Sustainable Champions

How International Companies are Changing the Face of Business in China

Fu Jia, Jonathan Gosling, Morgen Witzel

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351286145
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

In the face of strong competitive pressure and a dynamic market, multinational companies in China are forced to innovate with extraordinary pace and inventiveness. Environmental sustainability is a vital benchmark, and is a key driver for the best companies in each sector – many of them allied with the WWF Climate Savers programme.Sustainable Champions shows how nine leading multinational companies – including Nestlé, HP, Tetra Pak and Sony – are dealing with environmental, supply chain and ethical challenges in China. The book illuminates some of their transformative practices, and the impact this is having on business in China and beyond. The concluding cross-case analysis of supply chain and environmental challenges faced by leading international firms presents key lessons for business and for sustainability champions.Sustainable Champions: How International Companies are Changing the Face of Business in China is essential reading for researchers and course leaders seeking on-the-ground examples of local environmental challenges, and any company doing business in one of the world's fastest-growing economies.With a Foreword by Simon Zadek, Distinguished Fellow, Academy of Business in Society, Visiting Scholar, Tsinghua School of Economics and Management.

1
Responsible tourism: Fairmont Hotels

1.1 Introduction

Fairmont Hotels & Resorts was founded in 1907. Its first hotel, the landmark Fairmont San Francisco, became the city's venue of choice for glittering balls and presidential visits. Today the Fairmont portfolio includes the Fairmont Banff Springs, the Savoy in London, Quebec City's Château Frontenac and New York's The Plaza. Fairmont has grown into a leading luxury global hotel company with over 56 destinations.

Fairmont was also the first hotel chain to operate in a socially and environmentally sustainable fashion, long before "corporate social responsibility" became a buzzword. Fairmont Canadian hotels pioneered the Green Partnership programme in 1990, and this was then rolled out across the company Today Fairmont's sustainability programme encompasses activities such as recycling, organic waste diversion in the hotels' kitchens, retrofitting energy-efficient lighting, redistribution of household goods and food to those in need, purchasing green power and employing sustainable energy technology.

Fairmont's green philosophy is now one of the core values of the company. It is the first global hotel brand to join forces with the World Wide Fund for Nature (WWF) and become part of its Climate Savers programme. This programme establishes ambitious voluntary targets to address climate change. Climate Saver companies will collectively cut carbon emissions by 14 million tonnes annually – the equivalent of taking more than 3 million cars off the road every year – and at the same time these companies will save hundreds of millions of dollars in energy costs.

In 2009, Fairmont announced that it had pledged to reduce operational CO₂ emissions from its existing portfolio of hotels by 20% below 2006 levels by 2013. New Fairmont properties would aim to reduce their CO₂ emissions through the implementation of the company's new Energy and Carbon Management programme. Reducing emissions by 20% equates to removing 19,777 cars from the road annually, preventing the burning of 174,775 barrels of oil, or avoiding the consumption of 1,004 tanker trucks of gasoline. In addition, WWF and Fairmont agreed that the hotels would:

• Adopt a green procurement policy and supplier code of conduct
• Educate and encourage its top suppliers (representing approximately 25 % of the supply chain) to provide products in accordance with the green procurement policy and supplier code of conduct
• Update existing design and construction standards to incorporate and reflect LEED standards¹
• Endeavour to include sustainable and LEED-certified hotels across the brand
• Seek to relocate Fairmont Hotels & Resorts corporate offices in Toronto, Canada to a building with a LEED NC Gold target

Under the leadership of Fairmont's corporate environmental affairs division and hotel-based Green Teams, 26,000 Fairmont employees have become environmental ambassadors, helping to protect the habitat, resources and culture of the areas where they and their guests work, live and play. The main focus of the Fairmont Green Partnership programme is on responsible sustainable practices, both at a corporate level and at individual properties. To ensure sustainable operations, Fairmont has embraced policies that minimize impact on the environment by making ongoing operational improvements, mainly in waste management, energy and water conservation.

1.2 Fairmont Hotels in China

Fairmont manages three properties in China under its own brand. The Fairmont Beijing is a newly built hotel where employees believe that "the owner is very energy-conscious and wants to build green hotels in green environments, putting lots of effort in here to make sure that everything is green", according to Hans Hordijk, the former General Manager of the Beijing Fairmont. By contrast, the Fairmont Peace in Shanghai is a renovation of the famous old Shanghai Peace hotel. Because of the age of the building, there have been some limitations and restrictions on efforts to conserve energy. The third is the Fairmont Yangcheng Lake Hotel in Kunshan, in the countryside near Shanghai (we shall describe this hotel in more detail below). Fairmont manages a further eight properties in the country under the Swiss Hotel brand.

