgreenhousegas(GHG)emissions(Scope2) Yes/No Energyindirectgreenhousegas(GHG)emissions(Scope2)perunitofnetvalueadded Yes/No

Otherindirectgreenhousegas(GHG)emissions(Scope3) Yes/No

Indicators MeasuringWhy(OpportunitiesChallenges)

EnergyEnergyconsumptionwithintheorganisation Yes/No Energyrequirementperunitofnetvalueadded Yes/No Amountsofeachenergysourcerecognisedduringtheaccountingperiod Yes/No

Indicators MeasuringWhy(OpportunitiesChallenges)

Materials&WasteMaterialsusedbyweightorvolume Yes/No Totalweightofwastebytypeanddisposalmethod Yes/No Wastegeneratedperunitofnetvalueadded Yes/No Dependencyonozonedepletingsubstances(ODS)pernetvalueadded Yes/No Emissionsofozone-depletingsubstances(ODS) Yes/No Percentageofmaterialsusedthatarerecycledinputmaterials Yes/No

Indicators MeasuringWhy(OpportunitiesChallenges)

WaterTotalwaterconsumptionacrossoperations Yes/No Totalwaterwithdrawalbysource Yes/No Totalwaterconsumptionpernetunitofnetvalueadded Yes/No Location-specificdata:Waterconsumption(e.g.inasubsidiary) Yes/No Location-specificdata:Waterwithdrawalsbysourcetype(e.g.inasubsidiary) Yes/No Watersourcessignificantlyaffectedbywithdrawalofwater Yes/No

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Totalandpercentageofwithdrawalsinwater-stressedorwater-scarceareas Yes/No Totalwaterdischargebyqualityanddestination Yes/No Location-specificdata:Waterdischargebyqualityanddestination Yes/No Percentageandtotalvolumeofwaterrecycledandreused Yes/No Are you planning to report under the CDP’s (formerly the Carbon Disclosure Project) Climate ChangeProgramme?Currentlyreporting Yes,planningto NotplanningtoWhy?AreyouplanningtoreportundertheCDP’sWaterProgramme?Currentlyreporting Yes,planningto NotplanningtoWhy?IfyoureportundertheCDP,howdoyouselecttheinformationtoincludeintheSR,sincewehaveseenyourCDPreportsprovidesmuchmoredetailedinformation.AssuranceAssuranceistheprocessofprovidingconfidenceonthecontentandprocessofsustainabilityreporting,whichmayinvolveinternalandexternalstakeholders,anditsoutcomeisthedegreeofreliancethatcanbeplacedonreporteddata.Doyouundertakeinternalassuranceofsustainabilityactionsbeforereporting?Yes/NoHow?Doyouundertakeexternalassuranceofyoursustainabilityreport?Yes/NoIfyes,hasaparticularassurancestandardbeenapplied?Yes/NoWhy?Whatisthelevelofassuranceprovided?Why?Howdoesanexternalassurancecontributetoyoursustainabilityreporting?Couldyouestimatethefinancialcostsofexternalassurance?______________________________________________________________________Thank you very much for your collaboration. The information provided will remain anonymous and willcontributetosupportthesustainabilityreportingeffortsinthehospitalitysector.Resultswillbepresentedatthe22ndConferenceofthePartiestotheUNFCCC(COP22)toadvancehowthehospitalityindustrycontributestothe2030SustainableDevelopmentandClimateAgendas.Pleaseprovidethecontactingdetailsfortheinterview:Name:Position:Phonetobecontacted:E-mail:Availabledate:Availabletime:Timezone:

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Appendix 7: Infographic Analysing the quality and credibility of

CorporateSocialReportingintheHospitalitySector,2016

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Appendix8:CSRmanager’sinterviewguide

Stakeholderengagement:Which are the criteria and the process for identifying the external stakeholders relevant to yourorganisation?Whyyoursustainabilityreportcommunicates(ornot)thecriteriausedtoselectstakeholders?Howdoyoumobilisethepartnersandeffortsneededoutsidetheorganisationtoachievethestrategy?Doyouseeopportunitiestoengagewithabroaderrangeofstakeholders?Howcouldaccountabilitytowardsstakeholdersbeimproved?Materiality:Howisdefinedtheoverallobjectiveofyoursustainabilitystrategy?Whoisinvolved?Does your organisation conduct amateriality analysis? If not, howdo youdefine the content of thesustainabilityreport?Fororganisationsundertakingmaterialityonly:Whatdoes'materiality'meanfortheorganisation?Howdoyoudefinetheobjectives,audience,andscopeofthematerialityanalysis?How do you prioritise the significance of sustainability issues to the organisation? And to itsstakeholders?(Criteria,methodandmembersinvolved)Aredifficultiesencounteredwhenevaluatingmateriality?Couldyouprovideanexample?Whythosedifficultiesarenotreported?Howdoyoucommunicatethematerialityanalysisresultsandwhy?(matrix,tablewithmaterialissuesfortheorganisationandthedifferentstakeholders,etc.)Currentsustainabilitymanagementpractices:Whoparticipatesinimplementingthesustainabilitystrategy?Departments,rolesandresponsibilitiesWheredoyoudevelopthesustainabilitystrategyandreporting?Differencesbetweenowned,managedandleasedhotelsHow do you monitorthe sustainability progress continuously? (Complements questionnairequestions1-3)Doyouencourageopenreportinginsustainability?Whyandhow?Doyouneedtolaunchchangeprogrammestoadapttothesustainabilitychallenges?Howisitdone?Doyouhaveaspecificdatacollectionprocessforreporting?Future:Whatarethechallengesinsustainabilityimplementation?Andreporting?Whatcouldbedonetoovercomethosechallenges?Atanindustrylevel:Individuallybyeachorganisation:Howcouldtransparencybeimproved?Thankyouverymuchforyourcollaboration.Theinformationprovidedwillremainanonymousandwillcontributetosupportthesustainabilityreportingeffortsinthehospitalitysector.TheresultswillbepresentedduringanofficialsideeventonTourismandClimateChangeatthe22ndConferenceofthePartiestotheUNFCCC(COP22)thattakesplaceinMorocco(Marrakesh)betweenthe7and18thNovember 2016. Results will be used for academic purposes and practitioners’ publications toadvancehowthehospitalityindustrycontributestothe2030SustainableDevelopmentandClimateAgendas.

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Appendix9:Participantinformationsheetandconsentform(Experts)

PARTICIPANTINFORMATIONSHEET

ProjectTitle:SUSTAINABILITYMANAGEMENTANDREPORTINGINTHEHOSPITALITYINDUSTRY

Institutionsparticipating:UniversityofSurrey

PhD.Title:Aligningacompany’sneedsanditsstakeholders’ requests:Theroleof theMaterialityBalanceScorecardanditseffectonperformance.

NameofResearcher:MireiaGuix

NameoftheSupervisor:XavierFont

Invitationtoparticipate

Youhavebeeninvitedtotakepartinthisresearchproject.Beforeyoudecidewhethertotakepartinthisresearch,pleasetakethetimetoreadthisinformationsheet.Ifyouhaveanyqueries,pleasedonothesitatetocontacttheresearcher.

Purposeoftheresearch

ThisresearchisbeingconductedaspartofaPh.D.thesisforastudentoftheUniversityofSurrey.Thepurposeof the research is tounderstandhowahospitality organisation candefine sustainabilitystrategicobjectivestocreatesharedvalue,translatethemintoaction,measureoutputsandreporting.Youhavebeenchosentoparticipate,asyouareoneoftheleadingexpertsinthesustainabilityfieldinthetourismindustry.

WhatwillIbeaskedtodointhisresearch?

Data for this research project is collected via a semi-structured, phone or Skype interview tocontribute to better understand the barriers towards integration between sustainabilitymanagement,performanceandreporting.

Howwillmyinformationbeused?

TheinformationprovidedintheseinterviewswillinformpractitionersandacademicpublicationsasaresultofthisPh.D.projectatUniversityofSurrey.

Willmyinformationbeconfidential?

Allanswerswillbetreatedwiththestrictestconfidence,andtheresearcherwillholdallgathereddataconfidentially.Theinformationwillbeusedsolelyforitsintendedpurposebytheresearcher.Allparticipants will remain anonymous, and information that could lead to the identification ofindividuals will be concealed within the final report. Organisations’ nameswill be referred by apseudonymwhilejobtitleswillbedisclosed.TheresearcherandtheUniversityofSurreywillcomplywiththeDataProtectionAct1998.

CanIwithdrawfromtheresearch?

Participationinthisresearchprojectisvoluntaryandparticipantscanchoosetowithdrawfromthestudyatanystage.

ContactDetailsforFurtherInformationResearcherdetails:MireiaGuix E-mail:guixnavarrete.m@gmail.comSupervisordetails:XavierFont E-mail:x.font@surrey.ac.uk

341

Thankyoufortakingthetimetoreadthisinformationsheetandforcontinuingbytakingpartintheresearch.

PARTICIPANTINFORMEDCONSENTFORM:

I,[NAME]_________________,oflegalage,withID[IDnumber]_______________,actingonbehalfandoutofself-interest

DECLARETHAT:

I have received information about the research study entitledAligning a company’s needs and itsstakeholders’requests:TheroleoftheMaterialityBalanceScorecardanditseffectonperformance.Ihave been provided with an information sheet attached to this consent form for which myparticipationisrequested.Iunderstanditsmeaning;Ihaveclarifieddoubts,andtheprocedurehasbeen explained to me. I have been informed of all aspects relating to confidentiality and dataprotectionregardingthemanagementofpersonaldatathatisinvolvedintheresearchincompliancewiththeLaw15/1999onProtectionofPersonalData.

Mycollaborationintheprojectisentirelyvoluntary,andIhavetherighttowithdrawfromitatanytime,revokethisconsent,withoutnegativelyinfluencingmeinanysense.Inthecaseofwithdrawal,Ihavetherighttohavemydatacancelledintheresearch.

Likewise,Iwaiveanyeconomic,academicoranyotherbenefitthatmayarisefromtheresearchoritsresults.

Forthis,ICONSENTTO:

ParticipateintheresearchstudyAligningacompany’sneedsanditsstakeholders’requests:TheroleoftheMaterialityBalanceScorecardanditseffectonperformancewithintheaboveterms.

Give permission for the interview to be voice recorded. (Please note that this will be destroyedfollowingsubmissionoftheresearchpapers).

Givepermissionfordisclosingthejobtitleanduseapseudonymtorefertotheorganisation.

TheresearcherMireiaGuixandXavierFont,asprincipalresearcher,tomanagemypersonaldataanddisseminatethe information theresearchgenerates.My identityandprivacyareguaranteedtobepreserved at all times, as established by law 15/1999 of data protection and supplementaryregulations.

In[INCLUDECITY]to[INCLUDEDATE/MONTH/YEAR]

Name:

Organisation:

Siganture:

Date:

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Appendix10:Expert’sinterviewguide

Dear(name),thankyouverymuchfortakingyourtimetobepartofthisresearch.Youhavebeenchosentoparticipate,asyouareoneof the leadingpractitionersplacingsustainabilitychallenges in the forefrontagendaofthetourismandhospitalityindustryThisinterviewcontributesingeneraltoshedlightintothecurrentandpotentialsustainabilityintegrationbetweenperformance,managementandreporting.Ifyoudon’tminIwillproceedtorecordtheinterviewforbetterunderstandyouranswers,justrememberthatalltheinterviewwillbeanonymous,sowewon’trefertoyourorganisationnortoyourname,onlythejobtitlewillbedisclosed.(e.g.ExpertNºx:Academic)

Generalquestions:

• Whatisthechallengeforthehospitalityindustryformovingfromunsustainabletosustainable?• Whatarethechallengesthehospitalityindustryneedstofaceintermsofaddressingsustainability

issues?• Whydoyouthinkthosechallengesexist?• Whatdoyouthinkisthemainstreamdiscourseofsustainabilitywithintheindustry?• From your point of view, what is preventing change towards more inclusively address

sustainabilityissues/increasethequalityofsustainabilityreports?• Whatarethedominantideologicalpracticesinsustainabilitymanagementwithintheindustry?• Couldyouexpandonthemainstreamdiscourseofsustainabilitywithintheindustry?• Whosevaluesdoyouthinkbecomerepresentedincorporatedecision-makinginsustainability?

Sustainabilitystrategydefinition

• Could you explain the mainstream approach taken by the industry when defining theirsustainabilitystrategy?

• Whatarethechallengeswiththecurrentapproachtosustainabilitystrategydefinitionwithinthehospitalityindustry?

• Whatrestrictiveconditionspreventtheabilitytochangetheindustry’sbehaviour?• Couldyouidentifytheactorstochangethecurrentsituation?• Couldyouprovideanachievablepracticalgoaltotransformthecurrentreality?

Sustainabilityimplementation

• Could you explain the mainstream approach taken by the industry in sustainabilityimplementation/management?

• Whatare thechallengeswith thecurrentapproach tosustainability implementationwithin thehospitalityindustry?

• Whatrestrictiveconditionspreventtheabilitytochangetheindustry’sbehaviour?• Couldyouidentifytheactorstochangethecurrentsituation?• Couldyouprovideanachievablepracticalgoaltotransformthecurrentreality?• Whichsustainabilityplanninginstrumentsandcontrolsystemsshouldorganisationshaveinplace

withintheorganisationtosupporttheimplementationofthesustainabilitystrategy?

Monitoringsustainabilityperformance

• Couldyouexplainthemainstreamapproachtakenbytheindustryinmonitoringsustainabilityperformance?

• Whatarethechallengeswiththecurrentapproachtomanagesustainabilityperformancewithinthehospitalityindustry?

• Whatrestrictiveconditionspreventtheabilitytochangetheindustry’sbehaviour?• Couldyouidentifytheactorstochangethecurrentsituation?• Couldyouprovideanachievablepracticalgoaltotransformthecurrentreality?• Whatdoyouthinkarethechallengesinmeasuringsustainability(environmentalandsocial)?• Fromyourpointofview,whataretheadvantagesanddisadvantagesofhavingaperformance

managementtoolusedforsustainabilitythesameasforthecoreorganisation?• Andtheadvantagesanddisadvantagesofhavingtwoseparateperformancemanagementtools

onefortheorganisation’sstrategyandtheotherforsustainability?

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• Fromyourexperience,isthereanyrelationshiporintegrationbetweentheinternalperformancemanagement tools used for sustainability and the sustainability reporting inmost hospitalityorganisations?

• Whichsustainabilityplanninginstrumentsandcontrolsystemsshouldhospitalitygroupshaveinplacewithintheirorganisationstosupporttheimplementationofthestrategy?

• Fromyourexperienceisthereanyintegrationbetweenperformancemanagementtoolsusedforsustainabilityandsustainabilityreportinginmostofthehospitalityorganisations?

Sustainabilityreporting

• What is the role for the sustainability reports in achieving the necessary transition fromunsustainabletoasustainableindustry?

• Whoaretheintendedusers/audienceofsustainabilityreports?• Couldyouexplainthemainstreamapproachtakenbytheindustryinsustainabilityreporting?• Issustainabilityreportinganextendedpracticewithinthehopitalityindustry?Whydoyouthink

so?• What are the challenges with the current approach to sustainability reporting within the

hospitalityindustry?• Howcouldthosechallengesovercome?• What is preventing change towards increased sustainability reporting both in numbers of

organisationsreportingandintermsofqualityofreports?(e.g.assurance)• Couldyouidentifytheactorstochangethecurrentsituation?• Couldyouprovideanachievablepracticalgoaltotransformthecurrentreality?• Wouldyouconsidersustainabilityreportinganaccountabilityexerciseandalegitimatingtool?If

so,howandwhy?Ifnotwhy?• Aresustainabilityreportsgivingmorethanasocialrepresentationofthewaytheorganisations

wanttobeseen?• Whoaretheintendedusersofsustainabilityreports?• Have you seen an increase of interest from investors to access sustainability information for

financialdecisions?• Whatistheprimarydriverfororganisationstoreportsustainability?• Howdothedifferentreportingstandardsandguidelinescompeteorcomplementeachother?• Isthereaneedtostandardisesustainabilitymetricsfortheindustryacrossthedifferentstandards

andframeworks?• Whatistheroleofreportingguidelinesinstandardisingsustainabilitymetrics?• Shouldsustainabilityreportingbecomearequirementorshouldbekeptavoluntaryactivity?

MaterialityAssessment:

• Haveyouidentifiedanyshortcomingsonexistingmaterialityassessmentguidelines?• e.g.howtosetamaterialitythreshold,orhowtoaggregatethedifferentstakeholdersfeedback

fromthequestionnaireintoasingestakeholdergroupforthematerialityanalysis• Howcouldtheybeovercome?• Whosevaluesdoyouthinkbecomerepresentedinthematerialityassessmentforsustainability

reporting?• How does an industry materiality assessment contributes to the challenges of the hospitality

sector?• Doyouthinktheindustrymaterialityanalysis it’scomplementaryorsubstitutetoanindividual

organisationmaterialityassessment?• Shallmaterialityassessmentbeoneoffexerciseorhowoftenshouldorganisationsrepeatit?• Whatarethecurrentchallengesforthematerialityassessment?• Shallorganisationsreporttheprocessofmaterialityanalysisandtheoverallprocessofengaging

stakeholdersforbuildingthereports?

Stakeholderengagement

• Whatispreventingorganisationstoengageinmoremeaningfulwayswithstakeholders?• Doyouseeanotheralternativemethodfororganisationstobeaccountabletotheirstakeholders

intermsofsustainability?

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• Howcouldaccountabilitytowardsstakeholdersbeimproved?

