Towards Investment and Financing for Sustainable Tourism - 9 March 2018
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The OECD report on tourism trends and policies highlights the critical role of investment and financing in promoting sustainable tourism and transitioning to a green economy. It outlines various financing options, challenges, and examples of successful initiatives aimed at enhancing sustainable practices across the tourism sector. The document emphasizes the need for coherent investment environments, responsible business practices, and the incorporation of sustainability criteria in public financing.
Towards Investment and Financing for Sustainable Tourism - 9 March 2018
- 1. TOWARDS INVESTMENT AND FINANCING FOR SUSTAINABLE TOURISM OECD Tourism Trends and Policies Released 8 March 2018 - ITB Berlin www.oecd.org/cfe/tourism/ Follow us on Twitter @OECD_LOCAL #OECDTourism
- 2. LOW CO2 TRANSPORT OPTIONS Transition to sustainable and inclusive tourism Tourism can play an important role in driving the transition to a green economy, and contributing to more sustainable and inclusive growth. Investment and financing is an essential part of this, to support the transition to low carbon, resource efficient and socially inclusive tourism development. ENERGY EFFICIENT INFRASTRUCTURE INNOVATION SUSTAINABLE SUPPLY CHAINS The possibilities include public and private investment in:
- 3. Investment opportunities to support green innovation in tourism ENERGY-EFFICIENT TRANSITION improving the accommodation sector WASTE MANAGEMENT increasing resource efficiency. BIODIVERSITY maintaining ecosystems CULTURAL HERITAGE offering opportunities for continuation of traditions WATER MANAGEMENT improving water efficiency per guest
- 4. Investing in tourism to deliver on SDGs Tourism has the potential to contribute to all of the sustainable development goals (SDGs), but has been particularly included as targets in goals 8, 12, and 14.
- 5. Financing options and sources for sustainable tourism development Direct: create or invest in companies that bring in processes or services that reduce negative environmental impacts while increasing productivity Indirect: subsidised loans or grants, market-based loans, (partial) credit guarantees, insurance for green assets. Market: debt finance, equity and hybrid instruments and fintech innovations that reduce transaction and borrowing costs. Impact investment: blended finance, microfinance and crowdfunding. PUBLIC INSTRUMENTS PRIVATE INSTRUMENTS
- 6. Challenges to greater investment and financing for sustainable tourism Investment maturity mismatch, transaction costs, and lack of necessary collateral for financing small tourism projects. Financing institutions fail in the assessment of the environmental risk. Lack of data on green investments. Frameworks could serve as a useful benchmark to measure sustainable consumption and production. No sectoral breakdown for tourism. Firms fail to account for the impact of their actions on the environment. Policy should encourage and incentivise businesses to incorporate environmental and social impacts into their investment decisions. Negative externalities are not being adequately considered, with sometimes too much environmentally negative investment. Issues include : fragmented climate policies and presence of weak governance. LACK OF SUITABLE FINANCE INSTRUMENTS INSUFFICIENT DATA AND MEASUREMENT LIMITED INCENTIVES FOR SUSTAINABLE PRACTICES INADEQUATE CO-ORDINATION ACROSS GOVERNMENT
- 7. Mainstreaming investment and financing for sustainable tourism development PROMOTING INVESTMENT AND FINANCE FOR SUSTAINABLE TOURISM DEVELOPMENT CREATING A COHERENT AND SUSTAINABILITY FRIENDLY INVESTMENT ENVIRONMENT ENCOURAGING SUSTAINABLE AND RESPONSIBLE BUSINESS PRACTICES
- 8. Promoting investment and finance for sustainable tourism development In Mexico, long term loans and public guarantees promote green (solar) energy investment in hotels, to reduce greenhouse gas emissions. In Spain, an eco-tax of EUR 2 per night on overnight stays in the Balearic Islands was introduced to finance investments to maintain and improve the quality of tourism on the islands In Australia, the Clean Energy Finance Corporation’s Reef Fund Programme for clean energy businesses and projects invests in low emission vehicles and resort and building upgrades, including in tourism. New Zealand’s Tourism Infrastructure Fund provides NZD 100 million in co- financing for the development of tourism- related infrastructure , to support local communities facing pressure from tourism growth. In the United Kingdom impact investing has been used to transform a disused office building in London into an innovative green hotel, using pre- fabricated bedrooms made from recycled materials.
- 9. Creating a coherent and sustainability- friendly tourism investment environment In Chile, the Foco Destino or ‘Target Destinations’ initiative intends to build capacity of local managers in order to boost selected tourism destinations and increase their competitiveness and sustainability. In Sweden, an initiative by the Swedish Agency for Economic and Regional Growth boosts sustainable consumption and production with a co- ordinated approach driving actions tailored to the needs of participating destinations and regions. The Australian Trade and Investment Commission (Austrade) offers advice and facilitation services to international and domestic tourism investors, including a streamlined regulatory process.
- 10. Encouraging sustainable and responsible tourism business practices The Icelandic Centre for Corporate Social Responsibility and the Icelandic Tourism Cluster, support tourism SMEs to adopt more sustainable practices: demonstrating exemplary behaviour and respect for nature. In France, the Chamber of Commerce and Industry encourages members to adopt a more responsible approach to the environment, and has identified as challenges for sustainable tourism financing the high costs and low profitability associated with “going green”. In Germany, the Hotel And Restaurant Association developed a campaign offer hotels the possibility to engage in systemic energy saving, thus reducing costs and the emission of harmful greenhouse gases.
- 11. Policies to address the sustainable tourism investment gap Incorporate sustainability criteria into public financing and investment supports, and encourage uptake of green financing for tourism projects. RESPONSIBLE BUSINESS PRACTICES GREEN FINANCE DATA CO-ORDINATION Improve data and analysis on green finance and investment in sustainable tourism development. Build capacity and better co-ordinate actions across different levels of government and policy areas. Incentivise private investment in resource efficient infrastructure, and encourage more responsible business practices.
- 12. OECD Tourism Trends and Policies 2018 OECD Tourism Trends and Policies 2018 focuses on key policy and governance reforms in tourism and provides a global perspective with the inclusion of 49 OECD and partner countries. • This publication is undertaken in partnership with the European Commission • Data available on OECD.Stat • The 2018 publication is now available on the OECD iLibrary • For more information: www.oecd.org/cfe/tourism/ [email protected]