Beyond Greenwashing: Surviving the European Compliance Countdown

Vague sustainability claims are becoming a thing of the past. As EU member states begin enforcing the Empowering Consumers Directive, tourism businesses worldwide must prepare for a new level of transparency. Samantha Smits discusses why you must move from tracking monthly bills to measuring specific units like litres and watts to keep your market access open.

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Transcript

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And I think your relationship has to be extremely good if they're happy to keep paying your fines just for doing business with you. Because then rather than that they earn money from doing business with you, it's going to cost them money from doing business with you. Hi, I'm Samantha Smith and welcome back to the Sustainability Edge, the tourism podcast. No Yargon, no fluff. We're breaking down sustainability and especially how to turn sustainability in a practical tool that gives you more profit, more time, stuff that's staying, and a business you can be proud of. Let's get started. Hello, hello, welcome back. And I will actually talk a little bit more about what we've discussed in the previous episode. So we've talked before about why you're actually judged by your partners if we look at it from agent-facing, but even the agents that you choose, but also the empowering consumers for Green Transitions Directive and short MCO and the risk this means for you, even if you are not in the European Union yourself, but just doing business with it. And today I just want to dive a little bit extra deeper, give more attention to this risk of losing partners and what this looks like. Because again, in the current neutralism landscape, your supply chain is more than a choice. I mean it's still a choice, but it's a very contractual one that could I don't want to say safe or sync your business, but it's really changing how you have to do and run your business. And I would say for good, because as discussed in the last episode, you cannot claim everything about sustainability anymore. Sustainability will definitely not be easy to use as a marketing ploy, and we have to get real. So previously, a bad partner, as discussed in that episode, could mean a bad review, bad reputation, which is also very painful. But with the new regulations, you could even lose partners or access to European Union because it's just difficult to do business with you, you're becoming a full liability. European agents are now legally responsible for all the claims made in the supply chain and that they make. So if you are not having your business right, or a prime example that I have here with Tanzania, for example, there's a lot of European agents that sell Africa and Tanzania being one of the countries, and then they will make a lot of sustainability claims. But if all the way down in Tanzania, their supplier that, for example, is selling Kinamanjaro, and the ones who are aware of it, they know there's a lot of bad situations happening on there with port exportation, also happening in Nepal, of course. So there's various instances that have methods to verify the working conditions of portons or mountains. If you ever want to climb a mountain, definitely check this out yourself. Not only Tanzania, also Nepal, but any mountain you plan to climb where ports are involved. And then you see that on the ground, this DMC or is very exploitative or they just don't monitor it at all, which then still in nature can be experienced as exploitative without having this extension. The Asians can still have a fine because they have all these claims about how sustainable their journeys are and local impact and what and so on, and then they realize wow, we've never looked as deep as how the ports on the mountain are doing, and it turns out they're not fine. And in this case, for them to make it easier and to stop the risk of getting a fine, they will then work with a DMC that, for example, is certified or that in Tesla context is with KPEP, just any way that there is data to verify how things are going, which gives you the legal right to make a sustainability claim. But here also again for accommodations, if you you as a DMC are choosing accommodations very often because you are the expert on location. So even if you are doing everything right or have everything in order, but don't look at your own supply chain being in the supply chain of a European Union agent, yeah, that gets slightly confusing there, then you are carrying a risk for your agent. Because then if your if the accommodation is absolutely thrashing the camp where they're in, or if they are doing things not by intention, not sustainably, that goes back to you and from you to the agent, and again the agent gets fired. So again, down the line, you and that accommodation will not get fined because you're outside of Europe. But I think you can imagine that if it is actually your agent that gets fined, they will find a partner who doesn't end up being a legal risk for them and doesn't get them fined. So here just having trust and a good relationship is not longer what's gonna cut it. So even if you meet someone at a trade show and you have a great night over a few beers and you hit it off and have a good relationship, it's not gonna be enough if you're going to give them a headache and a legal nightmare. And here, one thing that you have not verified, and with verify verifying at its core, is basically confirming if something is true. And so anything you say in marketing or if they say, Oh, we care a lot about this, we do responsible sourcing, you have to get to the roots of it, to the core and see if is this fully true? Is there no space for vagueness and bigotry? Really get down and do the research. And again, I mean if we look from an agent perspective, you do not want to cut off your partners and you do not want to lose your agents. So now in this in-between period, it is so key to start leading, to start creating awareness, to start making changes, because now there still is space. So ask each other questions, send each other resources, do the work together. Now