Appendix 11: Interview themes, categories, subcategories and

illustrativequotes

Step0.Strategicplanningandstrategicandoperationalinformationsharing:Organisationalintegration-Structure(7S)Theme:Ownershipstructure

• Categories:OwnedhotelsOwnership%“Mostof((nameorganisation))hotelsareowned:,soagood85to90%now”(C4-L)“Onlya20%ofourhotelsonmanagement,soitisnotahugeissue”(C1-M)“ItisagreatissueforIntercontinentalforexample,orforHilton”(C1-M)“Maybeathirdofthehotelsarefranchised,butwedon’townanyofourhotels,weonlyrentthebuildings”(C7-W)“Nowallareownedhotels”(C6-L)Benefitsfromowninghotels-Decision-makingcontrol“Thatgivesusalotofleadwayinmakingdecisions”(C4-L)"Inthemodelofpropertywearetheownersofthehotel,andinonewayoranotherwedowhatwedecidedatacorporatelevel"(C3-M)-Effectivestrategyroll-out“Whenourhotel isowned theyneed to followourstrategy,which isgreat.Andwearemeasuringourstrategy,whichisgreat.Imeantheaccomplishmentonourtargets,whichisgreat”(C1-M)“makingsuretheyarecascadedwithoutanyobstaclesintheway”(C4-L)-Havingdata“Imeanownedandrentforbothwehavethedata,sowedon’thaveanyproblems.”(C1-M)

• Categories:RentalhotelsConflictsofinterest“Wehaveinthecontractwiththebuildingownersandwiththefranchisedstakeholdersthattheyaregoingtoimplementallourstandardsandallourfieldsconcerningsustainabilityandenvironmentalissues.It’sabittoughertomakechangesinthebuildingsiftheownerdoesnotagreewithus…Andwehavetopayforthechangesourselveseventhoughweshouldn’tbecausewedon’townthebuildings.”(C7-W)Decision-makingcontrol"Ifthehotelisrented,weexploitthehotelaccordingtoourcriteria,andwecanalsodowhatweconsiderappropriate"(C3-M)

• Categories:ManagementandfranchisingcontractsChallenges:-Limitedcontrol“Whenwehaveamanagementhotelwedon’thavesuchcontrolandthemanagementteamonthishotel,theownerofthishotel”(C1-M)“Itisanon-goingchallengeensuringthatpullthroughhappensunlesssomethingisabrandstandard”(C5-L)-Complexmanagement“Wetrytodevelopinallhotels,butweknowthatitismorecomplicatenotonourownhotels”(C2-M)“Needalittlebitmoretimeforthefranchisedhotels.I’dsaytheorganisationisnotreallymaturefordoingthingsinthesamewayinallourhotels”(C8-W)-Struggleinapprovingandrolling-outtheCSRstrategy“Itishuge,thisisthebigissue…approvalontheCSRstrategy,itistheissueinvolvingtheownersofthehotelsonourtargets”(C1-M)“Wehavedifferenthotelsthataremanagedindifferentwaysandsomethatwecallitfranchisedhotels,forexample,theyaremoreorlessrightnowexcludedinourinourrolloutthestrategy”(C8-W)-Notsharingdata“Wedon’tsharethedatabasewedon’tsharethesystemssometimes”(C1-M)“Sometimes you don’t have the data… The problem comeswith thewithmanagement contracts. Andsometimes they’re part of our systems, that we share the systems so that we can track their

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accomplishments, but some others not. Some other types of contracts are farther away from beingintegrated”(C1-M)“Onourannualreportweexplainforeachofthemtheperimeter,butformostindicators,itisreportingfromallhotels…mostofthetimeitisforeverybody,butsometimeswiththeenergyorwater,itcouldbejustforownedhotels.It’snotthemainindicators,notthemainbutthemajorityofindicators”(C2-M)-Partialimplementationofperformancemanagementsystems“Welaunchedanewsystemforallhotelsandalsoforsometimesforcorporatebutnotforall.Wecanfollowalltheperformancewiththisinternalsystem”(C2-M)-Barriersininvestingonthebuilding“It’sabittoughertomakechangesinthebuildingsiftheownerisnotagreeingwithusandhasthesamefocusonsustainability…wehavetopayforthechangesourselveseventhoughweshouldn’tbecausewedon’townthebuildings”(C7-W)“Thechallengeforusisthatwerentallthebuildings.Soitisanothercompanyowningthebuildingandwecan’ttellthemthattheyshouldinvestalotofmoneytorebuildthebuildingstomakethemmoreenergyeffective.SoIthinkthatthechallengeforusistoconvincethesepeoplethattheyshouldinvestmoremoneyintothebuildingstomakethemmoreenergyeffective”(C8-W)Nodifference-Littleresistance“Haven’treallyhadmanychallenges,evenwithourmanagedhotelswiththeCSRstrategy.Perhapsonlyafewofthemarereluctanttoinvestthemoneythatweputaside,forourcommunityinvestedprojects,whichisnormally0.1to0.2%oftheyearlygrossoperatingrevenue.It’sonacasetocasebasis,andthereisnotenough,let’ssay,resistancefromthemanagedhotels”(C4-L)“Somehotelsareverygood,andtheyarenotourownhotels”(C2-M)-Sametreatmentindependentoftheownership“Wedon’tcategorisetheminanydifferentway.Itisjustarunofthemillexerciseforus”(C4-L)“I think it also comeswith the fact that it’s part of the brand and the ethos, and perhaps there is anexpectationevenfromtheownerswhoengage((nameorganisation))tobecomethemanagementcompany,thatthiswillhappenandthisisoneoftherequirements”(C4-L)“Sointhe(energyproject)wesawitwasmoreinanownedhotelsthatwethoughtwecouldlaunchitbutinreality,wealsohavealltypeofhotelswiththisbestpractice”(C2-M)Mitigationactions-Inclusivemanagementcontracts“Our expansion and development departments (need) to include these criteria on the managementcontractsforbeingsustainable.Otherwise,nothingisgoingguaranteethattheyaresustainable”(C1-M)“Wehaveinthecontractwiththebuildingownersandwiththefranchisedstakeholdersthattheyaregoingtoimplementallourstandardsandallourfieldsconcerningsustainabilityandenvironmentalissues”(C7-W)-Incentiveprogrammes“Weseethatboththemanagerandthechainmanagertheyhavetobemeasuredonsustainabilitytoo”(C7-W)“LaunchingsomeCSRbonuses…hopingitwillhelptoimplementsomeactionsalloverthegroup”(C2-M)Leadbyexampleinownedhotels“Sometimeswebeginwithourhotelstoproofthatitwouldbegoodforothergroupsofhotelstofollowthesameactions”(C2-M)-Educationandcommunication“Allofthesestrategiesarecommunicatedtothemanaged,franchisedandleasedhotels”(C5-L)“Tothesedifferentgroupseducatewhyit’simportant,andwhyit’shelpfulintermsoftheoverallbusiness”(C5-L)Persuasion"Inamanagedhotelwechargesomemanagementfeesforhotelexploitation.Inthemodelsofmanagementandfranchisewhatisprimeishowpersuasiveandcapableyouaretopersuadetheownertobeabletodevelopjointprojects"(C3-M)

• Categories:ConsequencesofnotfollowingsustainabilitytargetsExtinguishingmanagementcontractsifbroken“Wehave seen that some contract of the franchised hotels have been extinguished from (organisationname)becausetheyhaven’tfollowedourcriteriaforsustainabilityandenvironmentalissues”(C7-W)

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“Ifyoudon’t findaconcept…youneed toaccomplishour targetsotherwiseyouarenotgoinghavean((organisation name)) hotel brand on the entrance. Either you have this, or you cannot really ask forcommitment”(C1-M)Noteverythingcanbeabrandstandard“Noteverythingcanbeabrandstandard”(C5-L)“Someof this it’snotmandatory forour franchisehotels, forexample, it is recommended.Evenon thecommunity engagement frontwe cannot, I mean there are some things that are brand standards, forexample on the environmental performance front. Other things that are not are more flexible butrecommended”(C5-L)Notknowingifsustainabilityisabrandstandardforfranchisedhotels“WhenitcomestothefranchisedhotelsIcan’treallyanswerthat;Idon’treallyknowthat.Otherhotelsthatwemanage100%ourselves,it’sconsideredastandarditisnotaquestionofwhetherornotsustainabilityshouldbeapartofthegoalsorobjectives,it’sjustthewayitis”(C8-W)

Theme:Sustainabilitygovernance-Roles&responsibilities• Categories:Atthecorporation

Chairman/CEO-Reviewandapprovethestrategy“Thechairmanhasthefinalrightoff(oftheCSRstrategy),let’ssaytheCEO”(C4-L)-Definekeystakeholders“The key stakeholders were defined with consultation with the CEO and other key members of theorganisation”(C4-L)-Developperformancereview“Everyyearhaveafollow-up,wecoverallthedata,andthenweshareit….withtheboardofdirectors”(C1-M)Boardofdirectors-Reviewandapprovethestrategy“Approvedintheintheboardofdirectors”(C1-M)“AlwaystheboardofdirectorswiththeCSRdepartment”(C6-L)“TwocommissionsoftheboardofdirectorsdealwithspecificthemesofCSR”(C3-M)Management/executivecommitteeorExecutivecouncils-Definesustainabilitystrategyandtargets“The committee defines the targets at a regional level, and then share them with the business unitsmanagementcommittee”(C1-M)“Ithelpstodeterminetheoverallenvironmentalsustainabilitystrategy”(C5-L)“Theyarealsopartofthisprocessfordeterminingouroverallgoalsanddirections.”(C5-L)“We have a strategic planning committee that develops areas liked with reputation, governance andresponsibility“(C3-M)-Reviewandapprovethestrategy“SothatwouldbedonethroughtheCSRcommitteeatthecorporatelevelwiththeCEO”(C4-L)-Receiveannualreports“Everyyearhaveafollow-up,wecoverallthedata,andthenweshareitwiththemanagementcommittee”(C1-M)Mentioned(C2-M)-ReporttoCEO“TheyreportdirectlytoourCEO”(C5-L)

• Categories:AtthesharedbusinessunitsCSRdepartment-Definethestrategyandtargets“Partofmyjobtotryandhelpguidethemtocreatemorespecificgoalsthatwecanreportouton”(C4-L)“AlwaystheboardofdirectorswiththeCSRdepartment”(C6-L)“ReviewourCSRplan…presentittotheboardofdirectors”(C1-M)“Wes13etthetargets”(C1-M)“Partofmyjobishelpingguidetocreatemorespecificgoals,SMARTgoalswecanreportouton”(C5-L)Strategyrollout“Werolloutthestrategyandmakesurethatit’sappliedatthehotellevel”(C4-L)-Sustainabilityperformancemanagement“We’vedevelopedcalledtheCSRscorecard”(C4-L)

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“Wecanmeasureperformanceamongstthehotelsandamongsttheiremployees”(C4-L)“Everyyearwehaveafollow-up,wecoverallthedata”(C1-M)-Reporting“Wecollectallinformation,andwetakeaCSRscorefromthat,andwebenchmarkinthatform”(C4-L)“Theyallsendtous,thenwequantifythem,andthenwesendoutasummaryoftheperformance”(C4-L)“Weconsolidatethereporting”(C1-M)-Policy-making"Wearelookingatmorehumanrightspoliciesthatneedtobedeployed”(C4-L)-Socialprojects“Wehaveasocialscan,thatwecarryoutbeforewegoaheadwiththeprojects”(C4-L)-Stakeholderengagement“Stakeholderengagementworkthatwewillbegin”(C5-L)-Assistingandadministration“Sustainabilitydepartmentassistingoutthedirectorofsustainablebusiness”(C8-W)“Sustainabilitycoordinatorcoordinatinganddoingalotoftheadministrationregardingsustainability”(C8-W)Mentioned(C2-M)Externalconsultant-Materialityanalysis(C1-M,C3-M,C8-W)“Nextweektojustsetupthemeetingwiththeconsultants.Sowearejustabouttoembarkonit”(C4-L)-Reporting(includesMA)“Weusedanexternalconsultanttohelpguideustoensurethatwe’realignedwiththoseGRIstandards”(C5-L)-DevelopingsustainabilityPMS“Toolthatwasunderdevelopmenthe’sconsideredtheleadconsultant”(C5-L)-Verifydata“Anexternalcompanythatisverifyingthosedata(environmental)onaquarterlybasis”(C1-M)Mentioned(C2-M)Expansionanddevelopmentdepartments-Includecriteriaformanagementcontracts“Expansionanddevelopmentdepartmentstoincludethesecriteria,Imeantheseaspects,onthecontracts,onthemanagementcontracts”(C1-M)Managementcommittee-Definetargetsattheregionallevel,approveandconsolidatereporting“Theyconsolidatethereportingonthedifferenthotels”(C1-M)“Approvalonyourmanagementcommitteeonwhatyourtargetsare…thecommitteedefinesthetargetsataregionallevelandsharestargetswiththebusinessunitsmanagementcommittee”(C1-M)Sustainabilitygroup-Setprioritiesredirectprojects“Thesustainabilitygroupwithpeoplefromallcountries….sustainabilitygroupdiscusseswhattheprioritiesandactivitiesthatshouldbe”(C8-W)“Internalworkinggroupsthatmeetonaquarterlybasissetobjectives,identifyneeds,opportunitiesandbarriers,andredirecttheprojectsontheenvironment,humanresources,suppliers…”(C3-M)Countrybasedmanagementteam/Regionalmanagers“One person responsible for social responsibility, one person responsible for environmentalresponsibility…nottheirmainresponsibilities,theyareheadsoflargerresponsibilitiesalsoundertakingthesocialorenvironmentalresponsibility”(C8-W)-Definecorporateobjectives“Regionalresponsiblevisithotelsanddefinecorporateobjectives”(C6-L)Networks-Anetworkofcouncilsdisseminatinginitiatives“Anetworkofbusinesscouncilsworldwide…worktogethertosupportvariousissues,suchascultureforthecompany,orcorporatesocialresponsibility.Theyareoftentheones,thatarepushingthehotelstousethereportingsystemsandtosupportvariousinitiativesthatwe’vekickedoff”(C5-L)Anetworkofprogrammecorrespondentsforhotelimplementation“Having some meetings with them…they can work directly with the hotels, executive hotels, workinginternallywithcorporateteamtointegratethesustainabledevelopmentineachhotel”(C2-M)

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ACSRrepresentativeforeachchain“Havingonerepresentativefromeachhotelchainmanagement…5personrepresentatives”(C7-W)Operationalcommittee“Anoperationalcommitteethatdealswiththeseissuesontheday-to-daybasis“(C3-M)

• Categories:AtthepropertylevelGeneralmanager-Accountableforthestrategydevelopment“Eachgeneralmanagerofthehotelsareresponsiblefordevelopingtheirstrategy”(C1-M)“Havingageneralmanager…accountableorinterestedinmonitoringthese”(E4-C)Maintenanceofficer-Owningthesustainabilitydata“Controltheconsumptions…thisisreportedatahotellevel”(C1-M)“Theownershipofthesustainabilitydata”(C1-M)Environmentalmanager-Manageenvironmentalsustainability“Managesustainabilityandenergy”(C7-W)Externalcommunication“The main task of most environmental managers is greenwash, most of them are more incommunications…tryingtoavoidsomebodythingsitmightbesomethingwrongwiththeenvironmentalimpactofthecompany”(E8-A)CSRchampion-Atpropertiesandbusinessunits“TheyaresomesustainabilitychampionsofCSRbecausewedon’thaveresourcesagaintohaveanexpertineachhotel,noteveninthebusinessunits”(C1-M)-Residentmanager“TheresidentmanagerineveryhoteliswhatwecalltheCSRchampion”(C4-L)Sustainabilitycommittee/greenteamattheproperty“Rationalisingitthroughagreenteamorsustainabilitycommitteeattheproperty”(E4-C)

Technicalintegration-Strategy(7S)Theme:Strategicplanning

• Categories:Strategydefinition/revisionprocessStrategydefinitionandrevisioninput-Corporateresponsibilitymodel/commitments"In2014wemadeananalysistodefineourglobalcorporateresponsibilitymodelthatappliesitspillarstoanyregionalinwhichthecompanyworks"(C3-M)“Establishobjectivesbasedontheorganisation’stwelvecommitmentsatshort,mediumandlong-term”(C6-L)“HavingaCSRmasterplan”(C1-M)-Materialityassessment&stakeholderengagement“Theresults,well,Ithinkit’salsoagoodchanceforusnowtorealignourCSRstrategy”(C4-L)“RedirectourCSRstrategy”(C4-L)“Informourlong-termsustainabilitygoalsforone”(C5-L)“ToredefineourCSRstrategy”(C1-M)“Sawthemaintopicsforus,wehaddifferentmaterialityissuesafewyearsagosonowweknowwhatthemaintopicstoworkonare”(C2-M)“That’sthebase,orthatwasthefoundationsforourstrategy”(C8-W)“Firstly,toknowwhatprioritiesfromthestakeholdersperspectiveshouldaddressthecompany…toknowwhatthestakeholdersexpectationsare,whattheythinkweshoulddo”(C3-M)“Thestrategyisalignedwiththebusinesscallsthatwehave…wemadeanalysisofwhatourstakeholdersvalueregardingsustainabilityandfromthatwehavetakendecisions…thetriangle,inthetopinspire,inthemiddleengage,inthebottomberesponsible”(C8-W)“Aroundthattimewewillalsobedoingstakeholderengagementasinitialprocess…thereisaverygoodchancethatwillhelpinformanykindofadjustmentsneededtolong-termsustainabilitygoals”(C5-L)“Wishingtohavedonemoreformalprocessbeforeresettingthesustainabilitygoals,atleastisaroundthesametime”(C5-L)-Benchmarking

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“Doing a corporate benchmark with other sectors to wide our image in the hotel structure aroundsustainabledevelopment”(C2-M)“Lookingatwhat themostcritical issuesare for thebusiness, lookinghowtoaddress them, lookingatoperationalefficiencies”(C5-L)Waystodoit-Meetings“Exchangingalotwithdifferentdepartmentsincontinuousmeetingsandlaunchingsomeworkinggroups”(C2-M)“Regular meetings on the new strategy, new KPI commitments, defining the main topics on thecommitments, puttinga quantitative target, packaging this andmaking the strategycomprehensive forinternalteamsandexternalpeople”(C2-M)-Usingaconsultancycompany“Resettingoursustainabilitygoalswasanexercisewedidwithaconsultancycompany…workingwith80differentpeoplefromacrossthecompany,disciplines,andgeographies,determiningfocusareas,askingthemtoconsiderasaproxywhatotherstakeholdersmightseeaskeyareasofopportunityorrisk”(C5-L)-Generalmanagerdevelopsthestrategy“Theneachgeneralmanagerofthehotelsareresponsiblefordevelopingtheirownstrategy…noneedtodiscusseachtargetorobjectivewitheachhotel…wouldbeanightmare,orwitheachbusinessunit”(C1-M)

• Categories:Strategyroll-outEstablishingobjectives"We establish objective for each regional, establish objectives for the hotels, set goals from top tobottom"(C3-M)“Havingspecifictargetsundereachfivekeyareasandtyingtargetstoyearlykeygoals”(C4-L)“Something set at the corporate level is approved by the board of directors and the managementcommittee…thendevelopthestrategyatbusinessunitlevel…identifyingtheCSRplanforthebusinessunits,settingthetargets”(C1-M)Cascadingdown“Thestrategycascadesdowneach,regionalimplementsanddevelopsthemodelbasedontherealitytheylive.Notalltheregionalonesdevelopatthesametimeandthesamespeedandintensityallthepillarsofthemodel.Objectivesareset,andtheprojectsareadaptedtotherealityofthedestination.”(C3-M)“Cascadingdownkeygoalsathotellevel”(C4-L)“Rollingoutthestrategy,makingsurethestrategyisappliedatthehotellevel”(C4-L)“Deployingtothehotel”(C1-M)“Leaders from each of those disciplines as the green environmental council had people representingeverythingfromoperationstolegaltohumanresourcesandcascaderesponsibilitydowntopeoplewhoreporttothemandheldaccountable,resettingtheoverallenvironmentalandsocialgoals”(C5-L)Waystodoit-Meetings&emails“Alwaysthroughface-to-facemeetingsande-mails”(C6-L)-Touringtohotels“Going to go on tour next year to every hotel…traveling to our nearly ten gatherings in each country,trainingtheminthenewstrategy,teachingthemaboutthenewenvironmentalobjectives,informingthemaboutotherstrategyprojectsandsustainabilityissues,informingaboutothertopicsnotonlyenvironmentaltopics…iftheyhavegoodideasorsuggestions,wecanworkwithwewouldliketoknowit…fromeachhotelmustattendatleasttwopersons,themanager,andtheenvironmentalcoordinatorbuttheycansendotherpeopleiftheywantto…somehotelshaveanenvironmentalgroupanditisokifthewholegroupcomesalong”(C7-W)-Orderingcommitmentswithpillars,stakeholdergroups,anddepartments“OrderingeachcommitmentwithpillarswiththestakeholdersandknowingforsomeofthemitwillbemoretheprocurementteamwhichwilldeploytheactionswiththeKPIswhileforothersisthemarketingteamsonpartnerships”(C2-M)-Factsheetsonconcreteactions“Wehavefactsheetoneachconcreteactionforhotelstolaunch.Thebighotelcanlaunchitbypillars,thehumanresourcesmanagercanuseitforeachtopicorF&Borthetechnicalservice.”(C2-M)

