The New Economy Innovation Series takes a look at leading cruise operator Carnival Corporation and its commitment to sustainability
Humankind’s responsibility towards the planet that sustains us grows as we grow. The cruise industry is booming, but with that success comes an obligation to keep the seas clean and ensure that tourist travel is carried out in a sustainable way. Carnival Corporation is making every effort to meet that obligation, particularly through its latest venture, Fathom, which will be explored in some depth in this supplement.
As the cruise industry grows, sustainability is playing a more important role than ever before, and the world’s biggest player is thriving on the challenge
Tara Russell founder and President, Fathom

Travel is experiencing something of a golden age right now. Never has exploring the world's treasures been quite so easy, and never has demand for delving into the unknown been so evident. This year's World Travel and Tourism Council report predicted the industry would grow faster than the global economy (at 3.6 percent) and generate a forecasted $7.8trn - accounting for 10 percent of the world's GDP.

As demand for travel has grown, however, so too have concerns about its environmental and social impact. Among the most affected sectors is the cruise industry. As the fastest-growing sector within the global travel arena - mushrooming more than 2,100 percent between 1970 and 2009, and contributing $117bn in 2013 - it plays a vital role in protecting oceans and communities across the world, as well as driving sustainability within the wider travel sector. Experts predicted a record 23 million passengers embarked on cruises in 2015, and global interest is growing, with China set to become the largest market over the coming years. If companies don't put sustainable practices at the top of their agendas in everything from suppliers through to logistics, their passengers risk doing untold damage to the world they wish to discover.

It's little surprise then that the global maritime industry has made sustainability one of its key priorities. Those efforts are paying off: the sector achieved a 20 percent reduction in greenhouse gas emissions between 2007 and 2012, according to the Secretary General of the International Chamber of Shipping, and its outlook for the future appears promising. Ventures such as the Sustainable Shipping Initiative, which currently has 17 companies to its name (and which Carnival Corporation is a member of), are an inspiration for others to follow, with ambitious, wide-reaching goals that could help transform the way the industry operates.

But there’s still a way to go. That’s something Carnival Corporation, the world’s largest cruise company, has recognised and acted upon. Evaluating everything from onboard materials to internal collaboration, it is pioneering the way for greater sustainability in terms of both the environment and, importantly, society. With groundbreaking, efficient ship designs, world-first technologies and a host of innovative approaches, Carnival is setting the standard for the industry in everything it does, using technology in ever more innovative ways to limit the impact of its ships on the oceans they traverse. With a staggering 50 percent share of the entire cruise market, 10 brands, 100 ships and 120,000 employees, Carnival Corporation is a leader in every sense of the word. With that power comes a great deal of environmental responsibility, but the company is embracing those challenges, most notably through its new Fathom brand.

Over the past decade, ‘voluntourism’ has become one of the fastest-growing sectors in the travel industry, with around two million people across the world every year embarking on trips as a way of helping communities while simultaneously enriching their own lives. Culturally immersive experiences on all levels are becoming more popular, with travellers seeking to go beyond the surface and get to know the real character of the communities they encounter.

In recognition of that, Carnival Corporation has launched Fathom, through which it is pioneering the concept of ‘social impact travel’ and enabling cruise passengers to have a genuine, lasting impact on the places they visit. The New Economy spoke to Fathom’s founder and President, Tara Russell, about what makes the new brand unique, what it means to be a social impact volunteer, and how the company is paving the way for a whole new type of cruising that’s set to send ripples through the wider industry and beyond – all while helping local communities move one step further along their path to economic independence.

How has consumer demand for social impact travel grown over recent years?

Fathom believes that many people long to make a difference in the world and within themselves, but have no idea where to begin. Great things are happening to address some of the social and environmental issues across the world, but there is far more to be done. Fathom exists to connect people’s passions and gifts with others’ needs, while creating meaningful social impact.

Who is Fathom targeting?

The company is expected to attract people of all ages and from all walks of life, although we predict particularly strong interest from North America, the UK, northern Europe and Australia. We expect to be especially popular among Millennials, as well as parents looking to create memories and open their children’s eyes to other parts of the world in a meaningful way – families [are] anticipated to account for around half of all travellers. It’s also likely to appeal to older people who are eager to find rewarding ways to help other people, beyond just writing out a cheque.

What would you say is the overall aim of the Fathom project?

We created Fathom to meet real hunger in the world for purpose, while at the same time tackling profound social issues through a sustainable business model. We harness the assets and resources of the world’s largest travel and leisure company and combine them with the talents and hearts of those working in social enterprises around the world.

What makes it unique?

What sets Fathom apart is its focus on significant, lasting and sustainable social impact. As trips are ongoing, Fathom will be able to build a long-term partnership with local communities and partners, rather than just providing a one-off trip with a short-term effect. Fathom provides an accessible, safe, convenient and high-value experience that leads to enduring positive impact on both travellers and local communities, while still providing flexibility, fun, and a chance to recharge. Fathom is set to send 710 passengers every week to communities in need, helping to sustain a variety of ongoing programmes. Given the scale, it’s expected to make a major difference to the lives of people and communities. Nothing like this currently exists.

