Yahoo Finance Skift Global Forum Preview: Carnival CEO Arnold Donald Says Sustainability Is ‘Job One’
Carnival Corporation has been no stranger to criticism against its sustainability track record. Earlier this year, its executive committee sat before a federal judge in Miami and pleaded guilty to violating its probation for environmental crimes.
But that doesn’t mean Carnival CEO Arnold Donald doesn’t want to talk about cruising’s impact on the environment. In fact, Donald said his company is redoubling its commitments to environmental compliance and getting cruisers where they want to go — safely, cleanly, and carbon efficiently.
As the cruise industry prepares to meet the International Maritime Organization‘s 2020 deadline for cleaner fuel standards — as well as its longer-term goal of carbon-free shipping by the end of this century — cruise lines like Carnival have their work cut out for them. Donald, however, seems aware that sustainability isn’t just a trend or buzzword used to attract younger cruisers. Rather, it’s something that must be at the core of Carnival’s operations and mission.
Donald will be speaking at Skift Global Forum in New York City on September 18–19.
Skift Editor’s Note: This interview has been edited and condensed for clarity and length.
Skift: Do you think most consumers/travelers see Carnival Corporation as an environmentally responsible company?
Arnold Donald: While I really can’t speak for most travelers in how they see us, I can tell you that excellence in safety, environmental protection, and compliance is a top priority for our company. Our guests want us to take them safely to places with clean air and water and to see beautiful environments and destinations, so it’s critically important to us to do our part to protect and preserve the environment.
Carnival Corp. CEO Arnold Donald aboard Adonia in Cuba. Photo: Carnival Corp.
We have backed up our declared priorities with concrete actions and improvements. Over the last three years, we have spent almost a billion dollars on environmental initiatives, implemented new and more effective procedures, and invested in hundreds of thousands of hours of training for our crew members — not only to meet our compliance targets but to strive to constantly improve every day in environmental excellence and stewardship.
Despite these efforts, we have by no means been perfect. Through the challenges we have faced, we have made renewed commitments and are striving for continuous improvement. And with the help of a supervised environmental compliance plan, which began in 2017, environmental excellence and operational compliance are at the core of who we are and are job one.
Skift: What are you doing in the way of sustainability to court ethics-conscious millennials and Gen Z cruisers?
Donald: The cruise industry as a whole has had success in attracting younger generations in recent years, and we’re seeing that, like people of all ages, millennials love cruising. In fact, millennials actually over-index on cruising because of their preference for experiences over things, so we’re seeing they prefer cruise and they repeat more often. As part of this, conscious travel is something we’re seeing as both a cruise trend and an industry imperative.
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Among our ongoing efforts, we are establishing a new corporate-wide ethics and compliance function that will focus on developing core values, improving communications, supporting our employees, enhancing our corporate culture, and improving diversity throughout our company … On the sustainability front, we have reduced our carbon footprint nearly 28 percent relative to our 2005 baseline. We’re leading the industry in creating improved technologies like the installation of our Advanced Air Quality Systems and pioneering the use of liquefied natural gas as an alternative fuel technology, both of which dramatically reduce emissions.
As corporate culture and sustainability continue to gain even more prominence in today’s world, especially among younger generations, we are optimistic that we will continue attracting more than our fair share of younger travelers to cruising.
Skift: How optimistic are you about the prospect of zero carbon cruising in the future?
Donald: As part of our long-term commitment to help mitigate climate change, we support the cruise industry aspiring to the International Maritime Organization’s vision of a carbon-free shipping industry by the end of the century. At Carnival Corporation, we’ve been putting measures in place to ensure we’re set up to achieve these goals — whether that’s building an industry-leading 11 ships that will be powered by clean-burning liquefied natural gas, installing Advanced Air Quality Systems across our fleet that improve our emissions, utilizing cold ironing capabilities to plug into a port’s electrical grid where infrastructure is available, purchasing carbon offsets, or the many other energy reduction and conservation initiatives we’ve employed to help us reduce our fuel use, drive energy efficiency, and further improve our emissions.
Skift: Do you think the cruise industry is treated fairly when it comes to environmental issues compared to, say, the aviation or hospitality industries?
Donald: Whether our industry has been treated fairly, relative to others, is really not important. What matters most is that the cruise industry has a duty and shared commitment to environmental sustainability not only because we depend on the vitality of the oceans, seas, and destinations in which we operate, but also because it’s the right thing to do.
We are committed to continuously improving our operations, including through our ever-increasing environmental focus … The reality is, even though we are actually a very small industry — if you counted all the cabins in all the cruise ships around the world, it would equal less than 2 percent of all hotel rooms in the world — we are a heavily regulated industry. And if you look at the entire maritime and shipping sector, with only about 400 cruise ships compared to over 50,000 commercial shipping vessels, the cruise sector only represents less than 1 percent.
But because we’re a highly visible symbol of tourism and maritime operations, there are sometimes misdirected negative perceptions that come with that. While those misconceptions aren’t necessarily driven by cruise companies, instead of pointing a finger at others, we’re focused only on being a part of the solution.
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