The business case for sustainability in tourism

1. The Business Case for sustainability
MATTHIAS LEISINGER
CORPORATE RESPONSIBILITY
14 APRIL 2015, CAPE TOWN

2. • … 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

3. • … 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

4. 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
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5. With our Corporate Responsibility,
we aim at maximizing the positive
effects of tourist travel and
minimizing its adverse impacts.

6. Material issues defined based on risk
assessment, gap analysis and SWOT
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7. RTD Cape Town, April 2015
Driving innovation and enhancing
customer value proposition

8. VALUE DRIVER
Opportunities
Risk
Reputation
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
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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 assessment
Onsite inspections of key suppliers
Supporting key suppliers

9. 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

10. 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)
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11. 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
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12. 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
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13. TRAVELIFE – LABEL FOR SUSTAINABLE TOURISM
TRAVELIFE STANDS FOR…
Environmental protection
Fair working conditions
Benefits for local communities
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14. Human Rights due diligence
RTD Cape Town, April 2015

15. 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
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16. HRIA India 2013: scope value chain
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17. Greatest business risk posed by labour issues of key service providers
HRIA India: Seven major issue areas identified
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18. Water Management

19. 19
RESOURCE SCARCITY
OVER-EXPLOITATION OF LOCAL RESOURCES (E.G. WATER) BY HOTEL PARTNERS IN
DESTINATIONS
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20. KUONI WATER CHAMPIONS – 10 STEPS
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21. Improving working conditions
in hotels

22. 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
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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

23. SCORE TRAINING PROGRAMME
RTD CAPE TOWN, APRIL 2015
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

24. ACHIEVEMENTS BY END 2014
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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

25. Child Protection is everyone’s business

26. 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

27. Staff training
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EXAMPLE: THE CODE E-LEARNING

28. COLLABORATION WITH PARTNERS IN
THE DESTINATIONS
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EXAMPLE: CHILD PROTECTION WORKSHOP IN KENYA

29. RTD CAPE TOWN, APRIL 2015
INDUSTRY & STAKEHOLDER
COLLABORATION
FOR INCREASED IMPACT

30. FOSTERING POSITIVE IMPACT THORUGH STAKEHOLDER
ENGAGEMENT, PARTNERSHIP & DIALOGUE
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31. 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.
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32. THANK YOU!
MATTHIAS.LEISINGER@KUONI.COM
"Tourism is like fire: you can cook
your dinner on it, but it can burn
down your house." (Asian saying)