Big Companies, Innovation and Sustainability
In our era, people are finally realising the impact their actions have on climate, the environment, and our planet in general. The World Health Organisation states that “according to current projections, droughts will strongly increase in frequency and intensity in the coming decades in large areas of South and Southeastern Europe”. Climate change, however, is not the only way human behaviour affects natural events worldwide. Indeed, every action affects the ecosystems, agriculture, migration, health, weather events, and pollution.
This is why both individuals and companies have begun to tackle this problem. People are becoming more and more aware of the impact they have on the world. Futerra’s survey of over 1,000 consumers in the USA and UK, discovered that 96% of people feel their own actions, such as donating, recycling, or buying ethically can make a difference. Moreover, increasingly, during the last years, individuals have begun to choose eco-friendly brands or invest in sustainable companies.
One of the most striking examples is Beyond Meat. According to Forbes, while meat sales have grown only 2.5% since 2018, plant-based substitutes have seen a growth rate of 10%. In particular, U.S. retail sales of Beyond Meat rose to $75 million over the 52 weeks of 2019. According to Information Resources, Inc, this is a 135% increase compared to the same period in the previous year. This is proof of the people’s growing environmental consciousness.
Sometimes, however, industries appear to take eco-friendly measures but, in practice, these are for show. This practice is called “green-washing”. According to the Cambridge Dictionary, this activity is defined as “behaviour or activities that make people believe that a company is doing more to protect the environment than it really is.”
Fortunately, some industries take this issue seriously, and have started projects and campaigns to raise awareness about how we treat our planet. Others have changed the way they work, opting for more sustainable processes. This benefits them. Potential customers, especially those who care most about the environment, will tend to trust them and buy from them.
How can big and established companies quickly change the way they work, produce and sell in the name of innovation and sustainability?
Ikea, an internationally renowned Swedish furniture retailer can be an example. According to Statista, in 2019, the annual revenues of the Ikea Group were 41.3 billion euros. The company has exhibited consistent growth over the last two decades. One way in which the company faced the increasing interest in sustainable products of consumers is by carefully choosing the materials it uses to create its products. Moreover, the company is committed to using only products based on recycled materials or renewable plastic by 2030. Moreover, they have already banned single-use plastic articles in their bistros replacing them with more sustainable disposables. This may not seem a big change. However, if all the existing companies undertook the same path, the impact would be enormous.
One industry that has a significant impact on the environment is transportation. It uses most of the world’s petroleum and creates air pollution. For example, according to “youmatter.world”, “Air traffic represents less than 2-3% of the global CO2 emissions whereas road traffic accounts for around 10% of these direct emissions. Still, planes remain among the most polluting means of transport, together with cars.”
Ships also cause pollution. Over 90% of world trade is carried across the sea by ships, which consume fossil fuels. They produce emissions that significantly contribute to global climate change. According to The Guardian, cruise ships also have an impact on the environment. Indeed, every day, cruise ships worldwide emit the same particular matter as a million cars.
Fortunately, there are measures to protect air quality from ships: the adoption of cleaner fuels, slow steaming, and the use of alternative sources of energy such as wind propulsion, and battery-electric propulsion.
A case in point is Costa Crociere. Costa, created in 1854, is one of the most prestigious cruise companies in the world and it is leading the course in sustainable development. For instance, their long-term goal is the creation of a ship which produces zero emissions. Though, this is a very ambitious project that, realistically, may not be achievable in the near future, the company is getting close to their goal: Costa Smeralda is the newest addition to their fleet.
Costa Smeralda is the first ever LNG ship in the world. As we can read on Il Corriere Della Sera, the ship is fueled by liquified natural gas, the most advanced technology to reduce emissions. Costa Smeralda can cut CO2 emissions by 20% , particulate matter by 95 to 100%, and it cuts sulphur oxides emissions completely.
In order to learn more about the way such a big historical company still manages to get with the times, I interviewed Davide Triacca, director of sustainability for Costa Crociere.
- What is your job?
I’m the director of sustainability for Costa Crociere. I was appointed to this role relatively recently, that is back in December, after 4 years leading Costa Crociere Foundation, which is the corporate foundation of the largest European and Asian cruise trade.
- How did you start being interested in the environment and sustainability?
Well, basically, my university background is in environmental sciences and agriculture but, since then, I have not been interested in strictly agricultural topics. Instead, I’ve been much more fascinated by sustainability. Back in 2000, it was an early global trend. I started to study biofuels and sustainability of biofuels which allowed me to specialise in London in Imperial College in Environmental Technology. Subsequently, I worked in sustainable consultancy for 10 years before joining Costa.
- What does it mean to you to take care of the environment and being interested in social issues?
Sustainability is nothing but being able to bring together the environment and people, taking care of the environmental component and social component of what we do. For what regards the industry I represent, globally, I see very few industries with such a complex chain of value, both vertically and horizontally. For example, we range from the design of ships to the production of ships, together with partners, to the operation of those ships, and so on. From a vertical perspective, our chain of value is so complex that we need to take care of the impact that it generates. From a horizontal perspective it is complex as well. We operate in hundreds of countries with guests from more than a hundred different nationalities. We visit people in different countries and this means that we have to focus on several different aspects.
