Introduction
Sustainability should be of great concern to all companies in the events industry. Their business activities have a great impact on the environment. There are many new developments in sustainability, both in theory (including an increasing body of academic literature) and in practice (such as new industry guidelines, accounting frameworks like Triple Bottom Line, and corporate certification schemes). Corporate management in events companies is, of course, in the best position to make business decisions consistent with the growing awareness of sustainability issues. However, other corporate stakeholders can also become engaged when necessary to assure that their companies understand and practice corporate social responsibility.
The following is an assessment of one company (AEG) and its sustainability policy in the context of these new developments.
Discussion
In recent years, people have started caring more about sustainability issues with event companies. The impacts of large events (like music festivals, sporting events and trade shows and conferences) have become the focus of much research attention, and the social, cultural and environmental impacts of such events appear to be gaining in importance (Mair and Whitford, 2013, p.15).
Today it is clear that there is an undeniable connection between large events and sustainability issues. Any given event might be “producing massive amounts of waste with zero recovery efforts, burning hundreds of gallons of diesel with zero efficiency or alternative energy efforts, throwing a festival in majestic natural spaces with zero stewardship efforts, and maintaining few positive relationships with the host community” (Stettler, 2011, p.2). Oppositely, a properly managed event in today’s world is one in which “sustainability awareness, design and decision making are fully integrated into its management logistics, operations, and production” (Stettler, 2011, p.9)
Sustainable event management has been evolving and is rapidly growing in recognition and acceptance, both in the national and international event industries (Stettler, 2011, p.9). As their activities greatly affect the environment, in addition to their social and economic impacts, more and more event companies have begun applying or considering a sustainability policy as part of or in connection with making any decision in their companies. Apart from private companies, local and national governments have also begun forming departments to specialize in events management and the related environmental and sustainability issues. For example, the International Centre for Research in Events, Tourism and Hospitality at Leeds Beckett University in the United Kingdom has been rated as ‘world-leading’ and ‘internationally excellent’ in this field. “With almost thirty full-time academic members of staff, the Centre is probably the world’s largest group of specialist researchers and educators with an interest in festivals and events” (UK Centre).
Triple Bottom Line
Sustainability is often mentioned as a worthy goal of businesses, nonprofits and governments, yet measuring sustainability is easier said than done. During the 1990s, John Elkington was among the first who attempted to quantify sustainability by putting forth a totally new framework for gauging the performance of an enterprise (public or private). His new and innovative accounting framework, which he called the Triple Bottom Line, went beyond traditional indicators of profits and financial gains to also include the review of environmental and social considerations. Through a more comprehensive analysis of the interrelated dimensions of “profits, people and the planet”, Triple Bottom Line reporting can be used as a valuable tool towards understanding and accomplishing sustainability goals (Slaper and Hall, 2011).
While some have criticized Triple Bottom Line as too conservative and not in keeping with significant progress that has been made since the concept was first written about (Sridhar and Jones, 2013), interest in Triple Bottom Line accounting has in recent decades been growing across all profit and nonprofit and even governmental sectors, and in many instances is now official government policy (UK Centre, 2016). In short, many public and private organizations have adopted the Triple Bottom Line sustainability framework to track their performance in these areas (Slaper and Hall, 2011).
Economics is one of the main reasons for event companies to keep running. Profits drive businesses, but sometimes it is really not easy for them to find the balance of it, even if they may have the guidelines to follow. Competition between companies always happens. To ensure the events companies are following the guidelines with sustainability and environmental conservation requirements means competition is even harder and may even seem unachievable. Costs will normally increase if they focus too much on it. Skeptics would say that there is a price to pay for sustainability. Triple Bottom Line as the guideline can assist each company to become a sustainable event company. Triple Bottom Line can act as the guideline that connects economic, social and environment concerns (Slaper and Hall, 2011).
Economic
Economics, or profits from business operations, is the part that most of companies care about. Like any other business, an event company is running their business for profit. While seeking to make profits, however, any company should also adopt a responsible corporate attitude and consider the social and environmental impacts of its activities. After all, without an environment and social structures and populations to support them, they cannot run their businesses for very long. Economic variables are variables that deal with the bottom line and the flow of money, and can include income or expenditures, taxes, business climate factors, employment, and business diversity factors (Slaper and Hall, 2011).
Social
“Social” represents the relationship between the public and a company. Any company needs to provide a good brand impression to the public and show them they are a sustainable event company. To make a good brand impression will also help to bring more business and help their economic results. Social variables refer to social dimensions of a community or region and could include measurements of education, equity and access to social resources, health and well-being, quality of life, and social capital (Slaper and Hall, 2011).
