PROTECTING OUR ENVIRONMENT

At NagaWorld, we recognise that whatever impacts the environment can affect our business. With this underpinning, we seek to deliver excellence to our guests while minimising the negative impacts on our stakeholders and the environment. We focus on the areas of carbon emissions, energy use, air quality, water use and waste.

To achieve our environmental commitments, we continuously review our operations and value chain to align with our environmental goals. This entails adopting industry best practices and green technologies, engaging our workforce on their role in reducing resource use, and reporting our environmental performance. For instance, senior management, including the CEO, receives monthly environmental performance reports detailing each month’s carbon emissions, energy use, water use, and waste generated and recycled.

In 2023, we made several progress with our environmental commitment. We established 2030 environmental targets for grid electricity use, carbon emissions, water use and food waste. We also issued an Environmental Policy as a guiding framework for managing our environmental impacts. The Environmental Policy communicates our commitment, principles and governance to conduct our business responsibly and minimise environmental impacts. Both were approved by the Board in February 2024. To view NagaCorp’s Environmental Policy, click here.

Environmental Awareness

We actively engage our employees and guests to adopt environmentally friendly practices. Through our internal edutainment platform, NagaFM, we held four environmental-related awareness activities and quizzes covering climate action and plastic pollution in 2023 at our staff cafeterias.

Educational messages on saving water and energy and paper towels are placed in common areas and offices to remind our employees and guests to reduce resource consumption.

At the national level, we continue to foster cross-sector partnerships by actively working alongside the RGC, NGOs, and the Cambodian business community to promote green initiatives and raise environmental awareness. Through our NagaWorld Kind Hearts CSR arm, we also regularly organise activities to support local communities in maintaining a clean and green environment.

Resource Stewardship

1. Energy Use

Our electricity is supplied by the Phnom Penh city grid, managed by the Electricite Du Cambodge (“EDC”). EDC’s grid energy mix comprises hydropower, coal, fuel oil, biomass, solar and purchased energy from the region. About half of Cambodia’s energy generation is derived from renewable sources.

Besides power from the grid, we consume other energy sources such as diesel to operate backup generators and hot water boilers, and LPG for cooking.

Our usage of backup generators depends on the frequency and duration of grid disruptions. During grid disruptions, our backup generators are activated immediately to minimise any interruption to our operations.

In 2023, total energy use increased by 14% compared to 2022. The increase was due to the continued business recovery from Cambodia’s higher tourist and expatriate volumes. It resulted in higher customer footfall and hotel occupancy, increasing energy needs. In contrast, the energy usage for the backup generators more than halved compared to 2022.

In support of global climate action and Cambodia’s climate goals, we committed to reducing grid electricity use by 25% by 2030 from a 2018 baseline. The target aligns with Cambodia’s National Energy Efficiency Policy, which aims to reduce energy use in commercial buildings by 25% by 2030. In 2023, our grid electricity use was 10% lower than in 2018.

Notes:

(1)	Since 2022, we have adopted the GHG Conversion Factors for Company Reporting from the UK Department for Business, Energy and Industrial Strategy (“DBEIS”).
(2)	Between 2 March and 14 September 2021, there was a voluntary temporary suspension of business operations due to COVID-19.
(3)	Energy use intensity was calculated using the aggregate gross floor area of Naga 1, Naga 2, NagaCity Walk and Central Laundry. 2021 and 2022 energy use intensity figures were restated to exclude energy from vehicles.

1.1 Energy Reduction Initiatives

As a 24/7 establishment, we consume more energy than conventional commercial buildings. We continue to explore opportunities to reduce energy use, especially for heating, cooling and lighting, as they consume the most energy.

In 2023, our energy-saving initiatives include

• Using LED lighting with lower wattage
• Removing unnecessary indoor lighting
• Installing isolator switches to reduce the operational hours of the kitchen’s motor exhaust fans
• Maintaining 27℃ on non-operational hotel floors
• Replacing the exhaust fan motor and control panel with variable speed drive
• Continuing the practice of adjusting the operational hours of lights, chillers, chilled water pumps, AHUs, walkway fan coil units (“FCUs”), boilers, and cooling tower operations according to human traffic at the front-of-house and back-of-house

Our hotel rooms and housekeeping protocols are designed to reduce energy

• Hotel rooms are fitted with card-activated power switches
• Standard room temperature is set at 23℃
• Using natural light for daytime room cleanings
• Keeping curtains closed to reduce cooling loss in unoccupied hotel rooms

Since 2016, we have cumulatively saved at least 3,794 MWh in energy usage and US$635,000 in energy costs annually through the energy-saving initiatives implemented at Naga 1 and Naga 2.

2. Carbon Emissions

In managing our impacts on the climate, we have been measuring and disclosing our carbon emissions since 2017, with enhancements to our methodology over the years.

In 2023, total Scope 1 and 2 carbon emissions were almost on par with 2022. Due to increased business activity, our energy consumption increased. In addition, we performed preventive maintenance of the transformers and switchgear, which consumed more diesel than usual. On the other hand, we experienced 24% less fugitive emissions from refrigerants in 2023 than in 2022, which is a significant improvement as refrigerants formed more than 20% of our total Scope 1 and 2 carbon emissions.

We took our environmental commitment further in 2023 by targeting to reduce our Scope 1 and 2 carbon emissions by 10% by 2030 from a 2018 baseline. Our target factored in Cambodia’s National Energy Efficiency Policy to reduce energy use. Compared to our 2018 baseline, we achieved a 12% reduction in Scope 1 and 2 carbon emissions in 2023.

