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A Commitment
to Oceans

A PARTNERSHIP FOR OUR OCEANS

At Royal Caribbean our mantra is continuous improvement. It drives us to improve everything. In 2016 we challenged ourselves to expand our conservation and sustainable business practices and so partnered with one of the world’s most respected conservation organizations, World Wildlife Fund (WWF). Together we have set out on a five-year journey to help ensure the long-term health of the oceans.

The relationship officially launched in January 2016 by setting specific and measurable sustainability targets to reduce our environmental footprint, raise awareness about ocean conservation among our more than five million guests, and support WWF’s global oceans conservation work with a philanthropic contribution of $5 million over five years.

Our initial targets set in January focused on reducing carbon emissions and ensuring sustainable seafood procurement. In June 2016, we upped those commitments by announcing additional 2020 environmental sustainability target, which focuses not only on our direct operations, such as the development of sustainable sourcing strategies for key soft commodities, but also on the sustainability of our tour operators and destinations.

Oceans cover 71 percent of our planet’s surface and make up 95 percent of all the space available to life. By working together to address some of the key threats to the oceans, we hope to create positive change on those waters and ensure their long-term health.

A full list of our 2020 Sustainability Goals is available here. In addition, we have reaffirmed our corporate sustainability goals, including waste and recycling, wastewater, and water bunkering through 2020.

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Designing for a More Efficient Future

Cruise ships may come with a long shelf life, but to achieve that there are years of intense brainstorming, design and construction by a small army of people. This presents both a challenge and an opportunity for us. The challenge is retrofitting for new innovations developed after a ship has been designed, and in many cases built. The opportunity is offering our team of architects and engineers the ability to look far into the future.

In 2016, Royal Caribbean announced the order of a new class of ships, project named Icon to be built at the Finnish shipyard, Meyer Turku. The order includes two ships largely powered by liquefied natural gas (LNG), a fuel source which has been making inroads in the maritime industry on various types of commercial vessels as a cleaner energy source. While this technology is not new, there are concerns with LNG availability at ports around the world. By planning into the future, we are confident that by Icon’s debut in 2022, the supply and infrastructure will be in place to support the cleaner fuel.

Looking farther into the future also allows us to challenge ourselves to find new energy uses that are safe, reliable and more efficient. In the case of Icon, that is where fuel cells come in. Described most simply, fuel cells are fed hydrogen, convert it to electricity and produce only water as a byproduct or waste. As the technology becomes smaller and more efficient, the possibility increases of using fuel cells in a significant way to power the ship’s hotel functions. In order to maximize their use onboard Icon class, we will be testing those possibilities onboard existing ships in next few years.

The technologies in this next generation of cruise ships continue our steady progress on increased energy efficiency and reduced emissions. This includes the introduction of air lubrication, which coats the underside of a ship with a blanket of microscopic bubbles to reduce friction, as well as fitting and retrofitting its ships with Advanced Emission Purification systems, informally known as exhaust scrubbers.

Smart HVAC Reduces Cooling by 25%

In the hospitality industry guest comfort is always top of mind. One of those basic creature comforts, maintaining the perfect ambient temperature is also one of our largest energy pulls. Our engineers are on a constant quest to identify efficiencies and innovations to reduce our energy and as a result, our cost and carbon footprint. With the launch of the Quantum-class, and in 2016 Harmony of the Seas, we have been able to customize and create a “smart” HVAC (heating, ventilation and air conditioning) system to address this critical aspect of our energy consumption and reduce our cooling by a quarter.

In the past, ship public rooms were air-conditioned according to their maximum capacity, but when the room only reaches a quarter of that capacity we were then forced to compensate for the lax of people by expending additional energy to warm the room to an acceptable ambient temperature.

Today, using a computer-operated demand-based system, new ships measure the CO2 in the room, use that to calculate the actual number of people, condition only the air needed for their comfort and continue to adjust as needed when more people enter or leave the space. Dealing with this in smart ways has resulted in significant energy efficiencies.

