Corporate sustainability in Canadian and US maritime ports

Highlights

• Most ports perceive sustainability as important.

• Ports adopted sustainability awareness/training programs, reporting, initiatives/standards, and improved stakeholder relations.

• Motivations/driving factors are growth, return on investment, risk management, corporate citizenship.

• Key challenges/barriers are costs, lack of sustainability competences, limited customer interest, difficulty in implementing changes.

Abstract

Despite the rising popularity of the corporate sustainability discourse in recent years, its role in the maritime industry, and in ports in particular, has been limited. Through an online survey, this study assessed the current state of corporate sustainability in ports in Canada and the US. The study ascertained the perception of port executives towards sustainability, analyzed port sustainability strategies and practices, and identified the main factors (motivations/driving factors and key challenges/barriers) influencing future adoption and implementation of corporate sustainability in ports. Results show that the majority of ports perceive sustainability as important and have adopted a number of sustainability strategies and practices, such as sustainability awareness and training programs, sustainability reporting, and sustainability initiatives and standards (e.g., Green Marine and ISO 14001 certification). Results also show that sustainability strategies have resulted in improved stakeholder relations in ports mainly with government/policy makers, customers, local communities, and industry associations. Yet, findings indicate that although corporate sustainability is regarded as important in the majority of ports, it is not fully integrated in strategic decision-making processes and operations in most ports. This study also investigated influencing factors for adoption of corporate sustainability in ports. Motivations/driving factors identified are growth, return on investment, risk management, and corporate citizenship, while main key challenges/barriers include cost associated with sustainability actions, lack of sustainability competences within the organization, limited customer interest for more sustainability services, and difficulty in implementing sustainability practices. Findings reveal that although many of the identified influencing factors for adoption and implementation of corporate sustainability in ports are similar to those identified in other studies, some are more sector specific which has allowed this study to contribute to advancing knowledge of corporate sustainability in the context of ports with novel insights.

Introduction

Corporate sustainability (CS) is most widely used to refer to an organization's approach to creating value in social, environmental, and economic spheres in a long-term perspective, supporting greater responsibility (Ashrafi et al., 2018). CS is increasingly acknowledged as an essential component of business strategies of any organization, and ports (i.e. ports managing companies and port authorities), as a result of deregulation efforts in recent decades, are not excluded (Kim and Chiang, 2014; Langenus and Dooms, 2018). Notwithstanding the competitive pressure for port managers and operators to maintain or improve port economic performance, external effects associated with port activities have been increasingly the subject of media scrutiny and public debates, which favour adoption of measures to mitigate port social and environmental impacts (Hiranandani, 2014; Lam and Notteboom, 2014; Acciaro, 2015; Carpenter et al., 2018). International pressure, by means of industry collaborative initiatives and global sustainability targets and ambitions, is also challenging ports to find ways to operate and manage activities efficiently, effectively and in a sustainable manner (Roh et al., 2016). ‘The 2030 Agenda for Sustainable Development’ that emphasizes the need for all economic sectors, including the maritime transport industry, to monitor and measure performance and report on progress towards meeting social, environmental and economic goals is further evidence of the growing importance of CS (UNCTAD, 2016). This trend will likely continue in the future and sustainability will acquire a more important role in the definition of port strategies as ports increasingly operate as global multinationals whose customers extend far beyond administrative boundaries of ports (Oh et al., 2018). The extension of benefits of port activities to regions far away from the port vis-à-vis more localized negative impacts necessitates that ports constantly justify their activities in face of local opposition and identify opportunities to develop, implement, and improve their CS strategies.

Despite a rapid increase in studies focusing on the importance of sustainability in ports (Dinwoodie et al., 2012; Acciaro et al., 2014; Hiranandani, 2014; Kim and Chiang, 2014; Acciaro, 2015; Roh et al., 2016; Sislian et al., 2016; Kang and Kim, 2017; Langenus and Dooms, 2018; Oh et al., 2018), the extent to which such importance is translated into port investment in CS strategy is yet under-investigated (Santos et al., 2016). There is also a call for further research in the area of CS within ports, through single and multiple case studies, as well as port practitioner surveys, particularly on how ports perceive sustainability and, on the complexity and diversity of sustainability approaches adopted by ports (Acciaro, 2015). In response, this study assessed the current state of CS in ports through surveying port managing companies and authorities in Canada and the US. This research aims to advance knowledge of CS in the context of ports by pursuing the following objectives: (1) to investigate how port executives perceive sustainability and what CS strategies and practices ports have adopted in their business plan; and (2) to identify influencing factors (motivations/driving factors and key challenges/barriers) that might affect adoption and implementation of CS strategies and practices in ports in the future.

