Is air travel the beacon of progress for our globalized society or is the big, bad, emitting giant in the sky poised to destroy us in its carbon wake? Most Americans pay little attention to the carbon footprint of their flight schedules, especially when the average American may fly all but once a year. Swedish teenager and activist Greta Thunberg is credited with turning heads to the environmental impact of flying. After Thunberg traveled by boat to the 2019 UN Climate Action Summit in protest of the climate impact of flying, “flygskam” (Swedish for “flight shame”) touched down on American soil1.
Thunberg’s message about climate change reportedly contributed to a subsequent four percent drop in the number of commercial passengers flying in Sweden2. JetBlue Airways executive Robin Hayes commented, “This issue presents a clear and present danger if we don’t get on top of it. We’ve seen that in other geographies, and we should not assume that those sentiments won’t come to the US3.” Another executive stated, “Today’s environmentally focused 22-year-old is tomorrow’s 35-year-old frequent business traveler4.” Without this significant global attention, Taylor Swift’s jet-setting carbon tally would likely never have garnered a steady media following, nor reached the current point of cease and desist5. The aviation industry, which has largely evaded contentious public discussions around global climate impact, has been cast into the throes of ESG.
This article aims to analyze the environmental “E” pillar of ESG (environmental, social, governance) for the aviation industry, outline the contours of the industry’s unique challenges, and highlight its equally unique opportunities to create change in the global ESG landscape6. Part I will first provide a brief history of ESG and its application in the aviation industry and then summarize how proxy statements and shareholder proposals, as key public sources of information, serve the public and investors to understand ESG. Part II will summarize ESG insights from an analysis of two major airlines’ proxy statements and shareholder proposals to sketch a picture of sustainability from a typical airline’s perspective. Part II will then include non-aviation industry perspectives to contextualize how the aviation industry compares against global sustainability efforts. Finally, this article will offer parting thoughts on how the airline industry can lead other industries in sustainability disclosure and commitment given its special position at the epicenter of the international marketplace and global community.
Humans have always impacted the natural environment. But Nobel Laureate Paul Crutzen and Eugene F. Stoermer proposed that humanity had driven the world into a new geological epoch—“the Anthropocene” era—which described geologically significant conditions and processes that had been fundamentally altered by human activities7. With our footprint came a natural evolution of ideas underlying sustainability, leading up to modern business practices today8. The term Environmental, Social, and Governance (ESG) has produced a groundswell of commentary, debate, and work9. While this article has an environmental focus, the concept of the environmental “E” pillar goes hand in hand with the development of the whole concept of ESG10.
The aviation industry is vast. Within its perimeter, billions of passengers are flown11, over $6 trillion worth of goods are transported12, and millions of jobs are created13. An astounding figure reports that around one in every 130 American workers is employed by either Boeing or one of its 12,000 local suppliers14. One must surmise not if, but which, of your neighbors is part of such an enormous industry. The aviation industry can be sorted into three categories: commercial aviation, general aviation, and military aviation15. The focus of this article will be on commercial aviation, which includes passenger airlines such as Delta and United Airlines, as well as cargo or freight airlines such as UPS Airlines and FedEx Express16.
Since the 1970s, aviation sustainability has been centered around local issues, such as the impact of air transport operations on surrounding noise and air quality17. Later focus broadened to climate change challenges involving technology and operations, coordinating international policy, state action plans, sustainable alternative fuels (SAFs), market-based measures, and outreach18.
The International Civil Aviation Organization’s (ICAO) decision to adopt the Carbon Offsetting and Reduction Scheme (CORSIA) was a groundbreaking step, marking the first time a single industry agreed to a global market-based measure in the climate change field19. This scheme, in turn, led to complimentary initiatives between the two main regulatory bodies of aviation—the International Air Transport Association (IATA) and the ICAO20. First, IATA’s “Fly Net Zero” resolution, which is a commitment of airlines to achieve net zero by 205021, and ICAO’s long-term aspirational goal to fly net zero by 2050, which are non-binding goals and guidelines22.