Hospitality organisations are increasingly part of more complex ownership structures: real estate groups with diversified portfolios, investment funds with mixed-use assets, franchise systems, management contracts, and multi-brand groups operating under a single parent company.

In these structures, sustainability reporting is frequently developed at the level of the legal entity that is required — or chooses — to report, not at the level of the individual operating business. A listed real estate group with office, retail, residential and hotel assets, for example, may report on its property portfolio as a whole, while treating hotel operations as a separate matter because they sit in a different legal entity, are operated under a management contract, or are simply outside the materiality assessment that defined the report’s content.

None of this is unusual, and it is rarely intended to mislead anyone. Reporting boundaries follow corporate and financial logic, not hospitality logic. But the practical effect is the same: a hotel can be part of a group that has credible, assured ESG reporting — and still have no usable ESG data of its own.

This becomes a problem at exactly the moments when ESG data is requested directly: a certification audit, an investor due diligence process, a corporate travel buyer’s sustainability questionnaire, or a journalist or NGO asking what a specific hotel’s footprint actually looks like.

At that point, “we already have an ESG report” is not a complete answer unless the hotel can also answer: does that report actually include us?

When a hospitality organisation is asked about its ESG position, it is worth separating two questions that often get treated as one.

Boundary one: who is legally required to report?

Following the Omnibus I simplification adopted in February 2026, mandatory CSRD reporting now applies only to companies that exceed both 1,000 employees and €450 million in net turnover. This narrowed the directive’s scope from an estimated 50,000 companies to roughly 5,000 across the EU. The large majority of hotels, hotel groups and even most regional hospitality groups fall outside this threshold.

This does not mean ESG is irrelevant for them. It means the obligation is not statutory but market-driven: investors, lenders, franchisors, corporate clients and booking platforms increasingly request sustainability information as a condition of doing business, independent of whether the law requires it.

To manage this without placing a disproportionate burden on smaller suppliers, the European Commission has developed the Voluntary SME Standard (VSME) — a simplified, standardised reporting format for companies outside mandatory CSRD scope. A central feature of the current draft is the so-called value chain cap: companies that are in scope of CSRD will not be permitted to request sustainability information from value chain partners with 1,000 employees or fewer that goes beyond what the VSME format covers. The consultation on the draft closed in early June 2026, with formal adoption expected later in the year.

For most hospitality organisations, this is the relevant frame: not “are we required to report under CSRD”, but “how do we respond credibly and proportionately to the ESG information our investors, partners and certification bodies are asking for” — a question addressed directly through structured ESG and non-financial reporting built around recognised frameworks such as GRI, rather than ad hoc responses to each request.

Boundary two: what does the report’s scope actually include?

This is the boundary that is far more often overlooked — and the one that matters most for hotels operating inside larger ownership structures.

An ESG or non-financial report always defines, usually in its first pages, what is included in its reporting boundary: which legal entities, which asset classes, which employees, which financial year. Large, diversified groups — particularly listed real estate companies that hold a mix of office, retail, residential and hospitality assets — frequently draw that boundary around the core real estate portfolio and explicitly state which parts of the business are excluded. Hotel operations, where they are run under a separate operating company, a management contract, or a structure that sits outside the consolidated real estate portfolio, are a common candidate for exclusion.

This is not unusual practice and is not, by itself, a governance failure. A group is entitled to define its own materiality and consolidation boundary, consistent with how it consolidates its financial statements. Under the EU’s reporting standards (ESRS 1), a subsidiary can legitimately sit outside a parent’s sustainability reporting boundary if it is excluded from financial consolidation on materiality grounds. The issue arises when that boundary is not communicated clearly internally, and a hotel team — or a hotel’s own commercial or sustainability contact — assumes that “the group has ESG” means “we have ESG”, without checking what the report’s scope note actually says.

It also helps to separate three levels rather than two. There is the ultimate ownership or parent group, which may hold a diversified mix of office, retail, residential and hotel assets and reports at that consolidated level. There is the hotel group or hotel portfolio itself — the entity or brand that actually operates the hotels, sometimes as a distinct subsidiary, sometimes simply as an internal division. And there is the individual hotel. A parent group’s report rarely needs to, and often does not, extend down to individual hotel level. The hotel group level is a different matter: where a hotel group operates multiple properties under one brand or management structure, its own ESG reporting should ordinarily be built so that individual hotels feed comparable data upward — even where no individual hotel carries an independent statutory reporting obligation of its own.

