This case study was published in the 2022 REIT Industry ESG Report, which details the REIT and publicly traded real estate industry's environmental, social, and governance (ESG) performance and features 32 case studies showcasing REIT leadership and ESG innovation from a variety of sectors. The report serves as a practical tool for shareholders and stakeholders to assess the scale and impact of the REIT industry's ESG commitments and initiatives. Applicable footnotes and/or citations for this case study are available in the full report.
Engaging Suppliers to Support Diversity of Procurement Decisions
As part of a broader effort to formalize its diversity, equity, inclusion, and belonging (DEIB) program, Host Hotels & Resorts, Inc. looked to better understand the diversity of its supply chain—recognizing the opportunity it had to promote innovation and resilience through its procurement decisions.
In 2019, Host launched its inaugural Supplier Excellence Survey to deepen engagement with its furniture, fixture, and equipment suppliers in ESG. The original survey, which included one question on ESG topics regarding diversity, aimed to identify how the company’s suppliers were managing ESG issues, especially regarding major renovations.
As Host’ DEIB program expanded, the company enhanced the original vendor survey. The survey now includes targeted questions on diversity for its strategic suppliers and professional consultants who support engineering services, design and construction, and project management.
“For over a decade, Host has worked with its suppliers on sustainability for our hotel renovations and redevelopment projects with a focus on renewable and locally sourced products and materials that promote healthy lifestyles. Increasing engagement with diverse suppliers is especially important to build a more equitable and resilient supply chain in a resource-constrained environment.”
-Helen Jorgensen, Vice President, Design & Procurement, Host Hotels & Resorts, Inc.
The additional questions were included to obtain baseline information regarding Host's suppliers and service providers. In addition, the questions were included to develop a procurement program to support businesses with diverse, minority-ownership, including women, veterans, people with disabilities, the LGBTQ+ community, and other underrepresented groups.
Host expanded the survey to nearly 230 direct suppliers and consultants, representing roughly 70% of the company’s annual capital expenditure spend To provide improved monitoring of its diversity spending, Host uses its in-house, proprietary asset management information platform to track spend with diverse suppliers and consultants identified in the survey. The platform aggregates the data, helping to streamline capital expenditure workflows, financial controls, and ESG reporting.
These efforts will enable Host to make more informed decisions regarding the partners it chooses to work with, ensuring diversity of thought and enabling equal exposure and opportunity for all potential suppliers and consultants. For example, at recent projects in Hawaii, Houston, and Philadelphia, Host sought to bring the work of local artists from underrepresented groups into its spaces to help increase their exposure while connecting Host’s properties to its communities. Host recognizes the value this creates by enhancing the design of its properties, while also highlighting the work of artists that may have not been previously considered.
As Host continues to measure and monitor its impact in the supply chain, it plans to utilize the data to establish key performance indicators and set goals to grow the program and publicly report on the progress and value created in partnering with diverse suppliers.
Host Hotels & Resorts, Inc., an S&P 500 company, is the largest lodging REIT and one of the largest owners of luxury and upper-upscale hotels.