One way we are doing this is by recirculating the air inside the ship instead of venting it outside, as had been the practice. Now warm air is pulled out of a room and sent to a recovery wheel – also called a rotary heat exchanger – where heat is caught and the now cooler air is returned to the fresh air intake.

The bulk of the air is brought onboard and sent into chillers that use a closed loop of pipe filled with water instead of a chemical refrigerant. That loop passes through a cooling coil below decks that does all the chilling before the air is returned to staterooms, common areas, galleys – anywhere onboard.

Supplementing air-handling units that bring fresh outside air to all areas of the ships are “fan coils” that recirculate the internal air once it has been cooled. Because excess humidity has already been removed from that air, it’s dryer and uses less energy to cool again. Dehumidifying in fact accounts for 75 percent of AC power consumption onboard.

Additionally, galleys that might otherwise run on full all day or night are now switched to standby when demand isn’t high. Staterooms link temperature control to the guest’s keycard, saving energy when no one is inside.

Compared to older ships, these new systems cut HVAC costs in half.

Environmental Initiatives Snapshot

35%
reduction in greenhouse gas emission from the 2005 baseline, per available passenger cruise days of our ship
BILLIONS
of tiny bubbles reduce the amount of energy needed to propel our ships by pushing out a coat of microscopic bubbles aimed at reducing the ship’s frictional resistance as it sails
Advanced Wastewater Purification Systems have been installed on
35 SHIPS

Developing Public-Private Partnerships

It is estimated that the cruise industry contributed $120 billion to the global economy in 2014. With that growth come demands on destinations, that must be properly managed to ensure future viability and economic development from cruise tourism is enjoyed by all parties.

The Caribbean is notably the most tourism-dependent region in the world, serving as the single largest contributor to GDP and the biggest employer in the region after the public sector. And for many countries in Central America, cruise tourism is the fastest growing segment of the tourism sector.

As our own company grows, and our geographic reach expands, supporting local economic development projects is top of mind. We believe that educating and empowering local stakeholders to drive change presents the greatest opportunity for us to enable responsible and sustainable corporate revenue growth. Our impact extends to our guests and crew who also contribute significantly to local economies by purchasing food, beverage, clothing, jewelry and items from local artisans.

An excellent example of local project development is Roatán, Honduras. Our investment in the Port of Roatán provides a model for how we intend to engage in responsible growth. Under a public-private partnership model, we co-developed, and now manage, Roatán’s port facilities as a public port available to all cruise lines.

Tourism is the main economic activity in Roatán with more than 25% of all households in the island deriving their livelihoods from jobs generated at this port. Our investment in the Port of Roatán has allowed the destination to keep up with the industry trend of building larger ships, and as such positioning Roatán as a destination capable of receiving the newest vessels being built. As a result, tour operators and independent taxi drivers have invested in better vehicles and the growing passenger spending amounts have provided significant direct and indirect employment in all sectors of the economy.

We also have worked to spread our commitment to conservation and sustainable tourism on the island. RCL grants have enabled the development of a destination stewardship action plan for the island in collaboration with local authorities and tourism boards. Project outcomes included the establishment of a destination management organization and a community cultural marketplace, in addition to defining steps to improve the management of solid waste and freshwater resources.

As our company grows and our geographic reach expands supporting local economic development is top of mind.

Our Approach to Sustainability

We have a responsibility to the guests who sail with us, the people who work for us and the communities we visit, but most critically we have a responsibility to the oceans – they are not only at the heart of our business, but connect each and every one of us.

