Corporate Responsibility

Leslie D. Hale
President and Chief Executive Officer

To Our Stakeholders,

At RLJ, we value and know that people are at the center of the hospitality industry. Our associates come from diverse backgrounds, our hotels serve guests from all walks of life and we impact the communities in which we operate in myriad ways. As such, we are committed to supporting these communities through our inclusive hiring and labor practices, responsible environmental and sustainability efforts, and our philanthropic endeavors. Therefore, even as we navigate an uncertain environment created by the COVID-19 pandemic, we remain steadfastly committed to the Environmental, Social, and Governance (ESG) matters which are tied to the overall sustainability of our business.

I am especially proud of our long-standing commitment to the importance of diversity in the workplace. The principles of diversity and inclusion have been embedded in RLJ since its founding by Robert L. Johnson, an iconic and highly successful African American entrepreneur. As a result, we have maintained a diverse board of trustees and employee base since the Company’s inception. Today, one third of our board is composed of women and half are racially diverse. Among our associates, more than 50% are African American, Latinos or Asian-Americans and half of our employees are women. While we are proud of our diversity and the example our Company has provided to the industry, we also recognize that much work needs to be done in our communities, especially as it relates to advancing young people of color. To address this, I have signed the CEO Action for Diversity and Inclusion™, which pledges support towards developing more inclusive and diverse workplaces. Furthermore, RLJ has directed significant financial contributions to empower minority and underrepresented individuals in the communities in which we operate, by supporting organizations such as the Robert Toigo foundation, N Street Village, Habitat for Humanity and the Boys & Girls Clubs of Greater Washington. For nearly 10 years, we partnered with Don Bosco Cristo Rey High School, which placed high school students in our offices to learn the industry and practical business skills. Since going public, RLJ has donated approximately $4 million to these organizations through our philanthropic efforts, which has positively impacted the lives of many.

As we operate our business, we continue to maintain our longstanding focus on sound environmental stewardship. We diligently follow strategies across a wide range of functions that reduce our environmental impact, such as investing in areas that allow us to effectively monitor and reduce our water and energy usage while optimizing overall efficiency. We are also pursuing initiatives and investments within our asset management and design and construction functions that reduce environmental risks. As a testament to our commitment, over the years we have focused on a number of efficiency projects. Since 2015 alone, we have invested in over 130 efficiency projects, which has allowed us to reduce our energy usage by 5.9 million kWh and our water usage by 20,000 kGal. Our environmental policies are formalized in our ESG disclosures and, given our commitment to reducing our environmental impact, we intend to enhance our program to continue to identify and mitigate climate and other environmental risks.

Another important aspect of our corporate responsibility policy is practicing strong corporate governance to safeguard the interests of our shareholders. In addition to maintaining a highly diverse Board, we place great emphasis on maintaining an independent Board and are committed to continuing refreshment. Four new Board members have joined in the past four years, and their energy, new perspectives and diverse skill sets have contributed to our Board’s sound decision-making.

Overall, our corporate responsibility is integral to our overall business strategy and commitment to driving long-term shareholder value. We believe that by continuing to maintain an inclusive corporate culture and investing in underserved communities, following strong corporate governance practices and making progress towards reducing our environmental impact, we have laid the foundation for operating our business in a socially responsible basis. As we look forward, we intend to continue our efforts in this direction and to also enhance our environmental, social and governance disclosures. I want to thank all our stakeholders, including our associates for their support and contribution to RLJ and its corporate responsibility efforts.
Sincerely,
Leslie D. Hale
President and Chief Executive Officer

About RLJ Lodging Trust

RLJ Lodging Trust is one of the largest U.S. publicly traded lodging real estate investment trusts (REITs) in terms of both number of hotels and number of rooms. We seek to generate strong returns long-term for our shareholders by acquiring, owning, and operating primarily premium-branded, focused-service and compact full-service hotels in markets that exhibit multiple demand generators and attractive long-term growth prospects.

RLJ Corporate Responsibility Strategy

As we operate our business, we are committed to fostering diversity and inclusivity in the workplace, demonstrating high ethical standards in the management of our business and managing our portfolio to reduce climate and other risks along with minimizing our environmental impact. We recognize the importance of ESG to our investors and stakeholders and in 2020, initiated the formulation of our corporate responsibility strategy to provide disclosure and transparency.

