Sustainable TourismAn Integrated Values-Based Business Model

Sustainable TourismAn Integrated Values-Based Business Model

Ed FoxEd FoxVice President and Chief Sustainability OfficerVice President and Chief Sustainability Officer

Ed FoxEd FoxVice President and Chief Sustainability OfficerVice President and Chief Sustainability Officer

National Academy Foundation Annual Institute National Academy Foundation Annual Institute for Staff Developmentfor Staff DevelopmentJuly 10, 2009July 10, 2009

S U S T A I N A B I L I T Y

The Icarus Foundationhttp://www.theicarusfoundation.com/Home.html

The Icarus Foundationhttp://www.theicarusfoundation.com/Home.html

Center for Sustainable Destinations – Center for Sustainable Destinations – National GeographicNational Geographichttp://www.nationalgeographic.com/travel/sustainable/http://www.nationalgeographic.com/travel/sustainable/

Center for Sustainable Destinations – Center for Sustainable Destinations – National GeographicNational Geographichttp://www.nationalgeographic.com/travel/sustainable/http://www.nationalgeographic.com/travel/sustainable/

Globalization101.org - A Project of the Carnegie

Endowmenthttp://www.globalization101.org/index.php?file=pnews&id=137

Globalization101.org - A Project of the Carnegie

Endowmenthttp://www.globalization101.org/index.php?file=pnews&id=137

The Sustainable Tourism GatewayThe Sustainable Tourism Gateway

What Is Sustainability?Why Does It Matter?

What Is Sustainability?Why Does It Matter?

Development that meets the needs of the Development that meets the needs of the present without compromising the ability of present without compromising the ability of

future generations to meet their own needs.future generations to meet their own needs. - -

Brundtland Commission 1987Brundtland Commission 1987

BUTBUTThe social responsibility of business is to The social responsibility of business is to

increase its profits. increase its profits.

- - Milton Freeman Milton Freeman 19701970

Sustainability is a systems approach to Sustainability is a systems approach to

planning and decision making that creates planning and decision making that creates

long-term value by embracing opportunities long-term value by embracing opportunities

and managing risks derived from economic, and managing risks derived from economic,

environmental and social developments.environmental and social developments.

- - WBCSDWBCSD

Sustainability is a systems approach to Sustainability is a systems approach to

planning and decision making that creates planning and decision making that creates

long-term value by embracing opportunities long-term value by embracing opportunities

and managing risks derived from economic, and managing risks derived from economic,

environmental and social developments.environmental and social developments.

- - WBCSDWBCSD

Triple Bottom LineTriple Bottom Line

Principled Business PerformancePrincipled Business Performance Based upon trends:Based upon trends:

Risk managementRisk management Optimize opportunityOptimize opportunity

Principled Business PerformancePrincipled Business Performance Based upon trends:Based upon trends:

Risk managementRisk management Optimize opportunityOptimize opportunity

EnvironmentEnvironment

EconomyEconomy Equity /Equity /CommunityCommunity

Context for Sustainability Context for Sustainability

South Africa – Apartheid Economic BoycottSouth Africa – Apartheid Economic Boycott

Union Carbide – BhopalUnion Carbide – Bhopal

Exxon – ValdezExxon – Valdez

Nike – “Sweatshops”Nike – “Sweatshops”

Monsanto – Genetically modified foodsMonsanto – Genetically modified foods

Ford/Bridgestone tire “Explorer” recallFord/Bridgestone tire “Explorer” recall

EnronEnron

WorldComWorldCom

South Africa – Apartheid Economic BoycottSouth Africa – Apartheid Economic Boycott

Union Carbide – BhopalUnion Carbide – Bhopal

Exxon – ValdezExxon – Valdez

Nike – “Sweatshops”Nike – “Sweatshops”

Monsanto – Genetically modified foodsMonsanto – Genetically modified foods

Ford/Bridgestone tire “Explorer” recallFord/Bridgestone tire “Explorer” recall

EnronEnron

WorldComWorldCom

Environmental Context for Sustainability

Environmental Context for Sustainability

50% of forests lost50% of forests lost

Accelerating bio-diversity lossesAccelerating bio-diversity losses

Global warming Global warming

Ocean fisheries Ocean fisheries in declinein decline

Dispersing 80,000 Dispersing 80,000 synthetic chemicals synthetic chemicals into land, air and waterinto land, air and water

