ESG Matters episode 7: transcript

Transcript

Anna-Marie:
Thanks for joining for our latest 30 for Net Zero 30 episode. Today, I am very happy to be joined by Denise Chen, chief sustainability officer of Melco Resorts & Entertainment, with integrated resorts in Macau, Manila, and Cyprus. Denise, thanks so much for joining us today. Maybe you could start by giving us a little bit of your background.

Denise:
Sure. Thanks, Anna-Marie. I guess if I go back to the beginning, I grew up in the UK and have had pretty traditional pathway through finance. Was an accountant, went into banking, and then found myself at Melca Resorts, helping with the raising of financing for our developments, and eventually culminated ending up being treasurer of the company. But I kind of hit a point a few years ago where just evaluating my career, and really feeling a need to find a bigger purpose in terms of my career path, which is why I then pivoted and I moved into sustainability and was given that role, given the opportunity and internally to move into that role.

So, that's really where I find myself today, putting together the sustainability strategy for the company and driving all the sustainability initiatives towards our longterm goals, which we've set to be pretty ambitious. We've got 2030 goals to be carbon neutral across all of our resorts, to also be zero waste by 2030. That means diversion from landfill, as well as incineration with no energy recovery. The third area that we focused on is really around sustainable sourcing. Resorts like ours, obviously the procurement is fast, so initially we're targeting three key areas, which covers seafood, chemicals, and cotton.

Anna-Marie:
Fascinating. So, stepping into a brand new role to see what you can achieve. Excellent. Excellent work, Denise. Maybe can you share with us what you've seen in the last 18 months to two years around sustainability? Have you seen a shift in how it's viewed or seen? I mean, you're based in Hong Kong. Has there been any evolution there?

Denise:
Absolutely. I think three years ago, when we started thinking about the strategy and what we were going to put in place, I have to admit there were areas where I wasn't sure. At that at that time, the technology and the products didn't necessarily exist to get us where we wanted. An example of that, for example, at that time was I really wanted to focus on single use plastics at our properties and to eliminate single use plastic bottles from both our back of house areas, meaning our staff areas, as well as the front of house.

With the operations and the scale that we have, it didn't look like there was a one-stop solution that was going to be possible to achieve that. However, over the last few years, we've actually worked together with a company called Nordaq Fresh. They're a Swedish filtration company, and previously had only been making individual taps for bottling filtered water.

As of January this year, we basically got an entire bottling plant delivered, which was custom made for our resort. That will basically eliminate 15 million plastic bottles a year out of all of our resorts in Macau once that's fully up and running. That was in a very short space of time, where when we first started, it didn't seem like that there was going to be a solution that would be able to scale up enough to cater for that.

But I think overall as well, not only on that front, I've definitely noticed since I've been in this role the shift in terms of general awareness. Like I said, the speed of products coming into the market that are sustainable to cover many facets, whether that's technology on the energy efficiency side, or with plastic, or with tracking food waste, et cetera, it's really ramping up. I think also with COVID and the last, I guess, close to 18 months that we've been living through that, I feel as though that people generally, it's been brought to the forefront of their awareness even more on the environmental side.

Anna-Marie:
And companies kind of moving into that void is I think really interesting. So, can we just stay with your water solution? Because I think that's fascinating for people to kind of figure out how you did that and how you, I guess, persisted, even though at the beginning, you didn't think there was any solutions. Can you step us through? How did you stick with it and find the solution?

Denise:
I think one of the biggest barriers that companies face is that there is a preconception that sustainable initiatives cost more money. I think that was the main barrier, whether we'd be able to find a solution. I mean, obviously I think if you pay enough money, there's going to be some kind of solution, but it's whether it can be economically viable to replace the existing, which is single use plastic bottles, which are by its very nature, cheap. So, that was really the conundrum we faced a few years ago. It wasn't that there wouldn't be that product at all, but whether that could fit, both from a replacement from the environmental perspective, as well as the economic perspective.

I think, just given my background in finance, I've put a real focus on that in terms of our strategy, so that when we're implementing new products, I work to show that there is an ROI there that can be delivered. With this machine, it certainly can. I think the payback was around one and a half years, the payback period. So, it surprised a lot of people internally. I think that there is this solution there, which from the outset could seem big. It is CapEx expenditure after all, but when you actually look at it over the life, it saves money.

Anna-Marie:
Yes. That's an excellent point, because I think that is a barrier when you're trying to really get buy-in from a company perspective, people want to do things in a sustainable way, but the idea in criminal cost is really certainly a big stopper. So, now that you've solved plastic in your Macau resorts, is there any specific action that you're looking looking for in the near future?

Denise:
I think one that's really important for us and that we have placed a lot of focus on outside of plastic is food waste. That was another area that was surprising a few years ago, we did full waste orders audits all of our properties to get a sense of what it was we were dealing with. I think without that data, you don't know. You can probably guess, okay, there are certain areas, plastic or whatever, that we want to focus on.

But without the hard data to support where you should focus your attention, it's very difficult to know which area to start targeting. But food waste came up at about 30% or more of our total waste stream. When we dived into that in a bit more detail, I guess the number one thing people would think of with all your outlets and guest facing restaurants, how do you start bringing that down?

In actual fact, it became our employee dining areas that generated the most. When you take a step back, it does make sense. We've got close to 15,000 employees across the group going into employee dining 24 hours a day. So, we took a real focus on that. I think that is one area that doesn't get as much focus as, say, plastic does. You hear a lot about plastic in the media.

