Holland America Line released their first sustainability report this October. The cruise industry tends to get a bad wrap in sustainability circles: if it’s not releasing sewage in open waters, it’s carrying invasives from one side of the planet to the other and obliterating local marine ecosystems. Don’t get me started on their impact on local communities. There’s no doubt that the cruise industry has some room to grow in terms of sustainability.
I was eager to read Holland America Line’s report to see how they dealt with these considerable challenges. I’m pleased to report that they addressed them head-on. The company neither hid behind immaterial wins like having solar panels on their headquarters, nor sugar coated their environmental and social impact. Rather they focused on their biggest challenges and reported comprehensively and clearly on their past efforts to make improvements and what their plans were for the future. This report is a model of one that gets both the letter and the spirit of GRI sustainability reporting. It’s clear that Holland America Line is using the sustainability reporting process to look critically at their own sustainability efforts and plan for future improvements. All the more impressively, it comes from an industry not well known for their sustainability efforts. This is one to watch. Now for the nitty gritty:
Holland America got their start in the Netherlands in 1873 and was one of the principal carriers of immigrants from Europe to the Americas during the great migration wave. The company moved more than 850,000 passengers all told, more than any other company in operation at the time. The ships also served as a regular freight transport service for Dutch operations in Indonesia. The company converted to exclusively tourist operations in 1975, but the longstanding relationship with Indonesia is still strong today. 81% of the on board employee force is of Asian decent, largely from Indonesia and the Philipines. The benefits and challenges of this strong bond were addressed openly and honestly in the report.
The report opens with an examination of the key sustainability challenges and actions taken over the past 3 years. Bam! Here’s what we had to overcome. The chart is robust and specific and offers a birds eye view of the company’s sustainability efforts:
- Sustaining the company’s operations through the recession
- Operating in a changing regulatory landscape
- Maintaining their fleet and brand
- Recruiting and retaining qualified employees in a seasonal industry with constant travel
- Protecting the health of passengers and crew
- Improving safety performance
- Conserving fuel and minimizing engine emissions
- Managing waste water quantity and quality
Throughout the report, each issue area was addressed pragmatically and with a strong connection to the company’s financial performance. It’s clear that Holland America Line understands that sustainability is a hard road, but that it’s the right thing to do and it’s good for the bottom line.
Engagement with Employees
Holland America Line is clearly working hard to be an ethical employer. The company is mindful of the considerable challenges associated with being a first world provider of a luxury good with a workforce largely made up of Indonesian and Filipino (81%) men (91%) who are away from home for 3 to 10 months out of the year, working seven days a week, on a contract basis. The report puts a lot of focus on the efforts the company has made to be a compassionate employer. The efforts are solid and substantial and deserve recognition. Benefits for the seagoing staff include: free training before and during engagement, free health care, room and board, and small but extremely meaningful benefits like the preparation of foods from home on board and the observation of the Filipino new year. 100% of the Indonesian and Filipino crew have union representation.
Employment is clearly a touchy subject for Holland America Line because discussion of the work crews took up a very large percentage of the report. For good reason. No matter how well the crews are treated, there is something innately unsustainable about hiring a 3rd world workforce to service a luxury cruise line. I suspect that the financials of the cruise industry basically make this practice a requirement to keep costs low enough to compete. Holland America seems to be dealing with the challenge head on, in as respectful and conscientious a way as possible.
Likewise, Holland America Line deals directly with the environmental challenges that are a given in this industry. The biggest challenges over the past 3 years were to conserve fuel, reduce solid waste discharged ashore and increase recycling, conserve water, and reduce refrigerant releases (since refrigerants have a huge impact on global warming).
The company has some laudable targets for future years: reduce solid waste offloads by 15% each year, increase recycling to 10% above the previous year and consume 93% of the water used in the previous year. These are moderate, achievable goals. They company has also made a few reductions of note: over the past 3 years, the fleet grew by 11% but total fleetwide fuel use only increased by 2.5% due to efficiency upgrades on board. Solid waste recycling increased 86% between 2007-2009
Water conservation and wastewater discharge are huge issues for the cruise industry. I was pleased to see them given a substantial amount of attention in this report. As the chart at left shows, wastewater discharge has increased somewhat over the 3 years measured, largely because of an increase in the discharge of untreated greywater. It’s good to see the company taking a hard look at these figures, but we hope that the company will focus on increasing onboard treatment of discharged water to the highest standards available.
Holland Cruise Line uses a lot of creative solutions to make fresh water last on board. Water is expensive, and heavy, and therefore the company has a big incentive to reduce water use as much as possible. They utilize desalination to create about a quarter of the water consumed on board, and they also capture AC condensation for use in non-potable applications like cleaning.
Since the company is just getting started, they deserve recognition for these wins, but of course we hope to see more stringent targets and accomplishments in the next report.
Room to grow
The one area where it seemed like Holland Cruise Line was not addressing its impact head on is in it’s impact on local communities. The report focuses pretty exclusively on a pollyanna description of the positive economic benefits in visiting needy communities, without addressing the real potential negatives impacts tourism can have on local communities. The potential negatives are substantial: a local economy that relies to heavily on one industry can collapse if it disappears, an unregulated tourist industry can substantially change local cultures for the worse: increasing crime, pollution, crowding and cost of living. Holland America Line should look more deeply at this issue in the next sustainability report. We recommend including local communities in port towns as one of the stakeholder groups whose intrests are addressed in the next sustainability report.
If you’d like to hear more, a representative from the Holland America Line sustainability team will be speaking at our GRI certification in sustainability reporting in Seattle November 20th and 21st. Registration closes for our SF course (November 11-12) on November 2nd! Sign up for either course HERE