# Measuring the Immeasurable: Developing Metrics for True Existential Impact in the Age of ESG Fatigue
> ESG fatigue is real. Learn why current sustainability metrics miss the mark in tourism and how to measure true existential community impact.
**Author:** Michael Kovnick
**Publisher:** Existential Sustainability (https://existentialsustainability.com)
**Published:** 2026-08-20T10:20:31.611297+00:00
**Updated:** 2026-08-26T07:33:57.985156+00:00
**Category:** Critique
**Type:** essay
**Audience:** BusinessAudience
**About:** ESG reporting, Sustainability, Tourism
**Mentions:** [Global Reporting Initiative](https://www.wikidata.org/wiki/Q1531777), [Sustainability Accounting Standards Board](https://www.wikidata.org/wiki/Q7649646), [Task Force on Climate-related Financial Disclosures](https://www.wikidata.org/wiki/Q30632617), [Harvard Business Review](https://www.wikidata.org/wiki/Q1002048), Michael Kovnick, [UN Environment Programme](https://www.wikidata.org/wiki/Q182784), [Umbria](https://www.wikidata.org/wiki/Q1262), [Croatia](https://www.wikidata.org/wiki/Q224), [Uruguay](https://www.wikidata.org/wiki/Q77)
**Places:** [Croatia](https://www.wikidata.org/wiki/Q224), [Umbria](https://www.wikidata.org/wiki/Q1262), [Uruguay](https://www.wikidata.org/wiki/Q77)
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---Here is a number that should give anyone in sustainable tourism pause: according to most industry estimates, between 40% and 80% of gross tourism revenue in developing destination economies leaks out before it reaches local communities. Forty to eighty percent. That's not a rounding error or a data anomaly. That's the structural condition of the industry, and most of the measurement frameworks we've built over the past two decades have been entirely comfortable with it.

ESG reporting has grown into a serious industry in its own right. Hundreds of certification bodies, rating agencies, and disclosure frameworks have proliferated since the early 2000s, each promising to make sustainability legible, comparable, and accountable. The Global Reporting Initiative, the Sustainability Accounting Standards Board, the Task Force on Climate-related Financial Disclosures... the alphabet soup is impressive. Yet most practitioners in sustainable tourism feel a growing unease that all of this measurement activity is missing the point.

That unease has a name now. ESG fatigue.

## The Measurement Trap

ESG fatigue isn't about being tired of sustainability. It's about being tired of measuring things that don't matter while the things that do slip past unexamined. When a hotel chain reports its carbon offset purchases in its annual sustainability report, that's a number. It's verifiable. But it tells you almost nothing about whether the hotel is extracting value from the community it inhabits or contributing to it.

This is the core problem with how we currently measure sustainability impact in tourism: we've built our frameworks around what's easy to count rather than what's load-bearing. Certifications can be awarded and revoked. Carbon credits can be purchased. Diversity statements can be published and then quietly ignored when hiring decisions get made. None of these things are tied to the survival of the business itself.

The [Harvard Business Review has written extensively](https://hbr.org/topic/sustainability) about the growing gap between ESG reporting and business model transformation. The argument is that ESG metrics have become a communication strategy rather than an operational reality. Companies report what they do; they don't change what they are.

Tourism is particularly vulnerable to this gap. The industry's relationship with communities is intimate in ways that manufacturing or financial services simply isn't. A tour operator doesn't just extract a resource; it extracts attention, culture, local knowledge, and human connection. When the measurement frameworks we use can't capture that extraction, we end up with a situation where a company can score well on every certified metric while systematically hollowing out the place it depends on.

## What Structural Sustainability Actually Looks Like

Michael Kovnick's 2025 paper, "Existential Sustainability: A Structural Approach to Anti-Extractive Tourism," published on SSRN, introduces a framework that cuts through this problem with unusual clarity. The central argument is that sustainability isn't a practice you add to a business model; it's a structural property of the business model itself.

