Matthias Leisinger - RTD11 2015

The Business Case for sustainabilityMATTHIAS LEISINGER

CORPORATE RESPONSIBILITY

14 APRIL 2015, CAPE TOWN

• … Regulation increase (antitrust, corruption, H&S, Carbon taxes) broad compliance definition

• … resource scarcity and availability

• … Mega trends (climate change, obesity, water, renewables, etc.)

• … Globalization

• … Public trust (access to information)

• … Compliance related failures, “licence to operate”, risk costs, e.g. cost of capital

• … Energy & raw material quality, availability, price volatility of resources, competition

• … Changing market forces and drivers, new and changing consumer patterns, new regulation

• … More opportunity through access to emerging markets, but also more risk and less control

• … Companies are not able to conceal anything (public eye, internet, social media, blogs)

Implications for companiesDrivers

Why sustainability matters – the bigger

picture

RTD CAPE TOWN, APRIL 2015

• … an attempt to ‘save the world’

• … a charity initiative

• … a simple communication / PR gag

• … a set of isolated, unfocused initiatives with weak links to business and destinations

CR is not… CR is …

• … a long term investment in Kuoni’s• future competitiveness

• … a protection for Kuoni’s reputation and credibility in ethically sensitive areas, both in destinations and source markets

• … an active element of Kuoni’s differentiation strategy

• … about gaining stakeholder visibility through appropriate projects and initiatives

Corporate Responsibility – a strategic issue

and not an attempt to ‘save the world’

RTD Cape Town, April 2015

CREATING SHARED VALUE FOR KEY STAKEHOLDERS

AND MANAGE THEIR EXPECTATIONS

• Build trust and loyalty by developing

new products that respond to the

growing demand for sustainable tourism

• Differentiate the company in a

competitive environment

A growing number of investors

are making investment decisions

based not only on traditional

financial analysis but on an

evaluation of CR performance

as well

• Reputation within society has a

significant impact on a company’s

performance

• Studies show that up to one-third of a

company’s reputation is based on its

CR perception

• Leverage innovation through partnerships

• Empowering suppliers

leads to higher product quality

and customer satisfaction

• Candidates/people care about

sustainability – top-talent recruitment

• Create an environment that motivates,

develops and rewards individuals

• Mandatory legislation and reporting

requirements from governments and

EU/OECD

• A growing number of governments

source products and services based on

CR criteria

Reducing the environmental footprint

leads to internal costs savings and helps

to protect the product at a destination

level

Employees

Customers

Investors

Society

EnvironmentSuppliers & Partners

Governments


With our Corporate Responsibility,

we aim at maximizing the positive

effects of tourist travel and

minimizing its adverse impacts.

Material issues defined based on risk

assessment, gap analysis and SWOT

6


Driving innovation and enhancing

customer value proposition

VALUE DRIVEROpportunitiesRiskReputation

APPROACH

Promotion of

sustainable

products

Supplier code of Conduct

Integration on online H&S self-assessment

Onsite inspections and support for key

suppliers

Promotion of

sustainable products

Sustainable Supply chain management

8

Engaging our suppliers:Adhering to minimum standards of the Kuoni Supplier Code of Conduct

Promotion of sustainable products:Selling sustainable products to our customers

Monitoring and improving sustainability performance of key suppliers:

Hotel online assessmentOnsite inspections of key suppliersSupporting key suppliers

OPPORTUNITIES (1/2)

COMMUNICATION & PARTNERSHIP

Long-term partnerships with hotels

Increased communication and concrete product offers to our

customers, hoteliers analysts and investors

Highlighting best practice examples (to customers, hoteliers, NGOs)

QUALITY OF PRODUCTS

Ensure minimum social and environmental standards as required in

contractual terms

Increased quality in our products (e.g. well-treated employees

provide better service)

Cost reduction (e.g. by saving water and energy)

BRAND AND RISK MANAGEMENT

Risk management (strong pressure on supply chain issues in

general) & legislative requirements (e.g. reporting & CO2)

