Why Most Hotels Fail Their First CSRD Report
The EU's CSRD deadline has been pushed, but the reporting requirements haven't gotten any simpler. Here's what hotels actually need to get right.
The European Commission recently adopted a "quick-fix" to the CSRD, allowing large companies to delay disclosing detailed sustainability data until 2026. For many hotel groups, that felt like a reprieve. But the reporting requirements themselves haven't been simplified, and the hotels that treat the delay as permission to wait are the ones most likely to scramble when the deadline arrives. This article breaks down what CSRD actually requires from hotels, where most properties fall short, and what a realistic path to compliance looks like.
The CSRD replaces the older Non-Financial Reporting Directive and dramatically expands who has to report and what they have to disclose. Companies must report on topics deemed material across environmental, social, and governance categories, using the European Sustainability Reporting Standards (ESRS).
For hotels, this isn't just a box-ticking exercise. The directive is built on a "double materiality" concept, meaning companies need to assess and report on how sustainability issues affect their business, and also their own impact on people and the environment. That means a hotel group needs to account for everything from energy consumption per room night to the emissions embedded in its food supply chain.
The timeline is staggered. Large hotel groups already in scope began reporting in 2024-2025, listed small and medium-sized hotel groups face a January 2026 start date, and non-EU hotel groups with significant EU operations follow in 2028. But even hotels not yet directly in scope will feel the pressure, because large businesses are increasingly requiring sustainability data from smaller suppliers, including independent hotels.
The challenge
Most hotel sustainability teams aren't short on ambition. They're short on infrastructure. The typical mid-market hotel group faces a very specific set of problems when it tries to report its carbon footprint:
Fragmented data collection. Each property tracks energy, water, and waste differently. Some use spreadsheets, some use the PMS, some don't track at all. There's no standardized format across the portfolio.
Scope 3 is a black box. Scope 3 emissions account for roughly 89% of a hotel's total emissions, yet they're the hardest to measure. F&B procurement, guest travel, outsourced laundry, waste disposal: most of this data either doesn't exist or lives with suppliers who aren't sharing it.
No standardized methodology. There are multiple conversion factors and methodologies to measure footprints, which creates inconsistencies across properties and makes benchmarking unreliable.
The intensity metric question. Hotels need to decide whether to report by occupied room night, square meter, or per guest, and the choice significantly affects how the numbers read. Without the right normalization, comparisons between properties become meaningless.
Audit readiness. CSRD requires sustainability reporting to be subject to external assurance, initially on a "limited" basis, with "reasonable" assurance required by October 2028. That means the data has to be defensible, not just directional.
Our solution
Hotels don't need to solve everything at once. But they do need to start with the right foundation:
Centralize your data pipeline. Pick one system that pulls energy, water, and waste data from every property into a single dashboard. Manual consolidation from spreadsheets won't survive an audit. PMS integration is the fastest path to reliable Scope 1 and 2 data.
Get Scope 1 and 2 right first. Accommodation companies typically see a larger proportion of their emissions in Scopes 1 and 2 given their operational nature and energy use. This is the most measurable starting point. Fuel records, utility bills, and refrigerant logs are data you already have.
Build a Scope 3 strategy, not a Scope 3 spreadsheet. Start with your largest categories: purchased goods and services (especially F&B), outsourced laundry, and waste disposal. Use spend-based estimates where supplier-specific data isn't available. That's acceptable under GHG Protocol and gets you a defensible baseline.
Pick your intensity metric and stick with it. CO₂e per occupied room night is the most commonly used and benchmarkable metric in hospitality. The Cornell Hotel Sustainability Benchmarking Index uses it, and so do most brand-level ESG programs.
Prepare for assurance early. Document your methodology, data sources, and assumptions from day one. The difference between a report that passes limited
The cost of waiting
The CSRD delay means hotels can postpone detailed sustainability disclosures, but the question isn't whether they can wait. It's whether they will.
Hotels that start now gain three concrete advantages: they build the data infrastructure before it's urgent, they can benchmark year-over-year improvement (which investors and brand partners care about more than a single snapshot), and they position themselves ahead of competitors who are still scrambling with spreadsheets when the deadline hits.
Reporting in line with CSRD recommendations can be advantageous even before it's mandatory, as provision of capital by banks and investors may increasingly become linked to compliance. Beyond regulation, corporate travel programs are already requesting carbon data as a condition of preferred vendor status. This is a commercial reality, not just a compliance one.
Of hotel emissions are Scope 3
89%
Deadline for reasonable assurance
2028