Where did the idea for Fathom come from?

The vision for Fathom was born in the summer of 2013 during a meeting between myself and [Carnival Corporation CEO] Arnold Donald in Miami. We spent 2014 building the vision, designing the product, developing the impact travel concept, and testing out the market. We also met with key Dominican Republic community leaders to understand local needs and work out how best to leverage the existing infrastructure of local organisations, in order to create enduring impact.

Where will the first Fathom ship be sailing to and why?

Beginning in April 2016, Fathom will offer round-trip voyages from Miami to the Dominican Republic. The company expects to begin offering trips from Miami to Cuba from May 2016.

Fathom selected the Puerto Plata region of the Dominican Republic as its first impact destination based on a number of factors: genuine need, infrastructure to support social initiatives, enthusiasm for the Fathom concept on behalf of country officials and other locals, its proximity to Miami and Amber Cove (the new Dominican destination, launched by Carnival Corporation in October 2015), and its innate beauty.

What does a social impact trip involve?

In the Dominican Republic, impact activities will be based around education, the environment and economic development. Volunteers will be able to participate on projects for up to three days, working alongside locals and Fathom partner organisations on causes they really care about. Sample activities include helping to cultivate cacao plants and organic fertiliser, working with Dominican school teachers to teach English skills, participating in adult learning programmes, and helping to build water filters. In Cuba the experience will be slightly different, with itineraries designed to meet the US Treasury Department’s People-to-People directives with the objectives of increasing cultural, artistic, religious and humanitarian exchanges between US citizens and the Cuban people. In order to comply with the Cuban Assets Control Regulations, all travellers will be required to participate in cultural exchange programmes.

How will local partners benefit?

Through the power of collaboration, Fathom will help local citizens build the foundations, infrastructure and skills needed to continue developing their communities. A portion of every ticket sold will go directly to partner organisations to cover a set number of on-the-ground activities, including supplies, travel, infrastructure and personnel. Additional donations will be made to support the partner organisations’ overall aims. The ongoing collaboration between Fathom and its impact partners will allow local organisations to have predictable, monthly revenue streams. This sustained revenue is such a critical [thing] for social enterprise organisations working to ensure they deliver on their missions long term, but right now it is missing.

What makes a Fathom ship different to others in the cruise industry?

Fathom sails on the Adonia, a 355-room ship which offers excellent accommodation for passengers, both on shore and at sea. An impact journey begins with one to two days at sea, with travellers preparing for their programmes. Passengers will receive an orientation to the country’s history, customs and culture, including guided sessions with the Fathom team to share insights and ideas. There will be opportunities to participate in a variety of other activities that help maximise each traveller’s onshore impact experience.

How do you see Fathom growing over the coming years?

Fathom aims to send thousands of travellers a year to communities, where they can contribute in a holistic, collaborative way across broad regions in each country. Collectively, they could spend a total of more than 100,000 days a year volunteering or immersing themselves in educational and cultural exchange. It will allow them to make a collective, transformative impact which they know will extend far beyond their involvement, and which will help the regions to flourish for years to come.

Carnival Corporation is pioneering a new kind of socially responsible cruising, which is set to make waves in the cruise industry
helping communities

Socially responsible travel has been on the radar of late, with an ever-growing awareness that the planet and its people must be protected if both are to continue to thrive. The world’s biggest players have made it a priority to ensure tourism helps, rather than damages, the places it affects, but there’s still more to be done. It’s not just companies that are recognising the need to help communities; more and more, travellers are seeking responsible experiences, embarking on volunteer vacations that enable them to give something back to local people and help economies to grow. The market for this sort of travel has been on the rise for some time. According to a 2008 report by Tourism Research & Marketing, volunteer holidays were taken by almost two million people and represented around $2bn, and the sector is growing; according to Mintel, in 2012, 35 percent of adults said they would like to try a holiday involving a ‘voluntourism’ component.

Until now, however, such holidays have largely been the province of NGOs, limited to a relatively small target market. But a ground-breaking move from Carnival Corporation – the world’s largest cruise company, whose 10 brands carry over 11 million passengers per year – could change that. The company has developed Fathom, a new brand pioneering the concept of ‘social impact travel’ by offering its cruise guests the opportunity to work with the communities they encounter abroad. It combines volunteer activities and orientation programmes with the more traditional elements of a cruise – onboard accommodation, good food and the chance to explore the world’s glorious seas.

Responding to demand

Fathom’s aims are simple: to create lasting social impact, drive economic growth, encourage cultural exchange, and enrich the lives of both communities and travellers in a way that hasn’t before been seen in the cruise industry. It’s a daring and unique move for a company whose brands include some of the sector’s biggest names – P&O (UK and Australia), Princess Cruises, Aida Cruises, Costa Cruises and Seabourn to name a few – but it’s feeding a growing demand among consumers.

