MGM China Holdings Limited - ENVIRONMENTAL SUSTAINABILITY

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ENVIRONMENTAL SUSTAINABILITY

COMMITMENT TO ENVIRONMENTAL RESPONSIBILITY

Our Approach to Environmental Management
At MGM China, we believe an environmentally-responsible business is a better business. As a developer, owner and operator of premiere integrated resorts, we are aware of our impacts on the environment through our consumption of natural resources and generation of emissions and waste.  Our dedication integrates environmental considerations into all operational practices from our supply chain, to our facilities management and guest rooms.

Our environmental management approach is defined by an ethos of continual improvement and we strive to find innovative ways to minimize our impacts on the environment. The Company’s Environmental Management System is aligned to well-recognized best practice frameworks, including ISO 14001 in Environmental Management, ISO 50001 in Energy Management, as well as local frameworks such as China (Macau) Green Building Label.   

Emissions
In planning for the future, we recognize the potential threat of climate change to our business and the impact on the communities in which we operate. We are committed to reducing our emissions through our resource efficiency initiatives and fostering climate change awareness and action among our people. Further, we disclose our carbon footprint through the Carbon Disclosure Project (“CDP”) as part of our parent company, MGM Resorts International’s report. Through this reporting tool, we have considered the risks and opportunities presented by climate change, as well as future global trends that may affect our business.

With energy accounting for approximately 98% of our emissions, our carbon reduction strategy focuses on the rigorous reduction of our emissions from energy sources (see the below “Energy Performance” section for more detail on our efforts to reduce energy consumption, which will also reduce our emissions from energy sources).  In 2017, total greenhouse gas emissions (Scope 11 and Scope 22) were 70,2803 tons of CO2e, a 1% decrease year-over-year, and 16% decrease from 2013. This year-over-year decrease is principally attributable to energy reduction projects such as LED lamp replacement, retrofitting our ventilation equipment to be more energy efficient and boiler plant optimization programs.

All guest limousines and leased shuttle buses are Euro IV and V compliant, meaning lower levels of pollution. Emissions through our leased shuttle bus service is also an area of focus with ongoing initiatives to reduce the quantity of shuttle buses on Macau roads with the joint aim to reduce traffic and emissions; in 2017 we reduced shuttle fuel consumption by 6% through operational and fuel efficiency programs. To support the Macau Government’s transport integration arrangement, we collaborated with a neighboring resort to launch a daily joint shuttle bus service connecting passengers between the Border Gate and our respective properties, the first collaboration of its kind in Macau.

Natural Resource Use
At MGM China, we are aware that our planet’s supply of natural resources is limited. With this in mind we are actively engaged and committed to resource conservation and efficiency.

Our Building Management System ensures energy and water consumption is closely monitored and energy and water-intensive equipment is effectively calibrated and maintained. We have also implemented a data management system which allows us to access real-time energy and metered water data in a central, web-based system.  Through this system, analytical tools allow us to perform complex analyses to help us better understand our impacts and areas for improvement, as well as to enable us to produce automated reports for distribution.

 

Energy Performance
Our energy consumption in 2017 was 89,150,005 kilo watt hours (“kWh”), which included purchased electricity, liquefied petroleum gas (“LPG”), diesel and gasoline. 

Energy type

Amount consumed in 2017 (kWh in 000s)

Energy unit consumed per m2 (intensity)

Emissions (tons of CO2e)

Purchased electricity

69,841

0.33

63,206

LPG

15,228

0.07

5,053

Gasoline

717

0.003

200

Diesel

3,364

0.02

822

Year-over-year, we have reduced our energy consumption by 1%, and 17% since our 2013 baseline4. While we realize 1% is a modest reduction, significant reduction gains made by us in the last decade amounting to over 30% of energy savings have made continued substantial gains challenging. However, we remain dedicated to continuous improvement and finding new and innovative ways to continue our downward trend, despite a growing business and a progressively warming climate. Targeted retrofitting of our building with more energy efficient equipment and focusing on employee behavior change in favor of energy conservation will continue to be areas of focus.