Our corporate responsibility strategy underpins our commitment to ESG, and we continue to integrate our strategy to create long-term shareholder value, while maintaining the highest standards of ethical behavior and effective corporate governance. We also commit to environmental stewardship by investing in projects that reduce our consumption of energy and water and lower our greenhouse gas emissions. Additionally, we strive to generate positive social impact by empowering our associates and supporting our local communities through philanthropy and other community engagement activities.

Sustainability Objectives

Our sustainability strategy aligns our ESG objectives with our commitment to generating long-term shareholder value through the following:

  • Drive revenue growth by following a disciplined investment strategy and through aggressive asset management,
  • Reduce costs through investments in energy and water conservation and other ‘greening’ efforts,
  • Improve our human capital by championing our corporate culture of diversity and inclusivity, to boost motivation, attract top talent and retain associates,
  • Validate our sustainability commitments through external benchmarking and transparent reporting, and
  • Expand our engagement with our partners, suppliers and the communities in which we operate.

Our longstanding commitment is formalized through policy, which will guide our actions going forward and include:

  • Environmental Policy: This policy outlines our objectives, risks and opportunities, management processes, standard technical practices and investment focus areas including reducing energy use and greenhouse gas emissions, green building, water use, effluents and waste and the physical impacts of climate change.
  • Environmental Policy (PDF download)

  • Human Rights Policy: This policy is designed to help safeguard our commitment to human rights and responsible labor practices, across the social issues most important to our Company, such as associate health and well-being, diversity and inclusion and community relations.
  • Human Rights Policy (PDF download)

  • Vendor Code of Conduct: This code aims to encourage our vendors to adopt our commitments to environmental stewardship, human rights, corporate citizenship and effective governance.
  • Vendor Code of Conduct (PDF download)

We look to continue to build upon this inaugural corporate responsibility report and disclosure of ESG data and information by aligning with generally accepted disclosure frameworks, such as the standards from the Global Reporting Initiative (GRI). Additionally, we aim to further disclose our key impacts, risks and opportunities by disclosing metrics in alignment with the Sustainability Accounting Standards Board (SASB) and participating in the Global Real Estate Sustainability Benchmark (GRESB) real estate assessment going forward.

People

As a Company we strengthen human capital by fostering a corporate culture of Diversity and Inclusion, investing in Health and Well-Being, and maintaining Responsible Labor Practices.

Diversity and Inclusion

Our associates and board of trustees are comprised of highly diverse individuals across gender, race, and age. Among our Board of Trustees 33% represent women and 56% represent ethnic minorities, including our President and Chief Executive Officer, who is an African American woman. Additionally, 56% of our associates are ethnically diverse, and 52% of our associates are women.1 The diversity in our workforce is a testament to our corporate culture of inclusivity at all levels of our organization.

At RLJ, we recognize that there is potential for discrimination to arise in a number of business processes, including recruitment, remuneration, performance assessment and advancement. We stand against discrimination in all its forms, including but not limited to race, color, sex, religion, political opinion, national extraction, social origin, age, disability, HIV/AIDS status and sexual orientation. We are committed to both anti-racism and a workplace free of discrimination at all levels of our organization, and this commitment is reinforced by our Chief Executive Officer. As such, we take a proactive approach to eliminating discrimination across our Company, from our Board to our associates and our vendors. Key highlights from our proactive approach include:

  • Conducting regular training on “Creating a Respectful Workplace” which focuses on discrimination and harassment awareness;
  • Holding a regular discussion series called “Conversations in Courage” to encourage associates to discuss issues related to racial unrest and diversity;
  • Leveraging a diverse slate of candidates for all job vacancies, including senior management; and
  • Providing access to skills development training for all associates, which encourages them to progress within the Company

In addition, we support several organizations committed to the empowerment and advancement of women and racial minorities in the business environment through active membership and donations. We especially focus on organizations in the real estate, hospitality and finance industries, including:

  • The National Association of Black Hotel Owners and Operators
  • The Robert Toigo Foundation, whose mission is to transform forward-thinking organizations through education and strategies that drive greater inclusion and the ongoing development and promotion of exceptional, diverse leaders
  • The Commercial Real Estate Women’s Network (CREW), whose mission is to transform the real estate industry by advancing women globally.