“During the past 10 years, in countless conversations I have had with people eager to serve others and make meaningful societal contributions, there has been a common theme: people struggle to know where they fit in and often have challenges finding trusted, easy ways to make a difference”, Tara Russell, founder and President of Fathom, and Global Impact Lead for Carnival Corporation, told The New Economy. “Fathom exists to address this desire and to create an enduring, life-changing impact, both in the communities where it operates, and in the lives of the travellers who embark on one of our journeys, allowing for unique impact experiences before, during and after the trip.” Russell, who previously founded Create Common Good (an initiative providing employment training through food projects) was recruited in 2013 by Carnival Corporation to develop the brand. She worked with CEO Arnold Donald and the rest of the team throughout 2014 to create an offering that met proven demand. Market research showed a potential market of at least one million people, valuing the global social impact travel market at around $1.6bn per year.

Fathom, which launched in June, will use an existing P&O ship – the Adonia – to transport over 700 passengers each week to the Dominican Republic, from April 2016. Leaving from Miami, it will dock in the northern Puerto Plata region (at Carnival Corporation’s new port, Amber Cove) where guests will sleep each night, recharging batteries in between a variety of onshore, community related activities. Later on in the year a service to Cuba will also be launched. Prices will start at $974 for the seven-day Dominican Republic trips, including all meals, accommodation, immersion experiences and three onshore activities (but excluding taxes, fees and port expenses). Additional activities and cabin upgrades will be available separately. A portion of every ticket purchased will go towards the local organisations involved in order to support their projects and secure predictable, stable revenue streams for the community.

The Adonia, which was built in 2001 and sailed as Royal Princess from 2007-11, offers an intimate cruising experience that reflects the notions of sharing, exchanging and connecting with others that Fathom has at its heart. “It’s small enough to let travellers get genuinely acquainted with their fellow travellers; the people who share a commitment to meaningful transformation, the people travellers will be working alongside during their time on the ground”, Donald told The New Economy. Despite its small size, there’s no skimping on leisure, with a pool, gym, spa, games deck and library all present alongside its 355 rooms and cabins. There will also be specialised retail and entertainment options, such as live music, and geographically-themed menus including Cuban- and Dominican-inspired dishes.

A new cruising dimension

Aside from those aspects though, Fathom is branching away from the traditional concept of a cruise, for which Carnival Corporation’s other brands are so well known. “Technically, Fathom really isn’t a cruise; it’s a travel experience”, said Donald. “It’s very different from what people normally think of. There’s no casino on board, there’s no Broadway shows, the dining will be different… there will be fun on board, but the entertainment orientation is very different.”

In May 2016, Fathom is due to set sail for Cuba… with the goal of encouraging cultural exchange and economic growth.
Instead of Broadway shows and casinos, passengers will be provided with training programmes that are aimed at enriching them personally and preparing them for their social impact stay. Activities might include learning basic levels of Spanish, watching documentary films about everyday life in the Dominican Republic (and eventually Cuba), and participating in workshops that will help them learn how to apply their skills and talents. Those activities will be tailored to their own specific programmes. An example might be learning about water shortages and practicing being an aid worker, so that when volunteers dock on Dominic Republic shores, they can hit the ground running.

The company’s goal is to enable travellers to develop on a personal level while simultaneously strengthening local economies. “A Fathom journey is about personal transformation, too”, said Donald. “Travellers will have the chance to spend some meaningful time with people who share their view of a world where everyone has the opportunity to reach their highest potential.” Given that ‘variety of activities’ ranked in the top 10 benefits of a cruise according to the CLIA’s Cruise Industry Outlook 2015, these onboard programmes are likely to appeal, creating an alternative to the standard cruise for those on the hunt for something different.

Experiencing something different will become even more apparent when on shore, with a number of projects available that have been designed to suit different levels of physical fitness. Initiatives span education, the environment and economic development, and travellers will be able to spend any time from a few hours to a few days working alongside locals on the projects. Fathom-licensed vehicles will transport volunteers to each activity, and English-speaking local guides will be provided for each project.

Chocolate-lovers might be interested to hear they could help cultivate cacao plants and support a local women’s cooperative in producing artisanal delicacies. In so doing, they could contribute to the region’s economy by producing high-quality plants that increase farmers’ yields, and create sustainable income opportunities for rural women. By helping to increase the cooperative’s workforce, volunteers will play a vital role in supporting it on the path towards economic independence.

Travellers will also be able to teach English to children in local schools to help boost academic performance. They can get involved with adult learning programmes, teaching conversational English to community members who want to enhance their career opportunities and secure a higher income. Environmental projects, meanwhile, include reforestation work and building water filters from locally sourced clay, which volunteers can then deliver to communities – providing safe drinking water in an area where piped water supply is limited. These projects are the result of extensive collaboration between Fathom and Dominican Republic government officials, alongside leaders of local NGOs. “Together, they identified an assortment of activities that would have the greatest impact on people’s lives and make lasting contributions to the community”, said Donald. “They then identified those most suitable for a wide range of ages, levels of skill and amounts of physical activity. The result is a broad variety of exciting and truly meaningful activities.”