Water Performance
Water scarcity is a pressing and urgent issue for many countries around the world and it is therefore everyone’s responsibility to ensure this vital resource is conserved. The majority of Macau’s water is sourced from the Xijiang River, the mainstream of the Pearl River, with low risk of lack of potable water supply, however there are concerns of raised salinity levels during certain periods of the year5.

In 2017, we continued to conserve our water usage through our ongoing program of upgrading our fixtures and fittings (for example, shower heads and faucets) with low-flow alternatives, as well as adjusting our flow rates where possible. Throughout the year, we also continued to increase the scope of our water recycling program which serves to recycle the condensate from our air handling units, as well as the cooling tower bleed-off, to be reused for flushing.

In 2017, we consumed 662,923 m3 of water, an increase of 2% year-over-year, but an overall decrease of 9% from our 2013 baseline. This increase in 2017 was due to additional employee headcount being added temporarily to MGM MACAU in anticipation of MGM COTAI’s opening and specifically attributed to our Employee Dining Room which used significantly more water in the process of meal production and dishwashing. Given these extra staff will be transferred to MGM COTAI from January 2018, we expect to recommence our annual downward trend at MGM MACAU. 

Waste Management
We recognize the importance of responsible waste management, and endeavor to reduce waste (hazardous and non-hazardous) sent to the landfill and incineration by managing our resources wisely.  In 2017, the Group generated 3,575 tons of waste, a decrease of 15% year-over-year, and 30% reduction from our 2013 baseline.

Our waste management approach in 2017 focused on three important areas:

  • Reducing: For example,  setting all of our printer default settings to double-sided printing and removing the availability of disposable water bottles in back-of-house meeting rooms;
  • Reusing: For example, using items such as reusable containers and cups instead of disposable ones, giving our guests the option of not having their towels and linen refreshed if they do not see the need, and donating furniture to local charities; and
  • Recycling: Deploying recycling facilities for the collection of plastic, paper, cardboard, cooking oil, soap, metals and glass in both front of house and back of house. In 2017, the Company implemented an intensive recycling program through which we have increased our recycling total 7-fold.

Typical non-hazardous waste includes organic waste, plastics, metals, paper & cardboard, fabrics and textiles.  Common hazardous wastes include diesel, compressed gases, oil-based paint, cooking oil, solvent adhesives, dry clean oil, acidic/alkaline and chlorine solutions (for pool water treatment), and batteries. Our hazardous waste management procedure ensures that such wastes are used up or returned to suppliers for safe disposal. Items such as cooking oil, toner cartridges and rechargeable batteries are recycled. In 2017, 0.002% of waste, or 7 tons, was hazardous waste, a decrease of 15% year-over-year. 

Green Building
We incorporate green building techniques into our design, development and construction processes using industry-leading green building frameworks.  MGM COTAI opened on February 13, 2018; this property is a best in class integrated resort and has been built with leading practice green building processes and technology. Some of the key highlights of our green building program at MGM COTAI include: high-tech energy efficient air-conditioning, 100% LED lighting, low-flow water fixtures and fittings, use of recyclable and local construction materials, and systems for advanced indoor air quality. MGM COTAI has been certified with the China (Macau) Green Building Label, the only private sector organization in Macau to be awarded with this label. 

Biodiversity
For any new construction, we are committed to protecting ecosystem biodiversity. When selecting the site for MGM COTAI, an external Environmental Impact Assessment was commissioned to ensure there was no loss to ecosystem biodiversity of the site chosen. Outside of our direct operational impact, we also seek to encourage our employees, suppliers and partners to also adopt responsible practices to support biodiversity through our engagement programs and policies.

We are also bringing the wonders of nature to our visitors through the permanent Nature’s Art installation in the Spectacle at MGM COTAI. The vertical and horizontal greenery will comprise over 100,000 plants and over 2,000 plant species from Macau, Hong Kong and mainland China as well as from other world destinations. This display of exquisite biodiversity will also bring back to life several extinct and extremely rare plant species through the use of seed banks in Hong Kong and Europe.

