Leading the Way to Sustainable Innovation in the Transport Sector: The Example of Cruising

In a world that increasingly looks at solutions to limit the environmental footprint of human activities, transport and infrastructure are in the spotlight as one of the most environmentally impactful, yet essential sectors.

The dilemma of sustainable infrastructure is receiving increased international attention, to the extent that during their recent G7 Summit, world leaders launched a Partnership for Global Infrastructure and Investments to “take on a stronger global role in promoting socially, economically and ecologically sustainable infrastructure”.

Rising expectations on sustainability are putting increased pressure on the corporate landscape. At the same time, however, businesses in this field are facing serious short-term challenges linked to the shortage of energy sources, and the need to strike the balance between efficiency and sustainability.

Despite this apparent conundrum, the sustainability race is going to be the defining element of business development and competition in the years to come. To navigate this complex scenario, businesses in transport and infrastructure are called to act as aggregators, enhancing progress and at the same time benefitting of the existing opportunities, including:

• new models of cooperation and public-private partnerships;
• unprecedented public investments in sustainable innovation and research; and
• private funding, to be leveraged through green finance.

The Case of Cruising: A Pioneer in Sustainable Innovation

In such a challenging landscape, we can look at the cruise industry as a laboratory of ideas and technologies leading the way to sustainable innovation for the entire maritime transport sector.

Historically, cruise ships have been at the forefront of responsible innovation. This is mainly due to the exposition of the cruising industry to consumers’ fast-changing demand, as well as its central role in connecting all key players in the value chain—from shipbuilding to the port communities. The construction of a single cruise ship entails the involvement of an entire universe of suppliers, designers, engineers, and technologists who develop and test new production techniques and sustainable solutions which can be scaled to other industries and have a positive spill over effect on port infrastructure too. In fact, by introducing green technologies and decarbonization solutions in the naval sector, innovative cruising companies have the potential to drive a long-term effect on the entire ecosystem.

An interesting case of a cruise company managing to work successfully with its network of partners and stakeholders towards decarbonisation is represented by APCO client Costa Group, the largest cruise company in Europe and among Europe’s leading tour operators. Guided by a sustainability strategy inspired by the UN 2030 Agenda for Sustainable Development, and thanks to continuous investments in new forms of propulsion and circular economy models, Costa has become a pioneer in sustainable innovation for the maritime sector.

In 2018, the company was the first to introduce LNG propulsion—the most advanced fuel technology available to reduce emissions. Furthermore, most ships in the fleet are equipped with shore power capabilities, and Costa is partnering with public and private players to favour deployment of cold ironing infrastructure to reduce emissions in destination ports. Furthermore, Costa ships are inspired by the concept and operating model of “floating smart cities”, with technologies allowing 100% on-board waste sorting, sustainable water management and an overall reduction of the operations’ environmental footprint.

Innovations introduced in the fleet are coupled with a long-term vision to leverage on global facilities and promote alliances across private and public partners on long-term R&D investments and projects. The latest step in this path is the recently announced creation of a dedicated decarbonization department within the Group. The unit will be studying and testing new propulsion technologies (e.g. batteries, fuel cells, solar and wind power) to refit the existing ships with greener solutions, support the decarbonization ambitions of the Costa fleet by 2050, and work towards the first zero-emission cruise ship. Furthermore, the new department will design proposals for Costa to work in close cooperation with Governments and contribute to a systemic effort leading to carbon-neutral solutions for the entire cruising and maritime value chain.

Takeaways for Businesses to Become Industry Leaders

The Costa case shows how crucial the choice of multinational transportation and infrastructure companies to embrace the challenge of ecological transformation is. A full adherence of companies to the goals set by the international community can transform shipping and infrastructure companies from potential stumbling blocks to true game changers, as their investment programs have a much higher than average “supply chain multiplier,” and the results of their investments are bound to generate effects for the decades to come.

So how should transport companies interested in becoming sustainability leaders tackle this challenge?

• Become an early bird of your industry’s transition, leading the process with a forward-looking strategy and securing the resulting competitive and reputational benefits.
• Know how to navigate the vast sea of political and institutional debate, building alliances with decision-makers and monitoring the regulatory risks and investment opportunities offered by institutions, both locally and internationally.
• Team up with industry associations, complementary businesses, and supply chain partners, directly involving all actors who can participate in the creation of shared value and gain from the multiplier effect of green investments in their sectors.

APCO alumnus Eugenio Serra co-authored this piece.