Fathom is currently working with two lead impact partners – Entrena and IDDI – both of which have strong roots in the Dominican Republic and its educational, economic and environmental projects. The brand is set to haul in other local organisations to bolster support over the coming period, with a longer-term aim of creating partnerships on a potentially global scale.

It’s not just projects Fathom’s guests can get involved with, though: in the Dominican Republic, travellers will be able tailor their own schedules and choose from a breadth of activities ranging from hiking the stunning coastline to spending time with a local family; from learning about local culture to relaxing on the island’s beautiful beaches.

It’s in part that natural beauty – charming colonial architecture, stunning mountains and vast desert scrubland – which led Fathom to choose the Dominican Republic as its first destination. The new port is also handily accessible from Miami, from where the Adonia will depart.

More than that, though, it was a decision based on need: 40 percent of the Dominican Republic population lives below the poverty line, and average household income is around $6,000 per year. The unemployment rate lies at 15 percent, and over two million people do not have access to piped water. There’s huge potential, however; strong infrastructure and reliable, well-established community organisations make for a promising platform for future development. Carnival Corporation is capitalising on that opportunity to bring about real, lasting change.

Cuban ambition

In May, Fathom is due to set sail for Cuba, where projects are still being developed with the goal of encouraging cultural exchange and economic growth. The company is working with Cuban officials and locals to assess where and how volunteers can have the biggest social impact, while complying with both the Cuban Assets Control Regulations and the US’ People-to-People directives.

Environmental projects include reforestation works and building water filters from locally sourced clay
It’s another smart move; as the largest country in the Caribbean, Cuba offers rich history and culture, a tropical climate and welcoming people. It is also a country of growing popularity; travellers from across the world are setting foot on Cuba’s shores, not least driven by the recent loosening of restrictions for US citizens. Regulations state Americans are now able to travel “with the objectives of increasing cultural, artistic, religious and humanitarian exchanges between US citizens and the Cuban people”. Carnival Corporation’s success in securing approval to take passengers to the country, with those humanitarian objectives in mind, is likely to drive a surge in American tourism to the country; Cuba currently receives around three million visitors per year, but only 90,000 come from the US. According to the IMF, the easing of restrictions could see that figure double, and Fathom looks set to be a key driver.

In capitalising on the new regulations, Carnival Corporation is providing travellers with opportunities to not only discover the beauty of Cuba and its communities, but to become a part of it through authentic, meaningful experiences. By participating in activities for a minimum eight hours per day, volunteers will get a real insight into the local communities they visit.

Expanding the market

Those volunteers are likely to come from a variety of backgrounds, according to Carnival Corporation. And it’s that very goal of opening cruises out to a wider industry that’s getting people excited. The cruise industry still attracts a fairly niche market; the current average cruiser is 49 years old, married and university educated, according to the CLIA’s 2015 Outlook. In North America, the most popular age ranges are 30-39, 50-59 and 60-74, with each group accounting for a quarter of all cruise passengers. Through Fathom, Carnival Corporation is aiming to get more families and Millennials on board (quite literally), appealing to their growing interest in the impact of tourism on societies. “Obviously, it is important for us to build a base of followers for the future”, said Donald. “Millennials are now at that moment in their life when they’re making the decisions on where to go and how to vacation.”

While Fathom is also aiming to attract previous passengers looking for a new experience, its main target will be new cruisers. Research estimates around 80 percent of those who embark on a Fathom trip won’t have boarded a Carnival Corporation ship before, and around half will be complete first-time cruisers.

“Attracting new cruisers to our industry is the next big opportunity for all of us”, said Donald. “Our chief competition is land-based vacations, so as we better communicate our overall value, we can convince more new cruisers to vacation with us and exceed their expectations when they are on board.” Once the cruise industry manages to capture new consumers, it often holds onto them: research shows an overall satisfaction rate of 94 percent for guests on traditional ships, with over 70 percent of those taking the plunge and returning.

Carnival Corporation’s move therefore seems to make sound business sense, and it’s expected the company will build even further on its recent successes. In 2014, it achieved results above expectations, with revenue totalling almost $15.9bn, and YouGov recognised the corporation’s namesake brand as the most improved brand in terms of consumer perception in the US.

As that consumer perception improves, so too does Carnival Corporation’s influence on the wider travel industry. Through social impact travel, the company is bringing a whole new dimension to the cruise industry, expanding its reach to a different market while setting an inspiring example for other companies to follow. Ultimately, it is drawing on the key tenets at the heart of any cruise – shared experience, immersive discovery and connection with others – and bringing them to the communities most in need. Donald is optimistic this could spell positive change on a huge scale. “You haven’t seen anything yet like what’s to come”, he said. And if the company’s sustained success and global reach is anything to go by, there’s no reason to doubt such a powerful statement.