The concept of CS is rooted in systems thinking in which the three domains of society, environment, and economy are integrated in the long-term (Bansal and DesJardine, 2014). CS strategies aim at strengthening links between social, natural, and financial capitals through improving water use and energy efficiency, reducing greenhouse gas (GHG) emissions, reducing or zero-waste, increasing resilience to climate change, minimizing impacts to biodiversity and natural resources, enhancing human capital and capability, and achieving greater social inclusion. Embedding CS into an organization's core business processes not only contributes to organizational success through enhancing both efficiency and profitability, as well as adding to competitive advantage (Laszlo and Zhexembayeva, 2011), but also creates shared value (i.e. shareholder's value and stakeholder's value) (Dyllick and Muff, 2016). A survey of 3203 executives representing the full range of regions, industries, tenures, company sizes, and functional specialties, conducted by McKinsey & Company in 2011, found that very large shares of executives believe that CS makes a positive contribution to their companies' short- and long-term value (Bonini and Görner, 2011).

The importance of CS in ports is reflected in performance assessments that consider regional and local economic prosperity and growth, environmental protection, and promotion of thriving communities with higher living standards, through collaboration and collective accountability. Ports, as an essential part of the maritime transport chain, facilitate trade and industries and contribute to economic development through contribution to Gross Domestic Product (GDP), as well as employment opportunities and other multiplier effects (Lam et al., 2013; Sakalayen et al., 2017; Hou and Geerlings, 2016).

While having numerous positive external effects, ports are also responsible for a wider set of negative environmental and social impacts deriving from activities at sea and on land, such as dredging, anchoring, cargo handling, marine fuel bunkering, waste management, and cargo operations (e.g., loading and unloading on ships or cargo movement to and from the port) (Dinwoodie et al., 2012; Klopott, 2013; Walker et al., 2019). Nevertheless, ports, taking advantage of their nodal positions, can actively contribute to sustainability of the maritime transport by taking a greater role and responsibility towards society and the environment (Klopott, 2013). Ports can promote CS through cleaner production initiatives and other proactive approaches, such as resource efficiency, sustainable building construction in a port/hinterland, optimization of logistical networks, enhancing safety and security in a port, improving relationships with key stakeholders, providing incentives to port users and tenants for green practices, employee productivity improvement, and creating good social and working environment (Kim and Chiang, 2014).

As local communities, governments, and port customers are increasingly becoming more aware of negative external effects of ports, several ports have made efforts to reduce their reputational risk by improving their sustainability performance. However, their economic viability and their sustainability actions are not on the same level of priority for port managers – or at least they have not been for many years (Poulsen et al., 2018). For ports to be able to create value for society and the environment whilst balancing profitability and growth, CS should be fully embedded into ports’ business planning and processes. Other studies also advocated the benefit of CS to ports through shaping success of the sector in the competitive economy while being the centre of environmentally and socially responsible transport systems (Kang and Kim, 2017).

CS implementation is influenced by a number of factors, which may hinder or promote CS adoption by prospective organizations (Evangelista et al., 2017). Understanding influencing factors for CS adoption is essential as it assists in predicting CS-related behaviour of organizations and exposing mechanisms that foster organizations with CS embedded in their core value. This allows researchers and practitioners to identify the efficacy of regulations and policies, as well as market and voluntary measures and approaches (Bansal and Roth, 2000). Previous studies have identified several influencing factors that compel organizations to employ CS strategies and practices, such as regulatory compliance, economic opportunities, reputation, risk management, ethical considerations, and competitive advantage (Bansal and Roth, 2000; Hart and Milstein, 2003; Schrettle et al., 2014; Lozano, 2015; Engert et al., 2016; Brockhaus et al., 2017).

In line with stakeholder theory on businesses' obligations towards multiple stakeholders, influencing factors of CS adoption are also affected by various stakeholders (Schrettle et al., 2014). In general, stakeholder pressure is a relevant influencing factor for CS adoption and implementation (Andiç et al., 2012; Govindan and Bouzon, 2018). In the context of ports, the role of stakeholders is significant as support from ports' stakeholders leads to more successful strategy implementation (Becker and Caldwell, 2015; Notteboom et al., 2015). Ports are intermodal transport nodes that often act as a gateway for international trade involving a wide array of national, regional, and international stakeholders, as well as those from public and private sector (Hiranandani, 2014). This delineates ports interaction with diverse groups of stakeholders forming a multi-directional relationship that influences ports' capabilities of responding proactively to market driven demands and local communities' needs, including those of an environmental and socio-economic nature (Song and Parola, 2015). There is a diverse range of stakeholders interested or concerned in ports operation and development (Wagner, 2017) whose pressure derives from and at the same time influences strategic and operational choices of port managers (Dooms et al., 2013). Therefore, it is imperative to identify influencing factors (motivations/driving factors and key challenges/barriers) for CS adoption and implementation in ports to understand underlying factors that might affect integration of CS in ports in the future.