Corporate Social Responsibility of Fraport AG

Contents

Glossary

Background

The Company

The Drivers

Taking Action

Environment Fund

The Business Benefits

Why is it CSR?

CSR Assessment

Summary

References

Glossary

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Background

Prepare a case study paper based on your readings, your own research, analysis and personal reflection. Choose an airline, aviation industry firm, or other aviation­relevant company for a case study on corporate social responsibility. Research what that firm is doing, how it understands CSR, what stakeholders it considers, how it engages them and what programs it runs.

Introduction

The Fraport AG is the owner and operator of Frankfurt's International Airport. The company is the only German Airport, which is listed in the German Mid-Cap share index (MDAX), where 50 mid-sized companies are traded.¹Due to the listing on the stock exchange, the company is committed to fulfill international transparency requirements like the application of international accounting standards and quarterly reporting. Additionally to the Annual Reports and the official publications, Fraport published "Fairplay", a so-called "Sustainability Report" in the year 2008 to communicate their activities dealing with Corporate Social Responsibility.

The document is published in german and english language, can be ordered as a printed document as well as downloaded from the company's homepage.²The aim of this report is to provide information about the strategies they are working with and the "concrete steps [they] are taking to develop [the] company based on a sense of economic, ecological and social responsibility."³

To enable a holistic sustainability management, Fraport has set up a Sustainability Board in 2008, which is "positioned at the level of executive management [...and...] reports directly to the executive board."⁴By having the committee at such a high position within the management-hierarchy, the Fraport Group likes to demonstrate the importance of CSR-issues within the company's preferences.

The Company

The Fraport AG employes nearly 19,000 people (together with its subsidiaries and affiliated companies) as of the end of 2008. Next to the ground handling services, Fraport is also involved in the airport retailing and real-estate business. Together with their subsidiaries they are active by holding shares or management contracts at 12 airports around the world.⁵

In the reporting year 2008 they serviced a total of 53.5 million passengers at FRA, generated € 2,1 billion revenue and made a profit of €180 million.⁶ These economic datas can also be found at the end of the "Fairplay-Report", but the major issue of the report is to provide the reader with on overview of the social and environmental impacts of the company's business operations. Fraport names three strategic goals for their business: value creation, performance and sustainability. ⁷Sustainability itself is based on the three pillars economy, ecology and social responsibility. The two latter are building the CSR fundament of the company.

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This case study focuses on the Ecology pillar of Fraport's CSR-activities.⁸

The Drivers

Environmental concerns, growing public pressure and regulatory measures are changing the way an airport represents itself. Consumers, passengers and shareholders are increasingly demanding environmentally-friendly services and products that are delivered by socially responsible companies. It is becoming increasingly important for airports to demonstrate that not only their investment strategies and day-to-day operations are sustainable, but also their corporate philosophies and how they are communicated.

Taking Action

Regarding Ecology, Fraport has the focus on reducing their environmental impact in as many areas as possible. For reaching this goal, Fraport has set up strategic sustainability targets to be reached until the year 2020:⁹

- reducing CO2 emissions per traffic unit¹⁰ by 30%
- no additional CO2 emissions through expansion projects
- building the new Terminal 3 as an "Eco Terminal" by using innovative energy sources like geothermal energy and photovoltaic technology
- promoting environmental management at all Fraport locations

As Fraport published these aims in April 2008, the former chairman Dr. Wilhelm Bender stated, that the airport's expansion is a "national task of significance for the future" and Fraport will solve the expansion in a carbon-neutral way.¹¹ It sounds like a advertising slogan when Bender considers: "For the sake of the environment, no more time can be wasted in holding patterns."¹² But if Fraport is really able to achieve these goals, we will see in about 10 years.

As a proof of Fraport's successful environmental management during the last decade, they had been validated by the European Eco-Management and Audit Scheme (EMAS) on a yearly basis.¹³ Frankfurt's Airport is the largest location certified by EMAS and they are as well certified in accordance with the international DIN EN ISO

14001 environmental standard.¹⁴

The Fairplay report lists all environmental measures Fraport is taken, for example:¹⁵

- new logistic system and developed software for optimizing handling processes on the apron to avoid empty runs and reducing operating times of diesel-operated GPUs

- district heating from co-generation
- optimizing building technology, energy supply and ventilation system at the largest energy consumers at Fraport, which are the existing Terminal 1 and 2 (requiring 200 million kilowatt hours each day!)
- reducing energy requirements in 60 service and administrative buildings
- encouraging employees for saving energy in working areas and at home
- all of Fraport's electricity is generated from hydropower as certified green electricity since 2008 and by this avoiding the emission of up to 135,000 metric tons of CO2 in 2008 and 2009; the use of geothermic energy sources are being tested right now¹⁶
- improving public transport and rail-connections to enable an efficient networking of air, road and rail carriers
- reducing private vehicle traffic at Frankfurt by offering job tickets to its employees (which 43 percent of their employees are using for traveling to work by train) and foundation of the Carpool Club CARRIVA in 2008
- prevent waste creation by recycling initiatives (e.g. for empty toner and ink cartridges) and increasing the recycling rate to 83 percent by now
- monitoring and improving air quality, reducing greenhouse gases and publishing FRA's air quality in annual air-quality reports¹⁷
- modernisation of the airport's fleet and replacing mobile ground support equipment by new technology (replacement rate of 17 percent in 2007 and 2008)
- environmental component within the airport charges since January 2008, which shall ensure that environmentally friendly aircraft are paying less charges than aircraft classified as more polluting (e.g. Boeing 747-200)

[...]

¹http://deutsche-boerse.com/dbag/dispatch/en/kir/gdb_navigation/listing/10_Market_Structure/31_auswahlindizes/20_MDAX

²http://www.fraport.com/cms/sustainability/dokbin/361/361310.sustainability_report_2008@en.pdf

³Fraport AG: Fairplay. Sustainability Report 2008, page 4.

⁴Fairplay-Report, page 5.

⁵FRA, BOJ, VAR, DEL, AYT, CAI, LIM, HAJ, DKR, RUH, JED, XIY

⁶http://www.fraport.com/cms/company/rubrik/2/2641 .company.htm

⁷Fraport AG: Visual Fact Book. Full Year 2008, Strategic goals, page 16.

⁸Fairplay-Report, page 5.

⁹Fairplay-Report, page 9.

¹⁰One traffic unit equals one passenger or 100kg freight.

¹¹http://www.enviro.aero/Aviationindustryenvironmentalnews.aspx?NID=235

¹²http://www.enviro.aero/Aviationindustryenvironmentalnews.aspx?NID=235

¹³http://www.emas.de/teilnahme/umwelterklaerungen/sammlung-emas-umwelterklaerungen/

¹⁴http://www.fraport.com/cms/glossary_sustainability/dok/320/320550.iso_14001 @en.htm For more information about the ISO certificate: http://www.iso14000-iso14001-environmental-management.com/iso14001 .htm

¹⁵Fairplay-Report, page 28 to 37.

¹⁶http://www.fraport.com/cms/environment/rubrik/2/2870.climate_protection_and_energy@55.htm

¹⁷Most actual example: Abridged Environmental Statement 2009, published by Fraport in June 2009: http://www.fraport.com/cms/environment/rubrik/3/3003.environment_management.htm