Environment
Environment is the area most conditioned on Triple Bottom Line. Because of private companies’ putting too much focus on economic results, the environmental area is normally the area of greatest shortcomings. Following the Triple Bottom Line, every company should put efforts into using environment friendly resources, such as recycling resources, and taking all other possible steps to protect the environment. Many companies waste too much energy (or food or other resources) and make too much unnecessary pollution. Environmental variables should represent measurements of natural resources and reflect potential influences to its viability and could incorporate air and water quality, energy consumption, natural resources, solid and toxic waste, and land use/land cover. Ideally, having long-range trends available for each of the environmental variables would help organizations identify the impacts a project or policy would have on the area (Slaper and Hall, 2011).
AEG
AEG is one of the leading events companies in the world. AEG “owns, controls or is affiliated with a collection of companies including over 100 of the world’s preeminent facilities” (AEG, 2016). In 2010, AEG became the first company of its kind to issue an environmental sustainability report, and in 2015 the company issued its fourth annual sustainability report covering its 76 owned or managed venues (AEG 2015 Sustainability Report, 2016).
While neither the AEG website nor AEG’s 2015 Sustainability Report (the “2015 Sustainability Report”) contain specific mentions of using Triple Bottom Line accounting, both reference the company’s own system called “AEG Ecometrics,” which in principle seems to be very similar to certain aspects of Triple Bottom Line. “AEG’s sustainability team relies on Ecometrics data analysis to understand and manage the company’s aggregate environmental footprint. Ecometrics also helps us evaluate the success of our initiatives and develop best practices” (AEG, 2016).
AEG, a wholly-owned subsidiary of The Anschutz Corporation, was formed in 1996 and is based in Los Angeles, California, USA. Events promoted by AEG include major sporting events and music concerts. AEG also holds ownership interests in numerous professional sports franchises and/or sports and music venues. Their other services include event planning and development, product promotion and organizing educational training. Moreover, AEG has some training programs to attract college graduates to join their company.
Analysis of AEG Sustainability Program
Upon reviewing AEG’s website and the 2015 Sustainability Report, it seems fair to say that AEG has come to understand how its event business activities may affect the environment, and rightfully accepts its responsibilities towards the environment, and does practice corporate social responsibility (“CSR”). In fact, AEG might be considered a leader in CSR and a model for other companies.
AEG’s corporate environmental sustainability program is called “AEG 1Earth”. Through this program, the company monitors the environmental impact of its activities, sets goals, and develops tools and strategies to improve its overall environmental performance. “The core elements of AEG 1Earth are our 2020 Environmental Goals, AEG Ecometrics System and education and communication initiatives.” The program’s mission statement is “to reduce our company’s environmental impact and drive business value through sustainability” (AEG, 2016).
2020 Environmental Goals
In the year 2010, AEG created its 2020 Environmental Goals, a set of eight performance goals in five areas: Energy & Climate; Water; Waste & Recycling; Responsible Purchasing; and Education & Communication. For example, the 2020 performance goals in Energy and Climate are a 20% reduction in greenhouse gases per attendee, and that 15% of all energy used will be from renewable sources. The 2020 Water goal is to reduce water usage by 20% per attendee from 2007 levels. The 2020 Waste & Recycling Goals include diverting 25% of all waste from landfills, and generating zero RCRA-regulated waste. The 2020 Responsible Purchasing Goal is spending 50% of total budget on designated high-impact products and services on environmentally preferable options. And the 2020 Education & Communication goal is that 100% of AEG venues will include environmental messaging and information available to guests, employees and partners (AEG, 2016).
AEG Ecometrics and Comparison to Triple Bottom Line
The company measures its progress towards the 2020 Environmental Goals by using its AEG Ecometrics tracking system. Ecometrics allows measurement of more than 86 specific data points, from energy consumption to food composted.
Triple Bottom Line differs from traditional reporting frameworks as it includes ecological and social measures that can be difficult to assign appropriate means of measurement (Slaper and Hall, 2011). According to Siegert, John Elkington developed the Triple Bottom Line approach in 1998. “The economic bottom line involves the profits after the depreciation of capital and deduction of costs. The environment bottom lines involve an increase in the natural capital. This includes the renewable, replaceable and substitutable natural value. The social bottom line involves efforts to increase social capital” (Siegert, 2013). There is a connection between economic, social and environment. The Triple Bottom Line has shown how these three parts are connected with each other. Sustainability depends on harmony of each part of the system, including social, economic and environment (Sridhar and Jones, 2013). Triple Bottom Line assumes that sustainability can work as a result of balancing the economic, social and environment factors. “All economic activity should be bent towards social progress and this must be achieved within environmental limits” (O’Riordan and Voisey, 1998, p.188). Every movement for the company should also consider the environment, and not just focusing on the profits.
