1. Managing the supply chain responsibly MATTHIAS LEISINGER KUONI SWITZERLAND

2. SUSTAINABLE SUPPLY CHAIN MANAGEMENT: A KEY PRIORITY AREA WTM AFRICA 2016 2 Monitoring Relevance to Kuoni’s business Degree of concern to stakeholders IMPACTS OF CLIMATE CHANGE& REGULATIONS CULTURAL HERITAGE COMMUNITY ENGAGEMENT SUSTAINABLE SUPPLY CHAIN MANAGEMENT SOCIAL INVESTMENTS HUMAN RIGHTS Child protection Working conditions M ONITORING / LOW EFFORT NATURAL RESOURCES Loss of biodiversity Water scarcity SUSTAINABLE PRODUCTS Product Innovation Customer satisfaction Social Media GOVERNANCE/ COMPLIANCE Anti Corruption Ethics/transparency EMPLOYEES Occupational Health & Safety Employee Engagement Leadership A CTIVE M ANAGEMENT /H IGH RISK AREAS Low High Low

3. SUSTAINABLE SUPPLY CHAIN MANAGEMENT – OUR PRIORITIES COMMUNICATION & PARTNERSHIP Long-term partnerships with hotels Increased communication and concrete product offers to customers, Highlighting best practice examples (to customers, hoteliers, NGOs) QUALITY OF PRODUCTS / NEW BUSINESS OPPORTUNITIES Increased quality in our products Cost reduction (e.g. by saving water and energy) BRAND AND RISK MANAGEMENT Risk management (strong pressure on supply chain issues in general) Investment in Kuoni brand Ensure compliance with social and environmental standards as required in contractual terms (Supplier Code of Conduct) WTM AFRICA 2016 3 SUSTAINABILITY OF THE DESTINATIONS Protection of landscapes, nature reserves and scenic attractions Creating jobs & economic benefits for people

4. LEVERAGING THE SUSTAINABILITY LEVEL OF THE SUPPLY CHAIN (MONITORING AND CERTIFICATION) WTM AFRICA 2016 SUSTAINABLE SUPPLY CHAIN MANAGEMENT – STRATEGIC APPROACH H&S inspections Online self- assessment CR capacity building supplier trainings /workshops supporting core hotels Integrate CR aspects into H&S on-site inspections Identify sustainable hotels Monitor hotel partners’ compliance with SCoC Detect issue areas and evaluate improvement measures Green sales Define “Kuoni Sustainability Leaders” Promote “Kuoni Sustainability Leaders” trough brochures and websites External certification

5. Increase number of certified hotels through promotion and capacity building ► PROMOTE GSTC RECOGNISED SCHEMES SUCH AS TRAVELIFE AND FTT Kuoni recommends sustainability certification to hoteliers and provides information Contractors understand the award scheme and processes ► CAPACITY BUILDING PROGRAMMES IN SELECTED DESTINATIONS ON DIFFERENT SUSTAINABILITY ISSUES (2013/2014) ► Thailand/Kenya: Water management ► Tunisia: working conditions ► Gran Canaria: sustainability training, preparation for Travelife certification ► Bali: environmental management ► Kenya: Better workplace environment WTM AFRICA 2016

6. Why focus on freshwater & Tourism? REPUTATION AND RISK MANAGEMENT Tourism businesses implicated in spread of disease by not treating wastewater 53% of hotel managers surveyed by WTM felt there business was already affected by water shortages TOURISM VS LOCAL CONSUMPTION IS DISPROPORTIONATE The tourism sector uses 1-2.5 x the daily amount of water used by a local resident in the Mediterranean and Caribbean. In North African destinations, 4-10 x is used In Thailand tourism activities need daily 6 to 8 times more water THAILAND IS A WATER SCARCE COUNTRY Thai Meteorological Department's Central Weather Forecast Division - Thailand will not have enough water this year and next year as the El Nino phenomenon reduces rainfall. Electricity Generating Authority of Thailand - Water retained in Bhumibol and Sirikit dams, is well below the 10-year average. The agency warns that this could affect all activities that depend on water from the two reservoirs WTM AFRICA 2016

7. 28% of destinations are projected to have water scarcity or be water stressed by 2025 DISTRIBUTION OF DESTINATIONS ACCORDING TO PROJECTED WATER SUPPLY Data based on the WBCSD Global Water Tool 2012. WTM AFRICA 2016

8. Stakeholder Meeting «freshwater and tourism» – March 2011 FOUR WORKING STREAMS HAVE BEEN DEFINED: 1. Technological Solutions 2. Water Footprint and Accounting Methodologies 3. Customer Awareness and Education 4. Standards for the Supply Chain WTM AFRICA 2016