• Categories:Reviewingstrategy“Veryad-hoc”(C4-L)“Lookingatwhetherthesettargetsareachievedornotandareaswherearefallingshort”(C4-L)

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“Hotelsevaluatetheiractions,identifyingwheretheyarehavingabiggerimpactandimprovingitsscores.Evaluatingthecompanynetwork,thenetworkorganisingsomeeventsandinvitingallsitestoprogress”(C2-M)

• Categories:Monitoring“Everyyearhavingafollowupcoveringallthedata,sharingitwiththemanagementcommitteeandtheboardofdirectors…seeingwhoisfollowingandwhoisnot…Needtocorrectthebehavioursthatarenotfollowing,helpingwithnotfollowinghotelstomakeitreal…Firstneedstounderstandwhattheyarenotfollowing and why…needing to have a dialogue with managers…you check…if something out of theircontrol…weneedtoelevate”(C1-M)

• Categories:SDGsNew“Somethingthatwe’realsowe’relookingtodiscussnextweek”(C4-L)“Thesustainabilitydevelopmentgoalsarestillquitenewtous”(C8-W)“TheSDGsschemewereofficialafterwedidourstrategy…Weareawareofthemnow”(C8-W)Amatterofpackagingit“Manyofourinitiativesfallunderoneofthegoals.Itisjustamatterofpackagingit,lookingatexactlywheredo they comeunder,and thenhowwe can report back to those aswell,without incurring huge extraworkload”(C4-L)Vague“The sustainable development goalswhich some of them are concrete,most of them are pretty vagueactually”(E8-A)“IthinktheSDGsareonaveryhighlevel”(C8-W)Nochanges"inretrospect,wouldwehadadifferentsetofstrategieswehadknownabouttheSDGsbefore?I’dsayno…Iwouldn’tsaythatitwouldchangeourstrategywehadknownaboutthemearlier”(C8-W)Value“Shouldbethegeneralvaluetolookat,tostartwith.Thatshouldbepartofthegoalofthehighestlevelofmanagement”(E8-A)Withoutincurringinextrawork“Withoutincurringinhugeextraworkload”(C4-L)

Step1.IntegratingsustainabilityintotheBSC:Technicalintegration-Systems(7S)Theme:Performancemanagementsystems’useandsustainabilityintegration

• Categories:Use“Intermsofcontrol,IthinkwedothatfundamentallythroughtheCSRscorecard”(C4-L)“CSR scorecard using it on a yearly basis…updated according to the new targets set in place…updatedaccordingtotheCSRstrategy.Everyhotelsubmitsbacktoheadofficetwiceayear,tomeasureperformanceamongsthotels,tomeasureperformanceamongstemployee”(C4-L)“UsingtheCSRscorecardtocascadedown”(C4-L)“Benchmarkinghotels…capturingtargetsinkeyareas(e.g.,volunteerism,utilitiesconsumption)”(C4-L)“Verydetailed…forexample,howmanynewsustainableseafooditemsyouhaveonyourmenu,howmuchwastehaveyousaved,howmuchrenewableenergyhaveyouintroducedthisyear”(C4-L)

• Categories:Separationvs.integrationTool(s)-Multipletoolsforsustainability(C2-M,C3-M,C4-L,C5-L,C7-W,C8-W)“Wedon’thaveageneralsystemweonlyhavemanysystems”(C2-M)“It’smoremaintenancewe launched itwith the technicaldepartment…somesocialandenvironmentalperformance”(C2-M)“Wehavemultiplesystemstomeasuredifferentthings”(C3-M)“Variousdisciplineshaveinvestedintheirownsmaller,boutiqueplatforms,andordevelopedtheirown.Andthat’showwemanagetrackingandreportingoutofperformance”(C5-L)“Iwouldsaythattherearedifferentkindsoftools,whenitcomestosocialsustainability…andasystemcollectingdataregardingenvironmentalsustainability”(C8-W)“Wehavedifferenttoolsoffollowinguptheseindicators”(C8-W)-Onetoolforsustainability“It’smanagedseparatelyinaspecifictool”(C1-M)

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“TheCSRscorecardisacompletelyseparatetool”(C4-L)-Lackofageneraltoolforsustainability“Wedon’thaveaspecifictool”(C6-L)-Onlyenvironmentaltool“Internalsoftwaretomeasureenvironmentaldata”(C6-L)Degreesofsophistication“Someofthemarenotasdevelopedasothers”(C5-L)“Engineeringteamisclosetoconfirmingtheuseofamuchmoresophisticatedsystem…totrackontheirengineeringdata”(C5-L)-Excel“PutsusinadifficultpositionwereeverythingisdoneinternallyonExcelsheets”(C4-L)“SomeareasarestilldependentuponthingslikeExcel,whichIdon’tthinkisthebestsolutionatall,andweareawareofthat.Butinthemeantime,wedoaninternalaudittoensuretheaccuracyofourdata”(C5-L)“WeuseExcelfortrackingcommunityprojects…wedonotmeasureimpact”(C6-L)Awarenessofcurrentdeficiencies“Wearebehindonthebestpracticesdefinitely”(C1-M)“Excel,whichIdon’tthinkisthebestsolutionatall,andweareawareofthat.”(C5-L)“Wehavetomakethesustainabilitytoolsthesametoolboxastheothertools”(C7-W)

• Categories:CurrentsustainabilityintegrationNoorganisation-widesystemtointegratesustainabilityintoit.(C1-M,C2-M,C3-M,C4-L,C5-L,C6-L,C7-W)“Wedon’thavethereportingsystemforfinancialandnon-financialissuesallintegratedyet”(C1-M)“It’snotonlysustainabledevelopment.Eachdepartmenthavetheirowntool.”(C2-M)“Wehavedifferentsystemstomeasuredifferentaspects”(C3-M)“It is separate…a question that asks the guests: do they feel that the hotel does good things for theenvironmentandthesociety?…feedsbackintowhatwecallourguestloyaltyindex,andthat’spartoftheoverallhotelperformance”(C4-L)“Thesevariousdisciplineshaveinvestedintheirownsmaller,Icallthemboutiqueplatforms”(C5-L)“Simplywedon’thaveadefinedtool”(C6-L)“It’saseparateoneuntilnow”(C7-W)Organisation-widePMSwithsustainabilityintegrated:“I’dsaythatitisinvolvedintheoverallperformancemanagementsystem”(C8-W)Futureintegration“Activelyworking in the integration of all our systems, Imeanwedon’t have the reporting system forfinancialandnon-financial issuesall integratedyet. Sowecan,butwedon’thave thematurityyet.Butdefinitely,itwillcomeinthefuture“(C1-M)“Nextstepswillbeintegratingthefinancialandnon-financialreportinginonetool”(C1-M)“Ithinkinthefuturewewillhavethis,andwewantaveryoperationalandreallyintegratedonthetaskplanning.”(C2-M)“Weareworkingtowardshavingabusinessintelligentmacro-projecttointegratealltheinformationfromCSRthatrelatestothebusinessforallthecompany”(C3-M)“Somethingweareworkingonnow”(C7-W)

• Categories:Opposingviewsonintegratingsustainabilityintotheorganisationwide-PMSAdvocacyforseparatesystems“There are some software that tries to aggregate everything, andmaybe therewill be something thataggregateslotsofpiecestogetherinadashboardformatforallsoftwareacrossthebuilding,butIstillhavemydoubts”(E4-C)Operationalanduser-friendlytools,notintegration(C2-M)“Itdependsonthesystemandshouldwehaveabigsystemveryoldortoobigandnotoperational.Ithinkthemaintopicistohavesomeoperationalsystemsreallyeasytouse“(C2-M)“Idon’tthinktheproblemistohavealotmanytools…Butthechallengeistohaveatoollinkedwitheachjob.”(C2-M)Requirements:-Topmanagementpriority“Theboardofdirectors,oryouknowthoseinseniorpositionswoulddeemimportantenoughtobeplacedamongstthefinancialkindoftargets”(C4-L)-Increaseawareness

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“Thateverybodyunderstandsthatitcreatesvalue.Soagain,it’saquestionofbeingconsciousthatthisispartofourbusinessstory”(C1-M)-Solvemeasurementchallenges“Itiseasiertomeasureeconomicandfinancialaspectsthanenvironmentalandsustainabilityissues.It’shardtofindtheindicatorsinthese…itisnoteasytoknowifyoumeasurehowmuchengagementthehotelsareallocatingandit’shardertomeasureinmanycases”(C7-W)Advantages:-Ensureaccuracy“I see the value in usinga larger systementerprise-wide to ensureaccuracy, not just in terms ofeachdiscipline,butacrossregions…muchbetterifthey’reusingthesystemtherethecentralreportingexactlythesamefashion,nomatterwhatregionthey’recominginfrom,andthenaggregatingthedata”(C5-L)-Understandperformance“Theadvantageisthatyoufinallyunderstandyourperformance,yourbaseline.Youcanbenchmarkyourselfwithpeerssimilartoyouintheindustrysoyoulearnbetterhowmuchyouneedtoimproveandhow”(E5-C)-Easiermanagement“Ifyouhavedifferentsystemsitwouldbeunsustainabletomanage”(E5-C)-Protectsustainabilityfrombeingside-linedfromthemainstrategy“Ithinkthereisalwaysariskifyouhaveseparatetoolsfordifferentthingsintheorganisationoriftheydon’thavegoodintegrationbetweenthem,wemayhaveasituationwhereyou’renotreallygoingtowardsfulfillingthestrategyyouhad”(E7-A)-Movingtowardsfulfillingstrategy“The system should encompass across different departments, and it should be embedded within thebusiness practices of the company as well, so it should not be left outside. You know just only as asustainabilitytool.Whatyoumeasurethroughsustainabilitymanagementtoolisitshouldbepartofyourbusinessdataforperformance.”(E5-C)“I think it shouldbe integrated… I think that financialperformance,qualityperformance, sustainabilityperformancethosethingsshouldbeintegratedtheywouldendupbeingdifferentmeasuresofcoursebuttheyhavetoworkasawholeintermsofmovingtheorganisationtowardsfulfilmentofgoals.”(E7-A)“Thereisaneedforintegrationbetweenthosesystems”(E7-A)“Ithinkyoumustalwaysintegrateintothefinancialmanagement….Soforthebigchainsisreallythebighotelchainsit’sreallyimportantthattheyintegrateit”(E8-A)

• Categories:IntegratingPMSandreportingNointegrationbetweenreportingandperformancemanagement“Abigdifference is reporting isgenerallydonebecause it’s requestedbyanexternal stakeholder...Butnobodyisusingthereportsasaperformancemanagementtoolliketheywouldwithsomethingelse.”(E4-C)“No,theyreallyseeitassomethingadditionaltheyhavetodobecauseothersdoit”(E8-A)

Theme:Performanceevaluation• Categories:Controlandmeasurementsystems

“Weobviouslyhavesystemsforgatheringinformation,wecannotmakedecisionswithoutinformation”(C3-M)“WeusetheNetPromoterScore,howourcustomersevaluateourreputation,howresponsibletheythinkweare”(C3-M)“InternalCSRinformationcollectionsystem”(C3-M)“Dataacquisitionchannels…informationfordecision-making,measurementsystems,controlsystemsandmanagementmonitoringsystems”(C3-M)“Systemfollowingup(environmentalsustainability)ongroupleveltheconsumption”(C8-W)

• Categories:MeasurementdifferencesTargetingstakeholders-Differentmeasuresfordifferentstakeholders“Internalonesaremorethingslikestakeholdersarenokeentoknowabout.Sohowmanyhoursdidyouspendonaspecificthemedvolunteeringactivity.Thatwouldbesomethingthatourinternalstakeholders,employees,wouldbeinterestedtoknowabout.Andthenyouhavethemoredetailedinformationonyourwater,energy,CO2footprintthatyourexternalstakeholdersneedtounderstandbetter.Whereasinternally

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you justneed toknowwhetheryou’vemet the targets,ornot, for theyear…what relatesback toeachstakeholderset,Iguess”(C4-L)“Beinganaturalprocessrelatingbacktoeachstakeholderset”(C4-L)“Engineeringhasadifferentwayoftrackingperformanceinternallythantheydointermsofsomeoftheseexternalreportingindicators”(C5-L)“Reporting out on greenhouse gas emissions numbers so much internally…. It makes more sense tocommunicatetothemaround,totalenergyusespeciallyifyouaretalkingallthewaydowntothelevelofourpropertieslevelengineers”(C5-L)-Differentlevelofdetail“IfwehaveadifferenttypeofreportingthenprobablybutwithGRIwedon’tneed,Imeanit’sverymuchaligned”(C1-M)“Wehavetomakereportingandcommunicationalittlebitmoredetailedsothehotelsactuallycanseehowtheyaredoingcomparedwiththeotherhotels.Externallywedon’tgotothatdetaillevel,andwetalkaboutmoretheperformanceonthewholechain”(C7-W)“Sometimesweconsolidatesomedata,butalotofthemarethesame”(C2-M)“Indicators internally, there is awider range of indicators, onKPIs thatweuse. Externallywewant tonarrow itdown tocommunicatingon fewer indicators…internally theyaremoredetailedFor instance,internallywefollowuphowmanyhotelsstillusegasstallsbutthatitisnotsomethingthatwecommunicateexternally”(C8-W)-Countrydifferentiations“Howdoyouevaluateinonecountryiscompletelydifferentfromanothercountry”(E7-A)

• Categories:Consolidatingindicatorsforexternalreporting“Indicatorsfor internaldecision-makingandexternalreportingdonotdiffera lot,weconsolidatesomedata,butalotofthemarethesame”(C2-M)“Aggregatedandconsolidatedbutnotdifferent”(C1-M)“Internallymakingreportingandcommunicationalittlebitmoredetailed…externallytalkingaboutmoretheperformanceonthewholechain”(C7-W)“Alotofthedatathatwe’vecollectedwe’vebeenabletouseforexternalreportingpurposes”(C4-L)“Wehaven’t identifieddifferent indicatorsfor internalmanagementthanforexternalreporting.No,notreally.Wehaveitthemaggregatedandconsolidated,buttheyarenotdifferent”(C1-M)

Theme:Rewardssystems• Categories:Incentiveprogramme

Forwho:“Fortheresidentmanagerineveryhotel”(C4-L)Purpose“BecomefamiliarwiththeCSRstrategy”(C4-L)“Hopingitwillhelptoimplementsomeactionsalloverthegroup”(C2-M)“(Atthebeginning)beingagreatcommunicationprogramfortheissue”(C1-M)“Abigtransformationforthecompanyculture…completelynewinthecultureofthecompany”(C1-M)What“Linkedbackwithbenefits”(C4-L)Noincentiveprogramme“Ifyouhavegoodsustainabilityworkthatwillimplyyoureconomicresults,bydoing,sothereisnoneedforsustainabilitycompensationsystem”(C8-W)“Inqualitycriteria,thereisnothinglinkedtoenvironmentorsustainability”(C6-L)“Nowhavingthetargets,allexpectyourtargetsonenvironment….wouldbeveryhelpful…butsomeotherprioritiesinthecompanyneedtobeincentivised”(C1-M)Planninginthefuture“Planningtostartwithincentivecompensationssystemsinthefuture…hotelmanagermustscorewellonallthis8criteriatogetthebonus.”(C7-W)

Theme:Othertools• Categories:Sustainability–relatedpolicies

Controlpurpose“Deployingnewpoliciesforcontrol”(C4-L)Topics-Humanrights

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“Definitelynewpoliciesforexamplejustlookingatmorehumanrightspoliciesthatneedtobedeployed”(C4-L)-Environment“Weonlyhaveanenvironmentalpolicy…wearealsogoingtomakesustainabilitypolicies”(C7-W)-Suppliers“Wehaveacodeofconductforoursuppliers,andwearealsogoingtomakeapolicyconcerningwhichsuppliersandhowwearegoingtobecomebetterinhowinvestsuppliersinmoresustainablepractices”(C7-W)Structure“Wearethinkingaboutmakingonetoppolicyandmakesome,maybethreeunderpoliciesandeachhotelchainwillmaketheirownhotelpolicies”(C7-W)Externalassistanceindevelopingpolicies“Contacting some consultants concerning policieswe are going tomake…feeling a little bit extreme inmakingthosepoliciesinthelongrunasthelastpolicythatwemadewasalittlebitnoconcreteenough”(C7-W)Challenges“Havingasoundprocurementpolicy”(E1-O)

• Categories:Externalaudit“Controlfromanexternalauditoronasampleofhotels”(C2-M)“Externalauditvisiting23hotelseveryyearandtheheadquarterstoseeifwedeservethe(environmental)certificates”(C7-W)“Fromenvironmentalcertifications”(C1-M,C6-L)

• Categories:InternalauditDataaccuracy“Eachhotelhasinternalenvironmentalaudits”(C7-W)“havingqualityassurance…83employeetravellingandvisitingallourhotelseachyear…bigpartofthevisitbeingsustainabilityandenvironmentalissues”(C7-W)“Meantimewedoaninternalaudittoensuretheaccuracyofdata”(C5-L)Managers’self-audit“Self-audit regarding social sustainabilitywheremanagers are asked a bunch of questions…. Self-auditmanagersfillinonceayearwithabunchofquestionsconnectedtothestrategyandsystemcollectingdataregardingenvironmentalsustainability”(C8-W)

• Categories:Environmentalcertifications“Importanthavingeco-labels”(E8-A)Benefits-Aligningtheteam“Beingalignedwiththeexternalcertificationshelpstoinvolveourinternalteam”(C1-M)-Roadmap“Certificationshavearoadmap…easiertodefinewhatactionsaretobeimplemented”(C1-M)“Based on the TravelLife certificate we organise the follow-up meetings and implementation of theenvironmentalmanagement”(C6-L)-Sellingtoconsumers“Helpingtosellthehotelstotheclients”(C1-M)“Consumerswillwantthiskindofthird-partyassurance,calliteco-labelorsomeothercertificate,crediblecertification…theyreadthosereports,processedalltheinformation,theygiveyouassurancehotelsaregoingok”(E7-A)Issues:-Disparity“If you look at those labels they have different parameters, different issues, different detail, often notquantifiable,justisthereamanagementreport?Istherearegulationwithinyourhotel?Areyouinformingyourguestsaboutsomething?Whatistheeffectofallthiswork?”(E8-A)-Missingkeyissues“Basicthingsarejustacoupleandaregenerallymissing”(E8-A)-Nottransparentresults“Almostneverrequiredinsuchschemes,certainlynotasapublicnumber…butthenkeptbytheNGOinsteadofpublished”

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Cognitiveintegration-SharedValues(7S)Theme:Approachtoperformancemeasurementandmanagement

• Categories:InternalreportingClosedreporting“Individualhotelscannotseetheperformanceoftheotherhotelsinsustainability”(C1-M)“Onlythecorporationatgrouplevelseestheresults”(C8-W)“Betweenthem(hotels)no,theyneedtowaitforthereport”(C6-L)“Hotelscannotcomparetheirscorewiththe355eighbourhotels”(C2-M)“Hotels can ask if theywant to, the network has all the resources, so if they want they can give theinformation”(C2-M)“Givingabenchmarkbycountry,somereportswithsomedetails”(C2-M)

