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HSH: On Track to Sustainability

By Elaine Cohen (beyond Business) on June 21, 2010 at 11:44am.

Content: 

This report from The Hong Kong and Shanghai Hotels Limited (HSH) is a section on Sustainability contained in the company's annual report. It is 32 pages long in what is a financial report of some 200 pages, and structured as a GRI C+ application level Sustainability Report in its own right. As such it is quite self-contained, while also referring to other parts of the annual report eg to governance.  The company is an investment holding company based in Hong Kong engaged in the ownership, management and operation of 9 prestigious Peninsula branded hotels in Hong Kong and China, plus other commercial properties, clubs and services in Asia, USA and Europe. The Group employs nearly 7,000 people. The company was named as the fifth most admired Company in Hong Kong in 2008 and their short but relevant sustainability report appears to be in line with this recognition. The report follows a GRI traditional flow, starting with the obligatory profile disclosures, report scope, governance, ethics and indicators by section, and ending up with an assurance statement and a GRI Index. It's not sexy or showy or presumptuous, but straightforward, down-to-earth, functional, quite readable and even rather modest.

Messages from the chairman and the CEO include highlights of 2009 performance and a commentary about the way sustainability processes have developed in the company, which, after a comprehensive review in 2008, and establishment of key focus areas, delineates 5 priority areas for the next 3 5 years.  The Group has accomplished much in 2008-2009, including the revision of the Code of Ethics, a comprehensive update of all Human Resources policies and development of a new HR manual, appointment of a Corporate Responsibility and Sustainability General Manager and CSR Champions, rolling out of a new Operational Risk manual at all sites, launching of a new supply chain code for ethical supplier management and even the development of a new framework for community investment and engagement. In 2009, over 1,000 staff volunteered over 2,000 hours.  HSH appears to have made rather a lot of progress in a short time. I wonder how this group can maintain the pace.

The sense from this report is of positive internal processes and investment in internal communications.  The CEO holds webcasts three times a year for all employees, and 90% of employees have annual performance and career development reviews.  Each hotel has its own employee embedded sustainability emphasis with Green Teams in Tokyo, "Make it Better" sessions in Bangkok, a Green Campaign in Beijing, a Green Committee in Chicago and other examples. 

Environmental performance is explained well with over 100 initiatives for water and energy consumption planned after a detailed operational sustainability review, of which 50 are planned for 2010, to deliver 15% energy savings by 2011. Specific plans for different kinds of energy savings (lighting / cooling /insulation etc) are listed, showing the proportion of benefit to be derived from each type, giving confidence that this is a well thought through plan.

Communication:

The report is written clearly, is logical in structure and flow and states facts. Objectives for 2010 are presented in each section.  Data is provided as well as calculation methods. Omissions (such as emissions from cars), are noted and explained e.g., the group does not have the data collection processes yet in place. The report has a nice mix of overall group performance with specific insights of implementation at different sites. This ranges from simple things such as replacement of disposable liners with cloth lined baskets for laundry to installation of hydro-carbon dry cleaning machines to reduce use of chemicals and waste treatment facilities for perishable waste. The report design is not especially fancy, but it includes some relevant photos which add a nice touch.

Credibility:

This is a credible report, though light on data, responding only to a small number of GRI indicators. What is presented is clear and supported by relevant commentary. The report appears to be a solid reflection of where this company is on their sustainability journey, ie at the very early stages. However, they have woken up with a burst of energy and made a very good start. In addition to accepting responsibility and accountability for direct impacts, we should expect to see HSH mature in future years to develop meaningful stakeholder engagement processes (of which there is no evidence in this report) and a more considered approach to materiality. Most important of all would be consideration of the way this company can engage its hundreds of thousands of guests and customers every year in its sustainability efforts, leveraging the unique relationship a hotel group can have with people who come to stay in its properties in the areas of developing awareness, managing travel, food and beverages options, energy consumption related practices and more. The HSH report gives confidence that the Group knows this lies ahead, stating: "we recognise that we would benefit from a systematic approach to identify other potential stakeholder groups, assess and classify their needs and areas of concern, and to integrate the engagement process into our wider corporate responsibility efforts. Therefore, in 2010 we will introduce a Stakeholder Mapping and Classification (SMC) protocol across the Head Office and our operations and plan for training on stakeholder engagement and facilitating structured stakeholder dialogues." HSH is cleverly electing to report before they have all the answers, and making clear commitments about future plans. If the last couple of years are representative, it seems that we can have confidence that HSH is well on track to deliver more in future years. 

Recommendations:

1. Just keep doing it.
2. Think beyond direct impacts.

elaine cohen is the Joint CEO of BeyondBusiness Ltd, www.b-yond.biz/en , a CSR reporting and consulting firm,  specializing in a wide range of consulting services for the development of social and environmental responsibility of businesses.