GlobeScan Asia Pacific Director Wander Meijer recently interviewed Mark to discuss Swire’s robust sustainable development strategy.
What is your role at Swire?
Our Sustainable Development Office’s role is group-wide, including many diverse businesses, both from a geographical and sectoral perspective. Within Swire, our operating companies also have their own sustainability functions which are responsible for managing the issues that are material to them and their sector, so it is our role at the centre to provide support to the Division as needed, whilst monitoring performance and supporting the development of a group-wide strategy around sustainable development. We also play a role in sharing knowledge among our subsidiaries; if a business is addressing an issue in one part of the group that may also impact or provide benefits to another, then we look to make connections and work together through our Group Sustainability Committee. This has happened, for example, in relation to the adoption of LEED green building certification in which Swire Properties has extensive experience, which has been utilised by our beverages and aviation divisions, as well as our offshore oilfield support business in Brazil. The Sustainable Development Office also plays a role in supporting the management of our Sustainable Development Funds, which together make over $US 38 million available to our companies annually to support environmental projects.
You launched your new sustainable development strategy last year called Thrive. Can you tell me more about it?
Thrive was launched at our annual Sustainable Development Forum where we bring together senior management and key operational managerial staff to talk about the big issues around sustainability. We launched the strategy because we felt we’d come to a point where we needed an extra push and we needed to really have a story that we could communicate to our people around what is important to us at group level, both now and in the medium term. The idea behind Thrive is recognition that for Swire to continue to prosper or thrive in the long term, we can only do that if the world around us is also sustainable and thriving. We have deliberately chosen to focus on the environment, rather than on social- or people-related components, because of the type of industries in which we are involved, such as aviation and shipping, with significant challenges around carbon dioxide emissions and the need for decarbonisation, or Swire Beverages and water conservancy/water consumption.
We felt it was important to have a strategy that reflects the reality of our businesses. Thrive focuses on six main areas and their related targets: decarbonisation; waste; water management and conservation; increasing the use of sustainable materials in our procurement and our supply chains; biodiversity; and climate resilience. Thrive will be supported by a rigorous and ambitious communications plan and it will set the tone and the agenda for our sustainability work at group level for the next five years and beyond. It is about having a clear, central overarching strategy. Due to the way we’re structured, each of our operating companies understands their geographic context, they understand the politics of their local areas, and they understand the communities they work in. They can then take the central themes emerging from Thrive and adapt it to their own circumstances.
How do you determine the big issues that you need to address?
Engaging our stakeholders has enabled us to spot emerging trends, such as the plastics we use in bottling, ocean conservation, wildlife trafficking, and sustainable cargo. The dialogue we have with NGOs and others outside of the group gives us the ability to identify emerging trends before they become big issues. Our senior management has empowered the sustainability teams across the group to engage with key external stakeholders such as NGOs when we look at campaigns that are going on globally. For example, we believe that biodiversity and climate resilience are going to become bigger issues at group level and we are fortunate to have top management support to really address these issues. But ultimately it has come through stakeholder engagement, external dialogue, and also from experience, for example, the shark fin cargo ban at Cathay Pacific which led to 27 other airlines following our lead.
What are some of the emerging issues you see?
Many large companies like us have become more focused on climate change and carbon. Airlines for example are going to need to focus on their future licence to operate around these key issues and continue to address operational noise. Aviation has come a long way in tackling its climate change impacts and Cathay Pacific has been heavily involved in working on the issue for many years, being one of the first international airlines to call on international governments to develop a global scheme to address CO2 emissions from aviation back in 2009 when we helped to establish the Aviation Global Deal group. This ultimately led to an industry coalition involving airlines, manufacturers, airports and others. The scheme became a reality at the UN’s ICAO last year. But aviation still relies on conventional fuel when other sectors are looking to decarbonise more rapidly. That’s why the group is investing in sustainable alternative fuels, such as Cathay Pacific’s investment in US-based biofuel developer Fulcrum, which aims to produce jet fuel from waste. Similarly, our marine division has begun to look at the potential of sustainable biofuels. We also have our own specialist biofuel business within the group, Argent Energy, which is now a leading UK sustainable biodiesel producer and fuel supplier. Given the combined knowledge and expertise gained from these investments and their respective technological capabilities, these businesses can play an important role in supporting our wider decarbonisation efforts and our overall sustainability performance.
What are you most proud of at Swire?
That is a difficult one to answer at group level because we are still in a relatively early phase in terms of the implementation of our new strategy and we have a long way to go. That said, those that have worked on these issues within Swire have done so for many years and we are building from solid foundations. Beyond the work in which Cathay Pacific has been involved, there are numerous examples of where we have made good progress in addressing sustainability challenges; our marine division relation has been undertaking important work on issues such as sustainable ship recycling, working together with NGOs and recyclers under the Sustainable Shipping Initiative. Similarly, our beverages company, Finlay’s, is working with other producers and NGOs on the future sustainable production of tea through the Tea 2030 initiative.
I mentioned earlier that senior management commitment to the cause has been unwavering and consistent. This is vital in driving continued progress. For Swire Pacific, 2016 was a very challenging year financially. But our chairman, John Slosar, who is responsible for sustainable development at Board level, made a commitment at last year’s Sustainable Development Forum to continue to move forward and offer support to our businesses, setting up a new HKD 100 (USD 13m) million Sustainable Development Fund to support our Divisions, mirroring a similar fund that has been in place in John Swire & Sons Ltd (the parent company of the group responsible for our privately held businesses) since 2013. The Chairman also stressed to staff that sustainable development was a long-term commitment for Swire and that, in difficult times, we should aim to do more in this space, not less. Such a statement and the action of putting in place significant funding to support continued innovations embodies how we view sustainable development at Swire and its importance to the group going forward.
Your latest sustainability report states “We believe that business growth should not come at a cost of the environment” – but sometimes it does. How do you make these tough choices?
Swire has always adopted a long-term view when it comes to its businesses and a commitment to sustainable development is very much in the DNA of the organisation. Today, we have a number of businesses, such as shipping and aviation, where our operations have an impact on the environment. As I highlighted earlier, these sectors do not currently have a viable long-term alternative fuel source, so we are taking steps to reduce their impacts through ongoing investments in the latest, most efficient technologies. We have also invested in green businesses such as those in the cleantech, renewables or biofuel areas. We believe that we have a role to play in decarbonising our more traditional businesses whilst encouraging innovation and cross-fertilisation of ideas in our more emerging sectors.
What is your big ambition for the role you are now in?
We need to focus on delivering on the six material areas identified under Thrive, given Swire’s global footprint. This year we are focussing on strategy implementation and ensuring that our SD Funds have the desired impact. Within Swire Pacific, we are looking at how we can reduce plastic in our beverages operations. We are one of the largest bottlers for Coca-Cola in the US and China and there is a real opportunity to demonstrate producer responsibility and to encourage NGOs and other producers to work with us.Our Beverages division recently became a member of the Ellen MacArthur Foundation’s New Plastics Economy initiative working with global brands such as Unilever, Mars and Proctor & Gamble to look at innovative solutions around the use of plastic in consumer products. We want to play a role in this because we think it is important, given global concerns over the volume of plastic in our oceans and landfills. If we get this right, we can support wider moves by governments and businesses towards greater recycling efforts and the notion of the circular economy.