The AEG Sustainability Program
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) (Sachs, 2015). 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. 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). AEG is one of the biggest event organizing firm and it is selected to assess the sustainability policy. AEG is based in Los-Angeles and is manages venues, international network of live music events, and sports franchises. The company is involved in promoting major sporting events and music concerts. The report will critically analyze and make recommendations on the sustainability policy of AEG that are based on the theories.
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.
Triple Bottom Line
Sustainability is often mentioned as a worthy goal of businesses, nonprofits and governments, yet measuring sustainability is easier said than done (Henriques & Richardson, 2009). 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. Triple Bottom Line is emerging because of its success in various businesses. It is a fact that most of the businesses are concerned with the profits but the social awareness amongst the people have led numerous organizations to participate in corporate social responsibilities. Triple Bottom Line helps the companies in achieving the financial returns, creating a positive social impact, and being environmentally sustainable. As the model covers all the aspects that are essential for the businesses to adopt theurefore, it is highly appreciated and accepted. 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).
Political
The political factors do effect the operation of the companies that involved in making arrangements for the events. Political factors can effect such businesses but the current political conditions of the company are favorable for the company and is helping them in achieving their goals.
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).
Technological
The company is in the favor of technological advancement and adopt the technological changes as they believe that they are important for the success of the business. The technological advancements has helped the company to grow and manage its operating functions in an effective manner.
Legal
The legal factors can also effect the company as some of the laws related to arranging an event are crucial and ignoring them can cause a lot of issues for the company. AEG abides all the rules that are necessary for them to conduct the operating activities. Such practices has not only improved working conditions of the company but has also helped the company in gaining the trust of its customers.
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).
Many people do not agree to the Triple Bottom Line to be effective in enhancing good social conditions. One of the main reasons is the Reductive Method which claims that the triple bottom line approach overlooks the social factors and focuses more on the economic and environmental factors (Scerri & James, 2010). In addition to it, the ‘Circles of Sustainability’ considers economic as a social domain, and is claimed to be more effective than the triple bottom line approach. Fred Robins in his book states that the biggest issue of TBL is its implementation in the practical world.
Analysis of AEG Sustainability Program
The corporate environmental sustainability program of AEG is called “AEG 1Earth”. The program helps the company to monitor the impact of its activities on the environment. It also focuses on setting goals and developing tools and strategies to improve its overall environmental performance. “The core elements of AEG 1Earth are 2020 Environmental Goals, AEG Ecometrics System and education and communication initiatives.” The company has launched these programs to derive a fruitful outcome from it and therefore, has a mission statement for the program which states “to reduce our company’s environmental impact and drive business value through sustainability” (AEG, 2016).
The company is focusing on completing its corporate social responsibility because of which it considers its current system to be beneficial for all the stakeholders. It should not be the only goal of the company as the corporate social responsibilities are not sufficient to market the events effectively. The sustainability program of AEG does not incorporate the strategies that can be effective in reducing the waste of energy and resources.
The sustainability program of AEG is effective because the company has not planned anything for short-term. Moreover, there are chances that the environmental conditions of the society worsen and the estimated plan of the company to participate in the sustainability of the environment kay not be sufficient at that time. There are several companies that are effectively participating towards the sustainability of the environment are successful in contributing towards it.
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).
The 2020 Environmental Goal of the company seems to be very effective as it covers several aspects. It focus on reducing the wastage of energy and other resources. The plan also has a goal of recycling which will keep the environment clean as much as possible. The current strategies of the company when mixed with these strategies in 2020, will be very beneficial for the company to attract numerous new customers towards them which will complete the goal of every organization. Though the plans for 2020 are furnished in an appropriate manner and the company is expected to achieve its goals but it must also be considered that the environmental challenges faced by the company will be much higher than the current situation. Therefore, the company must make estimations of the environmental challenges of that time and the years ahead to ensure proper implementation of the environmental sustainability program.
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). The triple bottom line approach is more beneficial for the company as it focuses on several aspects. The current approach of AEG is not very helpful in overcoming the adverse environmental impacts because it is more focused on providing social responsibility while completely ignoring the harmful effects that are caused by the events organized by them. On comparing the traditional approach with the Triple Bottom Line approach, it is observed that the Triple Bottom Line approach is more beneficial for the company as it will help the company in achieving all of its goals. The method will help them in focusing on all the three important factors of economics, social, and environment. AEG Company only requires to adopt the TBL in a proper manner and implement it efficiently so that it covers all the factors which will result in the success of the company.
As the company currently relies on in Ecometric approach it must make necessary alteration to serve all the purpose. The current approach adopted by the company is also beneficial in relation to the operational activities. Though, the company’s AEG Ecometrics system seems to be very similar to Triple Bottom Line in important respects (AEG Sustainability Report, 2015).
Education & Communication
The employee training programs of AEG includes sustainability strategies which helps them in understanding the impact of different operational activities on the environment. AEG is uniquely positioned to raise public awareness on environmental and sustainability issues because it has a platform to provide such messages. The company not only spread awareness through the events but also at different venues. The company even approaches the social media to spread such awareness. 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 play a role in serving the community where it operates. 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).
On analyzing the current approach of AEG, it seems that it is 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.
The major issue of the current AEG Ecometric system and sustainability program is that they are planned for long term while the company will be violating certain rules because of lack of short term planning. The company claims that it will make observations related to impact of the events on the environment. The results will help the company in developing a sustainability program but it still will not be very much effective because the environmental conditions will further deteriorate by that time. The main drawback of their current program is that it is unable to focus on the dangerous consequences of lack of short-term sustainability because of which the business of the company will be badly affected. In addition to it, there is a possibility that the company will lose its market share because of not focusing on the short-term sustainability programs. If AEG loses its market share now then it will be difficult for them to retain the same position in the market after the adoption of their long term environmental sustainability program.
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.
References
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].
Henriques, A., & Richardson, J. (2009). The Triple Bottom Line: Does It All Add Up. London: Earthscan.
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.
Sachs, J. D. (2015). The Age of Sustainable Development. New York City: Columbia University Press.
Scerri, A., & James, P. (2010). Accounting for Sustainability: Combining Qualitative and Quantitative Research in Developing Indicators. International Journal of Social Research Methodology, 13(1), 41-53.
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].
