Disney Sustainability

4/20/2016

Presented By: Hayley Bordui, Daniel Chang, Caroline Watkins

Corporate Sustainability

Analysis:The Walt Disney

Company

Accounts for greatest amount of waste and energy

consumption

The Walt Disney Company is a globally known company successful in four business segments each with environmental implications

Segment Overview:

Environmental Takeaway:

Media Networks: Broadcasting, radio, cable, publishing, & digital businesses

43.35%

% of total revenue in 2015:

Consumer Products: Physical products, like toys and games, along with digital apps

8.77%

Studio: Movies, music, and broadcast shows for

over 90 years

4.37%

Theme Parks & Resorts: Disney parks, like Magic

Kingdom, & resorts across the world

31.51%

Electricity, materials usage, and GHG during production are

greatest impacts

Packaging, production, and

transportation are major environmental

concerns

Major impact from consumer

products over broadcasting technologies

Recommendation

Focus on integrated marketing & pursuing

additional certifications

Benefits to our Recommendation

Concerns

Carbon Footprint

Waste/Water Generation

Certifications

Strengths

Cultural Integration

Transparency & Ambition

Overview

Industry analysis

SWOT Analysis

Our presentation will focus on analyzing the various aspects of Disney’s sustainability efforts & identifying improvement opportunities

The Walt Disney

Company

Universal Studios

Six Flags Entertainment

Corp

SeaWorld Entertainment

Inc.Carbon

Footprint

Certifications and Awards

Waste Management

Reduced Energy

ConsumptionTransparency

The Walt Disney Company is the clear leader in sustainability among its main competitors in the theme park & resort industry

Overview Strengths Concerns Recommendation

Sources: environmentalleader.com, prnewswire.com, greenisuniversal.com, sustainablebrands.com

Disney’s environmental strategies & progress have shown significant strength while still possessing several growth & improvement opportunities

- Transparency- Ambition- Sustainable integration into entire

business- Well-balanced initiatives

- Become first carbon neutral theme park corp

- Use 100% renewable energy- Proactive approach to business

expansion- ISO 14001 certification- Long-term sustainability for children

- ESPN’s declining market share and profits

- Globalization- Emergence of take-back legislation - Business growth

-

- Carbon footprint- Waste generation- Lack of sustainability in marketing- Size

Strengths Weaknesses

Opportunities Threats

“The land itself—should be as dear to us all as our political heritage and our treasured way of life. Its preservation and the wise conservation of its renewable resources concerns every man, woman and

child whose possession it is.” – Walt Disney

Overview Strengths Concerns Recommendation

Sources: waltdisneycompany.com, foxsports.com, disneytouristblog.com

Overview Strengths Concerns Recommendation

Sources: environmental.ucla.com, nature.org, youtube.com, californiahydrogen.com, triplepundit.com, theguardian.com

Disney has profoundly incorporated sustainability into its culture & into its interactions with external partners

Soy-based biodiesel for

trains

Bakery recycles

expired dough into

livestock feedImagineer taskforce

Partnership with Goodwill to recycle uniforms and shoes

Wilderness Preserve in the

Everglades with restored

wetlands 1 MW fuel cell at PixarSelf-imposed carbon

tax

Disney has demonstrated unmatched transparency & ambition in regards to its environmental impact & strategies

Overview Strengths Concerns Recommendation

Transparency

Ranked 3rd in world for CSR reputation w/ transparency being major

metric

Offers annual environmental reports, progress

reports, & strategies

Communicates progress &

initiatives through

outlets like the Carbon Disclosure

Project

Offers contact

information & communication outlets for its different

sustainability teams

Educates through

Kids+Nature program &

guest experiences

Ambition

Reduce Net GHG

emissions to 50% of 2012

levels by 2020 & move

towards zero net emissions

Achieve 60% waste

diversion by 2020, and

achieve zero waste long

term

Maintain water

consumption at 2013 levels

through 2018 & integrate

new plans for future sites

Proactively contribute

outside scope of business operations,

Conservation Fund Grant

Communicates

w/customers, employees, & shareholders to constantly

improve

Sources: 2015 Disney Environmental Goals & Targets, sustainablebrands.com

Disney has made substantial progress in reaching net emissions goals, but still accounts for a significant annual carbon footprint

Overview Strengths Concerns Recommendation

2015 Electricity Consumption: 5,459,837 MWh

Enough energy to power 41,619 US houses for an entire year!