Fairmont is trying to bring a new and different culture into the hotel industry by offering guests a unique product, an experience of an environmentally sensitive area and a beautiful location, managed in the most responsible way Part of Fairmont's company philosophy is the education of both staff and guests about the environment, history and culture of the areas in which it operates. This Fairmont global philosophy has been transferred to China and is being adjusted locally There are major projects across all the company's properties aimed at conserving energy and reducing energy usage, reducing consumption of gas and water, reducing packaging, recycling kitchen waste and where possible using organic or sustainably sourced food in its restaurants. "Green committees" in every hotel give employees a chance to come up with and implement their own ideas, and also serve as a channel for staff education on sustainability.

1.3 Fairmont environmental initiatives

As well as energy savings, Fairmont's environmental committees developed initiatives on how to make all sorts of reduction in the hotels' consumption of power, gas and water, and in reducing packaging, increasing the use of double-sided printing or refilling used printer cartridges. Recycling is also a major issue. Fairmont China introduced coloured bins in kitchens for vegetable scraps and coffee grinds. All coffee grinds are saved and reused as compost to enrich the soil. "Coffee grinds are really good for the soil," says Philip Smith, general manager of the Yangcheng Lake Hotel. "They help increase acidity. Granules add into the aeration. Since the coffee grinds are rough they allow some air to the soil, and the soil becomes healthy."

Fairmont green committees also promote sustainability in different hotel departments. Each department must be represented on the committee. Representatives discuss environmental initiatives that their departments are working on. Hans Hordijk, former general manager of the Beijing Fairmont, says: "to be successful [the programme] has to be employee-driven rather than management-driven. I can sit here and say you must do this with this item, but if the staffs don't own it, it's not going to happen all the time."

Every green committee comes up with different ideas about sustainability. Often these ideas are then submitted to Fairmont's green e-platform, which allows hotels to share and exchange green ideas. If the idea is implemented it becomes a green initiative. The hotel that submits the most initiatives in a year gets an environmental award.

Philip Smith provides an example:

In Canada there was an initiative about grey water, which comes from refrigeration. Fridges are cooled by water, and after being used the water goes down the drain. In Canada by law, grey water cannot be used for drinking once it has gone through a machine. The initiative was about rechannelling this cleaned grey water for use in urinals and toilets.

Emily Liu, Assistant Director of Rooms, offers other examples:

If we find a good idea, we'll disseminate it to other departments wherever possible. For example, we have a battery recycling Station in each department and will hand the collected waste batteries to a recycling company For housekeeping, the main issue is the control of detergent dose so we use the detergent dose dispenser provided by Ecolab, our detergent supplier. Also, we have a green tip board located at the staff canteen. There are many ideas that we share with all employees there.

Ecolab² provides training and technical support to Fairmont housekeeping staff concerning detergent usage and guidance for the effective application of certain detergents to different cleaning tasks. Ecolab also checks that staff use the detergents in the right way. Emily Liu explains: "For example, three sprays are needed to clean a bathtub. Some cleaners may think it is not a big deal if he or she sprays more times than required. But if a housekeeper sprays ten times, it is a waste." If necessary, Ecolab provides additional training on how to use products in an environmentally friendly way. As Emily Liu says, "When we work with Ecolab, we learn from them. They know their detergents and the right way to achieve the best results with the least possible dose."

Employees at Fairmont in China have come up with many ideas of their own, including educational programmes introducing environmental issues to guests, organic farming and delivering organic vegetables to guests' homes (of which more below). As well as complex engineering solutions for saving energy, they also come up with simple ideas such as stopping the use of paper cups. Fairmont people will never use disposable cups as these are wasteful and their use is "the wrong thing to do".

Fairmont employees also look after each other. If someone forgets to turn off the lights or the water tap a colleague will remind them. For example, security departments use a checklist when doing the rounds every night to report if lights or heat have been turned off or left on. The security report is always discussed as part of the morning briefing. Fairmont employees know they must remember to turn off the lights or they will hear about it at the briefing next morning.

This culture begins from the moment employees join the company. Sannie Sun, Learning and Development Manager at Fairmont Yangcheng Lake, says:

we have orientation training for new staff during the first week. After they are assigned to their departments they receive a copy of the action plan and job task checklist, which includes the knowledge they need to grasp for their job. In the checklist, there is a section called "doing". This includes green projects, representation in the green committee and responsible requirements of the hotel.

Flora Li, Director of Housekeeping, feels the importance of these programmes very strongly:

I feel that people don't receive enough education on this. They should be told the harmful consequences of their actions. China hasn't developed enough to pay much attention to these problems. Most Chinese people's priority is how to become more affluent rather than environmental protection. It is an issue of mind-set change. We educate our employees on how to reduce the use of water. The practice is applicable not only to their jobs but to their personal daily life, which has much more impact on society.