• Categories:MotivationsforusingasustainabilityPMSPerformanceimprovement“Itwasmorethestrategyissues. Imean, isthatweapprovedthatwewantedtobecommittedwiththeenvironmentortheCSRingeneralandwesetourstrategictargets.Andoutofthis,itis4easiertohavingthereporting.Butreportingcannotbeareason.Imeanreportingispartofyourcommitmentsforbeingtransparent”(C1-M)“Ifwedon’tmeasurewedon’treduce,wedon’taccomplish.Soitiscriticaltohavetheindicators”(C1-M)“Ifyouwanttohavegoodresultsonsustainabledevelopmentreallytohavesomedatabaseinordertomeasureyourprogress”(C2-M)“Therewasfinancialtroubleinthemiddleofthe90s,andtheydecidedtotakeactiontocostsandonefieldthattheysawthattheycoulddothatwasthefieldofenvironmentalsustainability,cuttingtheenergycosts,forexample,…theyalsosawthatthisheavilyconnectedtosustainability.”(C8-W)“Nowweabsolutelyseethebenefitontheinternalside,evenmorethantheexternalsideintermsofdrivingperformance”(C5-L)Reportinginfluence“Initiallyitwasmoreaneedforexternalreporting”(C5-L)“Sincewe’refollowingtheGRIIwouldwaythatisheavilyontheexternal”(C8-W)Mixed“A bit of both: internal decision-making and external reporting…It’s a demand from all, not all frompartners”(C7-W)“It’sboth.Wetrytorespondtoexternalrefereeship.ButIthinkthemaincriteriait’stobealignedwithourstrategyandwiththecommitments”(C2-M)“Iwouldnotdaretosay;Ibelieveitshalfinternaldecisionmakingandhalfexternalreporting”(C6-L)“Theselectionof indicators is influencedbybothreportingrequirementsand internaldecision-makingneeds”(C2-M)Measuringperformance“Initiallyforinternalpurposes,measuringperformance,understandingareasforimprovement,identifyinglackingareas,steeringthehotelstowardswhichtargetswewantthemtoachieveduringtheyear”(C4-L)Communicatingefforts“Thisyearaboutcommunicatingourefforts,forexamplehowmanysuccessfulCSRcampaignsdidyouholdandwhatwastheimpact”(C4-L)

• Categories:InitialmotivationformeasurementsandchoiceofindicatorsHandlingthingsthatcomeup–notstrategic“Howweneedtohavealargerplatform”(E4-C)“Howweneedtoroll-upprogrammes”(E4-C)“Howweneedtodeveloppartnerships”(E4-C)“Howweneedtoachievelargerandboldergoalssuchassize-basedtargetsorsustainabledevelopmentgoals”(E4-C)“Thebigcorporatediscourseisjusthandlingallthedifferentthingsthatcomein”(E4-C)“Inmanyorganisationsisnoteventhoughtoffthestrategiclevel”(E7-A)“Oversimplifyingthatacompanyjustgoesandsetsasustainabilitystrategyandhasitsinfluencesit’sjustrealisticallyinthedaytodaytosustainabilityitdependsonwhat’sthatsustainabilityofficermadeofandwheredidtheycome”(E4-C)“Notusedasatransformingforceintheorganisation”(E7-A)“Manycompaniesthinkthatsustainabilityislikeanicetohave…don’treallyseethatsustainabilityisaisabigpartofthebusiness”(C8-W)

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• Categories:CorporatediscourseShallowunderstanding“Thediscourseisreallythesameithasbeenforyears”(E4-C)“Justageneralbasicunderstandingofgreenorsustainabilitybutnevergoinganydeeper,neveradvancingasmuch”(E4-C)“Certainpropertiesincertainplacesexcellingandbecomeleaders”(E4-C)“Thebestmajorityjustsortofwaitingaroundforsomethingtohappens”(E4-C)“Thebareminimumthatwedotostaylegitimateandaddresstheissuesthatthepublicandthecustomers”(E7-A)

• Categories:PropertydiscourseWidespreadphilanthropy“The social pillars of sustainability are very much implemented in the hospitality industry… a lot ofcharitableprogrammes”(E5-C)“Ithinkthatistheeasiestpartofthisimplementationofsustainabilitythatweseeintheindustry”(E5-C)“It’sjuststandalonephilanthropy?Whichisallverynicebuteverybodycanchuckyou”(E1-O)“Thesocialsustainability,sothatisverymuchdeveloped”(E5-C)Limitedenvironmentalissues“Environmentalsustainabilitywearestillbehindotherindustries”(E5-C)

• Categories:IssuesaddressedWastemanagement“Understandthatdefinitelywasteisabigissue.Andprobablyisthenextstep”(C1-M)“Themostdifficultonetoimplement,todeployatalocallevelandthemostexpensiveone”(C1-M)“Mostdifficultproblemsthatthehotelsarefacingnowisthemonitoringandreductionofwaste,especiallyindevelopingcountriesinislandsresorts,becausethereisnoinfrastructuretosupportthatadequately”(E5-C)“Butifyouareataplacewhereisnothingorganisedthenitcanbeachallengeorifthatisorganisedinabadwaymaybewasteiscollected,butdisposalmaybeinaveryirresponsibleway”(E8-A)

• Categories:UrgentissuesCarbonfootprint“Identifyingwhatarethetargetsatahotellevel…carbonfootprintratios”(C1-M)“Energyconsumptionandenergyreductiononlymatterbecauseenergyhasacarbonfootprintattachedtoit”(E4-C)“Havinghotelsingeographicallocationsinfluencethepotentialforcertaincarbonfootprint”(E7-A)“Themainissuebeingcarbonfootprintperguestnight”(E8-A)“Providingthecarbonfootprintnumber”(E8-A)

Step2.Recognisingstakeholdervalue(Inclusiveness&Responsiveness):Technicalintegration-Systems(7S)Theme:Stakeholderengagement

• Categories:Unclearstakeholderconcept“Developingthewholeprocess…couldputpeopleoffabit”(E1-O)“Stakeholderisakindofaveryencompassingconcept…Immediatelymakesitahugecrowdandnotverypracticalfororganisations”(E7-A)

• Categories:Stakeholderengagementcomplexity“Prettysophisticated”(C1-M)Localperspective“Howdoyoumakeitlocallyrelevantwithoutmakingahugeoverdealtogetthatinformation”(E1-O)Inwardlooking“It’sveryinwardlooking”(E1-O)“That’sstakeholderengagementtoadegree,butit’snotyouknow,youthink,ithastohavesortofbroadergroupsratherthanyouknowseeinghowgoodyoulook”(E1-O)“Anextensivelistoftopicsofallkinds, fromtopicsrelatedtostrategicbrands,productservice,growth,financial results, environmental aspects, human resources, good subjects related to people, talent,employability,sotheyreturnthisquestionnaire”(C3-M)Obligationtoact“Onceyou’veaskedaquestiontosomebodyyouknowyoucannothearthatanswer”(E1-O)“Thereisanobligationthenyoucouldsaytoactonthis”(E1-O)

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“Wetrytorespondtoalltheseexpectations”(C3-M)Trust“Iwouldthinktrustmaybeoneissue”(E7-A)“BusinessandNGOsnotspeakingthesamelanguage.Thereareculturalbarriers,andthetrustissueiswhenthosetwosidescomeonthetable”(E7-A)

• Categories:IndustrycollaborationCollaborationinsteadofcompetition“Collaborationaroundissuesthatwebothseeinterestinourcompanies,andworkingtogethertoaddressthem”(C5-L)“Atanindustrylevel?Continuedcollaborationaroundkeyissues(i.e.,water,carbon,humanrights,youthemployment,etc.andagreeduponmetricsandindustrygoals”(C5-L)“Webelieveinalliances,wereallybelieveincollaborationandtheseissueswebelievethatismoreaboutcollaborationthanincompetition.Andthatwereallyelevatetheimpactsontheinitiatives”(C1-M)“Wereallyseethatinseveralotherareastocooperateinsteadofcompeting”(C7-W)“Collaborating”(C2-M)“Ibelieveitisimportantandithastobedone”(C6-L)“We put together () which you know develops some further guidance for properties and … it’s justinvaluabletoengagewithstakeholders”(E1-O)“Seethekeyissuescollectivelytotheindustry”(E4-C)“Needtohaveeverybodytocometogetherandunderstandsomeofthesekeyimpacts,thesekeyissuesthatweneedtofocusonasanindustryandthenbasedonthose,everybodyneedstoactonthose”(E4-C)Conditionsforcollaboration“Cooperationiswithothersthatareatthesamelevelasus…hardforustoworkwiththembecausewefeeltheyaretheonlyonesbenefitingfromit”(C7-W)Processfacilitators“Theyneedsome facilitators for theprocess, theprocessnot tobeone-on-one levelbutaroundbiggeraroundatablethatthechallengesandissuesthatallofthemfacewouldbediscussedthen,wouldreceivetheimpactfromdifferentparties.”(E7-A)Stakeholdercollaboration“Whatmustbetakenintoaccountisthattoensurethesustainabilityofadestination,notonlythewillsorstrategiesofprivatesectorcompaniesinfluence,butthatthereisaneedforconfluenceamongthepublicactors,theprivatesectorandsociety”(C3-M)

• Categories:BroaderengagementOpportunity“Showpotentialforexpandingstakeholderengagementbeyondanygroupsthattheymightbeworkingwithrightnow”(C5-L)“Themorethisprocessgetsabitmoreformalised,themorewe’llbeabletoidentifyanextendedcircle”(C5-L)“Greatopportunity…dependsonwhetheryoucanafforditornot…howfaryouwanttoreachversusyoucanaffordtoreachonthat”(C1-M)“Expectingmoreabouthowtoworkwithstakeholders”(C7-W)Notopportunity“Don’tidentifyonemorestakeholdertoincludeatthemoment”(C2-M)“Notreally”(C8-W)

• Categories:Process-characteristicsInformal“Wedon’thaveoneinplace.It’smoreofaninformaldiscussion”(C4-L)“Long-termrelationshipswithvariousstakeholderssoImeanmaybeitisnotformalisedinsomesortofadocument,buttheyareverymuchawareofwhomtheyneedtobeworkingwith,intermsofstakeholdergroups”(C5-L)“No,notreally”(C1-M)“Thelatermoreintuitiveprocess”(C8-W)“Adhoc”(C6-L)Inwardlooking“It’sveryinwardlooking”(E1-O)“That’sstakeholderengagementtoadegree,butit’snotyouknow,youthink,ithastohavesortofbroadergroupsratherthanyouknowseeinghowgoodyoulook”(E1-O)

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Formal“Structured and established ... model of dialogue to express commitmentwe havewith them and thechannelsandtoolsthroughwhichwemaintaindialoguewiththem”(C3-M)“Witheachstakeholdergroupadialogueismaintainedusingmultiplechannels”(C3-M)“Notallareasofthecompanymaintainadialoguewiththestakeholders,thedifferentareasmanageanddirectthedialoguewiththesestakeholders.Thecorporatelevelmonitorsandcoordinatesthedialogue”(C3-M)

• Categories:ToolsExternalconsultation“Wehadaconsultantcomein…theyweretheoneswhocarriedoutaninitialstakeholderengagement”(C4-L)“Weusedanexternalconsultanttohelpguideus”(C5-L)“withanexternal,thattheyareexpertsonthisofcourse”(C1-M)“Thecompanythatweconsulted…duringthisprocess”(C8-W)Stakeholdermap“Wehaveamapofstakeholders”(C1-M)“Wedidamapofourstakeholders”(C8-W)

• Categories:CriteriaRevenue“Whichstakeholderlistedandalsothedistributionofrevenueassociated”(C2-M)“Becauseof the impact inourbigpercentageonour invoice insystems… this is theprioritization, theamountofbusinessthatwehavewiththem”(C1-M)Businessmodel“Quiteobvioussomeofthestakeholdersareshareholdersofcourse”(C8-W)“Withourbusinessmodelweknowwhicharethestakeholder”(C2-M)Influence/impacttobebusiness“Peopleorbusinessthatinfluenceourbusiness”(C8-W)Alignmentwithcompanyprojects“ifalignedwiththecompanyprojects”(C6-L)Relationship“Workingwiththemforseveralyears,soitwasquiteobviousthatweshouldincludethem”(C7-W)Stakeholders’commitmenttosustainability“Thecommitmenttosustainability”(C1-M)Doesnotknow“Tobehonest,Ican’treallytellyouthat,becauseI’veneverundergonetheprocess”(C4-L)Confidential“Thisisconfidentialinformation,Icantellyousomeverygenericaspects,butthedetailoftheprocessisconfidential.”(C3-M)

• Categories:AttitudestowardsNGOsReactiveattitude“Theyaresuggestingthatwee:wedothingslikethis”(C7-W)“Whatwearetoldbyourcollaborators,NGOsaskforcollaborationonspecifictopics;thenweevaluateifthecompanywantstoworkwiththemornot”(C6-L)Proactiveattitude“Socialscan,thatwecarryoutbeforewegoaheadwiththeprojects,sothehotelswillusethiskindoftoolkittogooutanddoasocialscanontwoorthreebeneficiariesthattheyliketokindofengagewith”(C4-L)“Firstwedefinetheproject,andwhenwedefinewhowithwecandotheproject,withwhichpartners”(C1-M)

Step3.Determiningenvironmentalandsocialexposureofstrategicbusinessunits(MA):Technicalintegration-Systems(7S)Theme:Reportingguidelinesadopted

• Categories:Quality(GRIprinciplesforreportquality-5outof6notfulfilled)(Im-)Balanced(biaseddisclosure)“Thechildpresentsinformationinthewayitsuitsthechild”(E2-R)

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“Theannualreportorwhenevertheyreporttoshareholders…itislikeachildthenyearsoldwritingtotheparentssayinghowitsdoingatschool.Andevenifitsdoingyouknowbadlyatmathematicsatschoolitwillnotsaythat;itwillsayIamdoingwellatsports”(E2-R)“Thechildpresentsinformationinthewayitsuitsthechild”(E2-R)“Hadforyearssituationswerecompanieswerereportingonthingsthattheyareperformingwellonandamendingtheinformationweretheyarenotdoingsowell”(E7-A)(In-)Comparable“Vagueorkindoffullyhopefulintermsoflanguage,providingmetricswouldbemorehelpfultoinvestors”(E3-R)“Alotofinformationisqualitative,there’snotmetrics,andeveniftherearemetricsthemetricsareeasilyreportedindifferentunitsoverdifferenttimeframes,soitsreallykindofhardjusttellwhichcompaniesareactuallymakingprogress”(E3-R)“Doneinmanywaysandinmanydifferentqualities”(E6-C)(In-)Accurate“Notgreatdisclosurebyhospitalitycompaniesonsustainabilityissues,soit’sreallyhardforaninvestororaconsumertoactuallyknowwhoarethetruesustainabilityleaders”(E3-R)“Lotofverylightweightsustainabilityreports”(E5-C)“Talkonlyaboutsocialsustainabilitythatiseasybutveryfewaretackingenvironmentalsustainability”(E5-C)“It isnotnecessarilycentralreporting”(E1-O)“whatyoufindisoncompanieswebsites,youmightfindsomeanecdotalstuff”(E1-O)“Whyareyoudoingit?,it’sjuststandalonephilanthropy”(E1-O)“Muchinformationisqualitative”(E3-R)“Notnecessarilydefinedinastrategicway”(E1-O)“Nottransferredintoasortoftangiblebusinessbenefits”(E1-O)(Un-)Clear“Sustainabilityreportsaretypicallyverytextheavy,dryandcomplicated”(C5-L)(Un-)Reliable(QuotesfromtheMA-referringtolackoftransparencyontheprocess,methods…)

• Categories:FragmentedcontentControversyindecouplinggrowthfromimpacts“Needtobelookingmoreabsolute,soifitisanintensitymetricwellhowdoesitgoagainstyourgrowth…ifyouaregrowingyourbusiness,youmightbeable to increasingyourefficiencybutyou’reactually stillincreasingyourimpactontheplanetsowhereisthecompensation?Thetransparencyonthattosayactuallywearedecouplingourgrowth,ourbusinessgrowth,wewanttogrow,butwearedecouplingthatfromenvironmentalimpacts”(E1-O)“Evidentlyacompanythatgrowsisabletoemitmore,itisanissueofvolume.That’snottheproblem.Theproblemiswhentheratioofconsumptionperstayisreduced.Ifwetaketheconsumptiontotheroomandweseethatitgoesdown,althoughbeingbiggerweareoperatingbetter,inamoreefficientway“(C3-M)Separatetoperformance“Nodirectreflectionofperformance”(E1-O)“Idon’tseehowthatmakesyouabettercompanytoinvestin,whatmakesyoumorealong-termprospect,whatmakesyoulessofarisk”(E1-O)“NeedingtofindwaystointerlinkCO2emissionstoperformance…valueofroomnight,agreatexperienceorwhateveritisbeneficialtothehotel”(E5-C)“Aslongassustainabilityreportsareseparateyouknowtheyareseenasbeingseparateandwhyaretheyseparate?Aretheyseparateforgoodforagoodreasonorwhyisn’tthisashortpartofashort,snappypartofanannualreport?”(E1-O)“Howdowe give business value to such ametric (CO2 emissions) thatwe can incorporate it into thefinancialreporting,onlythensustainabilityisgoingtobereallytakenseriouslyasyouknowavitalpartofthebusiness.”(E5-C)“It’snotthatyoushoulddoeverythingjustforabusinessbenefit,butyoushouldquestionifyou’renotlinkingsortofactivitiestoyourbusinessandthecommunity”(E1-O)“Lookingatwaterasarisk,notasasustainabilityissue”(E1-O)“Shouldbeabouthowyouareoperatingyourbusiness”(E1-O)“Unlesswedonotfindasolutionofthattypethereisnotgoingtobeenoughdriveintheindustry”(E5-C)Genuinecarenotcentraltothebusiness

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“Juststandalonephilanthropy?Whichisallverynicebutyouknoweverybodycanchuckyou”(E1-O)“Notaboutgivingtophilanthropiccausesit’showyoumakeyourmoney;thewayyoudobusinessinthefirstplace”(E1-O)“Nothowyouspendyourmoney”(E1-O)“Needingtolookmoreimpactsandoutcomesratherthaninputs”(E1-O)Limitstoreductionfocus“Thecurveonreductionsandaccomplishmentsitcannotbethesame”(C1-M)“Thereductionsarelimited,andthenit’stimetohaveinnovation”(C1-M)“Jumptoinnovationandchangethemetricsystemagain”(C1-M)“Themetricinthefutureisgoingtobewhatpercentageofyourenergyisfromrenewablesources…energyreductiononlymattersbecauseenergyhasacarbonfootprintattachedtoit”(E4-C)Meaninglesswithoutcontext“Targetsreducedsuchandsuchathingby20%,allthat’sabsolutelymeaningless”(E1-O)“Resultshaveacontext”(E1-O)“Youneedtobetakingmoreofalocalapproach”(E1-O)“Onacorporatelevel,itcanbedifficulttoknowreallysortofperspectiveonthegroundunlessyoutakethetroubletoask”(E1-O)“Reducereducingtowhatright?Settinga10%reductiongoalwheredidthatnumbercomefrom?Sothereductionsaremeaningfulinaglobalcontext”(E4-C)“ItdoesnotmakesensetosaythatweemittedacertainamountoftonsofCO2”(C3-M)Metricstocomparewhatmakessensetocompare“Theindicatorthatallowstomeasurehowacompanyprogressesinthisdirectionistotakethedatatotheconsumptionortheemissionperstay”(C3-M)

