Stakeholder engagement

Our stakeholders help us define our Sustainable Development Strategy, communication strategies, how and what we choose to report on.

Why we engage with stakeholders

Our stakeholders help us define our Sustainable Development Strategy, communication strategies, how and what we choose to report on.

It is essential that we understand the issues of concern to our key stakeholders so that our business priorities reflect theirs. Many people are interested in the way we incorporate sustainability into the business and how we plan to address certain issues. As a way to address material issues and meaningfully strengthen sustainable development performance at Cathay Pacific, we regularly and systematically meet with a range of stakeholders, including our customers, staff, sustainability thought-leaders, NGOs, analysts, investors, suppliers, business and community partners.

Approach to stakeholder engagement

We started our formal stakeholder engagement on sustainability issues in 2006. Between 2012 and 2014, the engagements were focused on gaining insights into stakeholders’ perceptions of Cathay Pacific’s performance, any existing and emerging material issues for us, as well as their expectations of the company and areas of improvement. The findings informed two core elements: Cathay Pacific’s Sustainable Development Strategy and our sustainability reporting process.

The discussion groups and interviews were facilitated by an independent organisation, guaranteeing anonymity to ensure impartiality and encouraging respondents to speak frankly.

In addition to specific engagement related to our annual reporting process, we also proactively engaged with different stakeholders throughout the year so that engagement outcomes were effectively embedded into the way sustainability was managed.

In 2016, we continued to engage with key stakeholder groups (industry and sustainability influencers, investors, NGOs, local authorities, customers and employees) throughout the year on current and emerging issues. This approach allowed us to be more strategic in the way we connect with our stakeholders, and to respond more effectively to their issues of concern. We continued to monitor how material issues were trending and how stakeholders’ views were evolving.

Carbon emissions and climate change remained the two most important sustainable development issues facing the airline industry. The well-being of animals is also an emerging issue amongst external stakeholders (particularly for NGOs).

The table below shows the most common issues raised by the key stakeholder groups over the years.

Stakeholder group How we engage Common issues that are important to this stakeholder group
Customers
  • Reflex passenger survey
  • Online feedback
  • Comment cards and letters
  • Social media
  • Focus groups
  • Safety
  • Punctuality and service
  • Customer experience
  • Crisis handling and customer relations
  • Cost of tickets
  • Environmental issues
  • Customer education on sustainability
  • Caring for the environment
  • Collaborating with the community
  • Transparency with sustainability information
Employees
  • Intranet
  • Newsletters and briefing notes
  • Consultative committees and staff forums
  • Focus groups
  • Organisational alignment survey
  • Staff sustainability survey
  • Sustainability workshops
  • Social networks (e.g. Yammer)
  • Employee relations and labour standards
  • Staff benefits
  • Training and development
  • Education on sustainability
  • Reduction of inflight waste
  • Sustainable sourcing of inflight meals
  • Volunteering and community involvement
  • Better engagement and alignment between Hong Kong and outports
  • Safety and fatigue management
  • Reduction of fuel burn
  • Moving from paper to electronic documents
  • Communicating environmental benefits of new fleet to the public
  • Adopting best international labour and contractual practices
  • OHS training
  • Enhance communication of sustainability information to improve knowledge
  • Be provided with channels to express thoughts and ideas
NGOs and Academia
  • Stakeholder review committee
  • Focus groups
  • Strategic discussions
  • Event participation
  • Climate change and use of sustainable fuel alternatives
  • Strategic engagement with NGOs
  • Better communication of sustainability initiatives to the general public
  • Stronger influence on customers with carbon offsetting
  • Target-setting for key performance areas, e.g. carbon goals, carbon trading, offsetting and cost of emissions
  • Biodiversity
  • Investing in the next generation
  • Training local personnel
  • Staff satisfaction, retention and training
  • Maintaining employee relations
  • Community engagement, including on disaster response and relief and programme involvement
  • Global approach to community investment
  • Customer service
  • Safety
  • Having a supply chain strategy
  • Promoting sustainable tourism
  • Embedding sustainability into the workplace
  • Industry leadership
  • Innovation
Investors and shareholders
  • Annual Report
  • Focus groups and interviews
  • Improving transparency on environmental issues and supplier management
  • Contextual information on reported data to help stakeholder understanding
  • Focus on customer service and cost, rather than just the bottom line
  • Clearer reporting on community investment
  • Providing industry and peer data for easy comparisons
  • Direct engagement with investors
  • Embedding carbon information in flight booking menu
  • Sustainability performance
Suppliers
  • Supplier questionnaire
  • Sustainability newsletter
  • Focus groups
  • Commitment to climate change, offsetting and biofuels
  • Transparency around labour relations
  • Rising costs (e.g. fuel) and effects on the industry
  • Collaboration with local businesses and communities
  • More stringent supplier code of conduct
  • Supplier training
  • Communication on responsible procurement plan
  • Top level governance for sustainability
Other businesses
  • Annual Report
  • Focus groups
  • Business forums
  • Active communication on sustainability initiatives
  • Lead on climate change and resource efficiency issues
  • Highest governance level takes leadership position on sustainability issues imperative
  • Customer and staff safety
  • Staff welfare