1.4 Strengthening commitments

Globally, in nearly all hotels it is now standard practice for guests to put their room cards into slots next to the doors (or main switch) to run electricity In some hotels guests (or even housekeepers) leave extra keys in the slot to keep the air conditioning running non-stop, even if they are not in the room. Fairmont does not use this system, as it is not eco-friendly. Instead, motion sensors detect when a guest enters the room and switches on the required lights along with the air conditioning in the required position. "When guests leave the room, the air conditioning switches off automatically.

Fairmont also uses environmentally friendly technology in its bathrooms. The technique is called "rain forest" and it is based on pressurizing the shower heads. The amount of water coming from the shower resembles a mist, covering a large area and providing the feeling of a large amount of water but with a soft touch approach.

On average, each guest produces over 2 pounds (1 kg) of waste each night, mostly composed of beverage and paper products. These account for 65 % of all hotel waste. As well as ordinary refuse bins, Fairmont hotels provide a separate bin for recycling so that if guests do want to recycle they have that option. "We give the guests in each room an option of a recycle bin, which you might not find in many other hotels globally," says Emily Liu. "This is how we collaborate with our customers." There are also intensive back-of-the-house efforts to recycle a number of products as well as organics diversions from the hotels' kitchens.

Fairmont's waste management programme has three separate strands:

1. Implementation of comprehensive recycling programmes
2. Organics and composting programmes to capture food waste from kitchens
3. Redistribution of untouched food, partially used amenities and household goods to local groups and shelters

In the spirit of "think globally and act locally", ongoing sustainability projects are tailored to each property. This concept was launched in January 2005 as one of the latest additions to Fairmont's Green Partnership programme.

However, it can be hard to tell whether local producers use nonorganic fertilizers or pesticides to produce food. At present, traceability in China is based mostly on trust.

Laundry is a particularly important issue because of the health implications. Flora Li notes that when choosing a laundry service supplier for the Fairmont Beijing, Fairmont managers went to visit the supplier's premises. "They had to show us all their written documents such as qualifications, certification and the inspection report of the epidemic prevention station," she says. At Yangcheng Lake, Fairmont has its own laundry which also provides services for other hotels in the area. Fairmont laundry machines are highly sophisticated and have high standards for water and energy saving. As Sannie Sun says, "Our market investigations found that hotels tend to outsource their laundry. Our hotel has the capacity to take in laundry, and we make good profits out of this business."

1.5 Responsible purchasing and local organic trust

Local sourcing is a key part of Fairmont's philosophy. Fairmont recognizes the importance of its business to local communities, especially in terms of local purchasing, and strives wherever possible to purchase local products and to help the economies of the communities where it does business. In China, Fairmont also collaborates with suppliers to help reduce their CO₂ emissions. For example, Fairmont is trying to work with suppliers who use recycled paper, even to produce business cards. As Reto Boer, Director of Food and Beverages at the Fairmont Beijing, says, "we are very careful about what and from where we purchase. We have strategic partnerships with companies outside and within China but the key point (for supplier selection) is that we focus on the green standards of the suppliers."

Wherever any hotel in the Fairmont network can find green suppliers, then those green suppliers are given preference. Fairmont buys organic food because it believes it is the right thing to do. Organic food is of course more expensive, but this is what Fairmont guests are looking for and expecting. Fairmont restaurants will not put certain things such as bluefin tuna or shark's fin on the menu as these are endangered species. Fairmont suppliers are also aware that Fairmont will not buy endangered food even if it is available. In most cases the chefs control the food supplies because "we feel that a chef knows more about food than a manager does". In doing so, "chefs try to find things close to home instead of going out there in the world," says Reto Boer.

Fairmont has found a number of organic suppliers around Beijing – including on a golf course that has a few greenhouses. "We searched for the green producers, we approached them and we said we want to buy organic food, and they plant for us what we need." Fairmont makes inspections and checks to make sure that green producers follow the standards to avoid "cheating". "We try to get as much as possible from the local market because we don't believe in flying everywhere to all parts of the world and increasing the carbon footprin...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Figures
• Tables
• Boxes
• Foreword
• Acknowledgements
• Introduction
• 1. Responsible tourism: Fairmont Hotels
• 2. Learning to be sustainable: Hewlett-Packard
• 3. Sourcing strategy in China: Nestlé
• 4. Sustainable practice in China: SKF
• 5. On the "Road to Zero": Sony
• 6. One step ahead: Tetra Pak
• 7. Sustainable supply chain strategy: Vanke
• 8. Towards sustainable mobility: Volvo Group
• 9. Sustainable value chain strategy: Yingli
• Conclusion
• About the authors