Investment in Kuoni / GTS brand

9 RTD CAPE TOWN, APRIL 2015

SUSTAINABILITY OF THE DESTINATIONS

Protection of landscapes, nature reserves and scenic attractions

Protection of endangered species and eco-systems

Improving the quality of lives

Creating jobs & economic benefits for people

Fostering cultural exchange and understanding

NEW BUSINESS OPPORTUNITIES & COMPETITIVE ADVANTAGE

Meeting emerging consumer trends

Long-term investment in our business

Strengthening good brand image and reputation

Source of innovation

Improved employee engagement & satisfaction leading to increased

productivity, creativity & innovation

10

OPPORTUNITIES (2/2)


INCREASING AWARENESS AND BUILDING CAPACITY OF

EMPLOYEES AND SUPPLIERS WORLDWIDE

Targeted trainings for procurement functions on Kuoni

Supplier Code of Conduct & Kuoni’s Sustainable Excursions

Guidelines (e-learning & classroom)

Trainings on sexual exploitation of children and adolescents for

various actors along the value chain (e.g. hotel employees,

drivers, tour guides, contractors, sales agents etc.)

Capacity building programmes with hotel partners in selected

destinations:

• Kenya: SCORE ILO on workplace cooperation

• Tunisia: PPP on improving working conditions

• Gran Canaria: sustainability training, preparation for

Travelife certification

Training for procurement functions and capacity

building with suppliers


BACKGROUND / CONTENT

• Respecting local traditions

• Caring for the environment

• Caring for animal welfare

• Providing economic benefits to local communities

• Providing a fair working environment and employing qualified staff

• Ensuring customer awareness

KEY MESSAGE

SUSTAINABLE EXCURSION GUIDELINES


TRAVELIFE – LABEL FOR SUSTAINABLE TOURISM

TRAVELIFE STANDS FOR…

Environmental protection

Fair working conditions

Benefits for local communities


Human Rights due diligence


Objectives

Understand human rights risks and impacts (positive and negative) of Kuoni’s

operations and business relationships

Define appropriate mitigating actions to reduce negative and strengthen positive

impacts on human rights

Foster partnership with key stakeholders, including employees, suppliers, NGOs and

other businesses and organisations

Methodology

HRIAs conducted based on the 6 phases of the Kuoni HRIA toolkit developed for the

Kenyan pilot (2012) and adapted for the HRIA in India (2013)

The methodology includes background research, interviews with internal and

external stakeholders, workshops with management and employees and the

development of an action plan

As part of its human rights due diligence process, Kuoni further implements and

tailors the HRIA toolkit to suit the needs of other business segments

Identifying specific issues through

Human Rights Impact Assessments (HRIAs)

Reports available at:

http://www.kuoni.com/corp-responsibility/human-and-labour-rights/due-diligence


HRIA India 2013: scope value chain


Greatest business risk posed by labour issues of key service providers

HRIA India: Seven major issue areas identified


Water Management

19

RESOURCE SCARCITY

OVER-EXPLOITATION OF LOCAL RESOURCES (E.G. WATER) BY HOTEL PARTNERS IN DESTINATIONS


KUONI WATER CHAMPIONS – 10 STEPS


Improving working conditions

in hotels

Following the human rights impact assessment conducted in Kenya in 2012, Kuoni/Private Safaris and the International Labour Organisation (ILO) have engaged in an informal partnership with the following two objectives/work streams:

COLLABORATION ILO & KUONI

KENYA 2013-14


FOSTER INDUSTRY

COLLABORATION

IMPROVE WORKINGCONDITIONS

IN HOTELS (SCORE)

Convene local tourism stakeholders to address

issues identified which require a

broader/societal approach (e.g. distribution of

economic benefits, industry wages etc.)

Conduct capacity-building training for hotels in

Kenya, to help them to improve business

performance through improved workplace

cooperation and the adoption of responsible

and “lean” management practices (SCORE

methodology).