For more information on our climate-related financial disclosures, please refer to our TCFD report in page 111 of the Annual Report 2023.

Notes:

(1)	Direct, or Scope 1, emissions are attributed to sources and activities within our operational control. It covers LPG for cooking and fuels consumed by backup generators, hot water boilers and vehicles, and fugitive refrigerant emissions.
(2)	Indirect, Scope 2 and Scope 3 emissions are produced outside our immediate operations due to our activities. Scope 2 emissions refer to purchased grid electricity from the EDC. Scope 3 emissions are attributed to sources owned or controlled by other entities in our value chain, both upstream and downstream.
(3)	Since 2022, we have adopted the GHG Conversion Factors for Company Reporting from the UK DBEIS.
(4)	Baseline 2018 carbon emissions (Scope 1 and 2) data was restated according to our latest methodology. Estimates were used for historical data that were not previously captured.
(5)	Between 2 March and 14 September 2021, there was a voluntary temporary suspension of business operations due to COVID-19.

2.1 Carbon Reduction Initiatives

We optimise our energy consumption by identifying the opportunities to reduce energy use. Key enablers we have implemented include monitoring the hotel occupancy levels and human traffic on our premises, adapting the operating hours of our building systems and performing preventive maintenance.

Over the years, our energy reduction initiatives targeting lighting and cooling have consistently contributed to reducing carbon emissions. Since 2016, we have avoided at least 887 tonnes CO₂e from these initiatives.

3. Air Quality

For the comfort of our building users, we implemented monitoring and preventive measures to manage indoor air quality.

• Inspection and deep cleaning of AHUs
• Furnishing common areas with plants to boost greenery and air quality

Regarding vehicular emissions, we routinely schedule maintenance checks for our VIP fleet based on vehicle mileage. Our drivers also adopt environmentally friendly practices that reduce tailpipe emissions and save on fuel.

• Turning off engines when waiting for guests
• Dispatching to the pickup point when guests are ready for departure Checking traffic conditions to avoid traffic jams

4. Water Use

According to the World Resources Institute’s Aqueduct Water Risk Atlas, Cambodia faces medium-high water stress. As such, sustainable water management practices are essential to conserve the water supply.

Our water is supplied by the Phnom Penh Water Supply Authority (“PPWSA”). The treated freshwater from PPWSA complies with the drinking water standards of the World Health Organization and national drinking water standards. We have not encountered significant issues in sourcing water fit for purpose.

During the dry season in Phnom Penh, we practise prudent water consumption and ensure the sufficiency of water for operations using water storage tanks. We reduce water consumption by optimising our mechanical systems and processes and fostering responsible user behaviour. In addition, we monitor our water consumption to identify opportunities for improvement. We perform regular preventive maintenance, such as cleaning the ventilation filters and condenser tubes and optimising the operation and scheduling of the chiller systems and air conditioning units to reduce water consumption.

During the Year, our water consumption increased by 13% compared to 2022. This was due to improved business activity from higher hotel occupancy rates and footfall to our properties.

In 2023, we set a 2030 target to reduce water use by 10% from a 2019 baseline. Compared to our 2019 baseline, we achieved a 26% reduction in 2023.

Note:

(1)	Between 2 March and 14 September 2021, there was a voluntary temporary suspension of business operations due to COVID-19.

4.1 Water Conservation Initiatives

Water conservation features and practices are incorporated into our building design and maintenance.

• Water-saving toilets in hotel guest rooms
• Automatic sensor faucets at Naga 2’s public area toilets
• Regular inspections and maintenance of hotel rooms
• Training employees on water management during cleaning
• Implemented a preventive maintenance schedule for air conditioning filters, FCUs and AHU coil cleaning, which includes the chiller condenser and evaporator tube cleaning

We also educate our guests and employees on the importance of saving water through environmental messages in the hotel rooms and the toilets in public areas and offices. Our towel and linen reuse programme allows hotel guests to choose a more sustainable stay by not changing bed linens and bath towels.

5. Waste and Effluent Management

In managing our waste, we embrace the “5Rs” approach – Reduce, Reuse, Recycle, Refuse and Remind. This helps us to steer towards minimising resource use and maximising resource recovery.

As we are primarily a service business, we do not produce material amounts of hazardous waste or significant packaging waste. At the minimum, we comply with Cambodia’s law on waste management, namely the Sub-decree on Solid Waste Management.

We generate various types of waste and have invested efforts to segregate them for recycling. In 2023, we diverted 19% of our waste from the landfill. We recycled the following waste – food waste, playing cards, paper, cardboard, hotel soap bars, plastic drinking bottles, aluminum cans, cooking oil and batteries. All unrecycled waste is collected by the municipal waste collector and disposed of at the landfill.

Due to improved business activity, the amount of waste generated increased by 49% compared to 2022. The most significant contributor is dry waste, which increased by more than half.

We are cognisant of the challenges in improving our waste diversion rate. In Cambodia, there are limited large-scale recycling facilities and waste technologies. Most recycling in Cambodia is facilitated informally through street waste collectors and small-scale waste recyclers.

Note:

(1)	We began tracking the weight of recycled plastic bottles, aluminum cans and paper from October 2023.

Note:

(1)	We began tracking the weight of recycled plastic bottles, aluminum cans and paper from October 2023.

5.1 Waste Management Initiatives

Our waste management strategy is guided by the waste hierarchy framework, which prioritises waste prevention at the source and discourages disposal to the landfill. For waste that we cannot reduce further, we aim to recycle as much as possible. To continue improving our waste diversion rate, we focus on identifying waste hotspots in our operations and scouting for suitable collaboration partners.