Cincinnati Int'l & Red Deer Regional Share Their Roadmaps for Social Responsibility

Author: 
Jennifer Bradley
Published in: 
May-June
2016

From BP and Enron to Volkswagen and Valeant, there's no shortage of cautionary tales about companies shooting themselves in the foot with egregious-and ultimately actionable-breaches of conscience. It's no wonder that organizations in all sectors, including the airport industry, are beginning to recognize the importance of corporate social responsibility (CSR for short). 

Paul Behnke, a senior associate with the Montreal-based consulting firm Aviation Strategies International, notes that many airports have been "singing the right tune" regarding CSR for years, especially regarding noise control and reducing emissions. Many also engage in community service projects because they appreciate that the airport is a catalyst for economic growth and prosperity and needs to ensure its priorities are in lockstep with the community and the region.

FACTS&FIGURES
Project: Corporate Social Responsibility Programs
Location: Cincinnati/Northern KY Int'l Airport 
2015 Passenger Volume: 6.4 million
Sample Initiatives: System that captures & treats rainwater/snowmelt to protect local streams; sessions that help facilitate travel for passengers with autism; sound-insulation for nearby homes & businesses; visits from miniature horses to calm outbound passengers
Programs in Development: Green rental car facility; testing battery-powered mowers
Awards: Best Regional Airport in North America 2011, 2012, 2013, 2014, & 2015 (Skytrax)

Project: Corporate Social Responsibility Programs
Location: Red Deer Airport (Alberta)
2015 Scheduled Passenger Volume: 20,000+
Sample Programs: Charity barbecue; holiday card design contest for local children; purchasing clean fuels; bans on unnecessary engine idling
Under Consideration: Solar Arraysmental sustainability, he notes.  

Behnke attributes an increasing interest in formalized social responsibility programs to a major paradigm shift. Airports are no longer treated as public utilities, he explains, but rather as full corporate structures governed by business principles and the need to provide exemplary service. From parking and baggage handling to food and retail options, providing a pleasant journey for passengers is a proven approach that pays-in dollars and good public relations. 

"The top 100 airports, even in a bad year, are in the double digits for bottom-line profit after tax. With those profits come a couple of things," Behnke reasons. "First, is the notion there might be some responsibility when you're earning this revenue in your community and from transfer passengers; and second, you should have a partnership with the community and stakeholders to ensure that the benefits from the airport are shared." 

The concept of the "triple bottom line," which takes in to account financial, social and environmental/ecological factors, is widely accepted by the world's airports, he adds. 

Behnke, who is also an instructor for the Airport Management Professional Accreditation Program, recently helped design a session about CSR at this year's Passenger Terminal Conference. Candace McGraw, chief executive officer of Cincinnati/Northern Kentucky International Airport (CVG) and Roelof-Jan Steenstra, chief executive officer of the Red Deer Airport Authority, shared their experiences with the topic. 

CSR at CVG
McGraw describes CSR as acting ethically and responsibly-making sure you not only comply with the letter of the law, but also the spirit of the law. "It's (operating) within a framework that will build a positive image for your business while working well with neighbors, employees and partners," she says.

As such, CVG has three guiding goals:
1. Act as a socially responsible neighbor
2. Foster relationships with local governments, businesses and community leaders to strengthen and grow business
3. Build a culture of collaboration and teamwork

McGraw reports that everyone was fully on board with the airport's new CSR perspective and initiatives. "Frankly, a lot of the efforts were employee-driven," she adds. "I think it's important to get all employees and stakeholders rallied around the notion that we have to be a business [that] acts responsibly, with a social conscience." 

To protect local streams, CVG installed a system that captures rainwater and melting snow. Each year the system treats 400 million gallons of water. Also on the environmental front, the airport is currently changing its light fixtures to more energy-efficient models and plans to open a "green" rental car facility in 2021. 

In the last 25 years, CVG has spent nearly $100 million acquiring 681 homes affected by aircraft noise and providing sound insulation for 563 homes, 10 schools and a nursing home. 

Starting Our Adventure Right (SOAR) is a community outreach program CVG runs with Delta Air Lines to help children with autism spectrum disorders become more comfortable with flying and airports. Often, it enables travel that was previously unthinkable. "We've now had proven success, and families have been able to take vacations or visit grandparents," reports McGraw.  

In a new initiative, CVG recently teamed with a local farm to bring miniature horses into the terminal to help calm passengers before their flights. 

Why spend extra time and effort on social responsibility programs? McGraw likens CVG's efforts to Starbucks using environmentally friendly cups. "It brands them among their customers," she explains. Like Starbucks, the airport is a large corporation, she adds: "We generate $100 million in revenue and have a $3.6 billion economic impact on this community. We need them to be supportive of the airport and know we're a socially conscious business. People want to be supportive of a business that treats the environment well, the community well and pays its employees a fair wage." 

CSR is even embedded in the mission statement that guides the airport's 2016-2021 Strategic Plan: To become the airport of choice to work for, fly from and do business with. One of the basic tenets of the plan is to rally employees and stakeholders around the idea that CVG must be a business that acts responsibly and has a social conscience, summarizes McGraw.

With the airport's mission statement as a constant reminder, CVG personnel continue to develop new CSR programs. Currently, employees are testing battery-powered mowers and investigating ways to use excess land for growing food. "I think there's a myriad of things we can do in the future," says McGraw. 

