BAD: Cruise industry and so-called environmental social responsibility

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New research by Leeds Metropolitan University reveals that the cruise industry isn’t going far enough in their corporate social responsibility towards the environment, society and the destinations they visit.
The study, published this month in the journal Tourism Management, analyses the industry’s lack of corporate social disclosure and ranks companies through analysis of their corporate social responsibility reports and websites to provide the first cruise sector sustainability reporting index.

Sixty five per cent of the 80 cruise companies worldwide which were analysed do not mention corporate social responsibility on their websites, and only 12 brands publish corporate social reports- belonging to only four companies: Carnival Corporation, Royal Caribbean International, TUI and Disney Cruises.

Dr Xavier Font, the lead author of the study from Leeds Metropolitan University explains: “Most companies report soft data, such as statements from their CEOs, that are easy to copy and do not show real change.
“Companies mostly report on their corporate vision and strategy, their credentials and their governance and management systems, but they fail to report on actual performance data on many key environmental and socio-economic indicators. Reporting on emissions, effluents, waste or water is the result of eco-saving strategies and regulatory pressure. But not one of the 80 companies reports on the sustainability of the resources consumed or biodiversity actions, and few disclose their positive social or economic impact on destinations.”

The report highlights that more must be done by the cruise industry in terms of the environmental impact of cruise ship’s discharges, as cruises usually operate in highly valued costal water and marine ecosystems. It is noted that some anti-fuelling coating used to mitigate the impact contain hazardous chemicals which can be harmful to marine organism. The harm from ballast water is well recognised since 1970 when the International Maritime Organization noted the negative impact of non-indigenous organisms transported in the ballast water. Since 2004 there is a Convention for the Control and Management on Ship’s Ballast Water and Sediments but that has not entered into force due to the limited signing from states (only 33) until 2012.

Cruise ships that comply with legislation and are under international regulations may still discharge comminuted and disinfected sewage using systems approved by its flag administration at a distance of more than three nautical miles from shore. To be able to claim environmental responsibility, cruise companies should use an advanced system and use it consistently, not just depending on the jurisdiction.

The study also examined the socio-economic impact of the cruise industry and highlighted previous research which reported evidence of frequent violation rights for disadvantaged groups including charges for medical examinations, visas, transport and administration putting cruise industry workers into a level of debt that cannot be repaid and is comparable to forced labour.

It also noted that there is limited public data to sustain the claim that cruise industry contributes to the economy by creating jobs and contributing to the local economy of the destinations visited. In fact, low spend cruisers are considered unproductive given the costs incurred by their impact. Additionally earnings by the supply chain are limited, as the requirements for the cruise are complex, requiring larger number of forecasted supply. Economic factors, such as fuel consumption, are the only ones considered to select destinations, but not the impact on communities. This is especially acute in small destinations where the ratio to cruise passenger per resident is high.

Maria Jesus Bonilla, a Senior Lecturer in the Accounting Department at Rey Juan Carlos University, and contributor to the research added: “There is no consistency in the issuing of the reports. Some of the twelve companies stopped reporting as a single brand and start reporting as part of the whole group, while others belonging to the same group keep issuing their own corporate social reports. All this makes comparison among brands very difficult and transparency very limited.

Dr Xavier Font is an expert in responsible tourism marketing, with extensive experience in industry and government training on all aspects of sustainable tourism production and consumption. He is the most published academic in the world in sustainable tourism certification, having consulted on this subject for UNEP, UNCTAD, UNWTO, IFC, EC, VisitEngland, Fáilte Ireland, WWF, the Chilean government and the Travel Foundation amongst others. Previously he has analysed the corporate social disclosure of hotel groups and volunteer operators.

Dr. M. Jesús Bonilla-Priego is Senior Lecturer in the Department of Financial Economics and Accounting at Rey Juan Carlos University. Her research focuses on environmental management accounting and corporate social reporting for the tourism industry.
Dr. Rosario Pacheco is Senior Lecturer in the Department of Financial Economics and Accounting at Rey Juan Carlos University. Her research interest focuses on corporate social responsibility and intellectual capital.