Finding the lowest-emissions airline suppliers is a crucial step in decarbonizing your business travel, but it will likely need to be balanced with financial costs to avoid the "green premium".
For the third episode of our Sustainability in Motion webinar series, our Founder Kit Aspen hosted industry experts Faye Swart (GSK) and Jenniina Ylönen (IATA) for a discussion of how to achieve this balance.
View the original webinar recording
Does sustainability factor into your procurement?
To get a sense of how the audience approaches their air supplier procurement, we asked if they currently factor sustainability into their selection process. Over 60% of respondents said that they do, but it’s not as important as cost. 26% didn't have access to any sustainability data, while only 9% said it’s the most important factor. The final 4% said sustainability is not important at all in their selection. Kit observed, “It’s very hard to compare [sustainability] on a supplier level today, and it’s something we’ve worked on over the last year an awful lot”.
To illustrate the power of evaluating suppliers, Kit provided a real example with fuel-based emissions data. In this case, we compare two different carriers based on the specifics of their aircrafts flying the same route:
Boeing 767 400ER Aircraft launch date: September 2000 Average emissions (LHR → JFK): 505 kg CO2e Carrier: Delta |
Airbus A321neo Aircraft launch date: May 2017 Average emissions (LHR → JFK): 333 kg CO2e Carrier: JetBlue Airways |
Between these two aircraft types, there is a notable difference in average emissions, and simply by changing carriers, you could reduce your emissions by 35% for this flight. Now imagine the impact on your total emissions if your company takes 100 of these flights in a year.
Will airlines reach net-zero by 2050?
We also asked our audience whether they had confidence that their preferred airline would decarbonize by 2050. Only a small group (14%) had confidence the airlines would decarbonize, and a further 41% said they were unsure. A staggering 45% said they had no confidence that their preferred airline would decarbonize by 2050.
GSK’s strategy for reducing travel emissions
Faye Swart, Head of Global Travel & Meeting Operations for GSK clued us into how one of the largest global pharmaceutical companies is tracking its travel emissions. “We have over 70,000 employees over 100 countries, which is quite a big footprint,” she observes, “that being said, when it comes to emissions from travel, this actually contributes a very small percentage of our total outputs.“
The scenario that Faye describes at GSK is a familiar one—a large company where corporate travel doesn’t account for much of their carbon footprint. It may seem like travel emissions can be disregarded in this case, but GSK takes a holistic approach to decarbonizing its business units. This is both a climate-smart decision and a strategic one, as travel will become more material as other units decarbonize.
Given their operational priorities, GSK folded travel into their much higher-emitting logistics category, both of which can use sustainable aviation fuels (SAF) as a decarbonization lever. Faye concluded by pointing out that GSK has a long way to go, and added that there is a lot the travel industry needs to do to help them meet their targets.
“I think a voice at the table is really important as a travel buyer, making sure that we are heard, but also hearing what the (airline) suppliers are saying and what their challenges are”
-Faye Swart
Introducing IATA and their central role in aviation
The International Air Transport Association (IATA) is a trade body whose purpose is to lead, represent and serve the world’s airlines. They do this by setting global standards, advocating for aviation, and creating products that will help the airline industry thrive. They recently released their CO2 calculator product, IATA CO2 connect, an initiative that Jenniina Ylönen has led.
“Even though aviation now accounts for around 2% of the world's emissions, we know that if no action is taken, this is deemed to grow.”
-Jenniina Ylönen
“One of the foundations of this challenge is how we calculate emissions.” Jenniina continued, “Having accurate and robust data is absolutely essential to make sure that we track, report, and monitor emissions.”
The IATA CO2 Connect Calculator provides accurate emission information at a passenger level, and helps corporates, passengers, and airlines make informed decisions based on this data. The data is sourced from the airlines (currently 49 different airlines) and includes aircraft type, specific fuel consumption, load factors, direction of travel, and flight times—all based on real data, rather than theoretical models. This data covers around 98% of the actual passenger fleet worldwide.
