Nature-based solutions and ‘destination stewards’: How Iberostar is plotting its pathway to net-zero

“Catalytic” changes to the business’s overall strategy in the name of climate and nature action are being made, says Dr Morikawa

COP26, which took place in Glasgow in November 2021, is often described as the COP where private sector involvement reached new levels. To give just one example – even after 18 months of Covid-19-related disruption, more than 700 travel and tourism players signed a new Glasgow Declaration and pledged to firm up their net-zero plans.

Fast-forward one year and one of the first signatories of the Declaration, Iberostar, made good on the Declaration’s requirement for signatories to deliver a detailed climate strategy. The business used its platform at COP27 in Egypt to unveil a roadmap to carbon neutrality across all emissions scopes this decade.

Crucially, the global director of Iberostar’s sustainability office Dr Megan Morikawa tells edie, the roadmap entails cutting emissions in line with science. The business has achieved verification for its targets in line with 1.5C from the Science-Based Targets Initiative (SBTi) and has also applied for the SBTi’s Net-Zero Standard.

Dr Morikawa tells edie that, when Iberostar conducted a materiality assessment in 2018, climate exposure was perceived as a “relatively low priority”, largely due to “confusion around how a business in our space should be taking action”. This quickly changed as climate science evolved and policymakers began legislating for net-zero targets. In 2020, the business completed its first full measurement of Scope 1 (direct) and 2 (power-related) emissions, but “still didn’t have a sense – nor did the industry as a whole – of what Scope 3 should look like”.

To that end, Iberostar and others in the sector are looking to the Sustainability Hospitality Alliance methodologies to help better define the boundaries of Scope 3 emissions. It applied these frameworks and discovered that Scope 3 emissions accounted for 77% of its total carbon footprint.

All of this, Dr Morikawa says, amounted to “catalytic” changes to the business’s overall strategy in the name of climate and nature action.

“One of the messages we wanted to send is that bold ambition and action can actually happen relatively quickly,” she summarises.

Renewable energy acceleration

Iberostar’s 2030 targets are set against a 2019 baseline and include delivering an 85% reduction in Scope 1 and 2 emissions.

Dr Morikawa points out several “levers” that the business must pull to achieve this level of decarbonisation, including improving energy efficiency, switching to refrigerants with a lower global warming potential, electrifying machinery, and procuring renewable electricity to power those electrified systems.

“Above all, the most important lever in terms of our ability to decarbonise is having access to renewable energy in our destinations,” she explains, noting that delivering up to 66% of the target is contingent on sourcing renewable electricity for electrified machinery.

She adds: “This is absolutely not something we can achieve by ourselves. The renewable energy transition must be done in partnership with local governments, energy providers and other key stakeholders at our destinations.”

To that end, Iberostar is looking to go beyond tariffs and certificates where markets allow. It will install onsite solar in some locations and also seek out “gold standard” power purchase agreements (PPAs) which contribute to the development of additional generation capacity.

Dr Morikawa also emphasises that improving energy efficiency is the cornerstone of “any business case for decarbonisation” and helps to maximise the benefits of clean energy procurement. To that end, Iberostar is aiming to consume 35% less energy in operations in 2030 than it did in 2019. Here, she says, there is a “direct savings potential that can offset some of the investment required to update machinery”.

She’s also keen to highlight that switching energy supply and improving technologies should be coupled with procedural changes and employee engagement that results in behaviour change. She explains: “Big energy contributions come from our kitchens and industrial services – things that are back-of-house. We need the right protocols to make sure that staff are turning things like coffee machines off and on at the right time to save energy without impacting the quality of guest services.”

Supply chain engagement

As noted above, most of Iberostar’s carbon footprint is accounted for by Scope 3 sources. The firm has pledged to halve Scope 3 emissions by 2030, again against a 2019 baseline. Dr Morikawa says this target is “just a little more ambitious than being 1.5C aligned”.