50% of forests lost50% of forests lost

Accelerating bio-diversity lossesAccelerating bio-diversity losses

Global warming Global warming

Ocean fisheries Ocean fisheries in declinein decline

Dispersing 80,000 Dispersing 80,000 synthetic chemicals synthetic chemicals into land, air and waterinto land, air and water

SRI MarketsSRI Markets

Over $2 Trillion invested in Socially Responsible Over $2 Trillion invested in Socially Responsible Investment (SRI) FundsInvestment (SRI) Funds

Pension fund laws – eight European countries Pension fund laws – eight European countries require consideration of environmental require consideration of environmental and social issuesand social issues

Demographics – Baby Boomers interested in SRIDemographics – Baby Boomers interested in SRI

Over $2 Trillion invested in Socially Responsible Over $2 Trillion invested in Socially Responsible Investment (SRI) FundsInvestment (SRI) Funds

Pension fund laws – eight European countries Pension fund laws – eight European countries require consideration of environmental require consideration of environmental and social issuesand social issues

Demographics – Baby Boomers interested in SRIDemographics – Baby Boomers interested in SRI

Implementing SustainabilityImplementing Sustainability

Getting ThereGetting There

Today’s Today’s Business Business PracticesPractices

Focused on a Focused on a “win” for “win” for businessbusiness

Sustainable Sustainable Business Business PracticesPractices

QuicQuick k

WinsWins

Innovation Innovation ProjectsProjects

System System ChangeChange A “bigger win” A “bigger win”

for business for business and a “win” and a “win” for societyfor society

Engaging through Engaging through Networks with partners of Networks with partners of

all typesall types

Sustainable Value Partners, LLC © 2007Sustainable Value Partners, LLC © 2007

A Deliberate ProcessA Deliberate Process

Business StrategyBusiness Strategy Priorities and Priorities and GoalsGoals

Business Sustainability LensBusiness Sustainability Lens Take a full life cycle Take a full life cycle viewview Engage full range of Engage full range of stakeholdersstakeholders Focus on innovation (not Focus on innovation (not compliance) compliance) Find win/win Find win/win solutions (business & society)solutions (business & society)

Signs of SuccessSigns of Success

You’re asking questions you’ve never asked You’re asking questions you’ve never asked beforebefore

You’re learning from people you never talked to You’re learning from people you never talked to beforebefore

You’re finding ways to create value you never saw You’re finding ways to create value you never saw beforebefore

Business StrategyBusiness Strategy Priorities and Priorities and GoalsGoals

Business Sustainability LensBusiness Sustainability Lens Take a full life cycle Take a full life cycle viewview Engage full range of Engage full range of stakeholdersstakeholders Focus on innovation (not Focus on innovation (not compliance) compliance) Find win/win Find win/win solutions (business & society)solutions (business & society)

Signs of SuccessSigns of Success

You’re asking questions you’ve never asked You’re asking questions you’ve never asked beforebefore

You’re learning from people you never talked to You’re learning from people you never talked to beforebefore

You’re finding ways to create value you never saw You’re finding ways to create value you never saw beforebefore

APS Strategic FrameworkAPS Strategic Framework

What We Track, Measure and Report

Environmental PerformanceEnvironmental Performance StrategyStrategy Management SystemsManagement Systems ReportingReporting TrainingTraining Climate Change/EmissionsClimate Change/Emissions RenewablesRenewables BiodiversityBiodiversity WasteWaste

Economic PerformanceEconomic Performance Corporate Governance Corporate Governance Risk/Crisis ManagementRisk/Crisis Management Codes of Conduct/EthicsCodes of Conduct/Ethics Customer RelationshipsCustomer Relationships Market OpportunitiesMarket Opportunities CSR ReportingCSR Reporting

Social PerformanceSocial Performance Local CommunitiesLocal Communities Workplace PracticesWorkplace Practices Labor RelationsLabor Relations Human DevelopmentHuman Development Health and SafetyHealth and Safety Supply ChainSupply Chain Product SafetyProduct Safety

2009 - 2013 Corporate Measures

2009 - 2013 Corporate Measures

Economic

Equity / CommunityEmployees

Environmental

Annual Capacity FactorAnnual Capacity Factor Dividend yield + EPS growthDividend yield + EPS growth Equivalent Availability FactorEquivalent Availability Factor Nuclear Performance IndexNuclear Performance Index Non-fuel O&M ¢ per kWhNon-fuel O&M ¢ per kWh Rating Agency Bond Valuation Rating Agency Bond Valuation