Using conversion factors of CO2, CH4, and N2O, and assuming the FRCC power grid,

energy consumption equates to 3,067,173 tons of CO2 equivalents

Direct CO2 emissions for Disney: 1,140,000 tons

4,207,173 tons of CO2 in 2015!

Carbon Footprint

Year2012 2013 2014 20150

0.20.40.60.8

11.21.41.61.8 1.71

1.36 1.26 1.14

Net CO2 EmissionsMillion metric tons CO2

Disney has the goal of reducing net emissions to .855 by 2020, thus requiring annual net

emissions reductions of 5.00% from 2015 levels over the next 5 years.

Sources: 2015 Disney Citizenship Performance Summary, EIA.gov, P316 slides

Disney has taken measures to reduce its carbon footprint, but faces major challenges in mitigating scope 3 emissions

Scope 1• Direct emissions from its transportation

network such as cruises, buses, monorail, & airport transport

• Direct emissions related to operations of parks, resort buildings, and media production

Scope 2• Purchased electricity & energy to operate

businesses, parks, & resorts• Purchased heating & air conditioning for

buildings

Scope 3• Environmental impact resulting from millions

of people traveling across the world to resorts & parks

• Emissions & waste related to manufacturers of consumer products

• Contracted waste disposal & water treatment

-Avoid emissions for future growth operations, major R&D investment-Replace high carbon fuels with low carbon alternatives-Set internal carbon price to incentivize innovation of business segments-Purchase the necessary offsets to reach targets

-Utilize waste stream to create energy from aerobic digestion -Landfills and incineration with energy recovery-Created energy guidelines to influence efficient cast member behavior.-Grow renewable energy portfolio

-Enforce code of conduct & labor standards for manufacturers-Scope 3 emissions are difficult to gain control over, and this should be of major concern for Disney moving forward

Disney mitigation actions & strategies

Overview Strengths Concerns Recommendation

Sources: 2015 Disney Citizenship Performance Summary, ghgprotocol.org

Example- solar power farm for Epcot

Overview Strengths Concerns Recommendation

Sources: Bay News 9

22 Acre Facility48,000 Solar Panels

Disney has committed to water and waste management initiatives, but with continued growth, it faces the challenge of reducing consumption

Overview Strengths Concerns Recommendation

Sources: 2014 Disney Citizenship Performance Summary, temporarytoursist.com, orlandosentinel.com

Maintain water

consumption levels

7.08 billion gallons

Excludes Disney

Stores and leased assets

Shanghai148,341,000 visitors in

2014

314,551 tons baseline year

1%

increase in

diversion

rate

Disney works closely with the EPA, but has not prioritized certifications

Overview Strengths Concerns Recommendation

Sources: EnvironmentalLeader.com, EnergyStar.gov, HPAC Engineering, USGBC.org, DisneyDigitalStudio.com, Towards Life Cycle Sustainability Management, 2014 GEELA Program

• 1996-98 Implemented EPA Green Lights Program

• 2 Energy Star Labeled Buildings• The Disney Channel Building

(415,000 sq. ft.)• Team Disney Anaheim

(342,000 sq. ft.)• Energy Star Labeled bakery

equipment• 2014 EPA Food Recovery

Award

• 4 LEED certified buildings:• 1 Certified Starbucks

Anaheim• 2 Silver• Cinemark Oakley

Stations• Aulani Resort

• 1 Platinum Starbucks Disney Village

• ISO9001

• ISO14001

• Conducts LCA as part of Life Cycle Management Approach to Design of Resorts

• Recipient of CA Governor’s Environmental and Economic Leadership Award

We recommend Disney pursue ISO 14001 certification & additional LEED certifications, in addition to better incorporating sustainability into its branding

