With their substantial energy consumption and carbon emissions, hotel and restaurant chains are becoming key targets for reducing greenhouse gas (GHG) emissions through improved sustainability practices. Major companies like Chipotle, Marriott, Hilton, and others are presenting two conflicting faces.
On one side, these companies boast about their efforts to reduce carbon emissions and take strong climate action. Chipotle, for instance, offers an app that lets customers track the carbon footprint of their meals.
On the other side, these companies are involved in trade associations that are actively opposing local and state climate regulations, often filing lawsuits that could hamper environmental progress.
How Far Do Hotels And Restaurants Are in Lowering Their Emissions?
Chipotle aims to cut its GHG emissions by 50% by 2030. The restaurant managed to reduce Scope 1 (direct) and 2 (indirect from purchased energy) emissions by 13% in 2023 but Scope 3 (other indirect) emissions rose by the same percentage due to new restaurant openings.
- The restaurant chain reduced carbon emissions by 20% (vs. 2019 baseline) while growing its business by 80% as shown in the chart.
Chipotle’s strategy focuses on energy efficiency, reducing demand for traditional energy resources, and increasing the use of low-carbon and renewable energy. They commit to designing restaurants that rely less on fossil fuels like natural gas and aim for 100% renewable energy use.
Marriott and Hilton have made similar commitments, pledging to slash their emissions by nearly 50% by the same year.
Marriott aims to cut absolute Scope 1 and 2 GHG emissions by 46.2% by 2030, using 2019 as a baseline. It also targets a 27.5% reduction in Scope 3 emissions, covering energy use, waste, and employee commuting. However, despite carbon reduction efforts, the hotel’s emissions (Scope 1+2) rose (7%) alongside its revenue (14%) in 2023 compared with 2022.
Moreover, the hotel plans for 22% of its suppliers to adopt science-based carbon emissions reduction targets by 2028.
By 2050, the company aims to achieve a 90% reduction in Scope 1, 2, and 3 emissions, including emissions removal through bioenergy feedstocks. Marriott focuses on 3 distinct levers to reach its net zero target:
- Energy reduction,
- Getting energy from renewable sources, and
- Buying goods with lower carbon footprints
Hilton Worldwide aims for net zero by 2030, with clear targets for reducing Scope 1, Scope 2, and Scope 3 emissions. In 2023, Hilton reported Scope 1 and 2 emissions of 2,570,111 MT CO2e, reflecting a 9% increase from 2022. Meanwhile, revenue also increased by 17% for the same period.
For Scope 3, the company reduced emissions from franchises by 5.50%, down to 4,020,579 MT CO2e. Hilton aims to cut Scope 1 and 2 emissions intensity by 75% from managed hotels and reduce Scope 3 emissions intensity from franchised hotels by 56%, both by 2030, using a 2008 baseline. The hospitality company was able to cut emissions intensity for managed hotels by 45% in 2023.
The problem of the climate policy split among hotels and restaurants is significant as their climate impact is substantial. Buildings, in particular, play a significant role in carbon emissions. The heating, cooling, and electricity consumed by commercial and residential structures account for about 35% of GHG emissions in the U.S., with large hotels and restaurants contributing a significant portion.
Climate Promises vs. Reality
In cities like Denver, lawmakers have passed ambitious climate regulations aimed at reducing the carbon footprint of buildings. The rules require large buildings, including hotels, to improve their energy efficiency by implementing measures like installing LED lighting, using heat pumps, and adding solar panels.
- For example, Denver’s building performance standards mandate that around 3,000 buildings cut their energy use by 30% by 2030.
While some buildings, like a quarter of those in Denver, already meet the 2030 goals, others, such as the Sheraton Denver Downtown Hotel (part of Marriott), may need to reduce their energy consumption by more than one-third.
However, despite the public climate commitments of companies like Marriott and Hilton, their trade associations have opposed these building efficiency rules. In April, groups such as the Colorado Hotel & Lodging Association (where Marriott executives hold key board positions) filed lawsuits to block both state and city climate mandates. These legal actions argue that the regulations are preempted by federal energy law and claim that complying with the rules would cost billions of dollars.
The inconsistency between hotel climate pledges and trade group actions creates confusion among consumers and policymakers. Companies like Chipotle, which promote their sustainability efforts, are also key members of the Restaurant Law Center, a trade association leading lawsuits against climate regulations in multiple cities, including Denver.
Marriott, too, distances itself from the actions of the Colorado Hotel & Lodging Association, stating that it does not control the group’s decisions, even though its representatives hold influential board positions. These contradictions make it difficult for cities and states to advance meaningful climate legislation.
The Dilemma in Driving Climate Policy
Buildings are major contributors to climate change, accounting for significant carbon emissions, particularly in urban areas. In cities like Denver, buildings are responsible for roughly half of all climate emissions due to their reliance on methane gas for heating and electricity consumption, much of which is sourced from fossil fuels.
To combat this, many cities and states have implemented building performance standards aimed at improving energy efficiency, primarily targeting large commercial buildings like hotels and offices. These regulations offer flexibility in how building operators achieve energy reductions, allowing options such as lighting upgrades or solar installations.
The conflicts between the corporate climate commitments of major hotels and restaurant chains and trade association actions could have far-reaching implications. If industry groups succeed in rolling back city and state climate regulations, it could undermine hospitality companies’ efforts to reduce their carbon emissions.
At the same time, these legal battles send mixed messages to consumers, who increasingly expect these companies to take a stand on environmental issues.
As cities and states take on an increasingly important role in driving climate policy, the need for corporate transparency and accountability on climate issues has never been more urgent.
- SEE MORE: EU Regulations Poised to Catalyze Global Carbon Market Convergence, Says Trafigura’s Hauman
The post The Net Zero Game: Are Hotels and Restaurants Truly Committed to Reducing Carbon Emissions? appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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