Our Philosophy

Over the course of 20 years, Save the Waves has been behind our commitment to environmental stewardship. Stemming from a companywide recycling program in 1992, Save the Waves branched out over the years to include more ambitious goals such as emissions reduction and waste water treatment. The program’s main principles are:

As our knowledge of the oceans grew, so did our program, which evolved into a broader sustainability platform aimed at preserving the oceans and protecting coastal communities. In 2015, we took a step back and formalized that program into an official platform that spans all operations from our new building to our charitable giving. Extending well beyond shipboard operations and our employee workforce, the platform drives our collaboration with educational institutions such as the University of Miami, conservation-focused nongovernmental organizations such as World Wildlife Fund and other entities to help our Caribbean, Latin American, and South Pacific destinations strengthen policies and protect resources so their marine environment can remain vibrant and healthy.

A Letter from Our Chairman and CEO

Welcome. At a cruise line, the oceans are core to our purpose. They are our way of life, and respecting them is not a choice, but a responsibility – a responsibility we take very seriously. As a result, we are dedicated to innovation, continuous improvement, and environmental responsibility.

2016 introduced a new set of ambitious goals for us. Together with the World Wildlife Fund (WWF) we set sustainability targets in five key areas to reduce our environmental footprint and raise awareness about ocean conservation. These goals are science-based, impactful and touch nearly every aspect of our operations – from supply chain, to emissions reduction and even those destinations we visit. Partnering with WWF helps us find the right ways to improve and I look forward to seeing the results over the course of the next five years.

Our environmental stewardship journey, which led us to these new goals, is one I'm particularly proud of. We believe that what you measure gets better, and so continuous improvement drives our strategy. It has led us to deliver our most energy efficient ship, Harmony of the Seas, in early 2016 with 25 percent improved energy efficiencies over her sister ship, Allure of the Seas. Our teams worked diligently to create systems and develop new efficiency such as our HVAC (heating, ventilation and air conditioning) system which reduces cooling by a quarter.

We continue our work to remove sulfur dioxide emissions with our Advanced Emissions Purification systems with plans in place to retrofit onto a total of 26 ships by 2019. The retrofit has been one of the most challenging projects our Newbuild team has undertaken, and while there have been delays, as the process is new and different for each class of ships we undertake, the learnings have been a key part of the project.

Our people’s passion and vision is what truly fuels our accomplishments. It’s part of our DNA to embrace challenges and strive for the best. From our shipboard teams, that deliver incredible vacations while meeting all of our operational goals, to the design and engineering teams that are constantly envisioning our future trajectory.

That trajectory in 2010 included achieving 100 percent re-purposed waste onboard our ships. Today we have 30 ships achieving that goal and we have announced plans for LNG and fuel cell powered ships to debut in 2022. I look forward to welcoming those ships to our fleet and I anxiously await the innovations that we will see in the future.

Setting goals for ourselves and reporting publicly on the progress is an important discipline that helps us improve. This report reflects the hard work and commitment of our people who rise to the challenge daily. They truly make a difference and I thank them for their efforts.

Richard Fain
Chairman and CEO
Royal Caribbean Cruises Ltd.

As a member of the Board of Directors of Royal Caribbean for more than a decade and as Chairman of the Board’s Safety, Environment and Health Committee, I have a clear window into the company’s history of deepening commitment, careful stocktaking and goal setting.

When it partnered with World Wildlife Fund, in 2016, through ambitious science-based targets, the company further cemented its commitment and responsibility to the unspoiled nature, healthy seas, ecosystems and clean air that its guests expect to encounter.

The Board and management have been deeply involved in pursuing the achievements recorded in this report. The trajectory set out in the pages that follow is one of continuous expansion as new areas of effort are identified and then progress within them is measurably improved.

Measures listed in this report are integral to the company’s business strategy. Energy efficiency saves money. So does waste reduction and recycling. They require resourceful and creative thinking to accomplish and are not simple nor always easy to achieve.

My window is not the only way to look in on RCL, which prides itself on the transparency it provides to everyone who wants to learn more about the company, its ships, its practices, its footprint and its people.

It is that passion for doing the right thing, which can be found everywhere within the company, that I have come to admire.

William K. Reilly
Chairperson Safety, Environment and Health Committee
RCL Board of Directors