CASE STUDY. ABOUT Woodbine Entertainment Group. Corporate Governance - Sustainability

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1 Woodbine Entertainment Group Corporate Governance - Sustainability ABOUT Woodbine Entertainment Group Woodbine Entertainment Group (WEG) is the largest and one of the most innovative horse racing operators in Canada, with a range of operations in racing, gaming and entertainment and its two racetrack brands Mohawk and Woodbine. WEG directly employs approximately 2,300 full and part time employees with an annual payroll of almost $87 million. The Company s operations directly and indirectly impact the employment of nearly 55,000 jobs in the horse racing industry, Ontario s second-largest agricultural sector. Location Address: 555 Rexdale Blvd., Rexdale, Ontario Phone: Website: CORPORATE GOVERNANCE SUSTAINABILITY GOALS WEG s Woodbine Racetrack at 555 Rexdale Blvd. Although recognized for its horse-racing operations, WEG is on the fast track to reducing its environmental footprint and setting high standards for the entertainment industry. Environmental stewardship is a key corporate business strategy, says Jane Holmes, Vice- President of Corporate Affairs. WEG is committed to incorporating into its long term strategic planning comprehensive green initiatives, procurement practices and innovative technologies, with a focus on long-term sustainability. This commitment is reflected throughout WEG s corporate practices and has driven a number of projects as well as the creation of a Sustainability Development Steering Committee and an SD Action Team. The Steering Committee is comprised of six senior managers whose role is to champion WEG s sustainability programs. The Action Team is made up of employees representing every department and is divided into four subcommittees that provide input on WEG s target areas. WEG set a list of ambitious sustainability targets based on the Action Team s input, and in 2010 WEG met or exceeded all of these targets.

2 2010 Goal: To be 10 per cent leaner for a savings of $700,000+ Reduce WEG s energy and water consumption base load by 10 per cent at all locations Reinforce WEG s commitment to environmental sustainability through its purchasing decisions Reduce WEG s overall waste by 2 per cent Increase WEG s total diversion rate to 90+ per cent Reduce fleet by 10 per cent through the introduction of more bicycles and small off-road utility vehicles for staff use on WEG property ECO-EFFICIENCY AT WOODBINE DRIVING ENVIRONMENTAL PERFORMANCE A founding business partner in Partners in Project Green, WEG unites its not-for-profit status with a drive to improve the horse racing industry. This not-for-profit status allows WEG to reinvest its cash flow in upgrading its facilities and entertainment products. In recent years, the organization recognized that maximizing financial performance includes implementing environmental programs that minimize inefficiencies, reduce operational costs, and increase safety. In fact, safety is at the foundation of many of WEG s efforts, since increased safety leads to increased productivity for WEG employees, jockeys and horses. Employee safety prompted Woodbine to work with Johnson Diversey to create green cleaning practices and saved the company $750,000 on its marmoleum restoration, a project that prevented 30,000 pounds of linoleum from being sent to landfill. SETTING THE PACE WITH PROJECTS THAT MAKE A DIFFERENCE Energy Management In 2007, WEG completed a three-year, $5 million energy retrofit project that was designed and implemented by Direct Energy Business Services. This multi-faceted project included a lighting retrofit; a steam boiler conversion; and the installation of enterprise level software solutions, building automation systems, a SMARDT chiller, a domestic hot water boiler, automated air handling units, and occupancy sensors. Installed for $1.5 million, the boiler plant retrofit helped save $335,000 annually and has a fiveyear payback. The project was done on a challenging nightly schedule. Working with Direct Energy, Woodbine was able to successfully complete the project with no negative impact to its tenants. With a two-year payback, Woodbine s building automation control system has reduced summer energy consumption over 10 per cent for an annual saving of $75,000, while WEG s lighting projects help it save $15,000 per year. Total incentives for these initiatives equaled $92,241 thanks to Enbridge Gas, Toronto Hydro Energy Services, and the Building Owners and Managers Association (BOMA). Other energy-saving initiatives focused on reducing natural gas and electricity consumption and the resulting greenhouse gas emissions. Initiatives included: Expansion and optimization of building automation system (BAS) at Mohawk and Woodbine