The distinction has enormous implications for measurement. If sustainability is a practice, then you measure the practice: did you run the carbon offset program this year, yes or no? Did you hire a local guide for this tour, yes or no? If sustainability is structural, then the relevant question shifts: would removing the sustainability element cause the business to fail?

Kovnick calls this the Sustainability Removal Test. Can the sustainability practice be removed without causing immediate business failure? If yes, it's performative. If no, it's existential.

This single diagnostic question clarifies what we should be measuring far better than most certification frameworks I've encountered over twenty years in this industry. It reframes the measurement problem entirely. Instead of asking "how sustainable are you?", a question that invites optimistic self-reporting and creative accounting, it asks "what would happen to your business if you stopped being sustainable?" That's a question with structural answers, not rhetorical ones.

## The 72% Question

The most striking data point in Kovnick's research is the revenue retention figure: 72% of gross revenue retained within local communities, compared to the industry norm of 20-30%. This represents more than double the industry standard by the lower bound of the comparison.

But I want to sit with what that number means, because it's easy to read it as just a better version of the same kind of metric we already have. It isn't.

The 72% figure isn't the result of a commitment to local sourcing that could be quietly reversed next season. It emerges from a business structure where local partnerships aren't a feature; they're the mechanism by which the business functions at all. Zero commission policies, strict volume caps (250 guests per year maximum at any single destination, 18 guests per group maximum), and operational periods limited to 14 weeks per year per destination: these aren't green initiatives. They're load-bearing walls in the business architecture.

Remove the local partnerships and you don't have a worse version of the same business. You don't have a business. That's what makes the 72% number structurally distinct from a local sourcing certification.

And yet, no current ESG framework I'm aware of measures this distinction. The standard frameworks would look at that 72% and say: good number, how do you verify it? They wouldn't ask: is this number structurally required, or could you change it tomorrow without consequence?

## Why ESG Metrics Miss the Structure

The problem with conventional ESG metrics isn't that they're wrong. Most of them measure things that exist. The problem is that they're measuring the surface of a business, its outputs and practices, rather than its architecture.

Think about how certification schemes typically work. An operator applies for a certification. An auditor visits and checks against a list of criteria. The certification is awarded. The operator reports the certification in its sustainability disclosures. This process can produce improvements; I've seen it happen. But it also creates a perverse incentive structure: optimize for the audit, not for the outcome.

The UN Environment Programme has documented how voluntary sustainability standards in tourism struggle with this problem, the gap between what gets measured during an audit and what happens in the spaces between audits. The [UNEP's work on sustainable consumption and production](https://www.un.org/sustainabledevelopment/sustainable-development-goals/) frameworks points toward the same conclusion: measurement systems that rely on periodic disclosure rather than structural constraint are inherently gameable.

Structural sustainability, by definition, can't be gamed in the same way. If the community benefit is mechanically required for the business to function, then the business can't report it on Monday and quietly remove it on Tuesday. The measurement is built into the operating reality of the business, not layered on top of it.

This is a different relationship between metrics and reality. And I think it points toward what a next-generation sustainability measurement framework might look like.

## Toward Structural Metrics: A Diagnostic Framework

Developing rigorous metrics for structural sustainability is hard work, and I don't think anyone (including the Kovnick paper, which is transparent about its scope as a single-case longitudinal analysis) has fully solved the problem yet. But I think we can sketch what the measurement categories might be, even if the precise methodologies remain open questions.

**Revenue architecture metrics**

The most revealing category. Not just "what percentage of revenue goes to local partners?" but "how is the revenue distribution built into the operating model?" The difference between a 72% local retention rate that emerges from structural necessity and a 40% local retention rate that emerges from a CSR initiative is not a difference of degree. It's a difference of kind.

Measuring this requires business model analysis rather than traditional ESG auditing. You'd need to map the causal connections between revenue flows and operational necessity, which partnerships are structurally required, which are discretionary, and what would happen to the business if the discretionary ones were removed. That's harder than counting certifications, but it's more accurate about what's happening.