Revising supply chains in order to bring operations in line with environmental concerns is a big challenge for the cruise industry, but one that Carnival Corporation, in particular, is embracing
Opportunity from sustainability

Over recent years, the spotlight has fallen on sustainability in every industry – from pharmaceuticals to food, cosmetics to consumables. Businesses have come to realise that if sustainability isn’t considered at every stage of the chain – from supplier through to end service – both their customer base and the world in which they operate will suffer.

Nowhere is this more relevant than in the travel industry. Tourism’s impact has been brought to the fore, with governments, organisations and consumers across the world emphasising the importance of mitigating its potentially damaging effects through innovative approaches and tangible goals.

The maritime industry alone is responsible for three to four percent of the world’s CO2 emissions, and concern over its effects on society and the wider ecosystem is mounting. In response, cruise companies across the board have begun taking action, capitalising on new technologies to reduce fuel consumption, cut back on waste and improve energy efficiency.

A number of initiatives have been set up, among the most notable of which is the Sustainable Shipping Initiative (SSI), which has set out a variety of goals for 2040 with the aim of encouraging companies to diversify energy sources, act as responsible partners in local communities, capitalise on new technologies, and ensure efficient use of resources. The International Maritime Organisation (IMO), meanwhile, has set out regulations that require companies to implement a ‘Ship Energy Efficiency Management Plan’ (SEEMP) unique to every ship, while its Working Groups team has been established to promote efficiency specifically in the cruise sector.

Ambitious aims
Among the companies that have signed up to these agreements is Carnival Corporation, the world’s biggest cruise company. Carnival has taken things one step further, creating its own list of goals for 2020 and putting sustainability as a top priority in everything from supply chain management to operations and logistics. “We host millions of guests a year and visit 725 ports around the world, and the health and vitality of the oceans, seas and communities through which we travel is absolutely essential to our business”, the company’s CEO, Arnold Donald, told The New Economy. “That makes protecting the environment one of our most critical areas of focus as a corporation, and it is why it is important for us to publicly communicate our sustainability goals.” The company has already achieved its aim of cutting CO2 emissions by 20 percent a year ahead of schedule and has now decided to aim even higher, with plans to reduce them by 25 percent from the 2005 baseline.

By the end of 2014, Carnival had saved over one billion gallons of fuel and reduced fleet carbon emissions by 12 billion kilograms in the space of seven years
As well as protecting communities and the environment, such an approach is essential for bringing in customers and building brand image at a time when demand for sustainable business practices is at an all-time high. This is something of which Arnold is well aware: “Our reputation and success depend on having sustainable and transparent operations”, he said. US consultancy firm Hartman Group found in its Outlook on the Millennial Consumer 2014 survey that members of Generation Y were more likely to consider ecological issues when spending than their older peers. As they come to take the lion’s share of the market, that should become an increasingly important consideration for businesses.

Embracing technology
If sustainable operations are in the limelight right now, so too are the methods used to get there. New technologies are of the utmost importance in helping the industry to achieve the goals set out by the likes of the IMO. Initiatives such as the Green Ship Technology Conference 2015 highlight the importance of innovation – from efficient ship design through to effective energy management – while ventures such as the Shipping Innovation Fast Tracker (ShIFT) focus on encouraging the use of such technologies for both cost cutting and environmental purposes.

Hull coatings which minimise drag from algae and so bolster fuel efficiency, optimised propulsion and efficient lighting and air conditioning systems are all among the options that companies should be considering, and which could dramatically reduce the cruise industry’s impact on the environment. Carnival is one company that has embraced these opportunities, trialling different hull paints and cleaning technologies to minimise algae growth, working out the optimal speeds for its itineraries, testing various air conditioning systems, and evaluating how to make water production as efficient as possible. With a view to achieving the latter, the company now uses engine heat to convert seawater to fresh water, has installed ‘reverse osmosis’ systems, and is increasing its use of Advanced Waste Water Purification Systems (AWWPS).

Cutting fuel consumption
‘Cold ironing’ – using port power and therefore drawing on local electrical grids rather than running the engine while docked – is another key area for development that, if taken up across the industry, could help to cut fuel consumption significantly. It’s a big area of focus for Carnival, which helped to develop the first North American cold ironing port back in 2001 and has since made over 20 of its ships shore-power compatible. This type of action needs to be taken up on an industry-wide scale if the likes of the SSI are to achieve their ambitious objectives across the whole sector.

That includes establishing internal strategies tailored to each cruise company. Carnival is again setting a positive example, creating its own Fleet Fuel Conservation Programme to establish fuel-efficient ship designs and energy-saving approaches. It’s achieving tangible results; by the end of 2014, the company had saved over one billion gallons of fuel and reduced fleet carbon emissions by 12 billion kilograms in the space of seven years. It has also improved the fleet’s efficiency by 25 percent since 2007 – generating savings of around $2.5bn in fuel costs.

Carnival is attempting to optimise engine room fans, pumps and equipment to keep the engine room cool without wasting energy
Such savings provide palpable evidence of the positive impact that real effort, and new technologies, can have. Among the newest of such technologies is a gas-cleaning system that Carnival is pioneering, which is designed to remove major pollutants, including sulphur compounds, from exhaust gases. The result of a $400m investment, it’s set to be rolled out across approximately 70 percent of the company’s fleet by 2017.