Food waste, you do, but not to the same extent. I find that certainly not from a general awareness level, it's definitely not at the same level that plastic is. We've implemented AI technology into our employee dining areas, where we've got this technology called winner. It basically records every time food is thrown away into the bin. It records what it is, the AI learns the menu and recognizes what's being thrown away and the weight.

So, we literally have live data every day as to what things thrown and how much of it. That's also been a massive surprise. There's a few areas to address that.

One is looking at overproduced waste. So, food waste that basically food that's put out and not eaten, and separately, plate waste, which is food then is taken onto people's plates and thrown away as excess or remains of whatever it is you're eating. So, from an overproduction perspective, literally almost the month that we implemented that because of the data flowing through, we were able to reduce over production by up to 67%. That to almost eight times annually in terms of reduction on food waste on overproduced waste, but by firing away at the biggest contributor in our resorts to food waste in employee dining areas is plate waste. That's about 80% of the food waste within the total of food waste.

On that front, we work together with Winner, who are... it's much harder with plate waste. The AI can't recognize. I mean, you can imagine once you've eaten something naughty, it's a bit of a mess. So, it's very difficult for AI to recognize exactly what that is. So from that standpoint, it's much more an awareness raising tool. They've created, it's a similar machine in the sense that it will take pictures, but this then recalls the way every time someone throws something into the bin, the weight comes up and you can see it. It's just purely from that visual element and raising awareness that way. We're doing that trial at the moment backed by LSC in London who are doing the analytics behind that.

It's much more based on a communications campaign. So, looking at how you can change communications to drive behavior. That's also, just to me, a 30% reduction that we have seen in plate waste over the few months that we've been doing that.

Anna-Marie:
That's really fascinating, and really fascinating how people's behaviors are actually changing just from putting additional information in front of them, right? When they're making their own actions, right? On the individual level. Really, really interesting, yes, and brings me into my next question. Taking it a little more in-house for you, are there any things that you particularly are committing to around Net Zero in the next 12 months?

Denise:
Yeah. I think it's been kind of a long journey upwards that's been accelerating, particularly since I've had kids. For example, with plastics, we've done [inaudible 00:11:05] possible at home in terms of water filtered, bar soaps, toothpaste, tablets, all of that, bamboo toothbrushes. What would be great, and I guess it's a bit tricky living in Hong Kong, but as a family, we're looking to possibly move. In the new environment, I really hope to be able to be more self-sufficient in the sense of if you're able to grow, for example, your own vegetables, herbs, that kind of idea.

We certainly have switched our diet massively in the last couple of years. If I think about my plate a couple of years ago, I'd say probably a third of it was meat or fish oriented. I think now we've totally flipped that. We try to eat as little as possible, and so it's probably once or twice a week at most we'll have meat. So thing, there's all these little contributions we're trying to make, but I guess the big one is renewable energy. If I can get to the point where I can live in a house that I can power through solar, that would be amazing.

Anna-Marie:
Yeah. That's a nice personal goal there. So, then, if you could get a one person listening to take one action around reaching Net Zero goals, what would that be? I mean, it could be going into your company and starting the sustainability program. What do you think, from your point of view?

Denise:
I feel like with sustainability, when you try and set a big task, it can seem quite insurmountable. I think with the amount of information that's out there, when you think of the task in hand, they can seem insurmountable. So, I feel as though this is something that every single person, because this has an impact on the whole of humanity, and I think there are kind of two aspects of this. One is to raise the awareness around it, because I think would be on, Net Zero, even. We're at a point now where we need to be taking carbon out of the atmosphere, not just trying to reduce our own emissions to zero moving forward to be able to make this work.

Although that seems all little doom and gloom, there are solutions out there, for sure, that can get us there. But it also will take every single person, one to have that awareness, to recognize why it is so important, that it does have a direct impact, whether it's through climate risk and flooding. You may not live in an area that's low lying, but there are much wider implications of those areas being flooded on everybody, everyone, irrespective of where you live. So, I feel like it's one raising that awareness, and the second one is just in everyday activity. I think consumption is a real problem.

I think society now has grown up to you don't think about everything has been made so easy. You click a button, I can get 20 bucks here. Click another button, I can have five dresses delivered. I think every time you're faced with a consumption decision, I think you needs to think about, one, is that necessary, and two, is there a way I can do this that doesn't harm the environment? Because every time you're doing any transaction, even being on the internet, you're using up electricity. Everything we are doing has an impact, so I feel like if every person was more conscious of that and tried to live, no matter how small that that change is, it will make a difference.

Anna-Marie:
Inspiring words to drive behavioral change to drive climate restoration. That is a really interesting point, and one that needs to be talked about more. It's not, it's not just Net Zero, right? It is about healing the environment back... and I say environment in the widest sense of environment, back to where it's sustainable and resilient for all the inhabitants of the planet. Thanks very much, Denise, for joining us today. We really appreciate your time and really appreciate your efforts. Great work across the Belco team on really stepping up to this challenge.

Denise:
Thanks so much, Anna-Marie.

Anna-Marie:
Thank you for listening to this podcast. We hope you found it worthwhile. To learn more about the issues we've just covered, please visit ashurst.com/podcasts. This 30 For Net Zero 30 episode is just one small part of our continuing podcast series: ESG matters at Ashurst. Make sure you don't miss any of our future episodes by subscribing via Apple podcasts, Spotify, or wherever you listen to your podcasts. While you're there, you can also listen to our other episodes and leave a rating or review. In the meantime. Thanks again for listening, and goodbye for now.