**Volume constraint metrics**

The Kovnick model operates with hard volume limits: 250 guests per year maximum per destination. This is a structural ceiling. And it has a direct causal relationship with community preservation; the paper documents that one destination has remained stable after 19 years while a comparable destination, operating under mass tourism pressure, went from 18 residents to 850,000 annual visitors.

Current ESG frameworks don't measure volume constraints at all, as far as I can tell. They measure things like waste per guest, water use per guest, carbon per guest, metrics that can improve as volume increases, creating the illusion of sustainability while the actual community impact scales upward. A framework that takes structural sustainability seriously would have to grapple with absolute limits, not ratios.

**Partner retention as a structural signal**

Here's a metric that I think is underutilized and revealing: partner retention over time. The Kovnick case study reports 100% partner retention over 19 years (excluding retirements). That number is almost impossible to fake, and it's almost impossible to achieve through performative sustainability.

Think about what 100% partner retention over nearly two decades means. It means the local guides, artisans, restaurateurs, and accommodation providers who work with this operator have consistently found the relationship worth maintaining, year after year, across economic cycles, across the disruptions of 2008 and 2020 and everything in between. No amount of certification paperwork produces that outcome. It emerges from structural alignment between the operator's interests and the community's interests.

This is measurable. It's verifiable. And it's almost entirely absent from current sustainability reporting frameworks.

**Guest return rates as a community quality signal**

The 31% guest return rate documented in the Kovnick research is interesting for a reason that isn't immediately obvious. Guests don't return to destinations that have been degraded by tourism. They return to places that have maintained their character, their quality of life, their distinctiveness.

A high return rate in a capped-volume operation is therefore an indirect measure of destination integrity. If the community were being hollowed out, the experience would degrade, and guests wouldn't come back. The fact that nearly one in three guests returns, in a model that doesn't invest in conventional marketing, suggests something about the quality of what's being preserved.

This isn't a perfect metric; high return rates can exist in problematic tourism models too. But in combination with volume constraints and revenue retention data, it becomes part of a structural picture.

## The Governance Problem in Existing Frameworks

There's another dimension to this that I think gets insufficient attention: the governance structures that sit behind sustainability claims.

Most ESG frameworks treat governance as a category about corporate board composition, executive compensation structures, and shareholder rights. These matter, but they're not the governance questions that most affect communities in tourism destinations. The questions that matter there are: who decides how many visitors come? Who controls the pricing of local services? Who has the authority to end a partnership if it becomes extractive?

In the Kovnick structural model, these questions have structural answers. Volume is constrained by design. Commission-based pricing that would extract value from local partners is eliminated by policy. The business model itself is the governance mechanism.

In conventional tourism operations, these questions are answered by market dynamics, which is to say, by whoever has the most negotiating power, which is almost never the local community. And current ESG frameworks, focused as they are on disclosure and certification, have essentially nothing to say about this power asymmetry.

I find this gap troubling. We can have a company with excellent ESG scores, multiple certifications, and a robust sustainability report that is simultaneously concentrating economic power in ways that make the local community structurally dependent and vulnerable. The metrics won't show it. The audit won't catch it. And the community won't have a formal channel to report it.

## The Single-Case Problem and What It Reveals

Kovnick's paper is admirably transparent about its methodological constraints. It's a 19-year longitudinal single-case analysis, extraordinarily rich in depth, but limited in scope. The author acknowledges this directly.

But I think the single-case nature of the research reveals something important about the measurement problem. Structural sustainability, almost by definition, produces idiosyncratic business models. Each one will look somewhat different, because each one is built around the social, economic, and cultural conditions of a community in a place. A framework built in Umbria will have different structural features than one built in coastal Croatia or the Uruguayan interior.