Altruism in Alberta
Located in the economic corridor between Edmonton and Calgary, Alberta's Red Deer Regional (YQF) shows that small airports can make a big difference. 

YQF's annual Christmas card design competition is a highlight of the year for local children, notes Roelof-Jan Steenstra, chief executive officer of the Red Deer Airport Authority. The winning entry appears on the airport's annual Christmas card, and the young artist who created it receives an educational grant from the airport and local co-sponsor. A summer barbecue raises money for multiple charities, and the airport consistently volunteers and participates in the area's holiday parade.  

Such community events are essential for good exposure and put a face on the airport, says Steenstra. On the operational side, YQF's sustainability initiatives include purchasing the cleanest fuels possible and banning unnecessary engine idling. "These impacts are significant," he explains. "You're attracting airline services and passengers in a very competitive marketplace."

The airport is also considering a system to harness solar energy. It can be challenging to determine which endeavors will foster long-term success-and to justify their short-term costs, Steenstra adds.  While CSR embodies two of the three elements in the triple bottom line (social and environmental) they also require time and money.     

Dealing with social issues can be expensive, and traditionally there has been a limited relationship between CSR programs and financial performance, acknowledges Steenstra. "In a smaller airport, of course there are trade-offs," he relates. "Regional airports have tremendous challenges because we have limited resources. If you look at a larger airport's sustainability report, it's bigger than my annual report."

Financial costs and limitations don't discourage Steenstra; they inspire him to make CSR a priority by integrating practices directly into the airport's overall strategy and guiding values. "CSR is very real," he emphasizes. "It's a relevant business issue and can impact organizational financial performance positively if done in balance."

Striking a balance between making an impactful difference and maintaining focus on running a safe, efficient operation is no easy task. But despite the challenges, airports around the world are dedicating teams to sustainability and other CSR issues. Some facilities issue annual reports to the local community about their goals and accomplishments. 

"One of the challenges airports have now is how to identify the social issues that affect strategy," notes Steenstra. "We're doing ok. There [are] certainly a lot of things being done." 

With Profit Comes Responsibility
Behnke culls wisdom about CSR from Warren Buffett, the Berkshire Hathaway exec known for his own philanthropy and the Giving Pledge he encourages other wealthy people to sign. "It takes 20 years to build a reputation and five minutes to ruin it," says Buffett. "If you think about that, you'll do things differently." 

Spring-boarding off Buffett's idea, Behnke notes that CSR is more than doing the right thing. "It's also an insurance policy against losing that reputation in five minutes," he explains. 

Behnke consequently encourages airports to let their stakeholders, clients and communities know about the good work they're doing. With profit accountability also comes the responsibility to build and protect a brand, he remarks, reminding airports of Buffett's warning about how one big mistake can unravel an entire organization. 

Steenstra underscores the point by noting that Volkswagen took a $26.6. billion hit due to its recent emissions scandal. 

"The notion of protecting your brand is important," advises Behnke. He cites Delta Air Lines' recent employee profit-sharing bonuses and a tour/sixth birthday party his daughter was given at Geneva Airport in Switzerland as exemplary efforts.

What's Next? 
While many airports are performing laudable acts of CSR, most aren't quantifying them and sharing the results like they should, notes Behnke. 

Steenstra says the approach must be strategic because CSR matters-today and into the future. "Right now there are airports doing a really great job," he says, also noting a lack of guidelines about what airports should share publically. "In other industries, there are benchmarks and communications requirements to follow, because ultimately there are pitfalls and things that can hurt your organization." 

Despite the potential difficulties, Steenstra says the next logical phase of CSR for airports is communication-specifically, showing communities and stakeholders the positive impacts of their efforts. He encourages operators to carefully communicate as much as possible, even if there isn't a structured framework requiring such news to be shared. Such efforts will help the industry develop baselines for what CSR looks like on paper, even though standards will be different for each airport, he notes. 

"Some are going to have higher electrical costs, so LED lighting is going to have an impact on overall operations," he cites as an example. 

Behnke encourages airports to benchmark performance both against themselves over time and against "peer" airports. The ASQ customer service survey of Airports Council International, for instance, allows airports to assess their own performance over time and also ranks them among comparable facilities. "The idea is to keep improving all the time," he says. "Airports are competing with each other for air services, for cargo and for transfer passengers, as well as against other modes-particularly fast rail." 

According to Behnke, cleanliness of terminals and restrooms is among the most important customer service parameters, followed closely by friendliness of airport, airline and security staff. "These parameters are absolutely huge," he stresses. "If you fail on those counts, you know exactly where to look. By using survey data, airports can come to a CSR meeting armed with all kinds of great data for the stakeholders." 

McGraw notes that airports can enjoy plenty of benefits by engaging in a socially responsible manner, but the most important reason to embrace CSR is that it's simply the right thing to do. "If you always act with the best interest of your company in mind and do the right thing, you ultimately will reap rewards," 
she summarizes. 

Although McGraw doesn't currently hear a lot of talk about CSR at U.S. airports, she senses that interest in the topic is growing. Dubai World Airports and a number of European airports publish annual CSR reports, and she predicts more U.S. facilities will follow suit, particularly regarding environmental and community programs. 

Behnke agrees that more airport executives are now climbing on board. No airport would hire a new chief executive without asking questions about community outreach, stakeholder engagement or environmental sustainability, he notes. 

Subcategory: 
Operations

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