Case 3: Xanterra LLC: You Can't Save What Measure...Corporate Environmental Sustainability

Xanterra is the USA’s largest national park concessioner, operating hotels, lodges, restaurants, retail, campgrounds and transportation systems in more than 20 locations, including:

Xanterra has about 8000 employees in 19 locations and is headquartered in Denver, CO. Xanterra’s Environmental Management System (EMS) Ecologix is the source of a range of innovations that are the focus of this case study. Ecologix is the logical integration of ecology and business. According to Gina McIlwraith, Environment, Health & Safety Director, Ecologix ensures:

• continual improvement of Xanterra’s environmental performance;
• compliance with all environmental regulations;
• incorporation of best management practices; and
• flexibility to respond to property environmental priorities.

Drivers of Innovation

The most succinct reason for pursuing innovation in all of Xanterra’s operations through the Ecologix EMS is captured in the Misssion Statement, as follows:

Our business decisions balance economic viability with ecological responsibility.
We reduce and recycle waste, conserve energy and water, and educate our guests and employees on environmental stewardship.
We believe that increasing the sustainability of natural systems is not just good business. It is the right thing to do.

There is a belief within the organisation that sustaining natural systems through continuous innovation and improvement is not only good for the environments in which they operate, but also good business. Employees are asked to hold management to account for all operational decisions that relate to environmental performance. Thus, they have both a top-down mission and a bottom-up monitoring mechanism to ensure continuous improvement in environmental performance, compliance with environmental regulations and responsiveness to environmental priorities.

Process of Innovation: When and How to Innovate?

Xanterra’s Ecologix EMS involves a continuous improvement process, based on achieving a truly sustainable business by the year 2015 with the following characteristics:

• Use zero fossil fuels;
• Use zero persistent toxic chemicals;
• Generate zero waste to the landfill;
• Generate zero hazardous waste;
• Consume water to extent no species are negatively impacted;
• Employ sustainable design, construction and maintenance practices in all operations ;
• Serve 100 percent local organic food;
• Sell 100 percent fair trade products; and
• No flora, fauna species impact from development.

In order to achieve this, they have set the following ten-year targets for all areas of operation:

• Transportation: Achieve companywide CAFÉ standard of 35 miles per gallon (EPA rated combined city/highway mileage) for all vehicles purchased by 2015.
• Emissions: Decrease greenhouse gas (CO2) emissions by 30 percent (baseline year 2000).
• Solid Waste: Divert from landfill 50 percent of all solid waste generated.
• Hazardous Waste: Generate zero hazardous waste.
• Water: Decrease water usage by 25 percent (baseline year 2000).
• Energy: Decrease fossil fuel usage by 30 percent (baseline year 2000); Increase renewable energy to 7 percent of total electricity usage.

Ecologix is described as a hybrid Environmental Management System as it includes aspects of compliance, sustainability and accountability. It is based on ISO 14001 Certification and the National Environment Performance [NEPT] Track programs and began with top management setting an environmental policy expressing commitment to compliance and continual improvement.

Planning for Ecologix was done by forming a cross-functional team to complete a comprehensive review of a facility’s environmental activities that have potential to interact with the environment. The structure of the EMS is indicated in Figure 2.

Figure 2: Structure of Xanterra’s Ecologix EMS

Xanterra addresses significant environmental aspects by developing environmental policies, setting objectives and measurable targets, implementing actions which can include activities such as inspecting a chemical storage area to ensure zero spills and provide a framework for continuous improvement (eg. reducing energy use by 10 percent each year).

Thus, Xanterra has a management structure that incorporates these objectives and targets into its programs and procedures. These translate into work instructions to train employees in the EMS and ensure competence to carry out their responsibilities. In terms of monitoring, everything is documented so that progress towards goals is continually checked and corrective action is taken when necessary. There are procedures to monitor and measure activities and for handling non-conformance. Periodic auditing annual management review of the efficacy of the whole system is completed.

Xanterra’s environmental performance is also subject to significant public scrutiny, and Gina describes operating in national parks as “operating under a microscope”. In order to improve transparency and public accountability, Xanterra produces web-based reports that include:

• Corrective Action Database;
• Ecometrix – measures of total resource useage, greenhouse gas emissions and solid waste generation; and
• Sustainability Reporting on the web as well as hard copies available in all guest rooms operated by Xanterra, with an opportunity for guests to comment on environmental performance.

They also have third-party certification and complete external audits through programs such as:

• ISO 14001 – ANSI – RAB;
• Florida Department of Environmental Quality (FDEQ);
• Clean Marina;
• Environment Protection Agency [EPA] Performance Track;
• US Green Building Council LEED (Leadership in Energy and Environmental Design) a nationally accepted benchmark for the design, construction, and operation of high performance green buildings;
• Marine Stewardship Council;
• Organic Fair Trade; and
• WasteWise / Energy Star.

Barriers to Innovation

Introduction of Xanterra’s innovative EMS system Ecologix was an extensive and costly exercise for the organisation. It also remains to be seen if it will translate into actual improvements in environmental performance. So not only was it costly, it was also risky.

The ISO 14001 standard upon which it is based is not prescriptive. ISO is a basic process framework; initially intended for the manufacturing/industrial sector. Whilst it requires EMS, regular audits, and commitment to continuous improvement, it does not require environmental performance levels to be met. It’s one thing to have an EMS in place (on the shelf) but it’s another thing to actually achieve changes – such as reductions in resource consumption. Essentially the effectiveness of ISO depends upon the will and intention of each company employing it.

Hence Xanterra have had to first of all gain top management support for the EMS program and then set about designing the program and implementing it with the support of all staff members. This whole process was scrutinized by public and private agencies with an interest in US parks.

It has also taken place within a highly competitive environment for the concession contracts in US parks. Concessioners not only have to be cost competitive, but must also demonstrate strong environmental performance. Hence it has been far from easy, yet they have made significant innovations in all aspects of their business and environmental performance.

Networks for Innovation

Xanterra procures almost $40 million annually of foodstuffs to meet the needs of its guests including:

Thus in addition to the certification and external collaborations that support innovation, Xanterra took the opportunity to engage its extensive procurement and supplier organizations’ to assist in the process of improving environmental performance.

By introducing the environmentally friendly procurement policy, Xanterra has been able to develop:

• A Green Procurement Program with goals and targets;
• A tool to determine if a product is environmental preferable;
• Guidance on how to purchase fuel efficient vehicles;
• Letters to contractors explaining their responsibilities;
• Capital expenditures environmental impact checklist;
• Policy for vendors on product packaging; and
• Green Seal certified products.

Xanterra through an extensive program of retrofitting and replacement in the areas of waste management, energy, buildings and transportation achieved considerable reductions in their energy footprint. In particular, buildings which account for the highest energy and resource use and generate the most solid, liquid and gaseous waste have been the focus of the Ecologix program. New designs and technologies have been incorporated into all “green’ buildings and suites, producing the following benefits:

• Ecological benefits;
• Decreased operating costs;
• Increased worker productivity;
• Raising the bar for market competitors;
• Shorter return on investment (RoI) periods;
• Recognition by US Green Building Council and local media; and
• Becoming the industry standard and guide for environmentally sustainable design and construction.

Summary

The overall benefits Ecologix flow not only to the environment but also to the business performance of Xanterra. Increased environmental compliance, corrective action, measurement and monitoring of ecometrix, certification and external auditing has placed the company in a position of leadership in environmental performance. The innovative green procurement program has led to reduced costs, liabilities and impact on the environment and for Xanterra created competitive advantage.

This case study is one out of three on Innovation for Sustainable Tourism.A later version of the case study has been published in book form.