A detailed assessment was conducted on the findings of past years’ engagement exercises. In order to monitor current priorities and current issues, we relay back to our regular stakeholder engagement exercises. Although the importance of certain issues such as waste management, sustainable sourcing and biodiversity has increased over the years, some of the topics such as climate change have remained high as stakeholders’ priorities over the years. The following top issues continue to form the framework of this year’s Sustainable Development Report:

Issues materiality

We have been incorporating sustainable development risks into the company’s risk matrix to enable us to gain a more comprehensive perspective and to identify significant issues, risks or ‘material’ issues. We have also been developing a materiality matrix on sustainability issues since 2009. An issue is considered ‘material’ when it may substantially affect our long-term commercial and operational viability. This matrix combines the Swire Group’s approach to identifying the risk concerns of our stakeholders and our own materiality-scoring methodology, which follows the principles outlined in the G4 Guidelines and the AA1000APS Social Standard.

Our ongoing stakeholder engagement research showed that all issues raised were important to stakeholders, albeit to differing degrees. The level of importance of an issue is relative to the others being discussed. A lower-scoring issue does not necessarily mean they are of ‘low’ priority to stakeholders. These views are reflected in the three-tiered structure.

Our assessment criteria of the identified risks are shown in the following tables:

Criteria to assessing materiality

Assessing ‘Level of Concern to Cathay Pacific’s Key External Stakeholders’
TIER 1 The issue is understood to be of concern to key stakeholder groups at an international or national
level and meets two or more of the following criteria:

  • Has a high impact on society or the environment
  • Is known to be of high priority to stakeholders
  • Is strongly related to the activities of Cathay Pacific and others in the sector
  • Is particularly important in enabling judgments to be formed about Cathay Pacific’s CR performance
TIER 2 The issue is understood to be of concern to key stakeholder groups at a national level and meets one or more of the following criteria:

  • Has a moderate impact on society or the environment
  • Is known to be of moderate priority to stakeholders
  • Is related to the activities of Cathay Pacific but also many other industry sectors
  • Is fairly important in enabling judgments to be formed about Cathay Pacific’s CR performance
TIER 3 The issue is understood to be of concern to key stakeholder groups at a national or local level and meets one or more of the following criteria:

  • Has a low impact on society or the environment
  • Is known to be of low priority to stakeholders
  • Is only indirectly related to the activities of Cathay Pacific
  • Is not very important in enabling judgments to be formed about Cathay Pacific’s CR performance
Assessing ‘Current or Potential Impact on Cathay Pacific’
TIER 1
  • High current or future financial impact
  • Potential for some impact (positive or negative) on brand, reputation and key stakeholder relationships and international media attention
  • Some potential for legal non-compliance and fines
  • Some potential for positive or negative impact on operations and customer orders
  • Is part of stated strategy, policy or voluntary commitment
TIER 2
  • Limited current or future financial impact
  • Potential for some impact (positive or negative) on brand, reputation and key stakeholder relationships and national media attention
  • Low potential for legal non-compliance and fines
  • Low potential for positive or negative impact on operations and customer orders
  • Is part of stated strategy, policy or voluntary commitment
TIER 3
  • No or low current or future financial impact
  • Potential for positive or negative local media attention, with no impact on brand, reputation and key stakeholder relationships
  • No potential for legal non-compliance and fines
  • No potential for positive or negative impact on operations and customer orders

The graphic below is a summary of ongoing work in developing material issues for the Sustainable Development Strategy. The majority of the identified issues are consistent with the main concerns of our stakeholders and has subsequently been reflected in our reporting. Please refer to this link for more information on our material aspects.