COCO22 Intensity IntensityTransportation COTransportation CO22

Facilities COFacilities CO22

Facilities WaterFacilities WaterGeneration WaterGeneration Water

Customer satisfaction Customer satisfaction survey resultssurvey results

OSHA Recordable InjuriesOSHA Recordable InjuriesOverall reliability measureOverall reliability measureCustomer Program ImpactCustomer Program ImpactEmployee EngagementEmployee EngagementLevel

1Level Level

22

AuditCommittee Board

Finance, Nuclearand Operating

Committee

President & COO

VP & CSO

All OfficerSustainabilityPolicy Group

SustainabilityWorking Group

EHS

S & HAT EAT

EETI

Internal Sustainability Initiatives

Internal Sustainability Initiatives

Sustainability Working GroupSustainability Working Group Benchmarking Benchmarking BaselineBaseline Key MetricsKey Metrics

GHG emissions per MWhGHG emissions per MWh

Water use (gal/MWh and type)Water use (gal/MWh and type) Low-Hanging FruitLow-Hanging Fruit

Turn off PC monitors Turn off PC monitors ≈≈ $450k savings annually $450k savings annually

Increase fleet fuel efficiency by 25% - $640k savings Increase fleet fuel efficiency by 25% - $640k savings annuallyannually

Sustainability Working GroupSustainability Working Group Benchmarking Benchmarking BaselineBaseline Key MetricsKey Metrics

GHG emissions per MWhGHG emissions per MWh

Water use (gal/MWh and type)Water use (gal/MWh and type) Low-Hanging FruitLow-Hanging Fruit

Turn off PC monitors Turn off PC monitors ≈≈ $450k savings annually $450k savings annually

Increase fleet fuel efficiency by 25% - $640k savings Increase fleet fuel efficiency by 25% - $640k savings annuallyannually

Sustainability – Benefits Sustainability – Benefits

Reputation ManagementReputation Management Access to CapitalAccess to Capital Employee RecruitmentEmployee Recruitment Technology PartnershipsTechnology Partnerships Credibility Credibility Eco-EfficiencyEco-Efficiency

Saves $ Saves $ Reduces RiskReduces Risk

Employee Engagement Employee Engagement

Reputation ManagementReputation Management Access to CapitalAccess to Capital Employee RecruitmentEmployee Recruitment Technology PartnershipsTechnology Partnerships Credibility Credibility Eco-EfficiencyEco-Efficiency

Saves $ Saves $ Reduces RiskReduces Risk

Employee Engagement Employee Engagement

Customer Sustainability Initiatives

Customer Sustainability Initiatives

DSM ProgramsDSM Programs CFLsCFLs Air Conditioner RebatesAir Conditioner Rebates Business/Commercial Energy Efficiency Business/Commercial Energy Efficiency

IncentivesIncentives Energy Star HomesEnergy Star Homes

Renewable Energy ProgramsRenewable Energy Programs Solar Electric IncentivesSolar Electric Incentives Solar Water Heater IncentivesSolar Water Heater Incentives Green ChoiceGreen Choice Total Solar Total Solar

DSM ProgramsDSM Programs CFLsCFLs Air Conditioner RebatesAir Conditioner Rebates Business/Commercial Energy Efficiency Business/Commercial Energy Efficiency

IncentivesIncentives Energy Star HomesEnergy Star Homes

Renewable Energy ProgramsRenewable Energy Programs Solar Electric IncentivesSolar Electric Incentives Solar Water Heater IncentivesSolar Water Heater Incentives Green ChoiceGreen Choice Total Solar Total Solar

The Right PathThe Right Path

Sustainable Tourism

Sustainable Tourism

Eco-Efficienc

y

CulturalTourism

Local First

Sustainable Tourism

$$$$$

Eco-Tourism

CommunityInvolvement

Partnership for Global Sustainability Tourism Criteria

Partnership for Global Sustainability Tourism Criteria

The Partnership was initiated by the Rainforest The Partnership was initiated by the Rainforest Alliance, the United Nations Environment Programme Alliance, the United Nations Environment Programme (UNEP), the United Nations Foundation, and the United (UNEP), the United Nations Foundation, and the United Nations World Tourism Organization (UNWTO). Nations World Tourism Organization (UNWTO).

