JetBlue & AT Kearney explore ecological business case
The Caribbean is considered by many as a natural paradise that provides a rich bounty of exploration and relaxing possibilities. In a research project by Caribbean airline JetBlue, The Ocean Foundation and A.T. Kearney, the researchers strive to identify whether negative environmental impacts need to be incorporated into business models, on the basis that the ecological purity of that environment stands at the heart of the long term success of the businesses.
Environmental value
The Caribbean, with its pristine coast lines, warm crystal-clear corralled sea and rich plant diversity, has long been a destination for tourists from many walks of life. Yearly 22 million visitors are attracted to Caribbean destinations, where they are free to explore its beaches and dive in the seas. Visitors however, especially ones that lack a refined consciousness that extends over their environment, tend to leave things behind. Yearly, in the Caribbean, 100 million tons of trash finds its way into the ocean, with 89% of it created by shoreline activities that facilitate and involve visiting tourists. The trash washes up on beaches, contaminates fragile ecosystems, and is a health hazard to animals and humans alike.
Against the background of environmental considerations, JetBlue, a Caribbean airline that flies 1.8 million people to various Caribbean destinations per year, created a research project ‘Eco Earnings: A Shore Thing’, to, among other things, find out how negative impacts on the local ecology affects their business model. JetBlue’s reasoning for directly coupling environmental concerns with their business model, is that the majority passengers that fly with them come to the Caribbean to enjoy its ecological purity – the environment is therefore a key value in their in their model and effects on its quality may need to be quantified for their long term success.
To understand the environment’s value to the firm’s business model, a relatively new research avenue, the airline company joined forces with NGO The Ocean Foundation and management consulting firm A.T. Kearney, and together the researchers analysed the following question: is there is a causal relationship between revenue per available seat mile (RASM) and three environmental variables: mangrove health, beach trash and water quality. The research found that the biggest statistical effect on RASM from the variables considered came from beach trash, however, a direct causal link between variables could not be made from the information available to the project.
The concluding remarks from the researchers is that “as may be expected with a project that charts relatively new territories, we ended up in a decidedly gray area somewhere between supported and not supported. There was a clear correlation between environmental health and RASM but insufficient data to do an adequate regression analysis. Therefore, we cannot reach any definitive causation and conclusions.”
Further research
A major challenge, the researchers found, for ocean conservation is the lack of consistent and comparable data to measure and monitor progress. While an abundance of environmental data exists, definitions are too inconsistent and information is often not robust enough to develop business cases and action plans with the environment as a basis. The researchers argue however that there is much more to be done before a clear causal case can be made. They recommend a broad approach, between scientists, environmental NGOs and businesses to create a more robust data set with clearly defined parameters. Once this is in place, scientific conclusions about the simple hypothesis that clean, clear beaches and oceans sell, and that businesses that depend on a healthy environment benefit in the long term from protecting the environment they service, can be shown either way. The intrinsic value of the environment need not be forgotten, the business model approach just adding a further dimension to a broad approach to environmental protection.