9. Kuoni Water Champion Award AIM to support hotel partners in the implementation of technological & human solutions Reduce water consumption in hotels IMPLEMENTATION STEPS Select hotels that will be asked to participate in pilot projects. Identify best-practice installation and operation of water saving devices for the area, including a cost analysis. Develop water management manual, which addresses particular characteristics and types of hotels in the selected region. Collaborate with marketing department to highlight participating hotels and those with best reduction in water consumption. Implement workshops, courses and presentations. Identify training needs of hotel partners (e.g. water accounting methods) via needs assessments conducted by independent consultants. WTM AFRICA 2016

10. Success stories from Kenya project – major saving without any investment Hotel I: Initial water consumption: 2,470 litres/bednight Resulting water consumption 1,890 litres/bednight = 24% savings Improvement plan included: installation of multiple meters to establish where water is being used Leakages from aging and convoluted plumbing system fixed Replacement of staff showers Training of staff on water saving Review of irrigation system Hotel II: Initial water consumption: 1,790 litres/bednight Resulting water consumption: 1,110 litres/bednight = 38% savings Improvement plan included: Installation of multiple meters to establish where water is being used Fix leakages from aging and convoluted plumbing system Training of staff on water saving WTM AFRICA 2016

11. MAJOR ISSUE AREAS IDENTIFIED IN KENYA & INDIA Focus on labour issues of key accommodation suppliers WTM AFRICA 2016 11

12. EXAMPLES FOR PREVENTIVE/MITIGATION ACTIONS DEFINED FOR KENYA & INDIA KENYA Integrate findings in new Human Resources manual Private Safaris ILO SCORE project: capacity building workshops to improve working conditions in hotels Promote beach operator and hotel cooperation to mitigate tourist harassment Raise issues at destination level with other players in the industry/government INDIA Develop & promote sustainable houseboats in the Backwaters Establish innovative collaboration with ITC [Indian Hotel Group] to develop and promote sustainable products Develop information material to sensitize customers Improving working conditions of subcontracted staff (e.g. drivers) Raise issues in local industry associations HUMAN RIGHTS – HUMAN RIGHTS IMPACT ASSESSMENTS (HRIA): KENYA & INDIA WTM AFRICA 2016

13. Following the human rights impact assessment conducted in Kenya in 2012, Kuoni/Private Safaris and the International Labour Organisation (ILO) have engaged in an informal partnership with the following two objectives/work streams: COLLABORATION ILO & KUONI KENYA 2013-14 WTM AFRICA 2016 FOSTER INDUSTRY COLLABORATION IMPROVE WORKINGCONDITIONS IN HOTELS (SCORE) Convene local tourism stakeholders to address issues identified which require a broader/societal approach (e.g. distribution of economic benefits, industry wages etc.) Conduct capacity-building training for hotels in Kenya, to help them to improve business performance through improved workplace cooperation and the adoption of responsible and “lean” management practices (SCORE methodology). COLLABORATION ILO & KUONI IN KENYA

14. SCORE TRAINING PROGRAMME WTM AFRICA 2016 SCORE (Sustaining Competitive and Responsible Enterprises) is an ILO training programme carefully geared to the needs of small and medium-sized enterprises and has been tested and improved in many different sectors around the world. It was first adapted to the hotel industry in South Africa in 2009 and is currently being implemented in Kenya. STRUCTURE OF THE SCORE TRAINING 1.Training of local experts 2.Classroom training with hotels Two managers and two workers per hotel participate in a two-days training tailored to the Kenyan hotel sector 3.Individualized business advice Freshly trained local experts provide bespoke counselling at the hotel to help address the specific issues identified during the classroom training Close collaboration and empowerment of the enterprise improvement teams

15. ACHIEVEMENTS WTM AFRICA 2016 FOSTER INDUSTRY COLLABORATION IMPROVE WORKING CONDITIONS IN HOTELS (SCORE) 2 workshops conducted with Kenyan tourism stakeholders (ILO constituents & NGOs) to discuss issues & identify priority areas for action ILO constituents visited SCORE hotel to learn about SCORE methodology Training on social dialogue conducted with ILO constituents Successful lobbying for the reinstatement of a wages council for tourism 5 local experts trained as SCORE trainers 4 hotels participated in classroom trainings Enterprise improvement teams established Enterprise improvement plans developed and being implemented Case studies presented at closure event in November 2014 COLLABORATION ILO & KUONI IN KENYA