• Categories:ReportingaudienceRelativetobusinessmodel“Dependsonthecompany”(E4-C)“Somecompaniesyouknowwillhavetoaddressallthestakeholders;somedon’thavetoaddressanyofthem”(E4-C)“Sustainabilityreportinghasadifferentaudienceandisneededdependingonthenatureofyourbusiness”(E5-C)Relativetotheframeworkused“Differentframeworkshavedifferentaudiencesandgoals”(E3-R)Relativetostakeholders-Investorsandshareholders“Ifthecompanyispublictradedwithinterestedinvestorsandyouknowtheshareholdersmayaskforit”(E4-C)“Financialreportsfortheinvestors”(E7-A)“Definitelyaimedatthepublicandcustomersandtheinvestors”(E7-A)“Reportscanalsobeusedbydifferentagenciesthatevaluatetheirperformanceforfinancialandinvestmentpurposes”(E7-A)“CDP…manyinvestorsuseit”(E2-R)“Thereportiswidelyconsulted,solicitedandvaluedbyanalysts,byinvestors,byourownshareholders.”(C3-M)-Customers“Iftheyhavecorporatecustomers,corporatecustomersmayaskforit”(E4-C)“CSRreportslikeGRImostlyforthecustomersandthepublic”(E7-A)“Sustainability reporting the way they stand those sustainability reports I think currently are mostlydirectedatcustomers,generalpublic,tosomeextendtothecommunities”(E7-A)“GRIislookingatmuchbroaderrangeofstakeholders,suchascustomersandemployees,suppliers”(E3-R)“(Customers)preferprobablyawebsiteorasustainabilityreportorsomethinglikethat”(E3-R)“Itcanbethecustomers,Ithinkitcouldbeauthorities,companiesworkingwiththishospitalitycompany,mediapotentiallyaswell”(E6-C)-Employee“Staffandemployeesdefinitelyisabigoneaswell”(E4-C)“GRIislookingatamuchbroaderrangeofstakeholders,suchascustomersandemployees,suppliers”(E3-R)

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-Suppliers“GRIislookingatamuchbroaderrangeofstakeholders,suchascustomersandemployees,suppliers”(E3-R)“Itcanbethecustomers,Ithinkitcouldbeauthorities,companiesworkingwiththishospitalitycompany,mediapotentiallyaswell”(E6-C)-NGOsandcommunities“Ifyou’regoingintocities,sociallicensetooperateyouneedthecitizen’sview.NGOs,activistwhowanttoknowwhat’sthecompanydoing”(E4-C)“Sometimesassociationswillaskforstandardsforreportingsotheyproduce”(E7-A)“Sustainability reporting the way they stand those sustainability reports I think currently are mostlydirectedatcustomers,generalpublic,tosomeextendtothecommunities”(E7-A)“shouldbethegeneralpublicthegovernments,andtheNGOs”(E8-A)-Generalpublic“CSRreportslikeGRImostlyforthecustomersandthepublic”(E7-A)“Sustainability reporting the way they stand those sustainability reports I think currently are mostlydirectedatcustomers,generalpublic,tosomeextendtothecommunities”(E7-A)“Definitelyaimedatthepublicandcustomersandtheinvestors”(E7-A)“Shouldbethegeneralpublicthegovernments,andtheNGOs”(E8-A)-Government“Shouldbethegeneralpublicthegovernments,andtheNGOs”(E8-A)“Itcanbethecustomers,Ithinkitcouldbeauthorities,companiesworkingwiththishospitalitycompany,mediapotentiallyaswell”(E6-C)-Media“Itcanbethecustomers,Ithinkitcouldbeauthorities,companiesworkingwiththishospitalitycompany,mediapotentiallyaswell”(E6-C)-Allstakeholders“Areporttorespondtoanystakeholderthecompanyhas”(C3-M)

• Categories:ReachFromlargeorganisationsforlargeinvestorstolargecorporatebuyers“Sustainabilityreportingisaconceptthatstartedbasicallyfromalotoflargecompaniesforlargeinvestorgroupsforlargecorporatebuyers”(E4-C)“Itdoesn’ttripledownintheandadaptaswelltoanindividualpropertyforthebasicreasonsthatnobodyisaskingforreportsattheproperty.Andtheyhavetheframeworkisnotmadeforasmallcompanyreally.”(E4-C)“Hugediscrepanciesbetweenthelargecompaniesandthesmallbusinesses”(E7-A)“Largercompaniesdoit,whilenotallsmallercompaniesarestillthinkingaboutsustainabilityandtoreportaboutit”(E6-C)“Notatallanextendedpracticewithintheindustry”(E5-C)

• Categories:GlobalReportingInitiativeWhatisit?“GRIislikeabookthattellsyouhowyouwouldmakeyourownreportabouttheperformance…abookabouthowtoreport”(E2-R)“Givesguidanceabouthowtoreportintheirownreports”(E2-R)“If the hotel chain is owned by a property management company they will put more emphasis on asustainabilityreportingthatlooksatthelongevityofthebuildingratherthantheoperationaloutfitofthebuildingbecausetherealvalueforthemitisintheincreasedvalueoftheproperty”(E5-C)“GRIislookingatamuchbroaderrangeofstakeholders,suchascustomersandemployees,suppliers”(E3-R)“Oneoftheinternationallyaccepted,recognizedandendorsedstandards”(C3-M)“Asystemthateliminatesasymmetries,typeofcompany,sector,andcountry”(C3-M)Use“UsingGRI”(C4-L)“FirststartingreportingtoGRI”(C1-M)“MakingreportsaccordingtotheGRI”(C7-W)“HaveGRItoidentifythekeychallengeassociatedwitheachmainstakeholder”(C2-M)“Wearenotusinganyframework,andthereisnologicalexplanationonwhywearenotusingGRI”(C6-L)

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“GRIisagoodsystemtocomparewithotherentitiesthatdodifferentthingsbecausetheyworkinotherindustriesandallowsustoeliminateasymmetries,establishcriteriaformonitoringandstandardisationaccordingtowhattheinternationalreportingtrendsacceptedtodayare”(C3-M)

• Categories:CDPWhatisit?“Aprocessthatrequiresreporting”(E2-R)“Theonlyplatformthatyouhavetoreportdirectlyintoadatabasethatcanbepublished”(E2-R)“The CDP it was more detailed, and it asks more profound questions than we decided to put in oursustainabilityreport”(C8-W)Opinions“CDPitwasgreat,itwasaveryclearprocess,sowesharedwithfinanceandlegalandotherssayingthatwewereabouttofallbehindinthescoringprocess”(C5-L)“Carbonreportingisimportant…mostprobablyforcompaniesthathavemoreactiveshareholderswheretheyneedtodemonstratethattheCO2emissionsareundercontrol”(E5-C)

• Categories:IntegratedReportingOpinions“Agoodidea”(C5-L)“Somethingweneedtolookat,butit’sdefinitelythepath”(C1-M)“It’sreallyinteresting”(C2-M)“Integratedreportingisvoluntary”(C3-M)“Wehavebeenreportingwithgreatertransparency,greaterqualityandgreaterreliabilityandoneofthebestwaystoconveywhatthecompanyisreallyistocombinefinancialandnon-financialinformation”(C3-M)Challengesforimplementation“Notenoughinvestorsareaskingforthisyeteither”(C5-L)“Itwilltaketimetoadoptgiventhatannualreportstypicallygothroughamorerigorousreviewprocess,andwedonotyetperformafullexternalauditofourentiresustainabilityreport”(C5-L)“Timingissuesaswell,whenwehavesustainabilityreportingdatareadyvs.whentheannualreportgoesout”(C5-L)“Thetaskofeducatinginternalstakeholdersaroundthevalueofintegratedreporting”(C5-L)“Wearenotreadyyet;thisisagainaverysophisticatedissue”(C1-M)“It’sjustaquestionoftime,maturity,resourcesandthat’sit”(C1-M)

• Categories:SASBRegionalstockexchanges“Lookingatinformationforinvestorsthatwouldbedisclosedatannualsecurityfilling”(E3-R)“NewKPIsformthe((regionname))stockexchange,andthenwealsoneedthesustainabilitystatementsforBursa((regionalname))”(C4-L)

• Categories:AtoolforAccountability“It’smorekindofwheretheneedlefallsit’snot100%oneortheother”(E1-O)Wantingvs.realaccountability“Idon’tthinkenoughpeopleareusingitasanaccountingtool”(E1-O)“Peoplewantingittobeaccountabilityoraccountingbutit’sIfeelit’smissingthemarkbecauseitistoomuchwaffle””(E1-O)“It’saccountabilityifyouhavetoyouknow,publiclydiscloseyourperformancethenyes.Butifyouseemtohavegreatperformancesomehoweveryyear,thenthere’ssomethingwrong”(E4-C)Beingaccountability“Thefactthatweareaskingthecompaniestoengagewiththecommunityisbothaccountability”(E7-A)

• Categories:AtoolforLegitimacyWantingvs.reallegitimacy“Peoplewhatittobethiskindofa legitimatingI’d justthinktheyarenotclear, it’snotclearwhothesereportsaredirectedto”(E1-O)“Legitimizationyeahyoucouldsaythat,that’sacynicalview,butactuallythatreliesonactuallyreadingthereports”(E1-O)“Theycanpointtothefactthatitisthere,doesthatlegitimiseit?Idon’tknow”(E1-O)“Definitelycompaniesaregivingmorethanasocialrepresentationofthewaytheywanttobeseen”(E4-C)“Ifyou’rerequiredtodoareportthenyoumightnotevencareofyoursociallicensetooperatebecauseyouarejustdoingitbecauseit’scompliance”(E4-C)“Itcertainlyissomethingthatyoucouldlegitimiseyouractions”(E5-C)

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“Ifwesay its theyarepresenting themselvesas theway theywant tobeseen itwouldalmostkindofunderminethewholeexercisethatwe’redoing”(E7-A)“Reportsmaynotgivemorethanasocialrepresentationofthewaythecompanywantstobeseen”(E6-C)Beinglegitimacy“Thebareminimumthatwedotostaylegitimateandaddresstheissuesthatthepublicandthecustomersaremoreandmoreconcernedabout”(E7-A)“Havingdisclosureishelpfulforlegitimacy”(E3-R)“Totellwhatwedotolegitimisethattheyaredoingsomethingonsustainability”(E6-C)

Theme:FormalityofMA• Categories:Purpose

Informreporting“Alotofthedatathatwe’vecollectedwe’vebeenabletouseforexternalreportingpurposes”(C4-L)“Helptoinformourreporting”(C5-L)“Secondly, to report on the different reporting and corporate information systems that the companypublishes”(C3-M)Redefinestrategy“Theresults,well,Ithinkit’salsoagoodchanceforusnowtorealignourCSRstrategy”(C4-L)“RedirectourCSRstrategy”(C4-L)“Informourlong-termsustainabilitygoalsforone”(C5-L)“ToredefineourCSRstrategy”(C1-M)“Sawthemaintopicsforus,wehaddifferentmaterialityissuesafewyearsagosonowweknowwhatthemaintopicstoworkonare”(C2-M)“That’sthebase,orthatwasthefoundationsforourstrategy”(C8-W)“Firstly,toknowwhatprioritiesfromthestakeholdersperspectiveshouldaddressthecompany…toknowwhatthestakeholdersexpectationsare,whattheythinkweshoulddo”(C3-M)

• Categories:IndustryandorganisationMAComplementary“Participatinginindustryconveninggroups…butIalsothinkit’simportanttolookatitintermsofyourcompanyinparticular…complementary”(C5-L)“OurfirstapproachatITPwasagoodstartingpoint,andafterthat,wedevelopedourown,whichwasverymuchalignedwithwhatwehadalsoidentifiedatindustrylevel”(C1-M)“It’scomplementary”(E1-O)“Itcancontributetoacompaniesmaterialityassessment”(E3-R)

• Categories:OrganisationsMABenefits“Doingamoreformalstepbeyondthisprocessstakeholderengagementprocessthisnextyearaspartofournextsustainabilityreportingprocess”(C5-L)Introspective“Moretiedtohowyouoperateyourbusiness”(E1-O)“Themostintrospectivepiece”(E1-O)Localissues“Havingalocalperspective”(E1-O)“Shouldreallylookatthoseissuesdifferent...fromtheperspectiveofthespecificarea”(E8-A)

• Categories:IndustryMABenefits“Deflectcriticismtotheindustry”(E1-O)“Morefranc,muchmoreopen,andgetmuchbetterfeedback…honestfeedback”(E1-O)“Independentevidenceofyouknowourpriorityareas”(E1-O)CollectiveworkNeedingtounderstandwhatwecandoasacollective(C1-M,E1-O,I)“Needingtohaveeverybodytocometogetherandunderstandsomeofthekeyimpactsneedingtofocusasanindustry,thenbasedonthoseeverybodyneedstoacton”(E4-C)“Whatcouldwedoasacollective?We’reallfacingtheseissues”(E1-O)“Thinkthatthebigissuesintheindustry,weneedtohaveapartnershiptosolveit”(C1-M)

• Categories:MAconcept

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“Itmeansthatdifferentstakeholdersgivetheiropiniononwhatmattersaremostimportanttoregardingourbusiness”(C8-W)“Identifystakeholdersthatareaffectedthemostandtheissuesthatareimportantforthosestakeholders”(E7-A)

• Categories:MACriteriaSpecificcriteria“Issuesthatareofkeyinteresttousintermsofhelpingtothriveourbusiness”(C5-L)“Issuesthathavebeenbroughttoourattentionbyourstakeholdersinsomecasesinanegativeway…seeingapattern,whereit’ssomethingthatissignificantlybroughttoourattention”(C5-L)“Frequencyandimportanceforbusinessonthedifferentissues”(C1-M)“Thefrequencyidentifiedbythestakeholdersandalsotheimpactinthebusiness”(C1-M)“Theimpactonstakeholderexpectationsfromourhotelbusiness,intermsofreputationandfinancially”(C2-M)Generalcriteria“Becauseoftheowner’sinterest”(C7-W)“Whereweaffecttheenvironmentmost”(C7-W)“Someissuesareofkeyinteresttousintermsofhelpingtothriveourbusiness.Forexampleandthere’realsoissuesthathavebeenforexamplebroughttoourattentionbyourstakeholders…weidentifythisrisksandopportunities”(C5-L)“Materialityassessmentsthathavewedonepriorhavebeenlookingatotherelementsasaproxytospeakforthatgroup”(C5-L)Cannotrespond“Ican’ttellyouthatbecauseIdon’tknowandIhadn’tstartedmywork”(C8-W)“Thisisconfidentialinformation,Icantellyousomeverygenericaspectsbutthedetailoftheprocessisconfidential.”(C3-M)

• Categories:MAFrequency“Nomorethaneveryotheryearandnolessthaneveryfiveyears”(E1-O)“Wewilldoanupdatebut…atthemomentitisnotnecessarytolaunchanewmaterialitytable”(C2-M)

• Categories:Intentions“Tryingtodomoreintermsofformalisingit,startingwithmaterialityassessmentin2017”(C5-L)“Weareactually,soI’llbein(city)nextweektojustsetupthemeetingwiththeconsultants.Sowearejustabouttoembarkonit…Atthemomentnowehaven’t(approachandcriteriaforMA)”(C4-L)“Wehaven’tdonenothingsofarinthatareayet,butthat’salsosomethingthatweareworkingonnow,thatweseethatwehaveanareaofimprovement”(C7-W)

Theme:Externalassurance• Categories:UseaThirdParty

Alreadyusingathirdparty“Weusedanexternalconsultanttohelpguideus”(C5-L)“Withanexternal,theyareexpertsonthisofcourse”(C1-M)“Contactingsomeconsultants”(C7-W)(fordevelopingpolicies)“Thecompanythatweconsulted…duringthisprocess”(C8-W)

Cognitiveintegration-SharedValues(7S)Theme:Reportingrelatedmotivations

• Categories:Externaldrive-MaterialityStakeholderdemands(Clients)“They(clients)areaskingforCSRcorporatesocialresponsibilityorsustainabilitycriteriaontherequestforproposalseverytimewesellahotel”(C1-M)Reputation–Stockexchangerecommendations“It’snowpartofthe(regionname)stockexchangenewrules,wellit’shighlyrecommended”(C4-L)

• Categories:Externaldrive-ExternalassuranceMandatory-becauseIhaveto“Wehaveinthefinancialreport,andisalreadyassured,ofcourse.,itislegal,wehavetoassureit.Imeanthefinancialiscompulsory”(C1-M)“Itisbylaw,bylegislationwehavetoaudittheaccounts,anindependentaudit”(C3-M)Reputation“Fortheriskofe-mailsonreputation,itisimportanttohaveanexternalassurance”(C2-M)

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Rankingpositions“Ifwegotexternalassurancewegottoanadditional:10points”(C5-L)Stakeholdertrust“Moretransparentmorehonestdata,forourexternalstakeholders”(C4-L)“Ismuchmorevaluable if anaccredited third-partyexpertgivesagoodviewofwhathesees,whatheperceives,whatheaudits.”(C3-M)“Fortransparency,reliability,andqualityofinformation”(C3-M)

• Categories:Externaldrive-SustainabilityreportingBeingmandatory–becauseIhaveto“Definitelygivenapushtohavetocomplywithnewlistingsandrules”(C4-L)“We are obliged for the sake of transparency and because there are also legal requirements for thecompany’sturnovertopublisheconomicresults,financialresults,management,corporategovernanceand,ofcourse,sustainability”(C3-M)“Ifyou’reatHongKongyou’vetoreportagainsttheHongKongESG”(E4-C)“IfyouareaFrenchcompanyyouhaveto”(E4-C)“Thesebigcompaniesneedtocomplytocertainlegislationwhichtakesintoaccountsustainability”(E5-C)“Publicgroups…thereisapressuretodelivertransparentreportingtoforexampleCDPreportingwhichforallpublichospitalitygroupsnowisamust”(E5-C)“Sosomebodyreportsbecausetheygenerallyhaveto”(E4-C)“Ifyou’rerequiredtodoareportthenyoumightnotevencareofyoursociallicensetooperatebecauseyouarejustdoingitbecauseit’scompliance”(E4-C)Reputation-Leadershipandrecognition“Companiesadoptingsustainabilitybecauseoftheleadership”(E7-A)“AcompanywanttobeknownamongcertaincirclesIwanttobeontheDownJohnsSustainabilityIndex,sowearegoingtotrytoapplyontheDownJohnsSustainabilityIndexsoourreportsisgoingtoservethat”(E4-C)“Bigcompanies…topositionthem…youseeitisabiggerresponsibilityonabigcompanyabigcompanyshouldbedoingalotmorestuffonthesocialandenvironmentalfront”(E1-O)-Bestpractice“Thebestpracticeoverall”(E4-C)“Themassparticipationofthecompanies…mostcompaniesreportundertheCDP;mostcompaniesnowrecognisethatitisareasonableactivitythatit’sagoodidea,it’shealthy”(E2-R)-Publicrelations-Ifyoudon’tdoitisbad“Isbetterthanyoudoitbecauseifyoudon’tdoitisbad”(C1-M)“Generallyuseitfortheirpublicrelationsthanforreallymakingthingsbetter”(E8-A)-Rankingpositions“ReceivedapprovalatapointwhenwewereindangerofatleastkeepingupwithourcompetitorsforCDPscore.Andknewthatifwegotexternalassurancewegottoanadditional:10points”(C5-L)“Haveratingsandrankingsthatkindofthing”(E4-C)-Fulfilexpectations“It’sexpected”(E2-R)Agametoproducethebetterreportordisclosethemost“Nowitseemsjusttobecomeagameofwho’sabletoproducethebetterreportsordisclosedthemostinformation”(C4-L)Stakeholderrequests-Investorsandshareholdersrequests“CDPreporting….Isarequestoftheinvestorandtheshareholdersverymuch”(E5-C)“Bigcompaniestosatisfysortoftheinvestorsandshareholders”(E1-O)“Carbon reporting… probably for companies that havemore active shareholderswhere they need todemonstratethattheCO2emissionsareundercontrol”(E5-C)“Theauthorityofinvestors”(E2-R)“Informationrequestscomefrominvestors”(E2-R)-Externalrequests“Becauseit’srequestedbyanexternalstakeholder,wewanttoseewhatyou’redoinginthisreportontheseissues”(E4-C)“It’sademandfrompartners…Iftheydon’tdoit,thenwedon’tgetanycustomers”(C7-W)