Health and Well-Being

The impact of the COVID-19 pandemic on the global economy, the U.S., and the local communities where our hotels are located has been significant. However, RLJ is exceptionally well-positioned to navigate this period of uncertainty. In addition to the tremendous efforts we are making to mitigate the ongoing operational and financial impacts on our hotels from the pandemic, we are also taking aggressive steps to protect the health and well-being of our associates, customers and the employees of our third-party management companies. At a minimum, we adhere to the AHLA Safe Stay® initiative focused on enhanced hotel cleaning practices, social interactions and workplace protocols required to address the challenges and new expectations presented by the COVID-19 pandemic. We support our third-party hotel management companies by integrating these policies and procedures into hotel operations.

Our response to the impacts of COVID-19 builds on our longstanding commitment to the health and well-being of both our associates and guests. We have previously committed to initiatives that support associate well-being, including the AHLA 5-Star Promise – a voluntary, industry pledge to improve and promote workplace safety around sexual violence, assault and human trafficking. We are also committed to supporting our third-party management companies with integrating the 5-Star Promise principles throughout their hotel operations.

Responsible Labor Practices

Our Company complies with all federal, state and local ordinances and regulations regarding labor and employment. Our third-party management companies are responsible for hiring and maintaining the labor force at each of our hotels. Although we do not directly employ or manage the workers at our hotels, we promote regulatory compliance, particularly related to labor, to our third-party management companies and other vendors and partners. In 2021, we implemented an enhanced policy focused on labor and human rights, as a commitment to upholding the highest ethical standards across these important social issues.

Governance

At RLJ Lodging Trust, we treat our associates, customers and vendors with respect, which is driven by our high ethical and business standards. Our standards are defined by our professionalism, high integrity, ability to exercise sound judgement and respect for diverse perspectives. This begins with a robust Code of Business Conduct and Ethics, made available to all through our corporate website, to consistently guide and set our ethical standards across our Company. Our commitment to corporate responsibility is also driven by our accountability to our stakeholders, including our investors, associates, vendors, and third-party management companies.

Risk Management

Our Board of Trustees executes its oversight responsibility of risk management directly and through its committees. Risks related to environmental and social factors fall directly under the Nominating and Corporate Governance Committee unless they are thematically linked to auditing or compensation activities. Strategic risks, which may include highly significant ESG issues, are directly overseen by the Board and not delegated to one of the committees. As evidenced by our matrix of trustee skills, experiences and expertise, approximately 78% of our Board have deep expertise and experience in risk management.

Skills Matrix— 2021 Proxy Statement (PDF download)

Effective Corporate Governance

Our commitment to conducting our business affairs with integrity, transparency and professionalism begins with effective corporate governance. In this respect, our Board composition is a strength as highlighted by:

Board Diversity

  • 7 of 9 trustees are independent, including all members of our Board Committees
  • 3 of 9 trustees are women
  • 5 of 9 trustees are ethnically diverse
  • Trustee skills, qualifications and experience matrix are disclosed in proxy statements

Board Independence

  • Separate Chairman and Chief Executive Officer roles
  • Independent trustees regularly meet without management present
  • Engagement of an independent compensation consultant

Board Refreshment

  • Balanced trustee tenure with an average of approximately seven years
  • Evaluation of Board skills, experience, attributes and diverse viewpoints before selection

Environment

We recognize the strategic importance of increasing environmental efficiency within our hotels. We evaluate opportunities and invest in programs which reduce energy and water consumption while increasing profitability. Recent and ongoing measures to address resource efficiency include energy-efficient lighting, low-flow water fixtures, building and guestroom-specific energy management systems, heating upgrades, ventilation, air-conditioning, and refrigeration systems and participating in regional demand response programs. We intend to continue implementing measures that bolster our commitment to environmental stewardship while assessing opportunities in underinvested areas.

Efficiency Investments and Environmental Performance

In 2019, we invested $941,762 in energy and water efficiency projects across our portfolio.