3 Racetracks, which resulted in natural gas savings of 423,730 m 3 /year. Replacement of inefficient centrifugal liquid cooled chiller with an oil-free air cooled chiller, which resulted in electricity savings of 286,031 kwh/year and a reduction in natural gas consumption of 17,581 m 3 /year. LED retrofit of major lighting systems at Woodbine, for example: LED retrofit of Woodbine s main entrance sign reduced power consumption by 70,518 kwh/year, and an LED retrofit of Woodbine s dining and meeting rooms reduced power consumption by 350,306 kwh/year. Overall commitment to use environmentally friendly and non-ozone-depleting R134a refrigerant in the water cooling system. Waste Reduction Regular waste audits have resulted in a commitment to recycle nearly everything at the track: office supplies, metal, wood, used tires, used straw, manure, plastic, and even betting tickets. All areas are accounted for under WEG s recycling program, including its offices, restaurants, gaming facilities, backstretches and barns. For instance, the facility sends its old computer equipment to Sim s Recycling, batteries to Raw Materials, donates old cell phones and used printer cartridges to the Think Food charity, uses 25,200 m 3 of used wood shavings for compost and soil enrichment, and sends manure from the 2,300-plus horses stabled on its property to fertilize local mushroom farms. WEG s operations include a large food and beverage component that result in over 200 tonnes of organic waste being recycled every year. This program has had the biggest impact on the net waste diversion for WEG, both in operation costs and disposal expenses. Annually, approximately 1,200 tonnes of materials are diverted from landfills to recycling streams, including: Kitchen organic waste: 100 per cent recycled Cooking oil and greases: 100 per cent recycled Cardboard: 100 per cent recycled Glass bottles: 100 per cent recycled Waste paper from printing: 100 per cent recycled Metal: 90 per cent recycled Fluorescent bulbs: 80 per cent recycled In 2011, WEG launched their program On Track to Zero Waste to Landfill. Present for the launch were (left to right): The Honourable John Wilkinson, Ontario s Minister of Environment; Jane Holmes, Vice President of Corporate Affairs for WEG; and Nick Eaves, President and CEO of WEG. Water Conservation Installed in 2008, Woodbine s state-of-the-art Polytrack racing surface reduces water consumption by 66.2 million litres each year. The synthetic all-weather track s top layer is composed of silica sand, fibre, and recycled materials and works with a vertical drainage structure. The entire mixture is covered with a wax coating that allows water to flow through the top layer to the system below and reduces the need for constant maintenance. The Polytrack s lower maintenance requirements

4 have led to a 40 per cent reduction in diesel fuel use and have greatly reduced WEG s overall greenhouse gas emissions. Polytrack surface at the annual Queen s Plate Infield stormwater ponds at Woodbine Racetrack Under the jurisdiction of the Toronto and Region Conservation Authority, the Woodbine facility houses five stormwater ponds that collect water, which is then used to irrigate the racetracks. These ponds recycle approximately 43.2 million litres of water annually, which greatly reduces Woodbine s demand on the municipal water system. Since 2008, WEG has reduced water consumption at the Woodbine property by 30 per cent, achieving a cost avoidance of $476,387. Trends indicate that WEG is well on its way to achieving a further 14 per cent reduction in 2011, or a further 50 per cent cost savings. Sustainable Procurement Woodbine Entertainment Group has established an extensive set of guidelines and procedures that will help steer the organization towards making substantially greener purchasing decisions. By introducing a Sustainable Purchasing and Procurement Policy, WEG has committed to utilizing environmentally sustainable goods and services in its operations. A priority of WEG is to seek products that have reduced environmental impact because of the way that they are made, used, transported, stored, packaged and disposed of offsite. When determining whether a product is environmentally preferable, environmental attributes that the organization considers include: durability, as opposed to single use or disposable items; biodegradability; recyclable content; raw materials sourced in an environmentally sound manner; product produced by companies with good track records; compostable; low toxicity; carcinogenic free; shipped with minimal packing; and local sourcing. Before partnering with suppliers, WEG s Purchasing Department asks prospective suppliers key questions to see if they match the organization s criteria regarding product performance, cost, safety, and availability. WEG favours suppliers with product certifications such as EcoLogo, packaging that can be composted or returned to the supplier, and products that are energy efficient. Community Involvement While environmental stewardship is reflected throughout our business operations, our sustainability program also focuses on corporate and social responsibility with our community partnerships and economic sustainability, says Holmes. Woodbine Entertainment Group is the only not-for-profit corporation that is a member of Imagine Canada, a national program