Purchased goods and services alone account for almost half of Iberostar’s absolute carbon, making engagement with those suppliers key. Hotels procure a wide range of goods and services, including food and drink, beverages, towels, furniture and energy. Dr Morikawa argues that supplier engagement “is the essence of what any industry that isn’t hard-to-abate should be thinking about” and a “catalyst for decarbonisation” beyond the industry’s value chain.

Iberostar is at the stage of requesting more detailed information on emissions from suppliers in most cases, she explains. The hope, moving forward, is that suppliers will have enough information to make their own emissions targets matching the ambition of their key clients and that they can collaborate within their

Other sources of Scope 3 emissions covered by Iberostar’s targets include construction, capital goods, downstream assets, waste management, employee commuting, business travel and fuels not included in Scope 2. Flights taken by customers to and from destinations are not in scope, per the Sustainable Hospitality Alliance’s guidance on applying the Greenhouse Gas Protocol to accommodation providers.

Dr Morikawa notes that some suppliers may not be able to decarbonise as rapidly as others, but maintains that setting ambitions and expectations could help to accelerate innovation: “If your Scope 3 emissions include emissions from hard-to-abate sectors… you can’t wish away those sectors and the goods and services they provide you with. You can set an ambition greater than the one these industries are working towards, and it will take time for those segments of Scope 3 to decarbonise. I think it’s important for businesses to be realistic in understanding what it is possible to decarbonise from supply chains and how best to put pressure on those sectors that will really determine when the world will be able to reach net-zero.

“If there was any message we wanted to deliver at COP27, it’s that if you are excited about the level of ambition shown in our roadmap, you must know that none of this is possible to deliver independently.

“What we want to do as an organisation is to work as quickly as possible to not be the bottleneck within the sector.”

Global pledge, local action

edie has previously spoken with Iberostar about its emphasis on nature-based solutions. Dr Morikawa is notably a marine biologist, which may seem rare for a corporate sustainability role, but makes sense when you see how many of Iberostar’s 100+ hotels are in coastal locations across the world.

We ask whether the fact that Iberostar wants all ecosystems surrounding its tourist locations to be in improving health by the end of the decade will unlock opportunities for carbon insetting (unlike offsetting, insetting happens within an organisation’s value chain).

The short answer from Dr Morikawa is yes. She outlines how, if the business delivers its 2030 goals for reducing emissions, its carbon footprint will decrease from one million metric tonnes to 430,000 metric tonnes. It believes it can address all of this carbon using nature-based solutions on and around its sites. It is targeting 500,000 metric tonnes of carbon removal capacity from nature-based solutions.

Dr Morikawa notes that huge strides are being made in defining which emissions removals can and cannot be used in net-zero accounting. Earlier this year, the SBTi launched its first comprehensive guidance for companies using land-based emission reductions and removals figures. WWF played a key role in developing this guidance. More movement in this space is expected next year, as science-based targets for nature and nature-related financial and risk disclosures take shape, and as the UN firms up its own guidance on net-zero target credibility.

Whether it is action regarding nature-based solutions, supplier engagement or renewable energy procurement, Dr Morikawa emphasizes how important it is to interpret a global corporate pledge through changes and collaborations that make sense in the context of a particular destination. Is this location suitable for onsite solar, for example? What is the nation’s renewable energy infrastructure like and will that change as it delivers its Paris Agreement commitment? Which nature-based solutions are best suited to the local ecosystems? And which organisations are already working locally for the benefit of the environment?

To that end, Iberostar’s dedicated sustainability team is set to “grow substantially in the coming year” from 27 people at present.

Dr Morikawa says: “One of the areas we’re most excited about is establishing ‘destination stewards’. These professionals will integrate local regulations and transitions for renewable energy and supply chains, they will voice the needs of the destination, they will help us to adjust our strategy to deliver net-positive in the context of the locations where we operate.

“Global strategy needs to be realised in ways that make the most sense for the people and communities that we’re inviting others to visit. It is a critical component.”