Case study: How Cathay Pacific promotes sustainable sourcing

What are the material issues the company has identified?

In its 2018 Sustainable Development Report Cathay Pacific identified a range of material issues, such as customer safety, biodiversity, resources and waste management, occupational health and safety, employee welfare. Among these, promoting sustainable sourcing stands out as a key material issue for Cathay Pacific.

Stakeholder engagement in accordance with the GRI Standards                

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Cathay Pacific engages with:

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Cathay Pacific engaged with its stakeholders through surveys, focus groups, interviews, publications, websites, social media and face to face meetings.

What actions were taken by Cathay Pacific to promote sustainable sourcing?

In its 2018 Sustainable Development Report Cathay Pacific reports that it took the following actions for promoting sustainable sourcing:

• Implementing a Supply Chain Sustainability Code of Conduct
• Cathay Pacific’s suppliers are required to declare that their products and services comply with its Supply Chain Sustainability Code of Conduct. The CoC describes Cathay Pacific’s minimum environmental and social requirements including:
  • Legal and regulatory compliance
  • Not employing under-age workers/child labour
  • Not employing forced labour
  • Health and safety in the workplace
  • Protection for the environment
  • Provision of proper compensation and appropriate working hours for employees
  • Respect for employee rights and not discriminating against employees
  • Sharing standards with sub-contractors
  • Maintaining high ethical standards
  • Communicating openly and effectively with employees
• This CoC is available internally to Cathay Pacific’s global offices and shared with its suppliers, both locally in Hong Kong and to those based in the rest of the world. Cathay Pacific actively works with suppliers who share its standards and manages risks related to its supply chain through continuous collaboration with its suppliers in accordance to this CoC. In the event that a supplier has fallen short of the requirements, Cathay Pacific reviews the relationship and shortfall on a case by case basis and proceeds accordingly. Cathay Pacific has also developed a balance-rated scorecard for procurement to measure suppliers’ performance in six different areas: Costs, Innovation, Satisfaction, Quality, Assurance of supply and Sustainability.

• Sourcing sustainable seafood
• According to World Wide Fund (WWF) Hong Kong, about 90% of commercially important fisheries are either fully or over-exploited globally. While awareness on choosing sustainable seafood to adopt responsible and sustainable practices has increased over the years, fish stocks remain threatened and some are on the verge of collapse. As a company that regularly serves fish to its customers and staff Cathay Pacific has been proactively addressing this challenge through responsible sourcing for almost a decade. Cathay Pacific is a corporate member of WWF and shares the same values and approach in sourcing certified sustainable seafood on selected routes. Since 2010, the food served to Cathay Pacific’s Economy Class passengers on its flights from European ports has come from sustainable sources, such as those certified by the Marine Stewardship Council (MSC). Recognising the need to conserve certain species that are endangered due to the problem of overfishing, Cathay Pacific established its internal Sustainable Food Policy in 2011 to provide guidance for its purchasing decisions. Cathay Pacific opts out of purchasing specific unsustainable food items and asks for information with regards to where the food was originally sourced. In 2018, Cathay Pacific Catering Services (CPCS) purchased a total of 417 tonnes of certified sustainable seafood to protect the marine ecosystem, a 8% increase from 2017. It is also Cathay Pacific’s corporate policy not to serve shark fin soup either inflight, at Cathay Pacific City, Cathay Dragon House or at any corporate events or meals which are organised or subsidised by the company.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 308-1 New suppliers that were screened using environmental criteria

2) Disclosure 414-1 New suppliers that were screened using social criteria

Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.

Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:

• Sustainable Development Goal (SDG) 5: Gender Equality
• Targets: 5.2
• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.8
• Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
• Targets: 16.1

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.
References:

1) This case study is based on published information by Cathay Pacific, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to Cathay Pacific: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.