How Caesars earned its sustainability cred with 'CodeGreen'

MIT Sloan Management Review

How Caesars earned its sustainability cred with 'CodeGreen'

By 2007, Caesars Entertainment CEO Gary Loveman couldn't help but notice that employees at many of the company's properties were showing surprising amounts of resilience and initiative around sustainability. They were coming up with ideas for saving on energy and water and reducing waste, and they were running with them.

Loveman liked the fact that ideas were bubbling up from employees, but he wanted a more comprehensive sustainability strategy.

In October 2007, Caesars unveiled a companywide program called "CodeGreen," the company's first comprehensive sustainability strategy, aimed at organizing and supporting employees involved with projects at the local level.

Under CodeGreen, each resort was directed to assemble a team that would propose and implement sustainability programs at the local level, implement the enterprise-wide strategy every month and help educate their colleagues about sustainability. Resort general managers identified CodeGreen leaders, who took on the responsibilities in addition to their regular jobs. Although participation was mostly voluntary and attracted employees passionate about resource conservation and recycling, many teams also included leaders from key functional areas (e.g., facilities, food and beverages and human resources).

Initially there was considerable confusion and debate about the best way to organize and manage the effort, but the broad goals were clear: Management wanted to reduce consumption of water and carbon-based energy while increasing the company's recycling efforts and encouraging employee and guest engagement. But what was the best way to achieve these goals in a company that had facilities scattered across the country, as well as internationally?

Within a short period of time, two things became clear. First, regardless of initial enthusiasm about CodeGreen, the company couldn't tackle everything at once -- it needed to prioritize and break things down into more manageable projects that people could understand. Second, CodeGreen had to become a broad-based initiative, which meant that operations and bottom-line-oriented people and those who were passionate about improving the environment needed to work together.

Some of the same issues surfaced in discussions about the creation of a CodeGreen scorecard. The original idea was to develop a relatively simple scorecard made up of measures based on standards set by the Global Reporting Initiative that would help the company and individual property managers monitor their progress and compare themselves to others. To the extent possible, the goal was to find measures that stakeholders could understand and even influence.

But here, too, settling on the specifics was easier said than done. Scorecards from other companies provided little guidance because they tended to focus narrowly on health and safety, environmental compliance and costs. In categories such as waste reduction, the necessary data didn't even exist within the company; before the data could be tracked, it had to be defined and gathered.

Those who thought the scorecard should serve mostly as a tool for promoting employee and customer engagement concentrated on other issues. For example, should the scorecard track the hours resort employees spent participating in CodeGreen projects and survey employee attitudes? Should it measure how hotel guests responded to CodeGreen? If so, how? And how should it reflect recycling and waste reduction in light of the fact that recycling opportunities were severely limited in many locations? Resolving these issues meant that the development of the scorecard took longer than expected.

The delay in finalizing the scorecard didn't get in the way of the CodeGreen program building momentum. Several resort managers eagerly embraced the challenge. "As soon as I heard about it, I said I wanted to be involved," recalls Janet Beronio, regional president for Caesars Entertainment and general manager of Harrah's Rincon, near San Diego, California.

Beginning in late 2007, her local team of volunteers began holding weekly meetings to target what they called the "low-hanging fruit": energy audits, lighting retrofits in fixtures and signage, energy-efficiency investments in air conditioning and heating systems, and improved waste diversion. Efforts at other properties involved improving the water efficiency of laundry facilities, educating employees about the properties' environmental impacts and encouraging cultural and behavior changes to reduce environmental and social impacts and operating costs of Caesars facilities.

As word of successful local initiatives spread, managers and employees at other properties launched similar initiatives, often with their own approaches.

Five years after the CodeGreen launch, in the summer of 2012, the company published its third sustainability report, which featured a letter from Loveman that noted the company was on track to meet sustainability targets related to energy conservation, carbon reduction, water usage, LEED certifications and guest awareness.

This article is adapted from the case study "Caesars Entertainment: Betting on Sustainability" by Bruce Posner and David Kiron, published April 16, 2013 by MIT Sloan Management Review. The complete case study is available at http://mitsmr.com/10zEA0c.

Copyright © Massachusetts Institute of Technology, 2013. All rights reserved.

Photo credit: Jason Patrick Ross / Shutterstock.com