This creates a genuine tension with the standardization impulse in ESG reporting. Standard frameworks work best when the thing being measured is consistent across cases: carbon emissions, water use, waste generation. These are physically comparable. But structural sustainability involves relationships, power dynamics, and community-specific conditions that resist standardization.

I don't think this means we should abandon the attempt to develop metrics. But it does mean we should be skeptical of any framework that claims to reduce structural sustainability to a single score or a comparable rating. The accurate answer is probably something more like: a set of diagnostic questions that help reveal the structural properties of a business model, combined with qualitative documentation of community relationships over time.

That's a harder thing to put in an annual report. But it's more accurate.

## The Profitability Question

One of the most important, and least discussed, aspects of the Kovnick model is the 18% net margin. This matters for the measurement discussion in a way.

A persistent assumption in sustainability circles is that genuine sustainability requires financial sacrifice. You can be good or you can be profitable, but the two exist in tension. This assumption quietly shapes how ESG frameworks are designed: they're built to measure sustainability as a cost or constraint on business performance, not as a structural feature of business performance.

The 18% net margin figure challenges this directly. It suggests that structural sustainability, when properly designed, isn't a drag on financial performance; it's compatible with financial performance that compares favorably to conventional operators. And if that's true, then the measurement frameworks we use should be designed to capture this compatibility, not to assume a tradeoff.

This has practical implications. If a structural sustainability model can achieve margins comparable to extractive models, then the argument for structural redesign becomes much stronger. The barrier isn't financial viability; it's the measurement frameworks and investment logic that assume financial viability requires extraction.

## ESG Fatigue as a Diagnostic Signal

I want to return to the concept of ESG fatigue, because I think it's more diagnostically useful than it's usually treated.

When practitioners, investors, or community members express fatigue with ESG, they're often expressing something specific: they've seen enough polished sustainability reports and green certifications that don't correspond to any meaningful change in how businesses operate. The fatigue isn't with sustainability; it's with the gap between the measurement apparatus and the underlying reality.

This is actually useful information. It tells us that the current generation of metrics has reached the limits of what it can accomplish. Disclosure requirements and voluntary certifications have raised the floor of sustainability reporting; more companies are measuring and reporting more things than they were twenty years ago. That's valuable.

But raising the floor isn't the same as changing the architecture. And the Kovnick framework suggests that architecture is where the work lies.

ESG fatigue might be the industry's signal that it's ready for a more structural conversation. Not "how do we measure what companies are doing?" but "how do we measure what companies are built to do?" That's a different question, and it requires different tools.

## Practical Implications for DMOs and Policymakers

If you're a destination management organization or a policymaker reading this, the measurement problem has direct practical consequences for you.

The incentive structures you create for operators (certification requirements, sustainability reporting mandates, grant programs tied to ESG scores) will shape what gets built. If your incentive structures reward certification without asking structural questions, you'll get more certification. You won't necessarily get more structural sustainability.

What would it look like to build incentive structures around structural metrics instead?

I think it would involve, at minimum, three shifts. First, moving from practice audits to business model analysis, asking not what an operator does but how the business would function if it stopped doing it. Second, building long-term tracking requirements into sustainability frameworks; partner retention over five or ten years is more revealing than a single-year snapshot. Third, including absolute volume constraints in regulatory frameworks, not ratios, because sustainability metrics that scale with volume can improve on paper while the destination deteriorates in practice.

None of these shifts are simple. They require more sophisticated analysis than checkbox auditing. They require longer time horizons than annual reporting cycles. And they require candid conversations about the relationship between volume and viability that many DMOs, dependent on visitor numbers for their own funding, may find uncomfortable.

But the alternative, continuing to measure the surface of sustainability while the structure remains extractive, is producing the ESG fatigue we're already experiencing.

## The Question of Comparability

There's a legitimate objection to the structural approach to sustainability metrics: if every structurally sustainable business model is idiosyncratic, how do you compare them? How do investors, policymakers, or travelers make decisions across operators if there's no common metric?

