Hongkong and Shanghai Hotels ltd make sustainable progress.

HongKong Shanghai improve sustainable sourcing

HongKong Shanghai improve sustainable sourcing

ITP member Hongkong and Shanghai Hotels (HSH) has published its 2013 annual report including their progress on environmental and sustainability targets.

The report has been prepared according to the new G4 Sustainability Reporting Guidelines of the Global Reporting Initiative, and details the company’s environmental, social and financial performance for 2013.

HSH is one of the first companies in the world to publish its report in accordance with GRI’s G4 Guidelines and be accredited by GRI in the Materiality Matters check.

The report’s sustainability section highlights HSH’s newly launched Sustainable Luxury Vision 2020, which puts sustainability at the heart of the company’s business model and brand. With seven areas of focus covering all divisions of the business, Vision 2020 sets out more than 50 economic, social and environmental goals that HSH is committed to achieve by 2020. Vision 2020 provides a blueprint on how HSH plans to achieve its ambition of taking luxury to the next level, which is sustainable luxury. Mr Clement K.M. Kwok, Chief Executive Officer of HSH, said “To deliver on both luxury and sustainability is not without challenge, but we see a genuine opportunity to achieve this in a way that complements our heritage of quality, thoughtfulness and meticulous attention to detail. 2013 already saw some of our operations making great strides in crafting the path towards sustainable luxury.”

Some the group’s key achievements include:

  • Developed and embarked on a bespoke two-year stakeholder engagement programme with Sustainable Luxury Vision 2020 as the main theme of engagement
  • Continued progress in energy and water conservation as well as community engagement work
  • Achieved LEED Gold Certification for the renovation of the de Ricou tower of The Repulse Bay Complex, which is the first residential property in Hong Kong to earn this international accolade in the Alterations & Additions category.
  • 54% of the paper products used in its operations globally were from Forest Stewardship Council certified sources, a 20 percentage point increase from 2012.
  • Increased employees’ awareness of responsible and sustainable operational practices through a fun and interactive video-making contest
  • Increased underlying earnings of the company by 16% in 2013 while the EBITDA margin increased by one percentage point to 24%.

Chairman The Hon. Sir Michael Kadoorie said, “Corporate sustainability underpins our group’s businesses. Vision 2020, with over 50 measurable and time-bound goals, is the result of 15 months of planning that involved our management team and key stakeholder groups in a structured process of assessing the future trends that will affect our industry over the long term.”

CEO Mr Clement Kwok helps with a tree planting initiative

CEO Mr Clement Kwok helps with a tree planting initiative

 

The report says, “We are fully aware that the future of our business will depend on how well prepared we are for it. Dwindling natural resources, aggressive demand for talent, as well as an increasingly competitive market make it necessary for any responsible business to take a hard look at sustainability measures.”

At the operations level, HSH has continued to make strides in their efforts to improve on energy performance and carbon footprint. Despite business growth, they used 3% less energy and 4% less water in 2013, than they did in 2008. Across the group, they are also prioritising responsible sourcing as a standard practice.

And the group has reaped early rewards for their efforts, with The Peninsula Chicago receiving its inaugural EarthCheck Silver Certified status, and the Leadership in Energy and Environmental Design (LEED) Gold Certification for the renovation of the de Ricou apartments at The Repulse Bay Complex.

As well as keeping an eye on their responsibilities to the environment, the group is also committed to helping the communities in which their hotels are located.

Their vision for 2020 includes:

  • Contribute 100K hours of community service by 2020
  • Engage 10% of employees in community service
  • Develop Group “Impact” programmes on global and regional levels
  • All hotel operations have at least one “Impact” programme.
  • All hotel and property operations to annually organise at least one cause marketing campaign to engage their customers in contributing to communities where we operate.
  • Empower disadvantaged youth and marginalised groups in communities where we operate with the skills and opportunities for livelihoods while building the pipeline for our future workforce needs
  • The Peninsula Academy provides opportunities for guests to appreciate and care for the local community and environment.