External Stakeholders Cathay Pacific Overall Issues Section of the Report to which this issue relates to
Economic
Customer safety Safety
Governance Approach to sustainable development
Communications with stakeholders Approach to sustainable development
Disclosure and transparent Approach to sustainable development
Sustainability performance Throughout the report
Sustainability features and products and services provide Climate change
Waste management
Sustainable sourcing
Environment
Emission/climate change/alternative fuels Climate change
Biodiversity and animal welfare Biodiversity
Resource use Waste management
Sustainable sourcing
Material sourcing Sustainable sourcing
Air quality Climate change
Noise Not considered a material issue
People (employees and communities)
Occupational Health and Safety People
Staff welfare People
Communication and engagement People
Training and development opportunity People
Community investment People
Staff volunteering People
Tier 1 Tier 2 Tier 3

Stakeholder review panel

Since 2010, Cathay Pacific has invited different multi-stakeholder committees to provide external input in regards to our stated performance against our Sustainable Development Strategy. We also ask our multi-stakeholder committees to review and assess the balance, completeness and responsiveness of our Sustainable Development Reports.

In 2016, we have taken the opportunity to engage a new committee to provide their views on our performance and strategy.

The committee members were selected based on their range of expertise, which we believe can provide invaluable input for us to improve our report. Their advice will also help to shape our future sustainable development approach and programmes. This year, the panel consisted of:

  • Robert Wood – Head of Sustainability, Virgin Australia
  • Christoph Ganswindt – Executive Director, Information Technology and Sustainability, Hong Kong Jockey Club
  • Daisy Chee – Assistant Manager, Group Sustainability, CLP

The Stakeholder Review Committee convened twice in-person and via a conference call focus group meeting to review draft report content, as well as to provide advice on our Sustainable Development Strategy.

The committee considered the following topics:

  • The appropriate coverage of issues and the materiality of those issues (existing and emerging) for Cathay Pacific and its stakeholders;
  • The responsiveness of the report in terms of addressing stakeholder concerns; and
  • Improvements that Cathay Pacific could make in current and future reports, as well as in overall communications and engagement around sustainable development.

We would like to express our appreciation to the committee for their time and invaluable feedback on our report.

The Committee Statement:

We welcome Cathay Pacific’s invitation to be involved in this year’s Stakeholder Review Committee. This exercise demonstrates the organisation’s commitment to multi-stakeholder engagement and obtaining external input around the organisation’s reporting, performance and communications related to its Sustainable Development strategy.

Overall, the Committee acknowledges Cathay Pacific’s efforts to take a leadership role in the sustainable development of the aviation industry. This is supported by Cathay Pacific’s focus on alternative fuel investment and research in sustainable energy, its integrated approach in identifying and addressing material issues, and its transparent approach to reporting. It is also supported by Cathay Pacific’s engagement in various industry associations such as IATA’s Environment Committee and the ICAO’s Global Market-based Measure Technical Task Force for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) scheme.

The Committee welcomes the streamlined format of the online report; and commends the structure and readability of the report.

Looking ahead, we would like to encourage Cathay Pacific to consider:

  • undergoing a comprehensive discussion on the 20/20 commitments and future sustainable development strategy in the Report;
  • enhancing the communication around sustainability throughout the customer journey, using new and innovative channels such as social media, inflight entertainment, and mobile apps;
  • sharing its best practices and strategies internally with other department as well as externally with other organizations across the sector; and
  • Broadening the scope of stakeholder communications by pragmatic discussion of the various challenges being faced in sustainable development.

We commend Cathay Pacific for its continued commitment to sustainable development reporting and stakeholder engagement, which demonstrate transparency and integrity.

Stakeholder Review Committee