Pressure on all businesses to reduce carbon emissions, preserve biodiversity and showcase best practice standards with regards to ethics and human rights is coming from all sides. Consumers – especially young consumers with disposable incomes – are prioritising sustainability in purchase decisions, while regulators and governments have over the past few years introduced ambitious emissions-reductions targets and new laws on environmental, social and governance (ESG) compliance.
A GlobalData report, Global Environment Trends 2022, says leading companies already have, and will continue to enhance, environmental strategies that address a range of issues and factors surrounding the impact companies have on the natural environment, because this will ensure their future success. In 2020, ‘sustainability’ was mentioned 539 times in company earnings reports, according to GlobalData’s Company Filing Analytics Database.
This represents a more than 80% jump from the 295 times ‘sustainability’ cropped up in 2019. While this data was taken from all sectors GlobalData covers, it is clear from recent actions that travel and tourism, one of the largest industries in the world, is taking seriously the part it must play in reducing carbon emissions, water usage, waste and actively demonstrate good environmental stewardship.
ESG action feedback loop grows stronger
At the same time, consumer demand for businesses to act in a more climate-friendly way has really picked up pace. Among travel and tourism conversations on social media, ‘environmental’ discussions increased by 19% in the third quarter of 2022 over the second quarter. This data is collected in the GlobalData Social Media Analytics Database, which tracks activity of selected Twitter Influencers and Reddit channels. Climate change, emissions and carbon neutrality were key discussion trends over the period.
Against this backdrop, future-thinking international leisure groups are looking to make investments that align with their target market’s values. At the same time, sustainable infrastructure can lower resource usage and save money as well as allow the company to apply for green bonds.
The Costa Rica Investment Promotion Agency (CINDE) says enquiries to set up new and expand existing tourism operations in the country, which was labelled the happiest in Latin America by the UN in 2022, is higher than ever – and a host of financial incentives and the availability of a pool of highly trained, multilingual workforce gives the ecotourism pioneer a competitive edge.
Costa Rica is on the bucket-list
Costa Rica, sandwiched between Nicaragua and Panama, expects its international visitor numbers in 2023 to bounce back to 2019 levels of about 3.1 million. While relatively small, it is the most visited nation in the Central America region. The tourism board says demand is rising especially for luxury accommodation.
A pioneer in ecotourism since the 1990s, sustainability is in Costa Rica’s DNA. It was one of the first countries to turn its Paris Agreement pledge to reduce emissions into solid policies. In fact, the country has strategies in place to fully decarbonise its economy by 2050, including plans for the electrification of transport, sound waste management and sustainable agriculture. The environment is integrated into economic and political policies and that effort has been well rewarded. Costa Rica won the 2019 UN Environment Programme’s Champions of the Earth award. In 2021, Costa Rica was one of the first ever Earthshot winners. It was awarded the Prize to Protect and Restore Nature for an initiative which sees the government paying local citizens to protect forests, plant trees and restore ecosystems.
Since executing this plan, Costa Rica has doubled the number of trees in the country. Today, flora and fauna thrive, the rainforest is revived and half-a-million species and one-quarter of the country’s wild lands are protected by law. This serene Central American country, which is home to four Unesco World Heritage Natural Sites, received a significant economic boost in 2022 from its thriving tourism industry, which contributed more than $3bn to the local economy.
Costa Rica has always been ahead of the game when it comes to ecotourism, including establishing its Sustainable Tourism Certification in 1995. This certification assures tourists that hotels, tours, restaurants and transportation meet the country’s high standards in three key assessment areas: environmental, social and cultural, and economic. The Costa Rican Tourism Board rewards organisations that reach a high-level commitment (judged by five levels of certification) with benefits such as publicity from fairs or trade shows.
Investing in sustainable Costa Rica
“An abundance of local support awaits international companies looking to expand in Costa Rica,” says Lissette Acosta, tourism infrastructure lead at CINDE. Costa Rica’s free-trade zone regime offers a set of benefits granted by the government to businesses making new investments in the country. These include 100% exemption on corporate income tax, withholding tax, royalties, fees and dividends, local sales tax, with no time limit, duty-free imports and exports.
When it comes to finding a skilled workforce, Costa Rica has invested in helping talented people find opportunities, including talent development programmes, tuition reimbursements, internships and language courses.
“According to the National Statistics Institute, we have more than 180,000 people working in our hospitality, leisure and entertainment sector,” says Acosta. “That is 8% of the workforce. They are mainly young, driven and trained and passionate about showing off our beautiful country and world-class natural assets to visitors from around the world.”
To find out more about how CINDE can support you to find investment opportunities in Costa Rica, download the whitepaper below.