COLLABORATION ILO & KUONI IN KENYA

http://www.google.ch/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=Rj9HdNbGbje4uM&tbnid=tgvnK_8nEma9YM:&ved=0CAUQjRw&url=http://www.tawgih.org/online/en/about-us.html&ei=c00UU4mlIYrrswbo74D4DQ&bvm=bv.61965928,d.bGE&psig=AFQjCNF6pdF_GLYiaLHDBXz5hruc8I8t9g&ust=1393925811676786

http://www.google.ch/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=Rj9HdNbGbje4uM&tbnid=tgvnK_8nEma9YM:&ved=0CAUQjRw&url=http://www.tawgih.org/online/en/about-us.html&ei=c00UU4mlIYrrswbo74D4DQ&bvm=bv.61965928,d.bGE&psig=AFQjCNF6pdF_GLYiaLHDBXz5hruc8I8t9g&ust=1393925811676786

SCORE TRAINING PROGRAMME


SCORE (Sustaining Competitive and Responsible Enterprises) is an ILO training programme carefully geared to the needs of small and medium-sized enterprises and has been tested and improved in many different sectors around the world. It was first adapted to the hotel industry in South Africa in 2009 and is currently being implemented in Kenya.

STRUCTURE OF THE SCORE TRAINING

1. Training of local experts

2. Classroom training with hotels

Two managers and two workers per hotel participate in a two-days training tailored to the Kenyan hotel sector

3. Individualized business advice

• Freshly trained local experts provide bespoke counselling at the hotel to help address the specific issues identified during the classroom training

• Close collaboration and empowerment of the enterprise improvement teams

ACHIEVEMENTS BY END 2014


FOSTER INDUSTRY

COLLABORATION

IMPROVE WORKING CONDITIONS

IN HOTELS (SCORE)

• 2 workshops conducted with Kenyan tourism

stakeholders (ILO constituents & NGOs) to

discuss issues & identify priority areas for action

• ILO constituents visited SCORE hotel to learn

about SCORE methodology

• Training on social dialogue conducted with ILO

constituents

• Successful lobbying for the reinstatement of a

wages council for tourism

• 5 local experts trained as SCORE trainers

• 4 hotels participated in classroom trainings

• Enterprise improvement teams established

• Enterprise improvement plans developed and

being implemented

• Case studies to be presented at closure event in

November 2014

COLLABORATION ILO & KUONI IN KENYA 2013-14

Child Protection is everyone’s business

Integrating child protection into our

business operations

1. Establish a policy and procedures against sexual exploitation of children.

2. Train employees in children’s rights, the prevention of sexual exploitation

and how to report suspected cases.

3. Include a clause in contracts throughout the value chain starting a common

repudiation and zero tolerance policy of sexual exploitation of children.

4. Provide information to travelers on children’s rights, the prevention of

sexual exploitation of children and how to report suspected cases

5. Support, collaborate and engage stakeholders in the prevention of sexual

exploitation of children

6. Report annually on their implementation of Code related activities

26 RTD Cape Town, April 2015

http://www.thecode.org/index.php?page=1_1


Staff training


EXAMPLE: THE CODE E-LEARNING

COLLABORATION WITH PARTNERS IN

THE DESTINATIONS


EXAMPLE: CHILD PROTECTION WORKSHOP IN KENYA


INDUSTRY & STAKEHOLDER

COLLABORATION

FOR INCREASED IMPACT

FOSTERING POSITIVE IMPACT THORUGH STAKEHOLDER

ENGAGEMENT, PARTNERSHIP & DIALOGUE




MULTI-STAKEHOLDER INITIATIVE:

OPEN PLATFORM FOR THE SUPPORT OF HUMAN RIGHTS IN TOURISM

Roundtable on Human Rights in Tourism

http://www.menschenrechte-im-tourismus.net/en/startseite.html

Objectives:

- Kick off a process to implement the UN Guiding Principles on

Business and Human Rights in the tourism sector and ensure

tourism service providers commit to implement due diligence

- Develop, recommend and promulgate a standard and

management approach for human rights due diligence in the

tourism sector

- Provide information and (training) materials and best practices

which allow the exchange of know-how

- Sensitize broader public, media, travellers, enterprises,

investors, teachers and students as well as politicians on the

compliance with human rights in tourism.


THANK YOU!

[email protected]

"Tourism is like fire: you can cook

your dinner on it, but it can burn

down your house." (Asian saying)