"Over the past year we continued to make great progress with new goals and initiatives across our Sail & Sustain focus areas as we help chart a path to a more sustainable future," said Jessica John, vice president of ESG, Investor Relations, and Corporate Communications of Norwegian Cruise Line Holdings Ltd. "This year's report highlights not only these advancements but also our commitment to increase and strengthen our disclosures each year to provide our stakeholders with critical transparency."
John continued, "Whether its through our plan to pursue net zero by 2050 or our efforts to support the communities we live in or visit worldwide, were set on finding innovative ways to Sail & Sustain."
Among the many ESG initiatives covered in the report, key highlights from the past year include:
Reducing Environmental Impact
Ambitious climate action strategy and targets to reduce greenhouse gas ("GHG") emissions: NCLH recently announced its revamped climate action strategy focused on efficiency, innovation and collaboration, along with ambitious short- and near-term emissions reduction targets that support the Company's pursuit of net zero by 2050. The Company is now targeting a reduction in GHG intensity of 10% by 2026 and 25% by 2030, compared to a 2019 baseline with intensity measured on a per Capacity Day basis(1).
Methanol-Ready newbuilds on order: Modified the final two Prima Class ships, expected to be delivered in 2027 and 2028, to accommodate the use of green methanol as an alternative fuel source in the future. While additional modifications will be needed in the future to fully enable the use of methanol in addition to traditional marine fuel on these ships, this reinforces the NCLH's commitment to decarbonization.
Focus on water stewardship: NCLH continues to improve water production rates while at the same time focusing on efforts to decrease consumption. Across its fleet, 90% of the fresh water used in 2022 was produced on board.
Testing biodiesel fuels: Successfully tested small quantities of biodiesel blend B30, which is 70% marine gas oil and 30% biodiesel, in four of its ships to-date. By the end of 2023, NCLH anticipates more than 20% of its fleet will have tested and operated on biodiesel blends.
Investing in shore power: NCLH currently has 12 ships equipped with shore power capabilities which allows these ships to connect to onshore electrical power grids to supply much of the power needed while docked when available. The Company continues to invest in expanding this technology and expects to have approximately 60% of its fleet shore-power enabled by year-end 2023 and approximately 70% by year-end 2025.
Sailing Safely
Robust public health program to protect guests, crew and communities we visit: NCLH operates a comprehensive 24/7/365 public health and safety program, working closely with health authorities around the world to implement and continuously improve policies and procedures that meet and, in many cases, exceed regulations. Crew members are also highly trained in the Company's Outbreak Prevention and Response Plan, designed to mitigate, and help prevent the spread of communicable diseases.
Continuous public health training and education: In partnership with representatives from various government agencies and suppliers, NCLH continues to host public health training through monthly online collaborations as well as annual in-person summits.
Prioritized safety and security efforts: Utmost importance placed on safety and security at sea with third-party audits conducted regularly to verify compliance. Each ship also has a resident Safety Officer, with experience ranging between 10 and 15 years in various roles at sea, and ship crews participate in regular safety training, exercises and drills on board and shoreside.
Empowering People
Enhanced employee benefits demonstrate commitment to team members: NCLH expanded its suite of employee benefits by adding new Family Care Benefits which provides fully paid maternity, paternity and adoption leave as well as family planning assistance for full-time U.S shoreside team members.
Fostering inclusive workforce where diverse backgrounds are represented and empowered: Across NCLH's global shoreside workforce, 61% of team members are female, including 47% of managers and above. In addition, across the U.S. shoreside workforce, 67% of team members were under-represented minorities, including 54% of managers and above. In 2023, the Company also appointed three new Presidents to lead its brands, all three of whom were internal and ethnically or gender diverse candidates, including the appointment of NCLH's first female brand President, Andrea DeMarco, to lead Regent Seven Seas Cruises.
Provided training and development opportunities across workforce: NCLH team members logged more than 800,000 hours of training and development across various roles and responsibilities, cementing the corporate philosophy to empower top talent and foster robust career development.
Strengthening Our Communities
Ongoing corporate efforts to philanthropic contributions: NCLH contributed more than $2 million in monetary and in-kind donations to nonprofit organizations around the world. This included over $300,000 donated to aid in disaster and crisis relief, including Hurricane Ian recovery efforts in Southwest Florida.
Honoring the connection between travel and education: Each year, Norwegian Cruise Line's Giving Joy program recognizes top educators for their unwavering commitment to inspiring students every day. In 2022, the Giving Joy program awarded 100 teachers across North America a free week-long cruise for two, valued at over $750,000 collectively, along with thousands of dollars in contributions from NCL and its partners to the schools of the top three grand prize winners.
Offsetting Emissions and Supporting Communities through Carbon Offsets: NCLH has purchased 1.6 million carbon offsets to date contributing to 14 projects globally including in South Korea, Brazil and Turkey. The offsets purchased not only support the Company's decarbonization journey but also invest in cleaner energy sources and local job creation in these communities.
Operating with Integrity and Accountability
Tied ESG metric to compensation: The Board of Directors' Compensation Committee approved the inclusion of an ESG metric for the first time as part of the 2022 short-term incentive ("STI") and once again approved the inclusion of an ESG metric in 2023. This metric is tried to the progress made on NCLH's GHG reduction goals and builds greater accountability across the Company to accelerate the progress on ESG goals.
Fostering a culture of ethical conduct: NCLH continuously emphasizes the importance of ethical business practices and upholds all team members to a Code of Ethical Business Conduct which team members are required to review and certify on an annual basis.
Committed to maintaining a strong board with diverse experiences and backgrounds: NCLH welcomed a new board member in 2022, Zillah Byng-Thorne. Zillah brings her extensive technology sector, digital media and e-commerce experience to the board. Currently, the board is approximately 50% diverse, including 37.5% female and 12.5% under-represented minorities, with an average tenure of 6.6 years.
The 2022 ESG report and additional information on NCLH's global sustainability program, Sail & Sustain, can be found at www.nclhltd.com/sustainability.
(1) Targets cover the Company's emissions from its fleet of ships, islands and facilities (Scopes 1 & 2) as well as upstream fuel- and energy-related activities, including well-to-tank emissions (portion of Scope 3).
About Norwegian Cruise Line Holdings Ltd.
Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) is a leading global cruise company that operates Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. With a combined fleet of 30 ships and more than 60,000 berths, NCLH offers itineraries to approximately 700 destinations worldwide. NCLH has seven additional ships scheduled for delivery across its three brands, comprising nearly 19,000 berths.
To learn more, visit www.nclhltd.com.
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