Meanwhile, the Mitsubishi Air Lubrication System – which works by creating bubbles between the ship’s hull and water to reduce friction – is being introduced to Carnival’s new fleet of AIDA cruise vessels. In addition, eco-friendly, emission-light liquefied natural gas (LNG) will be used to power Carnival’s new AIDA and Costa ships, both at sea and port. LNG is stirring excitement in the industry, and it’s this type of technology that will likely play an increasingly large role in companies across the industry in the future. That’s likely to prove especially true thanks to the arrival of new restrictions, which include reducing fuel sulphur limits to 0.1 percent in Emission Control Areas (ECAs) as of this year, and 0.5 percent in non-ECAs by 2020 (from a current 3.5 percent).

These technologies draw attention to the benefits that efficient ship design can have. Alongside the systems themselves, there’s the issue of size – bigger capacity means more efficiency per passenger. That’s a consideration that Carnival has taken on board, bringing out four new, ‘next-generation’ ships that will boast the largest guest capacity in the world. They are set to improve fuel efficiency by 35 percent, reducing unit costs by 20 percent.

Companies are making far-reaching moves to ensure that sustainability is present at every stage of their operations. It’s not just about the ships themselves, however; AIDA, for example, opened a new sustainable office building in October, built with eco-friendly technology and featuring geothermal tech to control temperature. It’s set to save 60 percent on energy while significantly reducing CO2 emissions. BMW i3 electric cars will be used to transport staff to the cruise terminal to achieve further energy savings. These are prime examples of how environmental awareness is driving innovation throughout the sector – and how sustainability is being placed at the centre of every move. This is also evident at the level of supply chain and logistics; equipment for ship construction, furniture and materials must all be sourced sustainably if companies are to achieve their goals. AIDA, once again, provides a positive example: its floors are being decked out with eco-friendly and recyclable sheep’s wool carpeting, which can be returned to the manufacturer when no longer needed.

And on a company-wide scale, Carnival has established a Global Sourcing Initiative to reengineer its chairs, tables and other furniture by looking at usage, durability and daily wear and tear. “The goal is to create common specifications, allowing for a more unified approach for sourcing and manufacturing, while still enabling [subsidiaries] to vary design applications and create brand differentiation”, said Arnold. The new furniture, constructed using stronger aluminium and more protective coatings, is designed to minimise waste and maintenance costs by increasing life spans to between five and seven years. The company is taking a similar approach to uncover best practices for its mattresses, linens and other basic materials.

Collaborate to accumulate
Food is another key area of focus, and Carnival is leading the pack, with teams collaborating across the various lines to establish more efficient ways of sourcing it. “While still early in the process, the effort to coordinate and collaborate across the operating cruise lines on food and beverage sourcing is expected to deliver significant opportunities for us to improve guest experiences, operate more cost-efficiently and potentially impact overall sustainability”, said Arnold. It forms part of the company’s new working-together programme, which aims to improve communication between all of its brands in order to find new ways of doing business. Other key focuses for the company include airfare spend and footwear for employees – issues that businesses in other industries would do well to consider.

But if sustainability is to be achieved throughout the whole chain, it needs to go right back to suppliers. Setting out clear regulations and incentives can help to achieve that. According to Arnold, the company is considering drawing up ‘performance-based-logistics’ (PBLs) to improve the quality of equipment: “PBLs are designed to give vendors incentive to provide the best equipment possible, engineer solutions for new needs and quickly solve any problems that arise. Instituting PBLs for certain bridge, engineering or other forms of ship equipment across portions of the fleet can improve performance, save costs and deliver a level of uniformity of equipment used on ships, which will also enable efficiencies in training and improve safety.”

Local partnerships
It’s not just collaboration with suppliers and internal employees that companies need to focus on as they move to become more sustainable. There’s a growing emphasis on the need to support local organisations and form partnerships in the relevant regions to bring positive change – rather than damage – to the places being visited. Initiatives such as Fathom – Carnival’s new brand, which will bring travellers to volunteer on projects in the Caribbean – can create lasting impact in regions by enabling local organisations to get involved.

Such partnerships can bring new and exciting onshore activities to cruisers, encouraging cultural exchange while benefitting local communities. It’s also a way of spreading environmental awareness in local places, with programmes such as Fathom’s reforestation project (in the Dominican Republic) actively helping to have a positive ecological impact.

Carnival also provides a good example of community involvement on a wider scale, with involvement in a range of initiatives and a track record of making meaningful donations. It recently gave $2.5m to The Nature Conservancy, an organisation that aims to preserve the world’s oceans and reefs, and will be donating a portion of every ticket sold through Fathom to relevant partner organisations. Moves like this are vital in helping local communities to secure predictable revenue streams.

A happy workforce
Arnold notes that such projects benefit the company’s workforce as well as external partners. “Over the years, these efforts have created a stronger, more cohesive company and generated extraordinary personal satisfaction among our employees”, he said. “Carnival fosters and encourages the charitable and volunteer activities of our employees and will continue to help build better communities throughout the world.”