- Do you think that the industry of cruises can be reconciled with the issue of environment and climate change?
It’s both a duty and an opportunity for us. As a part of the global community, we need to be good citizens. As an industrial leader, we need to dedicate resources and efforts in being a pioneer and being a leader. Covid-19 has made it even more evident that this planet is ill. As a tiny part of the ecosystem, as human beings, living on it, affect it immensely: we need to do our part.
- What are the projects that have been created by Costa Foundation? How important is the cooperation between countries in the projects that the foundation creates?
Covid-19 made it even more evident that besides a global perspective we need to start understanding the local perspective. My general answer is that international cooperation is, of course, important, but local cooperation is, from certain perspectives, even more important. We’ve been forgetting this for too long now. We have been focusing too much on globalisation and increasing the cooperation between different countries and cultures, but we’ve forgotten to think about our neighbours, the people closest to us. This is what we need to work on. As regards the foundation, we’re the corporate foundation of a global brand. We have a similar global path. We have more than 30 different social and environmental projects in 4 continents, involving more than 120 different nationalities. There’s a lot of diversity. I need to stress one concept again: cooperation between countries is important, cooperation between people, even locally, is far more important.
It is true that we should not forget the local, but can problems and social issues be solved individually by nations or do we need supranational structures and treaties to solve certain issues?
For sure the latter. Traditional doesn’t necessarily mean “not updated”. In the classification of social issues, we have two macro-categories: one is global impact and the other is local impact. If we focus on, for example, climate change, the impact is always global. To solve this kind of issue, of course, we need supranational structures and approaches, such as those of the UN, and similar organisations. However, if we think that simply by cooperating, we find solutions to these issues, we are probably missing part of the problem. Cooperation among countries is vital and necessary, but it’s not sufficient.
- And how should we act locally to create a global impact?
By defining good practices and being able to combine a bottom-up with a top-down approach. Locally, we can solve issues, but we should raise our voices in a coordinated way. This is one of the functions of the foundation: collect local practices and make them global. For example, when a market leader like Costa intervenes to develop and to deploy initiatives, it doesn’t just provide financial support. We often give local initiatives what they need to become global, such as access to global markets, or an international voice; the kind of thing you can’t find locally, but found in the global arena.
- How are the projects chosen by the foundation? How do you choose where to invest?
We had kind of a mind-change, an evolution, over the years. We moved from a totally responsive approach to a directive one. Responsive means that, back in 2015 to 2018, we launched annual calls for ideas for social and environmental initiatives. Then, with a very transparent and impartial approach, we evaluated them and started to focus on some of them. However, we understood, in 2018, that that approach was suboptimal: it was very effective in choosing the best option available, but it was not effective in encouraging ideas to come forward from unexpected places. From that moment on, we started to deal with start-ups, universities, and no-profit organisations. We asked them on the basis of their track record, to collaborate with us on specific topics. Then, together, we built the projects. This way, we involve other organisations and we ask them if they would mind working with us to solve certain issues. This is much more effective.
- How is innovation important for a historical firm such as Costa?
I think it is vital. Costa has turned 72 this year, so it’s Italy’s oldest cruise operator. If we managed to reach this age, it is because we’ve been innovative over the years. We’ve been at the forefront of innovation. These days, many sustainability departments in different industries are no longer called “sustainability departments” but they have started to refer themselves as “innovability departments”, meaning that they bring together innovation and sustainability. It is a conditio sine qua non to thriving in a business for a long time. What is complicated is how to do it.
- How to do it then?
It depends. There is one very good line from one of my peers from Enel, Ernesto Ciorra, Chief Innovability Officer. He says, “if you think that you’re innovative, you’re getting old and you’re not, in fact, innovative”. So, you should think that you’re the least innovative element in the market, and then work hard to become the most. You shouldn’t change this mindset even if someone comes to you and says you’re the most innovative. Then, of course, thousands of variables, initiatives, resources, ideas and commitments are needed.
- How have your travel experiences influenced you and influenced the work you do every day?
Totally. I spent most of my free time traveling. When I will have the chance to do that again, I am keen to restart. We live in a global society made by local individuals and communities that all together make the world as it is now. It would be impossible for all sustainability professionals, in particular, or the innovation professionals, to work without being in contact with as many of these communities as possible. It is as banal as that: it is just vital to travel, to meet people and to see their perspective on things. This widens your capacity to face problems and issues. It is also good to be Italian as, in most cases, we will see both the quality of our mindset and its limits.
- What advice would you like to give us Global Governance students to make an impact in the world?
Be focused. Just have a few goals, or one goal and try to pursue that. Don’t be fascinated by things that pass you by during your careers. The hardest part if you’re lucky enough to have a good career, is that opportunities will pass you by. You will be flooded with opportunities, big and small. Choosing among them is the hardest part and staying focused is the best piece of advice that I can give.