This is not a new idea in real estate ESG reporting more broadly. Benchmarks such as GRESB, widely used by real estate investors and funds, assign participants to peer groups by property type specifically because performance differs meaningfully between asset classes — office, retail, residential and hotel portfolios are not compared against each other, and are not meant to be. Hospitality has its own version of the same logic: the Cornell Hotel Sustainability Benchmarking Index, compiled with Greenview, consistently shows that energy, carbon and water intensity differ by hotel type and star category — full-service and resort properties typically show materially higher energy, carbon and water intensity than limited-service hotels of comparable size. A hotel group with a congress hotel and a wellness resort in the same portfolio is, in effect, managing two different intensity profiles. A single, blended portfolio figure can obscure exactly the differences that matter for setting realistic targets and identifying where performance actually needs to improve.

Many hotels and hotel groups run internal environmental or “green” programmes alongside, or instead of, formal ESG reporting: guest-facing communication about waste, energy, water or sourcing, often backed by genuine operational measures.

These programmes have real value — they build guest awareness and frequently sit on top of legitimate operational improvement. But they are rarely built on a recognised reporting standard, rarely carry external assurance, and rarely produce data that is comparable across properties or over time. That gap matters operationally, and increasingly it matters legally too: under the EU’s EmpCo and Green Claims framework, guest-facing environmental claims need to be substantiated and verifiable, a topic covered in more detail in our article on EmpCo and green claims.

An internal programme is a reasonable starting point. It is not, on its own, a basis for certification audits, investor reporting, or the comparable data a hotel group needs across its portfolio — which is exactly what certification-aligned indicators and structured ESG reporting are built to provide.

For independent hotels and family-owned properties, the implication is reassuringly simple: most fall outside mandatory CSRD scope, and the emerging value chain cap is specifically designed to prevent disproportionate data requests from larger partners. The right response to an ESG questionnaire from an investor or corporate client is structured, proportionate reporting — not an attempt to mimic a large company’s reporting format.

For hotels owned by, or affiliated with, a larger diversified group or real estate structure, the implication is less comfortable but more important: the existence of parent-group ESG reporting needs to be checked, not assumed. This means reading the scope note of the group’s report, identifying explicitly what is included and excluded, and determining whether hotel-level data needs to be developed separately — aligned with the group’s methodology where possible, but built to answer questions the group report was never designed to answer.

For hotel groups managing multiple properties and brands directly, the boundary question applies internally: a single portfolio-wide figure is not the same as comparable property-level data, and a congress hotel cannot be benchmarked against a wellness resort without separating out their materially different energy, water and F&B profiles. Certification bodies, investors and corporate clients will increasingly expect that level of detail, not a blended average.

In every case, the underlying task is the same: define the actual reporting boundary at each level, identify the standard being applied, and build — or commission — the structured ESG and sustainability reporting that closes the gap between what currently exists and what is being asked for.

ESG and sustainability reporting in hospitality is becoming more structured, and the regulatory environment — Omnibus, CSRD’s narrowed scope, the emerging VSME and its value chain cap — is moving toward more proportionate requirements for smaller and mid-sized organisations. That is a genuinely useful development for the hospitality sector, where the large majority of businesses are not, and will not become, large enough to fall under mandatory CSRD reporting.

But proportionate requirements do not remove the need for clarity. They make it more important. A hotel group that can say precisely what its ESG data covers, which standard it follows, and where the boundaries of parent-group reporting end, is in a fundamentally stronger position — for certification, for investor relations, for corporate partnerships, and for credible guest communication — than one relying on the general impression that “the group already has ESG.”

This is also where ESG reporting connects to sustainability strategy and governance more broadly. Reporting is not a document produced once a year for external audiences. It is the output of a management system that needs to know, at any point, what is actually being measured, by whom, against which standard, and for which part of the business.

A parent group’s ESG report is evidence of commitment at that level. It is not, by itself, evidence of hotel-level performance. A hotel group’s own ESG report is the bridge between the two — built from comparable data collected the same way across every property, with portfolio-wide targets broken down by hotel, so that a congress hotel and a wellness resort are not measured against the same yardstick. Confirming who reports what, at which level, is one of the most practical sustainability questions a hospitality organisation can ask itself.