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“Touroperatorsrequirelevelsofcompliance”(C6-L)“Ourstakeholdersrequireinformationnotnecessarilyfinancial”(C3-M)

• Categories:Internaldrive–MaterialityAbouttime“Lasttimewasbackin2012”(C4-L)Leadershipcommitment“There’sbeenalotofstructuralchangewithinthegroup”(C4-L)“Muchchangewithintheseniorinternalmanagement”(C4-L)

• Categories:Internaldrive-ExternalassuranceControlmechanism“Ensurewhatwearecomputingininternalleveliscorrect”(C4-L)“Asacontrolkindofmechanisms”(C4-L)“Betransparentandtobesureoftheinformation”(C2-M)

• Categories:Internaldrive-SustainabilityreportingAboutowners’commitment“Manyhoteloperatorsareprivatelyowned,sotheinterestsaredrivenbytheowners,andiftheownersarebelieversinsustainabilityyouwillseethatisdrivenacross”(E5-C)-Ethicsdriven“Someownerstheyseeitfromanethicspointofviewthattheyneedtooperateinaresponsibleway”(E5-C)-Efficiency-driven“Someownersaremorepragmatic, and theysee it fromabusinesspointofview, sustainabilitymakesbusinesssense,becauseyouoperatemoreefficiently,soyourbottomlineisgoingtoimprovebecauseyoureduceyouroperationalcosts”(E5-C)Transparencycommitment“Reporting cannot be a reason, reporting is part of your commitments for being transparent, forcommunicatingyourefforts,forcommunicatingyourresultsandyoursuccessstories”(C1-M)-Communicationout“Agoodmeanstokindofgetthatmessageout”(C4-L)“Reportingisthejustificationofthechangesfromacompanylookinglessinsustainabilitytofocusingorhavingitintegratedaspartoftheirprocedures”(E6-C)

Theme:Valueofreporting• Categories:Organisationalbenefits

Focusonstrategy“Thefactthattheyreportcanshapethestrategythattheywillkindofpursueinthelongrun”(E7-A)“To report theyengagewith stakeholders to identify those issues, identifying thematerial issues, theirimpacts is very important for their organisation in a sense to change them or influence them to becontributorstothesocietyinapositiveway,ormitigatethenegativeimpactsatleast”(E7-A)Employeeengagementbranding“Thinkitisverygoodinencouraging,youknow,positiveemployeeengagementbranding”(C4-L)“Oneofthebigbenefitsofsustainabilityreportingistocometogether…isgreatinthatit’sanexercisethat’sverypurposefulintermsofbringingpeopletogetheraroundgoalsandmission,andreportingitout”(C5-L)“Ourownemployeesknowthecompany,oftenfromadifferentperspectivebyconsultingtheannualreport”(C3-M)“Morekindofgrass-rootsmovementswherethecompanyemployeesaremoreengaged”(E7-A)Performancemeasurement“Goodwaytomeasureourperformanceand,youknow,whatweneedtodotoimproveupon”(C4-L)“Areaswerewearefallingshort”(C4-L)“It’sarigorousannualprocess…muchmorethoughtfulandrigorousprocessforthem,whichtheywouldnotbequiteassubjectedtootherwise”(C5-L)“Askingaboutmanagementapproachandchallengesandopportunities”(C5-L)“Alsoanatureofknowinghowmuchourimpact,wewanttoknowhowweimpacttheenvironment”(C7-W)“It’sreallyaboutfindingmanagementattentiontoaneglectedarea”(E2-R)Commercialtool

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“That’swhatthebestcoverletter”(C3-M)“Itisaveryimportantcommercialtool,anessentialassettoboostreputation.”(C3-M)“Tocommunicatewhatthecompanyis….Whentheexpansionteamneedsorwantstotransmitinformationtoahotelowner,oneofthebestwaystomakethemunderstandwhatthecompanyis,istofacilitateourannualreport”(C3-M)

• Categories:MixedopinionsThereisvalue“Ithinkthereisvalueinsustainabilityreporting,similarlyasthereisvalueinfinancialreporting.It’sjustthat with financial reporting we have the standards, it’s more allowing benchmarking, it’s allowingcomparison,it’sallowingevaluatingthefinancialperformanceoftheorganisation.Ifthesocialreportingcanhavethesamelevelofstandardization,measuresorqualityorthird-partyassuranceitcanmeaningfullyallowustoseehowwellthosecompaniesaredoing”(E7-A)“Itisaveryimportantcommercialtool,anessentialassettoboostreputation.”(C3-M)What’sthevalue?“What’sthevalueindoinggoodreporting?Intermsofyouknowthereallyrobustcontent,engagingcontent,andgooddesign,youknow,goodmetricswhat’sthepoint?”(E4-C)

Step4.TheMBSC–barriers&enablers:Organisationalintegration-Structure(7S)Theme:Industrymodel:sizeandownershipstructure

• Categories:Barriers-DatacollectionLimiteddatasharing“Have the franchising model, encouraging those partners or requiring those partners to share theinformationcanalsobedifficult”(E7-A)“Theyareverymuchdependantonwhatpropertiesreportbacktothem”(E1-O)“It’samatterofwhatagreementtheyhavewiththeirfranchiseestoshareinformation”(E1-O)“Buteven(when)theycangiveussomeinformationtheyadmitthatit’snotnecessarilyfullycomplete”(E1-O)

• Categories:IndustrymodelConflictsofinteresthinderinvestments“Thechallengeforusisthatwerentallthebuildings…toconvincethesepeoplethattheyshouldinvestmoremoneyintothebuildingstomakethemmoreenergyefficient”(C8-W)“The biggest challenge overall has separate owners from operators. Because the owner has differentinterestsregardingdifferentapproachesthantheoperator”(E4-C)“Themodelofthehotelbusinessisgrowingbyfranchisingandseparatingtheownershipfrommanagement,whichithelps,ithelpschainsgrow,itevenhelpsownersgrow,ithelpsfranchiseesgrow,ithelpseverybodygrow.Butwhenitcomestomakingchanges,significantchangesthatcostmoneytobuildingthatisinhibitedbecauseofthestructure”(E4-C)“Strongconflictofinterestsbetweentheownersofthebuildingsandthemanagementcompaniesandnoeither one or the other one take responsibility for this investments so that is certainly slowing downimprovementthatwecouldseeintheperformanceofthemonitoringofresourceconsumption”(E5-C)"Problemisnottheprojectbuthowtodirectthemessagetodeveloptheproject,especiallywhenitentailsaneedforinvestment.Whatistheprimeresponsibilityoftheowneroftheassetwemanage"(C3-M)-(Un)Willingness“Wehaveinthecontractwiththebuildingownersandwiththefranchisedstakeholdersthattheyaregoingtoimplementallourstandardsandallourfieldsconcerningsustainabilityandenvironmentalissues.It’sabittoughertomakechangesinthebuildingsiftheownerisnotagreeingwithusandhasthesamefocusonsustainability…Someareveryeagertohelpusandmakechangesinthebuildingsandsomearenot.Andwehavetopayforthechangesourselveseventhoughweshouldn’tbecausewedon’townthebuildings”(C7-W)(Non-)Inclusivemanagementcontractsandbrandstandards“Needourexpansionanddevelopmentdepartmentstoincludethiscriteriononthemanagementcontractsforbeingsustainable.Otherwise,nothingisgoingtoguaranteethattheyaresustainable”(C1-M)“Itisanon-goingchallengeensuringthatpullthroughhappensunlesssomethingisabrandstandard…andnoteverythingcanbeabrandstandard”(C5-L)-Organisationvs.brandspecificstrategy

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“Toimplementthesamestrategyacrossdifferentbrandswithinthegroup….whiledeployingsustainabilitystrategythatlinksbacktothebranditself”(C4-L)“Adaptingthesustainabilitystrategytothedifferentbrands”(C4-L)(In-)consistentstrategyroll-out“Have a nice overall CSR report and sustainability goals and that kind of things but if you look at theindividualhotels,Idonotseethedifferenceactually,Idonotseewhytheyaregreen”(E8-A)“Somehowthehighermanagementisnotabletolettheirideasgodowntotherealitytotheworkforcetotheindividualhotels”(E8-A)“Communicatedbroadlyacrossmanaged,franchised,andleasedhotels”(C5-L)“Wehaveaglobalmodel thatequallyaffectsanymanagementmodel,whathappens is that theway toexecuteandimplementisdifferent...becauseyouhavetounderstandhowarethemanagementmodels”(C3-M)Focusonportfoliogrowthandprofitsmargins(Self-servinginterests)“Theindustrymodelisbasedongrowingyourportfolio.It’swasn’tbeforebasedonbrand,itwasn’tbeforebased on efficiency of the buildings, especiallywhen you’re only franchising them, or you’re getting amanagementcontract,werethemanagingcompanymakesmoney,youwanttomakesomemoneyfromrealstateoverthelongterm,soeverybodymakesmoney.Theindustryisservinginterestsoftheindustrymodelmoresothananything.Andsoit’snotacontextwheresustainabilityisaprofitit’showyouembedanythingintothatmodelrightnow”(E4-C)“Ifthebusinessesseebenefitsthatcanemergefrominvestinginsustainabilityinitiativestheywillbemorelikelytoadoptthem”(E7-A)“Hotelsarejustaccountedfortheirprofitmarginsandnotfortheirenvironmentalperformance”(E8-A)Separatingownershipthanmanagement“The model of the hotel business is growing by franchising and separating the ownership frommanagement”(E4-C)Structureinhibitingsustainabilityintegration“Franchising,thewholerelationshipbetweenthehotelmanagementcompanies,hotelowners,franchisees,flatownersisaffectinghowthingscanbedoneandresolved”(E7-A)"Itisnotthesametomanageaprojectofcorporateresponsibilityinahotelofpropertythattodoitinoneofmanagement"(C3-M)“Rightknowtheindustryisservinginterestsoftheindustrymodelmoresothananything…notacontextwheresustainabilityisaprofitit’showyouembedanythingintothatmodelrightnow”(E4-C)

• Categories:Enablers-IndustrymodelInclusivemanagementcontracts“Weneed tohave inplaceagreementsbetweenmanagementcompaniesand thepropertyownerswhowouldberesponsibleforkeepinguptheinvestmentonthepropertyitself”(E5-C)“Writethingsinthecontractlanguage”(E4-C)“Weneedourexpansionanddevelopmentdepartmentstoincludethesecriteria,Imeanthisaspect,onthecontracts,onthemanagementcontractsforbeingsustainable”(C1-M)

Theme:Organisationalrolesandresponsibilities• Categories:Enablers

Internalorganisationfitforsustainability-Alignresponsibilities“Maketheindividualmanagersatleastresponsibleforehfortheenvironmentalimpacts”(E8-A)-Aligntasks“Givesomeactionslinkedwiththejoboftheemployees,sothatthey,it’slogicallforthemtolaunchthem”(C2-M)-Aligndecisions“Takeintoaccountsustainabilitycriteriawhenmakingdecisions”(C6-L)

Organisationalintegration-Staff(7S)Theme:DisempowermentoftheCSRdepartments(SE,MA,SR,EA)

• Categories:LeanfinancialresourcescapacityDisempoweredmanagers“Theyhavetowintheirownbattles,sotheyneedtogainthepoliticalcompany,theyneedtogoandfigureouthowdoIgainimportance,howdoIgainpeople’sattention,howdoIdoitinalowbudget,howdoImakethebiggestimpact”(E4-C)

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“Theyneedtoprovethemselves”(E4-C)“Wedon’thavebigresource;notonbudget”(C1-M)“Lowmargins”(C5-L)“Takingsometimeforustocatch-up,becauseweareleanonresources”(C5-L)“Somefinancialrestrictions”(E6-C)“Lackoftheinitialfundingthatmightberequired”(E6-C)“Leancapacity”(C5-L)“tightbudget”(C5-L)“Lowmargins”(C5-L)“LowEBITDAcomparedtootherindustries”(C1-M)“Financialcapacity”(C5-L)“Thecostaswell canbeabarrier,particularlywhenwe lookat theadoptionofdifferent sustainabilityinitiativesoveraperiod,it’softenbeenthecasethattheinitiativesthatwillcostlessbuthigherpotentialforgeneratingsavingsfortheorganisationwouldbethefirstonetoadopt”(E7-A)“Initial investment that youmight need… some entities in the hospitality industrymight not have theresourcesforit”(E6-C)“Somefinancialrestrictions”(E6-C)

• Categories:Leanhumanresourcescapacity“Aquestiononresources”(C1-M)“Wedon’thavebigresource;notontheteam”(C1-M)“Thestaffislean”(C5-L)“Needtohaveabigteamtomanageallthisdialogue”(C1-M)“Effortthatittakestodostakeholderengagement”(E1-O)“Leancapacity”(C5-L,C1-M,C6-L,E1-O)“Knowledgeonwhomtoreportandhowtoreport”(C8-W)“Humanresourcescapacity”(C5-L)

Technicalintegration-Systems(7S)Theme:Reportingstandardsadopted

• Categories:Enablers-Increasereport’squalityIncreaseprocesstransparency“Requirementsfortransparencyintheprocessaswell,toseehowthoseissuesareidentified”(E7-A)“I think you should, it can be such quite simple … to have an appendix where you can outline yourmethodology”(E1-O)“Theorganisationengaginginmateriality,thattheymaketheprocesstransparent,identifiedmethods,andhowtheyengagedthosestakeholders”(E7-A)ClearFormat-Userfriendly“Moreuser-friendly”(C5-L)“Moredigestibleandshareable”(C5-L)“Simplifymoreandaddmorevisualsandinfographics”(C5-L)-Shorter“Keepitalotshorterandsnappier”(E1-O)“Sustainabilityreportsbroughtdowntorealminimumnumberpages”(E1-O)Engagingcontent-Long-termfocus“Muchmoreofaviewtothefuture”(E1-O)“Whatyouaregoingtodoyouknowabitofthelonger-termstrategy”(E1-O)“Forward-thinkingonwhichmakesyouinvestablemakesyoulessofarisk,yourabilitytooperate”(E1-O)“Howthatmakesyouabettercompanytoinvestin,whatmakesyoumoreofalong-termprospecttome,whatmakesyoulessofarisk”(E1-O)-Linktoperformance“Nothowyouspendyourmoney,soit’snotaboutgivingtophilanthropiccausesit’showyoumakeyourmoney,youknow,justyouknowthewayyoudobusinessinthefirstplace,demonstratingthat”(E1-O)“Howareyouaddingvalue…whatmakesyouabetterplayertostayortoinvestin”(E1-O)“Whereisthepresentperformancetighttoanythingthat’srealinlifegoingforward”(E1-O)-Impactsandoutcomes“Lookingmoreimpactsandoutcomesratherthaninputs”(E1-O)“Morequantifiableimpact”(E1-O)“Havealotmorefacts”(E1-O)

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“Belookingmoreabsolute”(E1-O)“Ifpeoplecouldreport, thesustainabilityreportsa littlebitmorelikeCDPreports itwouldbesomuchbetter,asitismuchmorequalityinformationinaCDPdisclosure”(E1-O)-Nonumberswithoutstoriesandnostorieswithoutnumbers“Youneedanarrativetogooverthesefactstoexplainwhythatisrelevant”(E1-O)“Nonumberswithoutstoriesandnostorieswithoutnumbers”(E1-O)Sincerity“Makeitsincerefromotherstakeholderspointofview”(E1-O)Externalassurance“IfMthesocialreportingcanhavethesamelevel…third-partyassuranceitcanmeaningfullyallowustoseehowwellthosecompaniesaredoing”(E7-A)“Similarlywedon’treadthefinancialreportstheyareanimportanttooltocommunicate,butthecustomerswillalwaysrelyonakindofthird-partyassurance”(E7-A)“Moreverification”(E6-C)Reportsforimprovingperformance“Theopportunitytouseitasatoolforimprovingourwork.Rightnowwearejustusingitasareportingtool”(C8-W)

• Categories:ExternalencouragementPositivetransparencyreinforcement“Morepositivereinforcementforbeingtransparent”(C5-L)Governmentintervention-Mandatoryreporting“Theyhaverequirementstoreporttheydoit”(E7-A)“Theauthoritiestheyneedtoputinthenecessarylegislation”(E6-C)

• Categories:ConsensusbuildingClarifyaudience“Clearaudienceinmind”(E1-O)Increaselevel“If the social reporting can have the same level of standardization,measures or quality or third-partyassuranceitcanmeaningfullyallowustoseehowwellthosecompaniesaredoing”(E7-A)“Provideacarbonfootprintguestnightasastandardforeachdifferenthotelsoyoucanseethedifference,andjustprovideitthenumber,andthenthepubliccanmakeachoicebasedonthat”(E8-A)Standardisation“Somekindofintegrationinallthestandardswoulddefinitelybeuseful”(C4-L)“Createmoreconsolidationaroundreportingandasks”(C5-L)“Betteralignmentofindicatorsforeachindustry”(C5-L)“Morestandardisation”(E6-C)

Theme:Performanceevaluation• Categories:Enablers

Developsustainabilityperformancemanagementsystems“Reportsareonlygoingtolookgoodifyourcorporateplatformisgood”(E4-C)“Needtotakealookbackinwardandseewhatshouldwebedoingasacompanyandthenit’seasiertoembedthatintoareport”(E4-C)Improveprocesses“Perhapsbetterprocessesinplace”(C4-L)

• Categories:Barriers-DatacollectionLackofsystems“Difficulttocomplyifyoudon’thaveanHRSsysteminplace”(C4-L)“Therightsystemsinplacetoenableustocollectbetterandprocessthedata”(C4-L)“Wedonothaveadefinedtool”(C6-L)“Newsystemforallhotels,sometimesforcorporatebutnotforall”(C2-M)“Alackoftechnologythatmakesgatheringalldataeasy”(E5-C)Unclearmeasurement/metrics“Thewhole ideaofmeasuring,beingable tomeasureperformanceand the fact thatwestill lack thosemeasuresthatwillcapturesomeofthosesocialandenvironmentalissues”(E7-A)“Harderwitheffortsandinitiativesthatpromisethoselong-termreturnsandarehardalsotomeasure”(E7-A)

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“Thematterofpropermetrics”(E7-A)“Itiseasiertomeasureeconomicandfinancialaspectsthanenvironmentalandsustainabilityissues.It’shardtofindtheindicatorsandgetgoodmeasures,havingtherightmeasures.Itisnoteasytoknowifyoumeasurehowmuchengagementthehotelsaredoing,areallocating,it’shardertomeasureinmanycases”(C7-W)

• Categories:Barriers-Measurementchallenges(Un)willingness“Issueofwillingnesstocollectandsharethedata”(E8-A)“Datacollectioningeneral,gatheringthedatawhetherit’sonepropertyoracrossaportfolio”(E4-C)Difficultmeasurement“Somesustainabilityissuesarereallydifficulttomeasure”(E8-A)Unclearmetrics-Complexmetrics“Overcomplicating…too technical, toocomparative…waydeep into thedetails,way toooverbearingonit…notsomethingthat’saccessibletoeverybodyintheindustry…Forexample,thebasicguest/nightmetricit’sgreatforlookingatyourperformanceforwaterorsomethingelse,butthehotelindustryneverusedguest/night…manycasestheydon’t”(E4-C)-Differentlanguage“Notusingthedialogueorthemetricsthewayallhotelindustryacts”(E4-C)-(Non)Alignment“Not correctly adapting performance measurement in sustainability to the mainstream performancemeasurementofhotelsingeneral”(E4-C)

