Royal Caribbean CEO Touts Sustainability Successes in Q2 2019 Call
During Royal Caribbean Cruises Ltd. Q2 2019 earnings conference call, CEO and Chairman Richard Fain attributed much of Royal Caribbean's success to its ability to adapt and innovate. He discussed how in the Galapagos, the animal species that survive are not necessarily the strongest, smartest or fastest. Instead they are the ones that are most able to adapt.
"We believe it's true for corporate species as well," Fain explained. "We believe that to succeed in today's world, you need to adapt to an ever-changing environment. The ability to adapt is often called innovation, but innovation is really adapting to and/or leading change in a rapidly evolving world. I'm proud of the people at Royal Caribbean who continue to innovate and to adapt to that fast-changing world."
According to Fain, the company's success is attributable to its ability to continue to adapt its product to changing guest expectations.
One area where Royal Caribbean has been seeking to adapt is in its ability to offer more sustainable cruise ships. As consumers become more eco-aware and intent on changing their personal behaviors to benefit the environment, reports that passenger carbon footprints triple on cruises and that cruise ships have been caught discarding trash, fuel and sewage into the ocean are fueling consumer desires for cruise lines to also become more eco-friendly.
This is driving cruise lines, like Royal Caribbean, to implement technology that will help it reduce its ecological impact.
According to Fain, in 2016, Royal Caribbean partnered with World Wildlife Fund to improve its sustainability efforts (and to help it remain accountable) by establishing specific goals in three areas of sustainability: carbon footprint, sustainable destinations, and sustainable food production.
Royal Caribbean's goals for the end of 2020 include: a 35% reduction in its carbon footprint from its 2005 base; offering 1,000 tours certified to the GSTC sustainability standard; and responsibly sourcing 90% wild caught seafood globally and the 75% of farm seafood in North America and Europe.
Fain reported that Royal Caribbean is on schedule for achieving its goals. It achieved its carbon footprint goal earlier in 2019 and two weeks ago, it certified its 1,000th sustainable tour operation. While the company has not yet reached its sustainable food sourcing goal, Fain says it is working hard to achieve it by the company's deadline.
The company has also begun implementing clean LNG as fuel on its new ships, has installed an Advanced Emission Purification system on most of its fleet, has made progress with its program to eliminate single-use plastics, and is increasing its number of ships that are zero landfill capable. Fain also mentioned that it is ramping up efforts to reduce food waste, and continues to experiment with zero-emission fuel cells.
"We see sustainability as a sine qua non," Fain said.