Green Procurement
Wherever possible, we seek to favor procuring goods and services that cause minimal adverse environmental impacts, and make this clear to our suppliers. For example, we favor those that are more energy and water efficient, or products that include less toxins to reduce adverse health effects, or those that use less packaging. Suppliers are monitored to ensure our standards are being met, with adhoc audits being carried out. In 2017, we spent over HK$73 million procuring products that are environmentally-preferable, such as office paper certified by the Forest Stewardship Council, sustainable seafood and biodegradable laundry products, for example.

Employee Engagement
We proactively engage our employees in our efforts to manage our environmental impacts.  In 2017, our environmental employee engagement program focused on periodical themed events, and ongoing education and communication.

CASE STUDY: Go Green Campaign

This year’s Go Green Campaign from March 20 - April 3, 2017, in support of the Civic and Municipal Affairs Bureau’s (“IACM”) Green Week, as well as the annual Macao International Environmental Co-operation Forum & Exhibition included a whirlwind of activities for our employees to raise awareness on topics such as:

  • Ocean conservation: A presentation was given by MGM's onsite team of aquarists on the issues related to water pollution and the need to protect our marine environment. This was then followed by a beach cleaning activity later that week.
  • Biodiversity maintenance: Under the guidance of IACM, MGM participated in a tree maintenance program organized at Hác-Sá Reservoir Country Park to help preserve Macau’s green spaces under the guidance of IACM’s tree specialists. Our Volunteer Team also participated in IACM’s mangrove planting program and awareness raising exercise to mark the importance of Macau’s mangroves which are vital to Macau’s ecosystem biodiversity and coastal protection.
  • Launch of Green Monday: To support low carbon living and raise awareness that our day-to-day actions can have an impact on the environment and contribute to climate change, MGM MACAU officially launched Green Monday in our Employee Dining Room.

          

During new hire orientation, all employees are made aware of our sustainability commitments and program. This is supplemented by department-specific Green Training for detailed advice on actions that can be taken to reduce impacts.

In addition to a monthly Sustainability Newsletter that is distributed to all employees celebrating monthly successes, we post stories and videos from our environmental program through our internal communication channels to update employees on our progress. We also welcome 2-way feedback, encouraging ideas from employees on how we can do things better.

Community Outreach
We are passionate about sharing what we have learnt from many years of dedication to sustainability with the community. We aim to engage our community through holding sustainability talks, back-of-house sustainability tours of our property to see sustainability in action and other awareness raising initiatives on various themes such as:

  • Resource efficiency: As Macau residents and visitors from afar gathered to watch Macau’s CNY Parade on January 30 and February 4, 2017, our parade float not only wowed and entertained, but also had a unique twist - an environmental message at its heart. To create the float, we thoughtfully used materials that can be readily recycled such 1,500 plastic bottles, 400 wine glass bottles and 500 room key cards; and for lighting we utilized 100% LED lighting. The acrobats and dancers that led the front of the float also donned costumes made from over 4,000 bottle caps, among other recyclable materials.  To the crowd, we distributed recycled soap created through our partnership with the Clean The World Program – a program that collects, sanitizes and recycles leftover soap.
  • Climate change: On March 25, 2017, 8:30-9:30pm, MGM MACAU once again joined Earth Hour, the global effort to raise awareness of climate change and environmental protection, by switching off all non-essential lighting during that hour. On a monthly basis, we also join “Earth Hour Every Hour” a local initiative instituted by the Macau Hotel Association encouraging Macau resorts and hotels to join in a monthly Earth Hour for continued awareness throughout the year.

 

Notes:

  1. Scope 1 emissions include: emissions from stationary combustion sources, such as boilers, emergency generators and fuel stoves; mobile combustion sources, such as company-owned and leased fleet vehicles, including cars, limousines, shuttle buses, etc; and fugitive emissions which are the hydrofluorocarbons (“HFC”) used in refrigeration and AC equipment. This year we have included all leased vehicles in our emissions total which was previously classed under Scope 3 emissions.
  2. Scope 2 emissions comprise emissions from the generation of purchased electricity.
  3. The GHG emissions calculation for 2016 has been updated to reflect the correct emissions factor for the year, which was previously unavailable at the time of the 2016 report writing.
  4. Our baseline was updated for energy, water and waste to 2013 for greater consistency and relevance.
  5. “Report on the State of the Environment of Macao”, 2015, DSPA