It’s an important point. Employee satisfaction is of the essence if companies are to ensure their workforce is as sustainable as their operations. Carnival has taken the lead on this, implementing a range of training initiatives to support its employees, including a Centre for Simulator Maritime Training, established in 2012, and a board-level Health, Environmental, Safety & Security committee.

And if collaboration with external parties breeds collaboration from within, the reverse is also true. As Carnival has strengthened its internal partnerships, so it has looked to build new ones with external bodies on a business level, for example by signing memorandums of understanding with enterprises in China, with the aim of building vessels and developing ports through joint ventures. Leveraging its position as the country’s leader – where it was the first to set up shop in 2006 – in order to expand, Carnival is setting a precedent for things to come.

The decision to move into China and form partnerships is indicative of the cruise industry’s scale. As it grows, so its issues of sustainability – in everything from how companies work with communities down to ship materials – will become more prominent. Carnival is one example of a company doing everything in its power to address those issues, using sustainable partnerships and breakthrough technologies to protect the environment that its ships affect. If the rest of the cruise sector takes heed, the industry may well have found the answer to some of its most pressing concerns.

Carnival’s emphasis on transparency, community involvement and new technologies is helping the company achieve its vision of sustainability at every level
redefining an industry

‘Sustainability’ is an all-encompassing word. Having a positive impact on the outside begins with cohesion and trust on the inside; a strong company culture, a sense of responsibility and a focus on transparency are vital for the continued success of companies such as Carnival, which became the first cruise company to publish its sustainability reports and has since continued to take the lead on initiatives both within its workforce and with its external partners. The New Economy spoke to the company’s Sustainability Director, Elaine Heldewier, to find out more about its eco-friendly approach and community-led initiatives, and to get a deeper insight into how the cruise giant is embracing its sustainability goals.

How is the cruise industry changing in response to environmental issues?
The health and wellbeing of the ocean, environment and communities in which we travel are critical to the industry as a whole; our business depends on it. We are therefore constantly carrying out research to find new ways of reducing our carbon footprint, while making the most of new initiatives to increase water use efficiency and reduce waste and air emissions. We also support a broad range of organisations through various partnerships.

Why is it so important that cruise companies prioritise sustainability?
It is vital that businesses operate sustainably if they are to succeed in the 21st century. That includes communicating openly, listening and responding to stakeholders, establishing sound corporate governance strategies and providing a work environment that supports career development. Working with local and global communities, partnering with organisations worldwide, supporting biodiversity and establishing ethical and environmentally friendly practices within the supply chain are all of the utmost importance.

How is Carnival Corporation pioneering change in the industry?
Carnival views sustainability as a core guiding principle, and is using its size and scale to accelerate sustainable practices and boost environmental and social efforts. Technological advances are essential to our sustainability strategy, so we continue to drive innovation within the cruise sector and the wider maritime industry. We have taken the lead on developing technology to mitigate the impact of new regulations that require lower sulphur emissions, while maintaining our commitment to the pristine environments in which we have the pleasure of sailing. Working across 10 brands and 100 ships, Carnival has, for example, reduced its rate of greenhouse gas emissions by 20 percent over the past 10 years, reaching this crucial sustainability achievement ahead of its targeted goal of 2015. In addition to that we have – through stakeholder analysis and a focus on our operations – expanded our sustainability plan beyond just CO2 reduction targets and developed 10 key goals.

How is Carnival Corporation improving energy efficiency on its ships?
Carnival is collaborating across its brands with a multi-year strategy aimed at improving energy efficiency on its ships to reduce overall fuel consumption, which is the company’s single biggest expense. Every piece of equipment consumes electricity, which requires fuel, so the company is taking a best-practice approach to find new ways of reducing energy usage across its fleet. Our newest ship design significantly outperforms the average in terms of fuel consumption and ship operating cost, and we will continue to enhance our fleet by building more efficient ships to replace older ones.

What involvement does the company have with the community?
As one of the world’s largest travel companies, Carnival recognises its responsibility to the communities in which it operates, including our corporate and operating brands headquarters locations and the many ports our cruise brands visit. We work in conjunction with local governments, trade associations, tourism organisations and other community stakeholders to help ensure we have a positive influence on communities, and we always consider the potential impact when planning itineraries and selecting new ports. We assess economic and environmental effects and seek to support local economies, including during natural disasters.

Our support is mainly coordinated through the Carnival Foundation. During times of crisis, Carnival works closely with national and international relief organisations, coordinating corporate and employee donations for emergencies in the US, the Caribbean and elsewhere around the world. From employee fundraisers and hands-on volunteer initiatives to innovative philanthropic programmes, Carnival strives to make a difference across the globe.

Carnival fosters and encourages the charitable and volunteer activities of our employees and will continue to help build better communities worldwide. Shipboard personnel participate in beach clean-ups and donate their time to orphanages and children’s charities in the Caribbean. In the past five years, Carnival and its employees have given over $30m in financial contributions and in-kind donations to a variety of local and national charities.

