Companies focus on corporate responsibility, in part, to land conventions and new business

A compressed natural gas (CNG) limousine is displayed during a tour of MGM Mirage’s CityCenter project Wednesday, Nov. 18, 2009. All the limos at the Aria will be CNG powered, a representative said. Properties in the $8.5 billion project will open next month.

Green Energy Limousines at Aria

A compressed natural gas (CNG)-powered limousine is shown at the Aria porte cochere Thursday, July 19, 2012. Aria has 29 CNG-powered limousines. Bellagio and Mirage also have CNG-powered limousines. Launch slideshow »

Sun coverage

Big corporations focus on environmental initiatives, philanthropy and workplace diversity in part because it’s the right thing to do.

But they also care about corporate citizenship because it helps them land business.

Las Vegas resort companies are well aware that leisure travelers, companies and groups are increasingly looking to book meetings and conventions at socially conscious venues.

That’s according to Michael Dominguez, MGM Resorts International senior vice president of sales and chairman-elect of Meeting Professionals International, a group of convention industry officials that is studying the corporate responsibility movement.

Much of the trend is driven by tech-savvy millennial generation consumers born after about 1980.

“What we see on the leisure component, with the changing demographic, especially with the millennial and the Generation X audience starting to travel more and becoming more of our core consumer, is they care more about (corporate responsibility) than any generation we’ve seen,” Dominguez said.

Not only do socially aware groups want to meet in “green” convention centers, they also want to reduce environmental impact on host cities.

“Many corporate boardrooms are going through these same dialogues,” Dominguez said. “Corporations today are really starting to focus on their carbon footprint and how they impact a community, especially when they’re moving large audiences of 10,000 people to a destination.”

Attracting socially conscious customers is requiring Las Vegas hotels and meeting space providers not only to step up their game in terms of social responsibility, but also to publicly disclose how they measure up or risk losing business.

“Our largest customer, IBM, would not even be with us if we did not have this type of initiative,” Dominguez said.

Last month, in a little-noticed development that could have big implications for public companies, the Nasdaq stock exchange joined four other stock exchanges around the world to create an initiative to press for more corporate transparency on issues such as the environment, philanthropy and workforce diversity. It isn’t a mandate, but it’s a signal that corporate social responsibility issues are being elevated to a level that more CEOs and companies will have to deal with on a regular basis. In particular, investors now have more ammunition to demand that companies regularly report progress on social responsibility.

Elevating corporate citizenship issues to front-burner status may take some getting used to for companies accustomed to focusing solely on the bottom line. On the other hand, for some of the world’s largest corporations, prioritizing social responsibility is nothing new.

In the gaming industry, diversity, philanthropy and environmental sustainability initiatives have been under way for decades. Some are carried out quietly while others are promoted with announcements and events. Some are voluntary. Others are mandated by gaming regulators.

Las Vegas Sands Corp. held an event last week at the Venetian and the Palazzo to promote its inaugural Environmental Report. The company said it is working to reduce carbon emissions and water use at its properties.

Caesars Entertainment Corp. issued a similar report in February that said the company is on track to reduce its carbon emissions by 10 percent next year from 2007 levels.

Wynn Resorts Ltd. also has worked on environmental issues, and all the big casino operators are regularly honored for achievements in diversity.

Still, despite achievements, only one of the big Las Vegas casino operators has formally elevated diversity, philanthropy and environmental issues to the level of its board of directors, where the most important company decisions are made.

MGM Resorts International got serious about diversity in the early 2000s when the company, then called MGM Grand Inc., came under fire from the NAACP for its diversity practices and a state Gaming Control Board member started asking companies about a lack of minorities in their executive ranks. All of it served as a wake-up call, and over time, MGM Resorts International established formal diversity training programs, mandated minority participation in purchasing and contracting and established a board of directors Diversity Committee chaired by former U.S. Labor Secretary Alexis Herman.

In 2002, MGM Resorts started issuing annual diversity and philanthropy reports. The company has since combined the documents and added an environmental achievement report. The most recent was issued July 11.

MGM Resorts executives said the report illustrates how corporate responsibility has been ingrained in the company, thanks in large part to Chairman and CEO Jim Murren and Herman. Herman’s committee is now called the Corporate Social Responsibility Committee.

Murren also heads a high-level Corporate Social Responsibility (CSR) Committee made up of diversity, human resources, corporate communications and advertising executives, as well as presidents of the Bellagio and Monte Carlo and Mandalay Bay’s chief financial officer.

“That’s an indication of our chairman’s deep desire that our CSR initiatives are first and foremost in the minds of executives and management in the company,” said Cindy Ortega, chief sustainability officer who is a member of the panel.

The company has undertaken several environmental initiatives, including:

• Designing CityCenter so that it’s 30 percent more efficient than comparable Strip properties. Its energy savings are equivalent to the power used by 7,500 homes.

• Achieving since 2007 a 10 percent reduction in electricity use by properties (excluding CityCenter), thanks to mechanical upgrades, lighting improvements and advanced control techniques.

• Obtaining a fleet of 38 limousines powered by compressed natural gas that so far have been deployed at Aria, Bellagio and the Mirage. Compared to gasoline-powered limos, they have achieved a 15 percent improvement in mileage efficiency while reducing carbon dioxide emissions by 25 percent. MGM Resorts wouldn’t disclose how much it spent on the limos but said that with lower fuel costs, the extra investment has paid for itself.

• Installing solar devices in 4,198 rooms that are being renovated at the MGM Grand to enable guests to open and close window shades by pushing a button.

MGM Resorts has invested $14 million over five years on energy-saving initiatives and plans to continue investing a couple million dollars a year. The investments typically pay for themselves in fewer than two years, Ortega said.

The financial benefit isn’t the main reason the company is so interested in pursuing green initiatives. Along with diversity and philanthropy programs, the sustainability effort has made MGM Resorts a better company to work for and for customers to do business with, Ortega said.

“It is building the reputation of the company to external partners or big corporate customers,” she said.

Dominguez agreed that MGM Resorts International’s being perceived as a socially responsible company has driven significant business to Las Vegas and to the company. Besides IBM, Microsoft is a big customer that’s known for being socially aware.

And MGM Resorts will send its Corporate Responsibility Report not only to the company’s business partners, but to officials and policy makers where the company is competing for the right to develop new resorts or is considering making a development bid. Locations the company is looking at include Maryland, Massachusetts and Toronto.

“A differentiating factor between us and our competitors is that we have a reliable and genuine track record of integrating sustainability beyond what we’re required to do in our projects," Ortega said.

The report is an important tool to teach decision makers unfamiliar with MGM Resorts about the company and its capabilities. Competitors likely are distributing similar material about themselves.

“Trust is everything,” said Clark Dumont, MGM Resorts vice president of corporate communications. “We want them to know we can be trusted to do the right thing.”

Business

Share

Previous Discussion:

Discussion comment

Only trusted comments are displayed on this page. Untrusted comments have expired from this story.

No trusted comments have been posted.