Green bonds, an opportunity for fostering sustainable tourism

Spain - 

Partners from Garrigues met with Meliá and Azora executives to discuss the role green bonds can play in the tourism industry, in the latest Garrigues Sustainable Dialogs encounter.

Sustainable financing is now, and will continue to be, one of the leading ways to fund and invest in the real estate, tourism and hotel sectors.

José Manuel Cardona, Garrigues partner in charge of the tourism and hotel industry group, and Gaspar Atienza, partner with the firm's Corporate/Commercial Law Department, met with Juan de la Hera, Meliá Hotels International’s Corporate Finance Director, and Antonio López Bodas, Chief Financial Officer at Azora, to analyze the role of green bonds in the tourism industry and the expected trends beginning in 2023.

As part of this new Garrigues Sustainable Dialogs encounter, which took place on October 27, 2022, participants discussed regulations governing green financing and, in particular, how it affects the tourism industry. They also looked at the different green lending models available to tourism industry companies, and examined the challenge that all this means depending on whether a company is an SME or a large undertaking.

The professionals noted that this idea is shaping the market, and that anyone that misses the sustainability boat could risk being shut out of financing: sustainability is no longer a bonus, but a must-have.

The participants agreed that a new regulatory model for this type of financing would be helpful, to facilitate access by small and medium-sized tourism companies. They also emphasized the importance of making it more effective and practical, and adding competitive advantages to sustainable financing for the tourism industry, while minimizing the risk of the current model being used for mere greenwashing.

In addition, the participants underscored that all three letters of ESG need to be taken into account, not just the “E” (environmental). They stressed that the social aspect (“S”) is particularly key for a sector in which employees work directly with clients. As regards governance (“G”), understood in the broad sense and beyond just corporate governance, they noted that there appears to be considerable work left to do. The participants recognized, however, that social and governance aspects are harder to measure and more subjective than environmental ones.

Lastly, the professionals moved beyond the scope of Spain to discuss the situation in Portugal, where there is also a keen interest between the tourism industry and sustainable financing.