The report adds, “In 2013, we continued the pursuit of improving our energy performance and carbon footprint through implementing a variety of environmental engineering projects, such as LED lamp replacements, chiller upgrades and improving the efficiency of our air handling units. We also launched a building re-commissioning project at The Peninsula Hong Kong to achieve energy and emission savings through optimising the performance of our machinery and equipment. The project was planned for completion in 2014. Our completed 2013 emission reduction projects are estimated to result in annual energy and carbon emissions reductions of 9,850 GJ and 1,447 tonnes of CO2 equivalent respectively. Over the past five years, our environmental engineering projects brought about an estimated saving of 94,383 GJ, which is enough energy to power more than 1,000 homes in Hong Kong for four years10. The saving in energy also meant a saving of HK$23 million on our recurring annual operational cost.

“In 2013, The Peninsula Tokyo replaced more than 5,000 halogen lamps in the guestrooms with LED lights, reducing the energy demand by 90%. It would generate an estimated annual saving of JPY11 million (HK$805,703) in electricity cost and 2,365GJ of energy, which is equivalent to the average annual electricity consumption of nearly 300 Japanese households11. It also meant a reduction of 274 tonnes of carbon emissions.”

The group describe their action on water preservation efforts:

“Across the Group, we used 1.9 million m3 of water, 4% lower than that in 2006-2008. The water intensity of our hotels division in 2013 was 1,187 litres per guest night, 7.3% lower than 2012 and 15.9% lower than the 2006-2008 baseline. However, the water intensity of commercial properties, clubs and services division saw a year-on-year increase by 6.6%. This was mainly due to the re-opening of the hotel at Quail Lodge & Golf Club and St John’s Building and The Repulse Bay switching to water cool chillers which increased the demand for water.

“Studies have shown that more than 40% of the world’s population will be living in water-stressed areas by 2030. Beijing, Shanghai and California, where our properties are located, are among the world’s most water-stressed places. Compared to the 2006-08 baseline, The Peninsula Beijing and Shanghai saw a 17% and 24.8% reduction in their water intensity in 2013 while The Peninsula Beverly Hills and Quail Lodge & Golf Club also lowered theirs by 21.5% and 8.8% respectively. We are conscious of the financial and operational risks of operating in these water-stressed areas, and endeavour to contribute our best in water conservation to support the sustainability of these communities.”

The group has set clear supply chain targets for 2020:

  • All operations continue to enforce the group-wide ban on shark fin.
  • Paper products will be from certified sustainable sources by 2017.
  • Critically endangered species are removed from our food and beverages offerings.
  • Strive to source 50% perishable produce locally
  • Guestroom amenities are made of sustainable materials.
  • More than 50% cleaning products used in operations will be chemical-free or biodegradable.
  • Tea, coffee and chocolate we sell are from certified ethical sources.
  • Our luxurious furnishings meet uncompromising quality and sustainability criteria.
  • Strive to have all procurement contracts in compliance with HSH Supplier Code of Conduct and verified by sample audit
  • Rejuvenate “Naturally Peninsula” as the choice for sustainable, organic, and healthy options
Sustainable coffee at HSH

Sustainable coffee at HSH

 

The group has made good progress on its paper sustainability:

“Our day-to-day business operations involve the use of a wide range of paper products. To ensure that our operational needs are not met at the expense of exploiting the world’s forest and forest biodiversity, we introduced in 2012 a policy which mandated all Group companies to purchase paper products from certified sustainable and transparent sources and to reduce the consumption of paper. It is our goal that all paper products used in all of our operations will be from certified sustainable sources by 2017.

“We made great progress towards our goal during the year with 54% of our paper product purchased from Forest Stewardship Council (FSC)18 certified sources, representing close to a 20 percentage point increase from the previous year. The Peninsula Merchandising, which develops and sells a range of Peninsula-branded food products, gift items and award-winning cookbooks worldwide, managed to switch more than 95% of its luxurious paper packaging to FSC-certified sources. The Peninsula Beijing and Chicago also set wonderful examples across the Group with nearly 90% of their paper needs now met by FSC-certified stock.”

All these measures and many more can be read in the report.

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