Criteria designed to establish a common understanding Criteria designed to establish a common understanding and accounting for the tourism and hotel industries and accounting for the tourism and hotel industries regarding:regarding: Effective sustainability planningEffective sustainability planning Social and economic benefits to local communitySocial and economic benefits to local community Enhancing local cultural heritageEnhancing local cultural heritage Reducing negative impacts on the environmentReducing negative impacts on the environment

- - SustainableTourismCriteria.orgSustainableTourismCriteria.org

The Partnership was initiated by the Rainforest The Partnership was initiated by the Rainforest Alliance, the United Nations Environment Programme Alliance, the United Nations Environment Programme (UNEP), the United Nations Foundation, and the United (UNEP), the United Nations Foundation, and the United Nations World Tourism Organization (UNWTO). Nations World Tourism Organization (UNWTO).

Criteria designed to establish a common understanding Criteria designed to establish a common understanding and accounting for the tourism and hotel industries and accounting for the tourism and hotel industries regarding:regarding: Effective sustainability planningEffective sustainability planning Social and economic benefits to local communitySocial and economic benefits to local community Enhancing local cultural heritageEnhancing local cultural heritage Reducing negative impacts on the environmentReducing negative impacts on the environment

- - SustainableTourismCriteria.orgSustainableTourismCriteria.org

AZ Dept of TourismAZ Dept of Tourism

Sustainable Tourism CouncilSustainable Tourism Council

Defines Sustainable Tourism as:Defines Sustainable Tourism as:

“ “Sustaining the culture, heritage and Sustaining the culture, heritage and environment of a region while at the same environment of a region while at the same time promoting economic growth and social time promoting economic growth and social wellbeing through tourism” wellbeing through tourism”

Sustainable Tourism CouncilSustainable Tourism Council

Defines Sustainable Tourism as:Defines Sustainable Tourism as:

“ “Sustaining the culture, heritage and Sustaining the culture, heritage and environment of a region while at the same environment of a region while at the same time promoting economic growth and social time promoting economic growth and social wellbeing through tourism” wellbeing through tourism”

A Better Tomorrow Starts Today

A Better Tomorrow Starts Today

TransportationTransportation Fuel efficient vehicles/hybridsFuel efficient vehicles/hybrids Local walking and bicycle toursLocal walking and bicycle tours Carbon offsetsCarbon offsets

LodgingLodging Conservation: energy, water, recycled products; non toxic Conservation: energy, water, recycled products; non toxic

cleaning products (supply chain)cleaning products (supply chain)

People/PlacesPeople/Places Buy and promote localBuy and promote local Offer excursions of indigenous peoplesOffer excursions of indigenous peoples Patronize local restaurantsPatronize local restaurants Offer eco philanthropy opportunities with local NGO’sOffer eco philanthropy opportunities with local NGO’s

TransportationTransportation Fuel efficient vehicles/hybridsFuel efficient vehicles/hybrids Local walking and bicycle toursLocal walking and bicycle tours Carbon offsetsCarbon offsets

LodgingLodging Conservation: energy, water, recycled products; non toxic Conservation: energy, water, recycled products; non toxic

cleaning products (supply chain)cleaning products (supply chain)

People/PlacesPeople/Places Buy and promote localBuy and promote local Offer excursions of indigenous peoplesOffer excursions of indigenous peoples Patronize local restaurantsPatronize local restaurants Offer eco philanthropy opportunities with local NGO’sOffer eco philanthropy opportunities with local NGO’s

The Value PropositionThe Value Proposition

Saving costs through improved efficienciesSaving costs through improved efficiencies

Increases revenues – market shareIncreases revenues – market share

Reduced riskReduced risk

Brand value and reputationBrand value and reputation

Developing human and intellectual capitalDeveloping human and intellectual capital Improving governanceImproving governance

Saving costs through improved efficienciesSaving costs through improved efficiencies

Increases revenues – market shareIncreases revenues – market share

Reduced riskReduced risk

Brand value and reputationBrand value and reputation

Developing human and intellectual capitalDeveloping human and intellectual capital Improving governanceImproving governance

“Our future is a shared one with our customers, shareholders, employees and the communities in

which we live and do business.”

“Our future is a shared one with our customers, shareholders, employees and the communities in

which we live and do business.”

- PNW Corporate Responsibility Report