Overview Strengths Concerns Recommendation

ISO 14001

Certification

Standard of LEED

Certification for New Buildings

rd

Social Media

Disney Channel

Pixar Short

Certifications Branding Sustainability

We recommend Disney pursue ISO 14001 certification & additional LEED certifications, in addition to better incorporating sustainability into its branding

Overview Strengths Concerns Recommendation

Sources: iso.org, Huffington Post, P316 slides

Educate a large market of consumers to create environmental consciousness, and reach younger consumers

Gain a recruiting advantage to attract high-level millennial talent & boost employee empowerment

Further relations with NGO’s to foster collaboration over hostility & alleviate potential scrutiny

By pursuing both of these strategies, Disney can enhance its brand and instill a memorable association between Disney &

the environment in the minds of its millions of consumers

ISO & LEED

Integrated branding

Already ISO 9001 certified & have experience in LEED certifications

ISO 14001 could enable regulatory proactivity & lead to operating cost savings

Minimize environmental impact of future structures & hasten water usage goal progress

Benefits

Appendices

Carbon Footprint Appendix A - Carbon Footprint Calculations

Competitive Analysis

SWOT

Transparency & Ambition

Sustainable Integration

Scope 1, 2, 3 & Strategies

Waste

Certifications

Benefits of certification & branding focus

Works ConsultedAppendix B - EPR & Takeback Legislation

Suggested strategy moving forward

Appendix C - Competitive Analysis

Appendix D - Competitors’

ProgramsAppendix E - Unique

Initiatives

Appendix F - Business Growth & Shanghai

Appendix G - Water Conservation

Appendix A - Carbon Footprint Calculations

Sources: 2015 Disney Citizenship Report, EIA.gov

Appendix B – Take-Back Legislation & EPR

Sources: Electronics Takeback Coalition, INSEAD Social Innovation Center

Current Situation:

- Current take-back legislation does not directly apply to any of Disney’s current operations

- Disney has implemented eco-effective strategies, such as collection of all clothing & costuming to send to charities such as Goodwill, but they currently do not have any EPR system in place to be accountable for its tangible products all the way through their entire lives

- Disney manufacturers of its consumer goods segment also face no regulation specifically for the types of products Disney offers

Future possible implications of take-back:

- Regulations could affect Disney’s consumer product segments & other segments, thus affecting contract negotiations with suppliers who have to enact regulatory requirements

- Some legislation is inflicting responsibility on a single entity & choosing the entity to be brand owners instead of manufacturers

- Profit opportunities could exist, specifically for implementing take-back for its business e-waste

- Barbara Kyle, national coordinator for Electronics Takeback Coalition, “If you are taking back business e-waste – like desktops, laptops and servers – you can make money here.”

The Walt Disney

Company

Universal Studios

Six Flags Entertainment

Corp

SeaWorld Entertainment

IncCarbon

Footprint Reduction

34% (50% by 2020)

40% (food production

only)

N/A 35 metric tons

Certifications and Awards

LEED, ISO9001, Energy Star,

LCA

Varies Varies Wildlife Conservation

Waste Management

49% diversion (60% by 2020)

19% diversion N/A N/A

Reduced Energy

Consumption

1 MW, 10% (2009-2013)

2.3 million kwh N/A N/A

Transparency N/A N/A

Appendix C - Competitive Analysis

Sources: environmentalleader.com, prnewswire.com, greenisuniversal.com, sustainablebrands.com, aboutdisneyparks.com, coaster101.com, thewaltdisneycompany.com

Appendix D – Competitors’ Programs

Sources: thewaltdisneycompany.com, greenisuniversal.com, coaster101.com, seaworldparks.com

SeaWorldPlantBottle

Universal StudiosGreen is Universal

Six Flags Six Flags

Unplugged

DisneyEnvironmental Stewardship

Sources: environmental.ucla.com, nature.org, youtube.com, californiahydrogen.com, triplepundit.com, theguardian.com