While neither the AEG website nor the 2015 Sustainability Report make specific mention of the Triple Bottom Line framework, the company’s AEG Ecometrics system seems to be very similar to Triple Bottom Line in important respects (AEG 2015 Sustainability Report). Triple Bottom Line is an accounting framework that incorporates three dimensions of performance (social, environmental and financial). The AEG Ecometrics tracking system shows similarities to Triple Bottom Line in the environmental category, and possibly in the social category as well. Comparing Triple Bottom Line to AEG’s Ecometrics Tracking system, there are many similarities to be found. In concept, certainly, AEG is attempting to accomplish through its own system many of the same goals as are supported by Triple Bottom Line.
Education & Communication
AEG includes sustainability in many of its employee training programs and helps employees fully understand the environmental impact of their various jobs, whether in the board room or in the field. With its involvement in many of the world’s most high-profile events, AEG is also uniquely positioned to raise public awareness on environmental and sustainability issues. And AEG sends these important messages not only at its venues, through physical deliveries, displays and presentations, but also through social media and online. AEG also hosts major events of its own for Earth Day, Earth Hour and America Recycles Day, all of which are growing in recognition within the United States and being copied in Europe and in other nations.
AEG is also committed to doing its part in the communities in which it does business. Over the last 10 years, AEG has contributed over $65 million in direct financial and in-kind support of charitable, community and civic programs, with tens of millions more raised at affiliated venues and companies (AEG, 2016).
AEG seems to be living up to the mission statement “to reduce our company’s environmental impact and drive business value through sustainability.” Through its sustainability program (AEG 1Earth), AEG monitors the environmental impact of its activities, sets goals, and develops tools and strategies to improve its overall environmental performance. “The core elements of AEG 1Earth are our 2020 Environmental Goals, AEG Ecometrics System and education and communication initiatives” (AEG). The AEG Ecometrics System is similar in many ways to the Triple Bottom Line framework and seems to share the same goals.
In summary, with regard to corporate social responsibility in general and sustainability in particular, my assessment is that AEG is a leader in the events industry and a model for other companies in any industry to follow (AEG, 2016).
Conclusion and Recommendation
Among event companies in particular, AEG stands out not only as a sales and profits leader in its industry, but as a leader in the commitment to sustainability. The AEG 1 Earth corporate sustainability program, featuring detailed annual sustainability reports, the 2020 Environmental Goals and the Ecometrics tracking system shares much in common with Triple Bottom Line reporting, both in theory and in practice. AEG is a true leader in environmental protection, and a model for other companies to follow.
Bibliography
AEG. [Online] Available at: <http://www.aegworldwide.com/> [Accessed 20 Jan. 2016].
AEG’s 2015 Sustainability Report. 2016. [Online] Available at: <http://www.aegworldwide.com/sustainabilityreport> [Accessed 20 Jan. 2016].
Mair, M. and Whitford, J. (2013). An exploration of events research: event topics, themes and emerging trends. International Journal of Event and Festival Management, (4)1. Emerald Publishing Group. [Online] Available at <www.emeraldinsight.com/1758-2954.htm> [Accessed 20 Jan. 2016].
O'Riordan, T. and Voisey, H. (1998) The transition to sustainability, the politics of Agenda 21 in Europe. Journal of Environmental Policy and Planning, 1(2), pp.188-189.
Siegert, L. (2014). Sustainable Development Approaches in the Food and Beverage industry. Grin Verlag. Munich, Germany.
Slaper, T. and Hall, T. (2011). The Triple Bottom Line: What Is It and How Does It Work? Indiana Business Review. [Online] Available at <http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html> [Accessed 20 Jan. 2016].
Sridhar, K. and Jones, G. (2013). The Three Fundamental Criticisms of the Triple Bottom Line Approach: An Empirical Study to Link Sustainability Reports in Companies Based in the Asia-Pacific Region and TBL Shortcomings. Asian Journal of Business Ethics, 2 (1):91–111.
Stettler, S. (2011)."Sustainable Event Management of Music Festivals: An Event Organizer Perspective" (2011). Dissertations and Theses. Paper 257. [Online] Available at <http://pdxscholar.library.pdx.edu/open_access_etds> [Accessed 20 Jan. 2016].
UK Centre for Events Management. Events & Festival Research. . [Online] Available at
<http://www.eventsandfestivalsresearch.com/> [Accessed 20 Jan. 2016].
