Uganda’s tourism sustainability agenda

The United Nations World Tourism Organisation (UNWTO) defines sustainable tourism as one that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities.

Sustainable tourism development guidelines and management practices are applicable to all forms of tourism in all types of destinations, including mass tourism and the various niche tourism segments.

Tourism sustainability principles are the environmental, economic and socio-cultural aspects of tourism development. There is need to establish a suitable balance between the three dimensions to guarantee the long-term sustainability of the tourism industry.

Thus, sustainable tourism should (Source: UNWTO Sustainable Tourism Development)

1. Make optimal use of environmental resources that constitute a key element in tourism development, maintaining essential ecological processes and helping to conserve natural heritage and biodiversity.
2. Respect the socio-cultural authenticity of host communities, conserve their built and living cultural heritage and traditional values, and contribute to inter-cultural understanding and tolerance.
3. Ensure viable, long-term economic operations through providing socio-economic benefits to all stakeholders that are fairly distributed, including stable employment and income-earning opportunities and social services to host communities, and contributing to poverty alleviation.

Environmental, social and governance (ESG) is a framework used to assess an organisation’s business practices and performance on various sustainability and ethical issues.

Environmental criteria consider how a company safeguards the environment, including corporate policies addressing climate change, for example. Social criteria examine how it manages relationships with employees, suppliers, customers and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls and shareholder rights.

Environmental, social and governance (ESG) considerations have become some of the most important issues facing corporations across the world today. In essence, ESG captures all material non-financial topics that usually are not being captured by standard financial reporting.

Given the direct interactions between tourism industry operators, the environment and communities the importance of ESG in tourism cannot be overstated. In a practical sense, the importance of ESG to companies within the tourism industry can be clearly seen in areas such as customer acquisition, customer retention, managing risks and regulations, gaining access to sustainable financing or managing investor relations.

How Uganda’s tourism is faring with regard to the ESG framework?

Environment

The tourism business poses a risk to the environment, if it is not well managed and carbon print closely monitored. While assessing compliance with protecting the environment, we look at these areas: energy usage and efficiency, climate change strategy, waste reduction, biodiversity loss, greenhouse gas emissions and carbon footprint reduction.

The tourism sector was flagged as one of the major factors to help the country achieve its ambitious target to reduce greenhouse gases (GHG) emissions from 22% to 24.7% in the new climate change plan also known as the Nationally Determined Contribution (NDC).

The tourism sector in Uganda is heavily nature-based with moderately clear eco zones gazetted in the form of forests, wetlands, national parks, game reserves or other conservation areas. This continually helps limit environmental degradation, exploitation and misuse. However, the sector faces effects of climate change like reducing glaciers on the Rwenzoris, breaking of river banks (River Nyamwaba), increase in water levels (Lake Victoria), landslides, unpredictable weather seasons, etc, which should be a wake-up call that more should be done in the tourism business operations to intentionally conserve and protect the environment since we highly depend on nature for survival as a sector. Furthermore, as a sector, this provides us with an opportunity to create innovate products and visitor experiences that do not highly rely on nature. A case is animated tourism products ,etc.

Social

It is often said that a business is as good as its people. The tourism sector in Uganda is one of the sectors that employs non-skilled, semi-skilled and skilled labour across its value chain.

Tourism according to national planning is charged with maintaining the number of Ugandans it employs at 667,000 people. By looking into the social aspect of the ESG, we consider fair pay and wages, equal employment opportunities, employee benefits, work place health and safety, community engagement, responsible supply chain partnerships and adhering to labour laws. The tourism sector has been ranked high by EOC as a great contributor to women and youth employment in the country. Additionally, numerous tourism businesses have adapted to the concept of “Buy Local Build Local” by sourcing labour, raw materials, hotel supplies from the community and also conducting CSR for the communities in which they operate e.g. UWA’s revenue-sharing programmes. However, the average earnings of employees in the tourism sector are still subsistence with minimal adherence to labour laws (leave issues, late work hours with minimal compensation, etc), and a few employers offering health and safety insurance for its employees. There is still room for us as a sector to embrace in the social aspect of the ESG framework.

Governance

The tourism sector in Uganda, is mainly composed of micro small and medium enterprises (MSMEs) thus making governance an option compliance element of most businesses.

By looking at the governance under the ESG, we consider corporate governance, risk management, compliance, ethical business practices, avoiding conflict of interest and accounting integrity and transparency.

The summit consultancy group’s report on the state of corporate governance in Uganda ranks SMEs at only 14.29% budgeting and incorporating risk management in their operations. This could even go much lower, if the micro-businesses are added. Therefore, governance is a key focus area for the tourism sector if we are to adhere to the ESG framework of business sustainability.

Conclusion

At the back of this ESG framework is the increasing global pressure. A pressure to have companies adhere to the environmental, social and governance (ESG) agenda.

Chief executives are facing a test of time. Most, if not all, are expected to fit the ESG agenda in their long-term business strategic plans and budgets.

Companies should be making commitments to deliberately integrate their operations and products with pro-environment and climate solutions. Companies are also expected to ensure human rights and labour protection practices within their organisational culture. Overall, building a strong, equitable and transparent governance structure is also expected, if the tourism industry is to develop sustainably.

ESG aspects are emerging as core values of companies in the tourism industry, major financial institutions and shareholders around the world. The United Nations considers ESG as a significant element that consumers, businesses and civil societies will look up for in a product, and the demand for ESG management is ever growing.

Thus, for Uganda’s tourism sector to be attractive both to investors and tourists, we need to seriously consider incorporating the ESG agenda in all our business operations.

The writer is the chief executive officer of Uganda Tourism Board