“It’s more than just a calculator, it’s serving the mission to harmonize the way we calculate emissions worldwide and how we represent airlines across the whole value chain” said Jenniina.
The IATA methodology is available with Thrust Carbon solutions
Read more about our recent partnership
So, how do you balance cost and emissions?
“For [GSK], giving people [carbon] budgets and putting a dollar amount on emissions helps set the scene,” said Faye.
As a healthcare company, traveler health is GSK’s top priority; which in some cases means higher emissions. GSK (like many companies) finds it unfavorable to require its travelers to choose lower-emitting economy seats over business class. Carbon budgets relieve the tension between emissions and passenger comfort by focusing the discussion on the bottom line rather than a policy. “We would rather people make the informed decisions of taking one less trip rather than coming down a class” noted Faye. The goal for GSK is to get to a point where both carbon and financial costs are transparent for travelers in order to help them make educated decisions.
A well-balanced and sustainable travel program is made up of many decisions like this, but companies have limited influence on the larger scheme of sustainable aviation. Faye posed the question that many companies are also asking: “What is the cost for net-zero, in terms of the aviation industry decarbonizing, and who should pay that bill?”
Sustainable aviation fuel
Sustainable aviation fuel (SAF) has the attention of many travel and sustainability professionals for its potential to cut emissions. A cursory calculation suggests that the bill for the 3000 SAF plants needed by 2050 to meet net-zero goals might be in the neighborhood of 750 billion USD.
The cost may be astronomical, but Jenniina is hopeful. “We have already seen from the wind and solar sectors that with strong public-sector support, it is possible to enhance the production and reduce the unit cost”. Jennina adds, “I think it's really a joint effort. The airlines are [already] investing huge amounts in SAF; every drop of SAF was purchased last year.”
The airlines are investing in it, but it’s no surprise that airline customers will bear some of this cost. Jennina suggests some solutions in the form of green fares or surcharges/levies, stressing, “it's really important that there is open, transparent communication between the passenger and airlines and the whole aviation sector.”
“To decarbonize, ultimately there needs to be more investment in sustainable aviation fuel, but it has to come from both the fuel sector and the public sector.”
-Kit Aspen
What about electric and hydrogen planes?
Jenniina predicts that we will see electric and hydrogen-powered aviation in the medium-term for short range routes. “We will see some developments especially in Northern Europe in the next few years. And Airbus has a commitment to launch the first commercial electric aircraft by 2035. “ She qualifies that, “In the overall picture, they will still be a very small number by 2050.”
Non-CO2 airline initiatives
Not every airline sustainability initiative focuses on emissions. Topics like single use plastics, water conservation, and ground operations all have an impact on the selection process of corporate buyers.
Faye made it clear GSK takes these into account in their selection processes. “[Non-CO2 initiatives] have a huge part to play. We actively monitor all of our strategic suppliers on how they are progressing on their stated [ESG] goals” she said, “But we also certainly see this in the hotel industry, possibly more so than the aviation industry.”
As we consider the balance between financial and carbon costs of flying, this conversation with Faye and Jenniina revealed how nuanced the topic can be. SAF, non-CO2 airline initiatives, and traveler welfare are just a few of all have important parts to play in supplier procurement in aviation.
Wrapping up
As businesses resolve to shrink their carbon footprint, balancing sustainability goals with financial and operational realities remains a complex challenge; especially in air travel. By choosing lower-emission carriers, using carbon budgets, opting for SAF, and making the procurement process more transparent, companies like GSK and organizations like IATA illustrate actionable solutions for addressing the challenge.
Our conversation with Faye and Jenniina also reinforced a well-established conclusion: achieving net-zero in aviation by 2050 will require joint efforts from airlines, businesses, policymakers, and consumers alike. Transparent collaboration, informed procurement decisions, and continued investment in innovations like SAF are a few of the vehicles we can use to reach a sustainable future in corporate travel and beyond.