In June 2014, for example, the Carnival Foundation donated $2.5m over a five-year period to The Nature Conservancy, one of the world’s leading conservation organisations, to advance the preservation of oceans and seas. This support will accelerate the organisation’s initiatives, which include protecting coral reefs and enhancing the value of marine ecosystem services through the Mapping Ocean Wealth programme. Through advancements in science, the organisation also seeks to find natural systems that reduce risks to coastal communities from storms and rising sea levels.

How else is Carnival ensuring it operates as a socially responsible, ethical company?
In 2014 we released our Business Partner Code of Conduct and Ethics, which goes beyond our Business Code of Conduct and Ethics by also focusing on our supply chain. Building and maintaining trust in our business relationships and pursuing the highest standards of ethical behaviour are fundamental to Carnival’s core values, and we are committed to conducting business with honesty and integrity. We take pride in holding ourselves to these high standards, and it is our expectation that our business partners will join us in following the same standards.

This year we announced our new brand Fathom, the ultimate goal of which is to help facilitate and maintain sustainable programmes to meet the needs of the local communities we partner with. Social impact travel, which the brand is pioneering, offers mindful, purpose-driven activities and programmes that enable guests to make a real sustainable impact on the people in the communities we journey to. It’s travel that transforms lives.

Can you tell us a bit about the new port that Fathom will be using?
The company spent $85m developing Amber Cove, the Caribbean’s newest cruise port. It is expected to welcome 350,000 cruisers in its first year and will be used by a number of our brands, including Fathom, Carnival, Holland America, Princess and Costa, allowing the company to add another port of call to its list of destinations.

How important is transparency for the company and the wider industry?
Our reputation and success depend on having sustainable and transparent operations. Through the Carbon Disclosure Project (CDP) we have, since 2006, voluntarily disclosed our carbon footprint, and over the past two years we have also chosen to disclose our water management practices. As part of our strategy, our greenhouse gas emissions are independently verified by a third party.

We are very proud of being the first cruise company to publish sustainability reports. Our reports follow the Global Reporting Initiative (GRI) guidelines, and we transitioned to the new reporting requirements two years earlier than required. In addition to that, we have a section on our website that is dedicated to sustainability, where we keep our stakeholders updated on our performance.

Carnival views sustainability as a core guiding principle, and is using its size and scale to accelerate sustainable practices and boost environmental and social efforts
In what other ways is Carnival ensuring it remains a leader in the cruise industry?
Asia continues to be a focus for emerging market development and we expect China to be the largest cruise market in the world over time. We were the first to enter the market through our Costa Cruises brand several years ago and are currently the largest cruise operator in mainland China. In 2014 we continued our lead in the industry, with four ships based in the country and more than 12 marketing offices across the region. To coordinate our growth strategy, our Chief Operations Officer Alan Buckelew has relocated to China, and we have entered into several strategic agreements with the aim of expanding the cruise industry there.

We signed a memorandum of understanding (MOU) with China State Shipbuilding Corporation (China’s largest shipyard) as well as with Italian shipbuilder Fincantieri, in order to explore the possibility of shipbuilding and other strategic partnerships to foster growth. We also signed an MOU with China Merchants Group, China’s oldest state enterprise, to explore joint development ventures in terms of ports and destinations, alongside other areas.

Human capital is our biggest asset, and our goal is to continue building a diverse and inclusive workforce, providing all employees with a positive work environment and opportunities to build a rewarding career. We remain focused on hiring and retaining the best and brightest; examples of recent hires at our top management levels include Orland Ashford (President of Holland America), Christine Duffy (President of Carnival Cruise Line) and Julia Brown (our first Chief Procurement Officer). We have also seen a number of promotions among our existing employees.

What are Carnival’s goals for the future?
This September, Carnival Corporation announced its 2020 sustainability goals, reinforcing its commitment to the environment as well as to its guests, employees and communities. As well as seeking to meet the 10 major goals over the next five years, we will continue to ensure sustainable business practices across our brands, business partners and suppliers. Alongside the environmental goals, Carnival Corporation strives to protect the health, safety and security of its guests, crew members and everyone else working on behalf of the company. We seek to build a sustainable workforce, to develop sustainable conduct compliance regulations for vendors and others in the supply chain, and to work on initiatives with local and global communities.

How do you envisage the future of the cruise industry more generally?
Cruise lines will continue to provide the best possible experience for guests both on and off the ship through new, innovative products, guest experiences and the addition of new ports and destinations. As long as sustainability remains a top priority, the cruise industry will continue to thrive.

fathom: Social impact travel


Holidays at sea have become more and more popular as a way to see multiple destinations, in an often five-star luxurious environment. But one cruise brand – Fathom, the latest line from Carnival Corporation – is bringing the social impact concept to the cruise holiday. Tara Russell, President of Fathom and Global Impact Lead of Carnival Corporation, discusses the social impact ideals of Fathom, and the new kinds of cruise holidays Fathom will be offering.