Impacts, risks and opportunitites

Identified material impacts, risks, and opportunities as determined in Pandox’s double materiality assessment.

E1 Climate change
Material impact:

Pandox operates in an industry that generates high levels of GHG emissions, where buildings accounting for 36 percent of emissions in Europe.
The Company contributes to emissions through Scope 1, 2 and 3, with the majority in Scope 3.
Pandox’s properties may be impacted by extreme weather, floods and rain, particularly in countries such as Austria, Belgium, Sweden and Norway.
Pandox is dependent on energy-intensive suppliers within the construction and renovation industries.
Many hotels’ heating systems use natural gas, a fossil fuel associated with high emissions.

Financial risks:

Future costs from emissions taxes and investments to meet energy efficiency requirements.
Requirement for all non-residential properties to reach at least F in Europe and C in the UK.
High costs for repairs and restoration following extreme weather damage.
Need for substantial investment in adaptation, such as for installation of cooling systems.
Older properties may be expensive to transform to meet new requirements.
An energy shortage could cause serious disruptions and financial losses for Pandox and its business partners.
Limited influence over emissions generated by partners that lease Pandox’s properties.

Financial opportunities:

By adhering to climate plans under the Paris Agreement, Pandox can remain an attractive partner for investors and financial institutions.
BREEAM certification of hotels can create business opportunities and attract guests.
Investments in energy-efficient buildings and equipment can save resources and energy costs in the long term.
Pandox can remain an attractive partner for hotel operators through energy efficiency improvements.
Create incentives for energy efficiency through new partnerships.
Investments in energy efficiency can make Pandox an attractive partner for hotel operators.

E2 Pollution
Material impact:

Products such as refrigerators, freezers and air conditioning systems could contain hazardous substances that harm the environment at the end of their lifecycle.
Fluorinated greenhouse gases from these products could be released into the atmosphere, which is made worse by rising temperatures and increased installation of air
conditioning systems.
Cleaning products used could contain hazardous substances.

E3 Water resources
Material impact:

Water emissions from hotel operations could negatively impact the surrounding environment.
Large volumes of wastewater from laundering, showering and rinsing/flushing could impact local wastewater systems.
Operations in water-stressed cities, such as London and Brussels, exacerbate the problem.

E5 Circular economy
Material impact:

Pandox has a negative impact through its choice and use of materials, especially the use of raw materials.
Some materials depend on the use of virgin resources, which could negatively impact the environment.

Financial risks:

Lack of insight into purchasing practices for materials, and their impact on people and the environment.
Resource and material shortages could result in increased prices or operational disruptions.
Materials from countries with less strict climate policies could become more expensive due to future EU rules on carbon emissions.
Increased costs and regulations on waste management.
Potential fines if waste volumes are not limited or recycled in line with requirements.

S1 Own workforce
Material impact:

Pandox creates employment opportunities through its presence in the community.
Operations in countries where freedom of association is violated could lead to worsening of working conditions.
Lack of language skills among workers is a contributing factor to health and safety risks and could lead to inadequate labour rights.
Discrimination and sexual harassment are common in housekeeping and food and beverage operations, particularly within restaurant and cleaning operations.
The proportion of women who hold management positions at hotels is lower elsewhere in Europe than in the Nordic countries.
Physically demanding work tasks could become more difficult for older employees.
A minority of cleaning staff have no access to computers, which makes training and information-sharing more difficult.

Financial opportunities:

Improve cooperation and efficiency within the Company by focusing on diversity, equity and inclusion (DEI).
Lower costs for training and reduce employee turnover through an effective strategy to attract and retain employees.
Increase business opportunities by improving employee satisfaction.
Develop strategies to address discrimination and harassment.
Adapt work tasks for older employees so they can still do their job.
Improve access to training and information for employees with no access to a computer.

S2 Workers in the value chain
Material impact:

Restaurant and cleaning staff are at risk of forced labour, low wages and precarious employment.
Risk of illegal labour and wage dumping in the real estate sector.
Inadequate language skills contribute to shortcomings in labour rights and limited knowledge of grievance mechanisms.
External cleaning staff may be exposed to chemicals that adversely affect health.
Lack of union membership and collective bargaining agreements can mean poorer working conditions and rights.
The construction industry is a risk sector for working conditions, health and safety.
Construction workers deal with stressful working conditions to meet deadlines.
Hotel employees are at risk of harassment and discrimination, especially migrant workers and agency staff.
Risk of forced labour and child labour in the value chain, especially in the coffee and tea industry.

S4 Consumers and end-users
Material impact:

Hotel operations are associated with the risk of prostitution, human trafficking and sexual abuse.
Risk that hotel guests will be exposed to bad behaviour or harassment from other guests or people in the vicinity of the hotel.
Pandox can contribute to inclusion by ensuring that its properties are accessible to all and by offering accessible rooms.

G1 Business conduct
Material impact:

Financial risks:

18 percent of the employees do not feel included, which could lead to reduced commitment and efficiency.
Social and environmental risks from suppliers who are not thoroughly audited.
Bribery and corruption could result in increased costs, lost business opportunities, legal sanctions and damage to the Company’s reputation.
The construction sector is a high-risk sector for bribery and corruption.
Risk of corruption in the procurement of goods and services, and risk of bias in contracts.

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