• Categories:Barriers-PerformancemanagementsystemData:-Detailofthedata“Theamountofdetailthatgoesintothescorecardwouldjustnotbeapplicabletothebusinessstrategywhichhasthekeykindindicatorssuchasrevenue,andcolleagueengagement”(C4-L)“It’scrazytothinkthataplatformwouldworkforeverysinglesubjectmatterthatI’mworkinghereinthebusiness”(C5-L)-Sensitivenessofthedata“HumanresourcesstatisticsareextremelysensitivethatIcan'tevenlookat…Sotherearedefinitelythinksthatcouldnot,evergointothatlargerplatform”(C5-L)Software:-Availability“There’snoonesoftwarethatsolvesalltheproblemsofahotel”(E4-C)“Thedisadvantageisthat….therearenotmanyaroundtheworldtherearenotmanysolutionssoyouhaveaverylimitedchoiceandthechoicethatyouhaveisstillnotaseasytouseasyouwouldimagine”(E5-C)-Costsofsoftware“Other systems thatwe could purchase that help to track progress overall for the company andmanydifferentdisciplinescanplugintothembuttheyareextremelyexpensive,andthat’sanotherareathatisanargument,aparticularargumentareatogetthefundingwhichisnotthereyet”(C5-L)“Thedisadvantageisthatitisanextracostthatyouneedtoadd”(E5-C)-Unclearbusinesslink“Thedisadvantageis…eventhoughbymonitoringyoursustainabilityoutputsyoucouldtackleyourcostsperformanceisstillveryearlystageandthereareveryfewbusinessesandstudiesthatprovethis.Soitisstillverydifficulttoprovethatthereisaverystrongbusinessbenefittoit.”(E5-C)-Complexity“reallycomplicatingtothecompanytohaveoneuniquesystemwithallonit”(C2-M)“Can’thaveoneuniquetool”(C2-M)-Knowledge“Integrativesustainabilitymanagementisamatterofknowledgeandpropermetrics”(E7-A)

Theme:Employingreportingstandards• Categories:Barriers-Unclearguidelines

Stakeholderprioritisation“Howdoyouprioritiseyourstakeholders?Everystakeholderhasitsownview.Ifyouasksomebodywho'sinvolved in labour they are clearly going to say labour is the most important issue. If you ask an

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environmentalNGOaboutbiodiversitytheyaregoingtosaythemostimportantthingisnottobuildanddepletetherainforest.”(E4-C)Issuesprioritisation“Whatdoesitmeantoprioritiseenergymorethanwater?DoesthatmeanIneedtospendmoremoneyonenergythanwater?ItmeansI’mgoingtospendmoretime?ItmeansI’mgoingtotrytoimprovethatmoreintermsofmyperformance?I’llhavestrongergoalsforenergy?Imean,nobodytranslatesthat”(E4-C)Lackoftransparency“Requirementsfortransparencyintheprocessaswell, toseehowthoseissuesareidentified…If istheorganisationengaginginmaterialitymaketheprocesstransparent,identifymethods,andhowtheyengagethosestakeholders”(E7-A)“Ican’tthinkexactlyifpeoplehavereportedthatornot…Ithinkyoushould,itcanbequitesimple…tohaveanappendixwhereyoucanoutlineyourmethodology”(E1-O)

• Categories:Barriers-LackofconsensusUnclearaudience“Notclearwhomthesereportsaredirectedto”(E1-O)“Thebusinesscommunityhasbeenaskingwhoistheaudienceofthereports”(E7-A)“Unclearaudience”(E1-O,E3-R)Unclearpurpose“Toomuchwaffle”(E1-O)“Wasteofmoneyreportingonissuesthatwerenotanissueinthefirstplace”(E8-A)“Missingthemark”(E1-O)“Thosewhodon’treportdon’tnecessarilymeantheyarenotperformingwell,justnorreporting.Sothereisalsothequestionthatwemayhavesomethatreportslikeyoumentionedfortheirimagepurposeandotherswithout substantial things to change their operations to be sustainable. And thenwemayhaveorganisationsthatdonotreportbutactuallyperformwaybetteronsustainabilityissues“(E7-A)“Lackofreasontodoso”(E4-C)Unclearusefulness“Peopledonotreadthereports”(E1-O)“Nobodyisreadingthosereports”(E4-C)“Wasteoftime”(E1-O)“Bygoingforafullrangeofsustainabilityissues,yougetadiscussionthatisnotclearanymore”(E8-A)“Ifwetrytoconcentrateoneverythingweendupwithnothing,that’softenthecase(laugh).”(E8-A)“Nobodyisusingthereportsasaperformancemanagementtoolastheywouldyouknowwithsomethingelse”(E4-C)“Justusingitasareportingtool”(C8-W)Unclearrighttopicsandmetrics-Lackofstandardisation“Thereisnostandardisation;thereisnotawaytodoit”(E6-C)“Non-comparablereports”(E3-R)“Sometimestheyareusingdifferentmetricsfromframeworks”(E1-O)“Needingconsistentmechanismsacrosscompaniesandovertime”(E3-R)“Lackofconsensusoverwhichrightmeasuresandtopicsare”(E3-R)“Furtherharmonisationandconsolidationexpectedovertime”(E3-R)“Forturningtoacommonsetofmetricsneedingtoidentifyandagreeonwhotheaudienceandpurposeis”(E3-R)“With financial reporting, we have the standards, it’s more allowing benchmarking, it’s allowingcomparison,it’sallowingevaluatingthefinancialperformanceoftheorganisation.Andallowingevaluatingfinancialperformanceoftheorganisation.Ifthesocialreportingcanhavethesamelevelofstandardization,measuresorqualityorthird-partyassuranceitcanmeaningfullyallowustoseehowwellthosecompaniesaredoing.”(E7-A)-Nonalignmentofframeworks“Ifyoulookforinstanceonthoselabelstheyaresofullofverydifferentparametersandissues,anddetailsandoftenyeahnotreallyquantifiable”(E8-A)“Createssometimesconfusiononcompanies”(E3-R)“Frameworksthatwereoriginallydevelopedbasicallywerealonglistofallthepossiblethingsacompanycouldorshouldreportandhow”(E4-C)“Someseriousfundamentalflawsinthattobeginwith”(E4-C)-inrelationtoMA

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“Needingbetteralignmentofindicatorsforeachindustry,forexample,CDP”(C5-L)“GRIdon’ttellyouexactlytheindicators,it’svery,Imean,becausewedon’thaveanindustryGRIdefinition”(C1-M)“ShouldbestreamlinedfromCDPtoGRI,toGlobalCompactprogressreports,tothemillennialdevelopmentgoals”(C4-L)“Muchbasedonhowdoyouevaluateitinonecountrythatiscompletelydifferentfromanothercountry.Andinmostreportingsystemsyoutendtohaveonevaluethatshouldcovereveryplaceintheworldandthatmakesthingscomplexanddifficulttoapply”(E8-A)

• Categories:Barriers-ExternaldiscouragementInadequatetransparencymechanisms“Morepositivereinforcementforbeingtransparent,forexample,inCDPanhonestanswertoachallengecanleadtoalossofpoints,whereasskippingthatquestionornottransparentlyansweringcouldleadtoabetterscore”(C5-L)“Certainlynotasapublicnumber,sometimestheyareintogetaratingbutthenisjustkeptbytheNGOinsteadofpublished”(E8-A)Politicaluncertainty“Lotofpoliticaluncertainty,whichisgoingtobereflectedinbusinessoperations”(E5-C)“Theeconomicsystemhassortofbrokenpeople”(E5-C)Limitedincentivesforsustainability“The conditions to save energy and emissions really they are not really good there are not toomanyincentivesformtheoutside…inthebiggercountries,theyoftengetabargainfortheirprice…thatdoesn’thelp”(E8-A)

Theme:DegreeofformalityoftheSRprocess• Categories:Barriers-Managerialcapture

Representativeness“Gettingstakeholdersinvolvedinfindingtheissues…notasgoodasitcouldbe…oftenwehavesomeselectivestakeholdersthatareaddressed”(E7-A)“Are the stakeholders that are engaged really representing all the parties that are affected by theorganisation?”(E7-A)“Had those stakeholders in,wehad the community representation but are they really representingallgroups?,especiallyvulnerablegroupsinthecommunitythattheyareaffecting?”(E7-A)“Howmanypeoplewereengaged?Whatkindofpeoplewereengaged?...Justforinterestorisitactuallystatisticallysignificant?”(E1-O)“Tiedtotheknowledgeofthestakeholderstheyinvolveintheconversation”(E7-A)“Alltheinterestgroupsofthecompanyparticipate,becausewhatcannotbedoneistoleavesomeoftheinterestgroupsout”(C3-M)Proceduralquality“Soifyouaskthequestions,itdependshowfreepeoplearetobringupotherissues”(E1-O)“Whatkindsofpeoplewereengaged?Andinwhatway?”(E1-O)“Isthecompanywhosetsthequestions,isn’tit?,Soifyouthinkaboutit,anysurveyisgoingtobeasgoodasthequestionsasked”(E1-O)“havingasetofquestionsinaquestionnaire,youstirpeopletolookitfromthatperspectiveratherthantheperspectivethattheymighthave”(E1-O)“It’sveryinwardlooking”(E1-O)“Alistoftopicsisobviouslynotleftopenbecausewewouldlosefocusandthedispersionofthemeswouldbesuchthatitwouldnotmakesensetodotheanalysisofmateriality”(C3-M)Qualityfeedback“You’vegottoengagewithpeoplewhokindofknowyouaretalkingaboutandknowthecompanyquitewell”(E1-O)“Ican’tcommentonacompanies’performanceifallIcanreadaboutitswhattheywrittenabout”(E1-O)“Quiteafewpeoplearedoingitbyathirdparty,soIthinkthat’sprobablythebestwaytobehonest”(E1-O)“Thequalityontheirresponsesofcourse”(C1-M)“Anextensivelistoftopicsofallkinds…sotheyreturnthisquestionnaire”(C3-M)Quantityfeedback“Wedonothavethefeedback,thequantityoffeedbackexpected”(C1-M)“Difficultyisjusttogettounderstandotherstobeinvolvedinanswering”(C1-M)

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“Youneedquiteafewresponsestomakethatvalid”(E1-O)Justnessoftheoutcome“How would you weight and how would you explain your rationale for weighting different thestakeholders?”(E1-O)“Iamassumingthattheyaregivingeverybodythesameweight,butI’dbeveryinterestedifnot”(E1-O)“Decision-makingisnotnecessarilydoneincludingthosedifferentstakeholders”(E7-A)“Therewasaworkshopwiththetopmanagementteamofthecompanywheretheyhadapresentationofeachandeverystakeholderpriorities.Theyanalysedthis,andfromthat[they]madeadecisiononwhattoaggregateand[what]resultsshouldbeandwhattheprioritiesforthecompany[are]”(C8-W)“Theorganisationmakesadecisiononwhattheythinkis important,importanttodo,andimportanttoshareisnotalwaysexactlythesamething”(E7-A)“Whoisreallyparticipatinginthatmaterialitydecision-making?”(E7-A)“Includingandidentifyingtheissuesisonething,thedecisionmakingintheorganisationisanotherthing”(E7-A)"Stakeholdersactivelyparticipateintheintegrationofcertainapproaches"(C3-M)

• Categories:Barriers-Potentialforposture“Materialitycanbeinanegativesenseusedbythoseorganisationstokindofhidethingsthattheydon’twanttoshow,butdefendingthemselveswiththefactthattheyconductedmaterialityanalysis.Andactuallythoseissuesarenotasimportant”(E7-A)“There'sbeenforyearssituationswerecompanieswerereportingonthingsthattheyareperformingwellon,andkindofamendtheinformationweretheyarenotdoingsowell”(E7-A)

• Categories:Barriers-Pointlessexercise“Thereisthisbigstandardpointofmaterialitysayinglet’sunderstandthebiggestimpactsbutagaintheoverqualificationoroverassessmentofmaterialityatthispointIthinkiscounterproductive”(E4-C)“Bythispoint,ifwehaven’tfiguredoutwhatthemostimportanttopicsarefortheindustryoranyindustrythenwhathavewebeendoingthiswholetimeright?Howisitthatsomebodystillneedstogoandasktheyhavenoideawhattheirbiggestimpactsare?”(E4-C)

• Categories:Barriers-DatacollectionLackofsystems“Difficulttocomplyifyoudon’thaveanHRSsysteminplace”(C4-L)“Therightsystemsinplacetoenableustocollectbetterandprocessthedata”(C4-L)“Wedonothaveadefinedtool”(C6-L)“Newsystemforallhotels,sometimesforcorporatebutnotforall”(C2-M)Unclearmeasurement/Metrics“Whatmeasurestouse”(E7-A)“Whattimeframetouseforthemeasures”(E7-A)“Thescale”(E7-A)“Formanythings,thereisnotasoundmethodologyforhowtomeasureimpacts”(E7-A)“Moreworktohaveestablishedmeasures”(E7-A)“Needagreementtohavethosemeasures”(E7-A)“Initiativesthatpromisethoselong-termreturnsandarehardalsotomeasure”(E7-A)“Difficulttoreportonasortofaggregatedwayonsocialthings”(E1-O)“Overcomplicating”(E4-C)

• Categories:Enablers-UseaThirdPartyThirdparty“Fewpeoplearedoingitbyathirdparty,so:Ithinkthat’sprobablythebestwaytobehonest”(E1-O)“Thelesstheyhavetodothebetter”(E1-O)

Cognitiveintegration-Skills(7S)Theme:Knowledgeandskillsofemployees

• Categories:Notwell-developedorganisationalcapabilities:MA-Lackofknowledge“Thereisnoknowledgeaboutthis”(C1-M)“Thereisnoexpertsonthisortheotherside”(C1-M)-Timemanagement“Aquestionoftime”(C1-M)

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Externalassurance-Lackofknowledge“Lackofknowledge”(E6-C)Stakeholderengagement-Lackofknowledge“Tryingtoembarkonthisrobuststakeholderengagement,andunderstandexactlyhowthatworks,theyoftenwantsometrainingforthat”(C5-L)“Knowingwheretostartsometimes”(E1-O)“Lackofknowledge”(E6-C)“Havingtolearn…expectingmoreabouthowtoworkwithstakeholders”(C2-M)-Timemanagement“Itistime-consuming”(E1-O)“Lackoftime”(E6-C)-Capacitytoreachout“Havingtherightconnections”(E1-O)SustainabilityReporting-Lackofbasicmanagement“Needforbasicmanagement”(E1-O)“Wedon’tseecarbonreportingorsustainabilityreportingmorewidespreadisbecausehotelsdonothavedata”(E5-C)“Lotofconsumptionstillmonitoredonestimates”(E5-C)“Hotelsarenotmeasuringtheirwateruse”(E1-O)“Reallydifficulttocreateasustainabilityreportifyoudon’thaverobustbaselinesonwhichtobaseyourassumptionsandtomakeforecastsforyourbusiness”(E5-C)-Timemanagement“Timereportingvs.timedoingthings”(E1-O)“Anotherstepofsomethingelsetodo(E1-O)“Awasteoftime”(E1-O)“Whyshouldyouputmoremoneyandtimeefforttodoareportwhenyouaresobusywithsomanythingsgoingon?”(E4-C)-Materiality“Themattersofdefiningwhatisthematerialissues”(E7-A)Sustainabilitymanagement-Lackofbasicmanagementcapabilities“Theymakerealthemanagementofthis(sustainability)”(C1-M)“Themostimportantthingisthatdataisavailablenotthesustainabilitydatafromtheindustryingeneral”(E5-C)“Stillneedtounderstandthebaselineandhowtomonitortheresourceconsumptioningeneral”(E5-C)“Itwilltakequitealongtimetoaddress”(E5-C)-Lackofknowledge“Stillinhotelindustry,youdon’thavemanysustainabilitymanagersunderstandthetopicverywell,soyoumighthaveitonlyinbigorganisationsbighotelsbutafteratmoregranularlevelofindependenthotelsyoudon’thaveanyonethatunderstandsdataandknowswhattodowithit”(E5-C)“Havingenoughskilledemployeeswhocankindofbringthatexpertiseonhowtheorganisationimplementqualityorintegrativesustainabilitymanagement”(E7-A)“It’sthematterofknowledge”(E7-A)“Lackofknowledgeaboutwhatitincludes”(E6-C)-Elementaryperformancemanagementsystems“Wecannotdevelopsuchbigsophisticatedtools,yet,ingeneral”(C1-M)“Everythingisdoneinternally,youknow,onexcelsheets”(C4-L)“SomeareasarestilldependentuponthinkslikeExcel,whichIdon’tthinkisthebestsolutionatall”(C5-L)“WeuseExceltomonitorsocialinitiatives”(C6-L)-Theinternalorganisationnotfitforsustainability

-Responsibilities“Theyarenotorganisedtotakeallthesekindsofproblems”(E8-A)(Exampleonenergy)“Needtogototheoldmanagementoftheenterprise”(E8-A)

-Separatemanagement

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“Maybetolda littlebitwrongwherewehadhadanenvironmentaldepartment,wehavemadeourowntoolsandourownsystems,reportingsystems.Whereweseethatitdoesn’tgetenoughattentionfocusinthecompany”(C7-W)-Timemanagement“Lackoftime”(E6-C)-Materiality“Thematterofdefiningwhatisthematerialissues”(E7-A)

Cognitiveintegration-SharedValues(7S)Theme:Organisationalcultureandvaluessystem

• Categories:Barriers-CulturalbehaviourValue-ladendecision-making“Peoplesbeliefsinfluencetheirwork”(C6-L)“Makesensefortheperson,soit’salsopersonrelatedfromthepersonwhoworksonthecompany”(E6-C)“It’sjustrealisticallyinthedaytodaytosustainabilityitdependsonwhat’sthatsustainabilityofficermadeofandwheredidtheycome”(E4-C)Culturaldiversity“Makeadjustmentswhichweredifficultconsideringculturaldifferences”(C5-L)“Peoplefrominsideandoutsidethecompanyareusedtodothingsdifferently…operationaldepartmentsareusedtoworkwithanotherculture”(C6-L)Operationalreactivenon-strategicfocus“Short-termthinkingthatit’syouworkhereandnow,anddonotthinkonalong-termstrategy”(E6-C)“Peopleofthehospitalityindustryisverybusinessbusywiththedaytodaymanagementandthereforedon’tthinklong-term”(E6-C)“Theirworkwith sustainability is notwell prepared,well structured and therefore not always totallyprioritisedaccordingtotheneeds”(E6-C)“Ithinkthathospitalitycompanycanchoosetoworkwithaspecificpartandingeneraliftherewasatotaloverviewthenitmightbemorerelevanttostartwithanotherpart”(E6-C)“Itisnotsoholistic,andit’smoreeasysolutionsortakenthepartofthesustainabilityworkthatiseasier”(E6-C)“Theeffectisnotmaximised.Ifyouhadanoveralloverviewofallthedifferentpartsofsustainabilityyouwouldknowwherethebiggestdifferencecouldbemade”(E6-C)“There’sallthethingsthatcomeatit,soforexamplesuddenlythereisadebateontheUK,soweneedtodosomethingtoaddressslaveryinthesupplychain,okI’mgoingtoreact”(E4-C)