Energy Efficiency Investments

Total Number of Projects Total Investment Total Cost Savings Total Annualized Energy Reduction
(kWh)
Total Annualized Carbon Reduction
(kgCO2e)
32 $771,593 $312,154 2,220,121 841,760

Water Efficiency Investments

Total Number of Projects Total Investment Total Cost Savings Total Water Reduction (kGal)
6 $170,169 $67,886 8,947

Our approach to investing in optimizing the overall efficiency of our hotels is reflected in our historical environmental performance across energy, greenhouse gas emissions and water. While we recognize that environmental efficiency is an ongoing journey, we are proud of how our hotels have performed. In addition, we are also committed to working with our third-party hotel management companies to improve waste tracking to disclose waste performance going forward.

Since 2017, within our comparable portfolio we decreased our energy intensity by 0.83%, and our carbon emissions intensity by 8.32%. We believe this reduction is a result of our investments in energy efficiency projects, which in addition to reducing our environmental impact has also reduced our energy related expenses. Our water consumption intensity decreased by 3.65% from 2017 to 2019. Reducing our water consumption is particularly important considering that 23% of our portfolio are in areas experiencing high or extremely high-water stress. Therefore, reducing our consumption will help mitigate not only the operational risk associated with future changes to water pricing but, also the overall water stress.

Environmental Performance

2017 2018 2019 2017-2019 Change
Energy Intensity Per Square Foot (kilowatt hours) 25.46 25.69 25.25 -0.83%
Greenhouse Gas Intensity Per Square Foot (kilograms CO2e) 8.70 8.12 7.98 -8.32%
Water Intensity Per Occupied Room (gallons) 137.06 136.62 132.06 -3.65%

We track the efficiency profile of our hotels on a routine basis to monitor progress and identify opportunities. Noteworthy portfolio-wide environmental practices through 2020 include:

  • Nearly 40 of our hotels have been accepted into the TripAdvisor® GreenLeaders™ Program;
  • 77% of our properties have equipped more than 90% of their guestrooms with digital thermostats;
  • 76% of our properties utilize an environmental management system;
  • 73% of our properties have more than 90% low-flow toilets, faucets, and/or showerheads; and
  • 70% of our properties have eliminated the usage of plastic straws.

Philanthropy

RLJ is committed to strengthening community relations and instilling a sense of community engagement throughout our Company. As such, we have established a series of programs and initiatives to serve the local communities where we operate our business. We maintain a matching gift program for all active full-time associates to encourage and support a culture of generosity and community involvement. The program provides matching funds to the charitable organizations associates personally support. To maximize the impact of associate charitable giving, we may match donations made by eligible donors up to $1,000 per year to the eligible non-profit organization of their choice.2 We support a wide variety of organizations through cash donations, contributing approximately $4 million since our IPO in 2011, including $602,000 to 77 different organizations since 2017. To connect our associates with their community, RLJ operates an associate volunteer program through a series of events every year. Over the past four years, our associates have donated 427 hours of service to Habitat for Humanity.

Youth

Our holistic approach to corporate responsibility extends to improving education, employment and other opportunities for young people in the metropolitan Washington, D.C. area and in some of the communities where our hotel properties operate. As a gold sponsor, we support the American Hotel & Lodging Foundation through financial contributions, which covers several youth-related programs, including the “Empowering Youth Program” and “Opportunity Youth”. The Company also has supported Don Bosco Cristo Rey High School in Takoma Park, Maryland; Washington Tennis and Education Foundation in Washington, D.C.; the D.C. College Access Program (DC-CAP); A Better Chance; the Global Scholars Foundation; Washington D.C.; Big Brothers/Big Sisters of the National Capital Area; and Washington D.C. Boys and Girls Club.

People in More Dependent Circumstances

The Company also supports people in more dependent circumstances. We continue to support programs through the major hotel brands that operate our hotel properties, including Marriott’s Bridges Foundation. We have also supported the following organizations in the past: Catholic Charities, Providence Health Foundation, Cystic Fibrosis Foundation, Fight for Children, Potomac Community Resources, Service Source Foundation and Autism Learning Center.

Performance

ESG performance data tables (PDF download)

ESG Policies and Information

GRI Index (PDF download)

Environmental Policy (PDF download)(

Labor and Human Rights Policy (PDF download)

Vendor Code of Conduct (PDF download)

Code of Business Conduct and Ethics (PDF download)

Corporate Governance Guidelines (PDF download)

 

1. As of year-end 2020

2. Eligible organizations must be in the United States and be recognized by the Internal Revenue Service as tax-exempt and designated as a public charity under Section 501(c)(3) of the IRS Code

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