use this relationship that you have to go down this sustainability road together and ask each other the uncomfortable questions about wages, all the policies and all of it. It's better to figure out now than to get hurt later. And be sure you're on the same page, you have the same logic, and that anything is verified and becomes a default way of running your business again, sustainability as a management system. But then, of course, we're now talking a lot about how this looks like from a management level, from higher up, but this also affects, like I said earlier, all the way down to your freelancers, your guides, your boarders, your staff, anyone down who is not, does not show who are just thinking, ah, this is all extra work for us. I mean, if you are asking people uh in the back office that are not necessarily managers but still have to start tracking certain metrics or KPIs, for them it seems like, oh, this is all extra work. Why on earth would we care about this? Why would I be doing this? What is in it for me? Here, really again, the awareness is key that it's a business risk, thus also a risk for their job indirectly, but also all the good stuff it actually brings if you start caring about it and making it more interesting and more fun. It becomes a shared success. And to be honest, what where would people be more proud to work for? For a company that is proudly displaying they're doing the right things and have all the ducks in a row and can provide all the evidence by what they say, or for a company that is maybe saying the same stuff or not at all, and then behind closed scenes is not operating sustainable or good to the staff at all. Obviously, they want to work for the first one. For all of this, you're also going to have to look into what they call sustainable procurement. And here, as I promised, no yargon, so let me define procurement would be basically your whole idea, your choices, your strategy that you have behind anything that you purchase or anyone that you choose to work with. That is procurement, fancy said. So you have to look at every every piece of money that you spend in your supply chain, anything that you get for your office, where is it going? Is it protecting your business? Is it actually a legal risk? Most or I would say any business already does keep track where their money is going to and how it's incoming, because that's needed for your local tax office, probably. But much more of the same has to be done with sustainability because now it's it's becoming a legal requirement for doing business with the European Union. And when you are first becoming more mindful of all the choices you make, all the purchases you make, how you basically run your business and are documenting this and creating the data and doing the tracking, that makes your claims and your business verifiable. This big word that everyone is asking for nowadays, can you verify? Which basically means can you show me this is true? Because a lot of people are good talkers or very strong with words, but behind the scenes, do you have the evidence? Is it really true? That is the most simple translation of all of this to show the truth behind all of it. Sustainability is here a big tool that will build on the trust that you already have, that shows if partners are the right ones, whether it's in your supply chain or you're the agent or the other way around. This whole misalignment that currently often is happening between the agent who doesn't visit destination and makes these promises and what the supply chain delivers, or the other way around with a disappointing supply chain. This there's quite often a gap between the agent and the supply chain DMCs. It is kind of going to close, even if partly, by this directive that's coming up and by the need of you having to be able to show if every claim you make is true or that your agent has to do by when they claim they are sustainable or responsible, they have to show it's true, and you are part of their story, you are part of their delivery. So if you being part of it shows it's not true that they are sustainable, you will be removed from the story. So rather than just winging it and doing something, you're going to have to establish, you're going to have to establish standards, you're going to have to document policies, you're going to have create data, you're going to have measure things just for the simple store answer to is this true? That you can say yes and we can prove it. That will be the ultimate flax, as we say nowadays, to start doing business with you, and thus you keep your partners and gain even more and become the preferred one. At this point, I mean, and we mentioned that earlier episodes that then partners would have to apologize for your mistakes, but they cannot apologize for your mistake when they're rest with the fine. That is pretty final. And I think your relationship has to be extremely good if they are happy to keep paying fine just for doing business with you. Because then rather than that they earn money from doing business with you, it's going to cost them money from doing business with you. And most people will then move on. Alright, okay, this was a little bit more in-depth about the partner risk side about it all. Has this started a worry on you or a concern, feedback, or you want to ask me anything about it? Do hop on the call, show on the show notes, do reach out to me on LinkedIn, let's discuss how this looks like for your business and how to get you ready for you to keep your partners, or maybe you've received an email that's from one of your partners that scares you. You're not sure what now your most logical next step would be. Reach out, let me know. We're gonna get it sorted. And then I see you in the next episode. Thank you for listening and congratulations on investing your time today to think strategically about your future, to make sure you never miss a step to understand sustainability better, how to grow your competitive edge. Follow the podcast right now. And if this was helpful, please leave a five star rating. It will help other people like you to find these tools. I'm Samanda Smith, and I'll see you in the next episode.