By Mohamed Inaz, Nexia Maldives
At Asia Pacific Hotel Industry Conference & Exhibition (AHICE) Maldives 2025, held at Kurumba Maldives, I set out a simple proposition: in island and coastal hospitality, ESG is a performance system that protects natural assets, improves margins, and opens doors to buyers and financiers. I referenced Europe as an example because EU frameworks - most notably the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) (alongside investor-focused rules such as SFDR) -are reshaping what suppliers must disclose and manage. Even non-EU hotels that sell into EU tour operators, OTAs, or corporate programs increasingly need comparable, credible ESG information to pass procurement screens and financing checks. The same direction of travel is emerging in other markets; the EU, for now, simply provides a clear, near-term benchmark.
Why ESG - and why now?
ESG has moved from “nice to have” to deal hygiene. Investors, lenders and major travel buyers increasingly expect comparable sustainability information aligned to global baselines (ISSB/IFRS S1 & S2) and backed by credible certification. Operators that can provide a short, consistent data-pack face less friction in diligence, procurement and financing - transforming from compliance to competitiveness.
The Maldives lens: nature is the product
In destinations like the Maldives, the brand is built on reefs, lagoons, beaches and the natural ecosystems. Protecting these assets is not an add-on; it safeguards revenue and reputation. Current policy signals point toward nature-positive growth, circular resource use, and island systems that are more resilient and opportunity-creating - themes echoed in national planning around resilient islands and prosperous communities.
ESG as a tool for value creation
Revenue & market access: Credible sustainability helps defend rate and occupancy and keeps doors open with tour operators, OTAs and corporate programmes (EU buyers are a clear example). A recognised certification badge can act as a simple, independent signal - useful in RFPs and listings - but the story should rest on your actual performance data.
Cost & resilience: On islands, efficiency is immediately margin-enhancing. Prioritise hybridising power with on-site renewables, smarter cooling/controls, RO efficiency and leak detection, plus waste diversion and plastics reduction (e.g., on-site glass bottling). These moves reduce OPEX and volatility while supporting the wider shift toward more resilient island systems.
Risk & capital access: Clear Social and Governance practices - workforce safety and development, supplier standards, anti-corruption, transparent incident handling - lower reputational and compliance risk. Combined with a short, consistent data-pack, they make sustainability-linked borrowing credible.
Financing the transition: example of a practical tool
Sustainability-Linked Loans (SLLs): loan margins step down when agreed sustainability targets are met (and up when missed). Success depends on material, auditable targets - think energy intensity, percent renewables, water per guest-night, waste diversion - and independent verification. Paired with a sensible capex plan for efficiency and renewables, SLLs translate ESG outcomes into real OPEX savings and steadier cash flows.
Make it operational
What matters most is execution: a concise, repeatable data-pack with a few hotel-friendly intensity metrics; clear roles and policies; a credible certification pathway; and regular, transparent updates. Measure once, report many - to investors, lenders, brands, distributors and guests. Done well, ESG advances both business performance and the broader trajectory toward resilient islands and prosperous communities - the essence of sustainable tourism in the Maldives.