Soy-based biodiesel for

trains

Bakery recycles

expired dough into

livestock feedImagineer taskforce

Partnership with Goodwill to recycle uniforms and shoes

Wilderness Preserve in the

Everglades with restored

wetlands 1 MW fuel cell at PixarSelf-imposed carbon

tax

Appendix E – Unique Initiatives

Challenges Opportunities

Experience

Partnership with

Government

Informed Consumers

Competition

Attendance Surges

Cost-Cutting Issues

Appendix F – Business Growth & Shanghai

Sources: bloomberg.com

300 Million Potential Visitors

Appendix G – Disney & Water Conservation

Sources: 2015 Disney Citizenship Report, Disney Environmental Goals & Targets

Maintain water consumption at

2013 levels through 2018

Goal2012: Unreported

Water Usage

2013: 6.93 billions gallons

2014: 6.89 billions gallons

Current StrategiesAdopted water conservation plans at all

owned parks & resorts

Working diligently to identify where majority of water usage takes place

Executing employee awareness & engagement campaigns

Implementing water conservation designs into all new structures

Works Consulted

https://ditm-twdc-us.storage.googleapis.com/envirogoalsandtargets.pdfhttp://www.statista.com/statistics/193140/revenue-of-the-walt-disney-company-by-operating-segment/http://www.ghgprotocol.org/files/ghgp/public/FAQ.pdfhttp://www.sustainablebrands.com/news_and_views/organizational_change/sustainable_brands/google_bmw_disney_microsoft_once_again_top_lhttp://www.baynews9.com/content/news/baynews9/on-the-town/article.html/content/news/articles/cfn/2016/2/26/disney_s_new_solar_f.htmlhttp://www.disneytouristblog.com/3-5-billion-disney-world-expansion-2/http://www.iso.org/iso/iso_14001_-_key_benefits.pdfhttp://www.huffingtonpost.com/john-friedman/sustainable-business_b_1576400.htmlhttp://www.electronicstakeback.com/2015/05/06/is-there-a-business-case-for-product-take-back/https://flora.insead.edu/fichiersti_wp/inseadwp2010/2010-71.pdfhttps://ditm-twdc-us.storage.googleapis.com/FY15-Data-Table-Final.pdfhttp://www.environmentalleader.com/2015/04/30/disneylands-zero-waste-efforts-earn-epa-award/http://www.environment.ucla.edu/newsroom/making-the-magic-more-sustainable-at-disney-parks-and-resorts/http://hpac.com/building-controls/how-disney-saves-energy-and-operating-costswww.usgbc.orghttp://www.calepa.ca.gov/awards/GEELA/2014/Program.pdfhttps://www.energystar.gov/index.cfm?fuseaction=labeled_buildings.showResults&filter_b_id=all&q=Disneyhttp://disneydigitalstudio.com/2372/digital-studio-services-achieves-iso-9001-certification/http://link.springer.com/chapter/10.1007%2F978-94-007-1899-9_22

Works Consulted

http://www.sustainablebrands.com/news_and_views/marketing_comms/caitlin_kauffman/seaworld_launches_transparency_campaign_wake_blackfihttp://www.greenisuniversal.com/learn/about-us/theme-parks/http://www.prnewswire.com/news-releases/universal-studios-hollywood-adds-innovative-new-energy-program-to-reduce-carbon-emissions-120058269.htmlhttp://corporate.comcast.com/our-values/environment/green-is-universalhttp://www.environmentalleader.com/2014/07/14/seaworld-uses-cokes-plantbottle-sustainable-packaging/https://www.youtube.com/watch?v=BAkAC-dZj9khttp://californiahydrogen.org/sites/default/files/Entertainment.pdfhttp://www.theguardian.com/sustainable-business/carbon-emissions-tax-microsoft-disney-shellhttp://temporarytourist.com/how-many-people-go-to-disney-world-every-day/http://www.orlandosentinel.com/travel/attractions/the-daily-disney/os-disney-parks-worldwide-attendance-2015-story.htmlhttps://aboutdisneyparks.com/about/awards/disney-recognized-energy-conservationhttp://www.coaster101.com/2012/01/12/going-green-six-flags/http://www.bloomberg.com/news/articles/2015-07-09/shanghai-disneyland-is-customized-for-the-chinese-family