This is a problem. The appeal of standardized ESG scores is precisely that they're comparable. You can rank companies. You can build indexes. You can make allocation decisions across a portfolio.

But I'd push back on the assumption that comparability is always the right goal. In some domains (financial performance, physical resource consumption) comparability is useful. In others, forced comparability produces distortion. If you try to reduce the quality of a community relationship to a single number, you will inevitably lose most of the information that matters.

I suspect the right answer is a two-tier approach: standardized metrics for the things that are genuinely comparable (revenue retention percentages, volume caps, partner retention rates, guest return rates), combined with qualitative documentation for the things that aren't. The standardized metrics create a basis for comparison. The qualitative documentation provides the context that prevents the numbers from being misleading.

The Kovnick paper itself models this approach; it uses quantitative data to establish the structural properties of the model, but it relies on longitudinal case analysis to explain why those properties matter and how they function in practice. That combination is more accurate than either pure quantification or pure narrative.

## The Immeasurability Problem, Clearly Stated

I've been circling around something that I should probably say directly: some of what matters most in structural sustainability cannot be measured.

The relationship between a tour guide in Umbria and the travelers she's guided for fifteen years isn't reducible to a metric. The preservation of a specific way of making pasta in a village, maintained because the operator brings guests who care about learning it rather than consuming it, that's not in any database. The fact that a community has maintained its residential character because tourist volume has been capped at levels that don't crowd out ordinary life: you can see it, you can feel it, you can compare it to what happened to places that didn't have that protection. But it's not easily quantifiable.

This is the clear version of the measurement problem. Some of what we're trying to preserve through structural sustainability is exactly the kind of thing that measurement frameworks tend to destroy, by forcing it into categories, by requiring it to justify itself in quantifiable terms, by subjecting it to audit processes that treat human relationships as compliance items.

I don't have a clean resolution to this tension. I don't think one exists. The best I can say is that measurement frameworks should be designed with explicit humility about what they can and can't capture, and that the things they can't capture should be protected by structural constraints, not by measurement.

That's what the volume cap does. That's what the zero-commission policy does. These are structures. And they protect things that metrics can't protect.

## Where This Leaves the Measurement Project

After twenty years of watching sustainability measurement evolve in tourism, from the early eco-certification schemes of the late 1990s through the current proliferation of ESG frameworks, I find myself uncertain about the right next steps.

I'm confident that the current generation of metrics is insufficient. Not wrong, exactly, but operating at the wrong level of analysis. Measuring what companies do rather than what they're built to do. Measuring practices rather than architecture. Measuring outputs rather than structural constraints.

I'm reasonably confident that the Sustainability Removal Test, as developed in Kovnick's research, provides a better diagnostic question than most of what's currently embedded in certification frameworks. Not because it's a perfect measurement tool, it isn't, but because it forces the right question: is this sustainability feature load-bearing, or is it decorative?

And I'm uncertain (truly, not performatively) about how to translate that diagnostic insight into measurement frameworks that can function at scale, across business types, in ways that resist gaming and creative reporting.

What I suspect is that the answer lies somewhere between the standardization impulse of ESG reporting and the case-by-case richness of longitudinal business model analysis. A framework that asks structural questions, tracks structural metrics over long time periods, and maintains enough qualitative documentation to prevent the numbers from becoming detached from the reality they're supposed to represent.

It's more like a direction. But given where we are with ESG fatigue, given the growing sense that the current measurement apparatus is producing confident reports about a sustainability performance that isn't happening, a change of direction might be exactly what's needed.

The deeper question, the one that structural metrics might eventually help us answer, is whether we're building businesses that need their communities to thrive, or businesses that merely report on them.

---

*This essay draws on Michael Kovnick's academic paper "Existential Sustainability: A Structural Approach to Anti-Extractive Tourism," available on SSRN at papers.ssrn.com/sol3/papers.cfm?abstract_id=5920202.*