Materiality summary

The hotels, travel and leisure sector is made up of an eclectic mix of companies each exposed to slightly different GELSCE issues. gaming, alcohol and tobacco companies produce significant negative externalities for their customers however, raising customer issues such as product suitability and treatment of customers to the fore.

The following issues populate the top half of the materiality table:

• Product suitability rises to the top of the table given the harm caused by gaming, alcohol and tobacco
• Treatment of customers is particularly significant for the hotel companies
• Governance issues, particularly around system integrity and board balance, are of significance at CFR
• Issues of water, energy & bio-physical impact are material to BTI, ANH and DST who are exposed in their supply chain
• Fair labour issues, both within companies and related to their supply chains, for BTI, ANH and DST
• Audit independence, an issue attracting scrutiny following recent corporate failures

Results

Within the Hotels & Leisure industry, scores for the sin industry companies are characterised by a strong tendency to window-dress, while City Lodge and Richemont appear more sincere in their reporting.

City Lodge the best performer for maturity of leadership, with consistent scores for the more material issues (excepting for industry equity).

AB Inbev scored by far the worst amongst peers, with reporting appearing to be no more than a public relations exercise.

In the Gaming subsector, Tsogo Sun outperformed Sun International, showing maturity of leadership in depth of context discussion, but both disingenuous regarding mitigation of harmful effects of gambling.

Richemont scored positively for all its material issues, but was dismissive in its approach to reporting on board structure, shareholder dominance, and aspects of audit independence and system integrity.

British American Tobacco top scored for governance reporting, but otherwise adopted a strong compliance approach, backed by an aggressive legal response to societal action against the company.

AB Inbev scored poorly across all GELSCE areas, revealing lack of leadership maturity in managing societal concerns.

Distell’s score of is flattered by an excellent environmental report which also reflected much improved operational control. However, the company otherwise adopts a minimum compliance, or even boilerplate, approach to reporting on material issues.

See the executive summary for individual company scores and materiality weightings. Buy our full report for detailed analysis and substantiation of our analysis.