• Categories:Barriers-Balancingvaluesforprioritisation(Valuestrade-off)Balancingeconomicandenvironmentalvalues“Iseethechallengestobalancetheeconomicvaluesandtheenvironmentalvalues,andbecausesometimesthereareinvestmentsthatyouwanttodotoimprovetheenvironmentalsustainability…butyoucannot,itcoststoomuchmoneytodothat.SoIwouldsaythechallengeistofindthebalancebetweentheeconomicandtheenvironmentalsustainability”(C8-W)Balancingeconomicandsocialvalues“It comes to a balance between economic and the activities that we want to do regarding socialsustainability”(C8-W)“Justaquestionofprioritising”(C8-W)Lowhangingfruits(Dependencyfromprioritisationofeconomicoutputs)“Prioritiseamongalltheseopportunities.Wecannot,wedothemallatthesametime”(C8-W)“Whatcanwedothatdoesnotcostmuchthatgivestheimagethatwewouldliketoshowandit’seasy,sothelowhangingfruitsbasically”(E6-C)“Peopleareworkingwithmakingmoneyandselling,andthat’stheimportantforthestaffandiftheygetalittlebittimeweworkwithsustainabilityandenvironmentalstuff”(C7-W)“HowdoIgainpeople’sattentionhowdoIdoitonalowbudget,howdoImakethebiggestimpact.Sothey’llgotofocusonthefinancialcosts,energyreductioncosts,sothat'sstraightthey’llhelpsavethecompanymoney”(E4-C)“Theywanttodosomething,sotheylookit’seasytotakethatpartofsustainabilitywork,andsowedothat,andthat’sourfocus,buttheyhaven’tmadeanoverallassessmentofwhatokwhatwasreallyneedit”(E6-C)

• Categories:Barriers-Creatingvalueoutofsustainability

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Monetisesustainability“Thebigchallengeistocreatevalueoutofthis,tomonetizethis.Isthattheconsumerchoosesyoubecauseyouareyouareasustainablehotel.Isthatyouremployeechooseyoubecauseyouareasustainablehotelorachainandthatyourinvestorschooseyoubecauseyouareasustainablehotel,evenyourownersforthemanagementcontracts,chooseyoubecauseyouareasustainablehotel.Thiswillbetheendofthestory.Becausewecreatevalueoutofthis.”(C1-M)Notmakingmoneyjustspending“Untilnowisstillpending”(C1-M)“Stillwearenotmakingmoneyoutofthis”(C1-M)“It’shardtobefocusedonsustainabilityifyouarenotmakingmoney”(C7-W)

• Categories:EnablersOwnersengagement“Youneedtoengagetheownersmore,therealhotelstate.Theymaybecompletelyseparatefromthehotelindustryhasnopartofthediscussionatall.Theyseethemselvesasoneoftheirinvestmentsinbuildingsthathappentobehotels.Ifwecangettheminvolved,inthehotel'ssustainabilitydiscussions,realisewhatitmeans,whatitentails,andwhattheopportunitiesare,Ithinkthatwouldhelp”(E4-C)Topmanagementendorsement“SupportfromtheCEO”(E5-C)Involvedteams“Manyopportunitiestocollectthoseideasandmakethemturnintoactivities”(C8-W)“Thesuccessdependsontheparticipationandcommitmentofemployee…someprojectsareproposedbytheemployee”(C6-L)

• Categories:CulturalbehaviourAppropriateculturalbehaviour“Culturalbehaviourisoneofthekeyelementstoimplementagoalortargetsuccessfullyunlessyoudon’thavethatyou’renotgoingtoachieveanything”(E5-C)

Theme:Managerialattitudes• Categories:Fearfromexposure(SE)

Reputationalfear“Notfeelinglikeweareonthespot.AndIthinkthat’sanotherelementthereisafear”(E1-O)“Sectorstakeholderengagement:“deflectssomeofthecriticismfortheindustry”(E1-O)

• Categories:Fearfromexposure(SR)Reputationfear"Sharinginformationisseenasincreasingvulnerabilities”(E7-A)“Beingafraidtheywillnotscorewelloncarbonfootprintperguestnight…somepeoplemaychoosenottobookanymorewiththem”(E8-A)“Canitbackfiretheorganisation?”(E7-A)“Maylookworstthancompetitors”(E7-A,E8-A)“Reportreaderswillnotalwaysrealisedifferentcircumstancesinwhichcompaniesoperate”(E7-A)“Sharingtheresultsmaynotbeseenwell,actuallybenegativeformyimageandbrand”(E7-A)“NextyearifwehavehigherCO2emissionswecanbeattackedforit”(C3-M)Competitionfear“We publishmany things on our results, information, and alsowe share, it could be very bad for thecompetitor,allothercompanies,otherorganisation”(C2-M)“Aimtohaveasmuchtransparencyaswecanwhenitcomestosustainability,butofcoursewealsowanttobethatcompanyinsustainabilityin((regionname))ofcoursewedonotrevealourstrategiesandallourplansforthefuture”(C7-W)“OfcoursetheymentioncompetitiveissuesorissuesofcompetitionbutIactuallydon’tseewhatthevalueofthatis…maybetheybelievethereisacompetitionissueoracommercialissuehere…ifonlyonedoesitmaybethenthereissomething”(E8-A)Fulfillinghighexpectations“Wehaveanownerthatisverymuchinthemediatalkingaboutenvironmentalissues.Therefore,theguestsandthecommunityexpectustodomore,andthatcanbehardtofulfiltheirexpectations”(C7-W)

• Categories:DatacollectionLimiteddatasharing

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-Unwillingness(companiesandpartners)“Inthehospitalityindustry,they’renotwillingtosharemuch”(C5-L)“Let’s seewhat theotherhotel companiesare reporting, they’renot reportingas robustlyasuswearereportingthemost,wearenotgoinganyfurtheratthispoint”(C5-L)“Havingtheloweroptionatleastforsustainabilityreporting”(E7-A)“Lots of different partners that they are working with and those partners not necessarily want thisinformationtotheshared”(E7-A)“Thereisanissueofwillingnesstocollectandsharethedata,specificallythelaterone”(E8-A)“Somesustainabilityissuesarereallydifficulttomeasure,butsomeareveryeasyandarenotdone”(E8-A)(Example:Scope2energyusewhichisalreadyonthebill)

• Categories:NarrowreachofIndustrycollaboration“IfHotelCarbonMeasurementInitiativeistheglobalstandardthattheindustryassessthenitshouldbemorewidespreadacrosstheindustry”(E5-C)“Needthevastmajorityoftheindustrytouseitaswellandtoknowitandtobeawareofit”(E5-C)“Muchcommunicationthatneedstobedoneatthatlevel”(E5-C)

• Categories:SustainabilityreportingCostsvs.value“Ifyoudon’tseethebenefitfromit,whypaythecostandengageinthisactivity?”(E7-A)“Theydon’tseeitasapriority”(E5-C)“Ifyoudon’tseethebenefitfromit”(E7-A)“forsomereason,theyarenotawareofthat”(E8-A)“Itisanaddedcost”(E5-C)Abattletoconvince“We’retryingtoalsopushtheargumentaroundtheworkthatneedstobedone”(C5-L)“Havenotfullyconvincedthemaboutthatyet”(C5-L)“It’snotthatthey’renotsupportiveofsustainabilityorCSR,ingeneral,it’sjusteithermoreintricateparts,sowehavewecaneducatethemaroundwhy”(C5-L)“Tokeepitalive”(C1-M)“Kindofabattleeverytimebecausewearenotusedtodoingit”(C8-W)Lackofinternalendorsement“Needingfullbuy-infromstakeholders,especiallyinternal”(C5-L)

• Categories:SustainabilitymanagementAbattletoconvince“Wehavefoughtforbeingpartofthestrategyofthecompanyotherwise,isveryrisky.PerhapsonedayyouhavetheCSRstrategyandperhapsanotherdaythisdoesn'tcome”(C1-M)“Constantlyconvincethetopmanagementteamthatsustainabilityispartofourbusiness,thataffectsourbusiness”(C8-W)“Toconvinceallpartiesthisisacommitmentthatisheretostay,thisisserious,andweneedtodogoodthingsforthebenefitofall”(C6-L)“Manycompaniesthinkthatsustainabilityislikeanicetohave…theydon’tseethatsustainablecompaniesaremoresuccessfulthanothers.Sothechallengeistoconvincethem”(C8-W)“Manytimestheyhavetowintheirownbattles,sotheyneedtogainthepoliticalcompany,theyneedtogoandfigureouthowdoIgainimportance”(E4-C)Lackofseniorendorsement“Unlessyoudon’thaveseniormanagementendorsementisnotgoingtohappen”(E5-C)“Needtohavethesupportofthetoplevelmanagement…Beingconsciousthatthisispartofourbusinessstory”(C1-M)“Tohavethetopmanagementsupportcouldbeachallenge”(C2-M)“Fullbuy-infromstakeholders,especiallyinternal”(C5-L)Notinvolvedteams“Wewouldbesuccessfulonourtargetsifwehadourteamscompletelyinvolved”(C1-M)

Theme:Awarenessofsustainability• Categories:MA

Lowpoliticalawareness“Sustainabilityisprettynewinthemanagementofacompany…somaterialityisjustoutofthisworld”(C1-M)

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“This[materiality]isprettynew,veryunknownissue.It’ssomethingyouneedtoexplain”(C1-M)“Noteverybodyunderstandstheimportanceofthisandisnot,Imean,thispeopleisnotawareonthis”(C1-M)

• Categories:ExternalassuranceUnclearneedandusefulness“Workingtoconvinceourinternalstakeholdersthatweneedabudget,forexample,todoanassuranceanexternalassurance.Soweareusedforthatforseveralyears”(C5-L)“Beliefthatit’sjustextracostsandthenthevalueisnotcorrespondingtoit”(E6-C)

• Categories:StakeholderengagementLowpoliticalawareness“Seeingthatmaybetheydon’thavetodoit,sowhyagainengagewiththestakeholders?”(E7-A)“Theywillengagewithshareholders,ownersinasensebecauseofthatfinancialtie.TheotherstakeholdersIthinkthechallengeisthattheydon’talwaysseetheyshouldsoit’snotgettinghighontheiragenda”(E7-A)“Unfortunatelywedon’thaveenoughbusinesscases,successfulbusinesscasesthatspeakforthemselves”(E5-C)“Mightnotbeaware”(E6-C)“Notontheprioritylist.It’snotupenoughintheprioritylist”(E5-C)

• Categories:Sustainabilityreporting“Akindofpoliticalissuehowinterestedisthehospitalityindustryinclimatechangeorsustainability,istodowiththepoliticalevolutionofawarenessinthatsector”(E2-R)“Afewyearsagoitwasenoughtoreporthowthebusinessevolutionandtheincomestatement”(C3-M)“Comparedtootherindustriesourcarbonfootprintispeanuts”(C1-M)“To make sure that everybody understands the importance in a 21st century that companies mustaccomplishandbecommittedtothisthing…thedifficultyistomakesurethateverybodyunderstandsthebigopportunity”(C1-M)Industrymaturity“They’renotasmatureintermsofthestakeholderengagementpiece”(C5-L)“Itisaquestiononmaturity”(C1-M)“Hugediscrepanciesbetweenthelargecompaniesandthesmallbusinesses”(E7-A)Lackofattention-Lackofexternalpressure“NoNGOornopublicthatispressingthesectortodosomethingreally”(E8-A)“Thesectorsthathavemorecustomerpressureorgovernmentpressure…theydoit”(E7-A)“Needformoreeffortsonthecompaniesandthewholecommunitytohelptheindustrymovemoretowardssustainableperformance”(E7-A)-Notenoughcare“It’salltodowiththecareandattentionsocietyappliestotheproblem.”(E2-R)In reference to Financial reporting: “existing formal processes for evaluating companies financialperformance,andthereisveryhighdegreeofstandardizationinfinancialreporting”“investorswillkillthemanagementofcompaniesthatfailtomakemoney”(E2-R)“Ifnobodycaresitwillbeverydifficulttomakethedifficultchildrenreportconsistently”(E2-R)Voluntaryactivity“Unlessit’snotcompulsorywhydoit?”(E5-C)“Thesectorsthathave…requirementstoreporttheydoit.”(E7-A)“Ifit’savoluntaryactivityifyoudon’tseethebenefitfromit,whypaythecostandengageinthisactivity?”(E7-A)“Untillegislationdoesnotenforcethesustainabilityreportingasamust,nooneisgoingtodoitbutnotonlyinthehospitalityindustrybutinanyindustry”(E5-C)“Inotherindustries,therearelegislativerequirements,sotheydoit”(E5-C)“Inthehospitalityindustry,theserequirementsapplyonlytothebigconglomerates”(E5-C)“Needingtoseewhetherthelocalgovernmentsarecommittedtoimplementingstricterlegislation”(E5-C)“Haveitasvoluntaryisridiculous”(E2-R)“Iffinancialreportingwerevoluntaryitwouldbeadisastertotheworld…theworldreliesona100%oncompulsoryfinancialreporting,buttheworldisnotreallythreatenedbyfinancialreporting,theworldisthreatened by the environmental crisis. The same principle applies. Absolutely should have a 100%reportingall,forexample,greenhousegasemissions”(E2-R)

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“Theminimumlevelshouldbemandatory.ItwouldincludethatthereisaCSRpolicyproducedatleasedbyeachonewithtargetsandthatcanbemonitoredandevaluated”(E6-C)

Theme:Legislation• Categories:Barriers-Tacklingcountrylegislations

“The challenge of the hospitality industry, ifwe look it fromaglobal international point of vieweverycountryhasdifferentregulation,legislationwhichneedstobetackledatcountrylevel”(E5-C)“Itdependsverymuchonwheretheaccommodationis”(E8-A)

• Categories:EnablersPolicyandregulations“Thegovernmentshouldbemuchmoreactiveonthisrespectandmakethepricesrisesothatpollutingtheenvironmentiscostly.Also,regulatethingslikewater-basedwastemanagementandthatkindofthingsinabetterwayandaccountcompleteforit.”(E8-A)“Thereshouldbeamechanismtogettocareforthecarbonfootprintsandotherissueslikewaterusage,etc.”(E8-A)“Aseriesofpoliciesdevelopedtosupporttheapplicationofnewtechnologies like…inthiscountrythat2020allbusinessesshouldbesuppliedwithsmartmetersbutaswellwhatisthenextstep,afterheadingsmartmetershowourbusinessisgoingtomakeuseofthisdatatotheirbenefit.Andwhatarethenextpoliciesthatshouldbeputinplacetomovethiscountrytothenextlevel”(E5-C)Mandatoryreporting“Definitelygivenusalittlebitmorepushtohavetocomplywithnewlistings,andrules”(C4-L)“Theyhaverequirementstoreporttheydoit”(E7-A)“Theauthoritiestheyneedtoputinthenecessarylegislation”(E6-C)

Theme:Stakeholderpressure• Categories:EnablersSustainabilitymanagementandReporting

Increaseexternalpressure-Internationalagreements“OfcoursethepressureisincreasingafterParisismoreandmorecountriesaredoingthings,butsofarinthehospitalityindustrythereit’snomainstreamtodothat”(E8-A)Publicpressure“Nopublicthatispressingthesectortodosomethingreally”(E8-A)“Amoreimportanttacticforallbecausetheyknowthecustomersexpecteverybodytodosomething.Forthemanagementtoknowthatifyoudon’tdoanything,youwilllosethebattle.Ithinkyouseenowthatwheneverybodyknowsthisisimportantforlotsofpeople”(C7-W)-Customerengagement“Wehaven’tengagedconsumersorbuyersofhotelsroomstostarthelpingtobuildthemarketcase”(E4-C)“Havemorecustomerpressureorgovernmentpressure”(E7-A)“Customers,individualsorcompaniesusingthehospitalityindustryshouldhavesomedemandsonit”(E6-C)-EmpoweringNGOs“NGOshavearoletopushforthechanges”(E6-C)“NGOspower,therearealotofNGOs,butmostofthemaresomuchinvolvedinthetourismsectoritselfthattheyarenotreallyempowered,theyarenotcreatingscandalstowhichcompanieshavetoreact…that’snotenoughincentivesforthosewhodon’tandmakebigmoneyforit”(E8-A)“TheshareholderswilljustaskforthemoneyunlessthereisanNGOthatpressuresyoutosaysomethingabouttheenvironment,butifthereisnot,thenthat’sthefinalheard”(E8-A)Tippingpoint“Inhistory,companiesdidnotalwaysreportthefinancialperformancebutthengraduallymore,andmorecompaniesdidandtheneventuallyallcompaniesrealisedthatwaswhattheyshoulddo.Weareinthatprocesswithenvironmentalreporting”(E2-R)“Considerthesustainablereportpartofalargepoliticalprocessthatsocietyisengagedin”(E2-R)“Thehospitalitysectoritselfneedstotakealeadingrole”(E6-C)Collaborationinsteadofcompetition“Continuedcollaborationaroundkeyissues…andagreeuponmetricsandindustrygoals”(C5-L)“Needmoremechanismstoengagetheentireindustry,allofthehotelsregardlessofthelevel,efficiencyorperformance”(E4-C)

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“Haven’t been giving the mechanisms to encourage hotels to go forward, little by little to advance,incrementalbenefit”(E4-C)“Findacommonbenefittoworkingwithotherchains”(C6-L)Processfacilitators“Needsomefacilitatorsfortheprocess,theprocessnottobeone-on-onelevelbutaroundbiggeraroundatablethatthechallengesandissuesthatallofthemfacewouldbediscussedthen,wouldreceivetheimpactfromdifferentparties”(E7-A)Investorsendorsement“Ifinvestorscollectivelyareextremelyinterestedandputpressureoncompanies,theywillbecomehighdegreesoftheorganisationinqualityinreporting”(E2-R)“Educatinginternalstakeholdersaroundthevalueofintegratedreporting”(C5-L)“Notenoughinvestorsareaskingforthisyeteither”(C5-L)

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Appendix12:Transcriptionsymbols

[]Brackets:onsetandoffsetofoverlappingtalk

=Equalssign:nogapbetweentwoutterances(nohuecoentredosenunciados)

(0.0)Timedpause:silencemeasuredinsecondsandtenthsofseconds

(.)Apauseoflessthan0.2seconds

.Period(stop):fallingorterminalintonation

,Comma:levelintonation

?Questionmark:risingintonation

↑Riseinpitch

↓Fallinpitch

-Adashattheendofaword:anabruptcutoff

<Immediatelyfollowingtalkis‘jumpstarted’,i.e.startswitharush

><Faster-pacedtalkthanthesurroundingtalk

<>Slower-pacedtalkthanthesurroundingtalk

——Underlining:someformofstress,audibleinpitchoramplitude

:Colon(s):prolongationoftheimmediatelyprecedingsound

°°Degreesignssurroundingapassageoftalk:talkwithlowervolumethanthesurroundingtalk

.hhArowofh’sprefixedbyadot:aninbreath(inhalación)

hhArowofh’swithoutadot:anoutbreath

WORDCapitalletters:utterance,orpartthereof,thatisspokenmuchlouderthanthesurroundingtalk

(word)Utteranceorpartofitinparentheses:uncertaintyonthetranscriber’spart,butalikelypossibility

()Emptyparentheses:somethingisbeingsaid,butnohearingcanbeachieved.

(())Doubleparentheses:transcriber’sdescriptionsofevents,ratherthanrepresentationsofthem.

Source:AuthoradaptationfromA.PeräkyläfromAtkinsonandHeritage(1984).