5 that promotes public and corporate giving, volunteering, and support to the community. The benchmark for contributions is 1 per cent of pre-tax profit to be donated to charity; WEG exceeds this requirement and donates 3 per cent of its net revenues to charity and makes significant in-kind donations of services and products. Partners in Project Green WEG is a founding partner in Partners in Project Green and sits on three Project Teams, including the Building Mohawk Racetrack staff and their children at the 2011 Nassagaweya Clean Up Performance Team, Resource Reutilization Team, and Green Job Team. WEG has a large overall impact with Partners in Project Green, and its financial support of the Green Jobs Team has been integral to the development of new socio-economic opportunities in the Pearson Eco-Business Zone. The Green Jobs Team has brought together post-secondary institutions, local businesses and public agencies to develop new job opportunities for youth. One program that has resulted from this is the Cool Rexdale initiative, a program to help young people in Rexdale begin careers in eco-roofing by connecting them to roofing apprenticeships and eco-roof installations in the Pearson Eco-Business Zone. Lessons Learned and Bottom Line Results Woodbine Entertainment Group considers its sustainability efforts to be a continuous process. This process includes getting input from employees on the front lines through the SD Action Team, taking advantage of government incentives, and promoting safety throughout its entire organization. In addition, the WEG team has learned not to be daunted by the number of options, but to look at its overall sustainability on a project-by-project basis. Involving employees and prioritizing research into directed areas makes implementation more manageable for the team and helps achieve the corporate sustainability goals. Overall, WEG s efforts not only help the corporation manage rising operational costs, but also make it stand out as a forward-thinking, sustainable business in the highly competitive entertainment industry. WEG has received a number of awards for its environmental efforts: WEG earned the 2010 Ontario Waste Minimization Platinum Award from the Recycling Council of Ontario in partnership with The Ministry of the Environment. This award recognizes leadership, innovation and excellence in waste reduction and waste diversion. It is the third consecutive year that WEG has received this distinction in the Facilities Management category, having earned an RCO Silver Award in 2008 and an RCO Gold Award in In 2010, Woodbine Entertainment Group was honoured with a prestigious Century International Quality ERA Gold Award for QC100 Total Quality Management. This global recognition by business leaders from 49 countries reflects a systematic, integrated and organizational way-of-life directed at continuous improvement. The QC100 Total Quality Management model is a quality-centred, customer focused, fact-based, team-driven, seniormanagement-led process to achieve an organization s strategic imperative through continuous improvement.

6 WEG was recognized by the Green Toronto Awards for environmental excellence. WEG earned the 2008 Certificate of Recognition for the Corporation s Leadership and Energy Conservation, awarded by Peter Love, Ontario s Chief Conservation Officer. WEG received the Building Owners and Managers Association s Power Partner Recognition Award for its contribution and commitment to energy conservation and environmental stewardship. WEG was the first organization in Canada to earn the Johnson Diversey s 2008 Sustainable Facility Care Award for its use of green cleaning products. WEG was named in the top 44 corporations in North America on Buildings Magazine s Who s Who list for DRIVING FUTURE CHANGE WEG has a number of exciting sustainability projects underway in 2011, including: Convert diesel generators at Woodbine Racetrack to 80 per cent natural gas to reduce carbon emissions and save approximately $1.2 million. Replace 1,760 televisions used across all WEG locations to LED models to reduce energy consumption by 325,000 kwh annually and save $32,500 per year. Complete a BioGas Feasibility Study to determine how to turn over 37,000 tonnes of manure and organic waste produced on-track into electricity. Complete a Solar Feasibility Study to investigate the potential of utilizing existing grandstand and barn roofs for energy; applied under the Ontario Power Authority s Feed-In Tariff (FIT) program for the installation of a 4 MW solar plant for Woodbine s barn area. Reduce Carbon Emissions by 50% by 2013 Over the last two years, WEG has made a significant investment in its infrastructure to increase the longevity of its equipment and systems and to reduce replacement and disposal costs. Redundant equipment is reused in new projects and new equipment is only purchased if significant efficiencies can be gained. WEG is investigating the use of alternative energy sources to realize its commitment of reducing energy consumption from traditional sources. Some of the initiatives that are underway in order to achieve this goal are: Reducing and modifying fleet (e.g., security vans have been replaced with diesel powered Kubota utility vehicles) Installation of a computerized fuel system to strictly monitor fuel consumption of WEG s fleet vehicles Security patrols of parking lots at Woodbine and Mohawk are done by bicycle patrol Continue to investigate and implement renewable energy sources

7 Reducing lighting consumption (e.g., Woodbine s 983 lighting poles at 2,000 watts each will be replaced by new technology reducing the wattage to 1,000 watts per pole) Undergoing a partial lighting retrofit to replace incandescent MR16 lighting with LEDs Reviewing the effectiveness of the cool roof installed on Woodbine s grandstand WEG is committed to investigating and testing innovative solutions, and to implementing proven technologies to realize its corporate sustainability objectives, says John Marhong, Director, Infrastructure and Energy Efficiencies. WEG will continue to identify and implement industry leading environmental programs that not only lower operating costs, reduce energy and water consumption and improve waste diversion, but also reduce the carbon footprint at all its facilities.