The impact of air travel on greenhouse gas emissions (GHGs) and climate change
is receiving increasing scrutiny, especially in Europe — the Air Transport
Action Group reports that emissions from air travel account for approximately
2 percent of global GHGs. Air travel is increasing globally, and growth in air
travel will lead to greater emissions; the International Civil Aviation
Organization forecasts that by 2020, aviation emissions will be 70 percent
higher than they were in 2005.
Airlines are clearly being affected by the focus on aircraft emissions and their
contributions to climate change. The French government recently announced a new
eco-tax on airlines for all
flights from airports in France. While the tax may affect the financial
performance of airlines and cause customers to pay more, the tax was adopted in
response to the growing attention to the role that air travel plays in climate
change. Taking this reputational challenge head on, KLM Royal Dutch Airlines
recently launched a “Fly Responsibly” advertising
campaign,
urging customers to, among other things, consider alternative means of transport
for short trips. KLM’s website
provides information on what the airline is doing, what the industry can do, and
what its customers can do to make flying more sustainable.
The focus on aircraft emissions has implications that extend well beyond the
airline industry. Almost all businesses use air transportation to some extent,
and this contributes to carbon emissions, climate change, and reputational risk.
Forbes writer Michael Goldstein has noted a transformation from the
glamorous image of the “jet set” to today’s “flight
shaming”
by environmental activists. While air travel may be a small percentage of many
companies’ total GHGs, the attention of activists and the public visibility of
air travel create an environment where corporate social responsibility
reputations could be challenged.
Technology offers some options for businesses looking to reduce employee air
travel. Video conferences can be a substitute for face-to-face meetings that
require travel, providing effective means of holding meetings, sharing
information, and building personal relationships. Combining means of
transportation can also help. Long-haul flights can be used in combination with
trains and cars for shorter trips. Corporate policies mandating more coach
versus business class travel also reduce the emissions per person. Even packing
lighter can save on emissions. Finally, purchasing carbon
offsets
can compensate for some air travel emissions.
The old accounting adage that you can’t manage what you don’t measure, and the
corollary that what you measure you will manage, may be apropos when it comes to
air travel emissions. The specific metrics and approaches to measuring and
controlling many environmental impacts vary by industry and geographic location.
A variety of calculators that estimate the GHGs per air passenger are available
online, including the ICAO
calculator;
but a simple metric for air travel emissions could be applied by all companies.
By measuring and accounting for emissions, business units can assess the climate
impact of their air travel, incentivize reductions in air travel emissions, and
disclose this information publicly to build an image for transparency and
environmental responsibility. For example, adding the cost of emission
offsets
to travel budgets could be an effective means of providing incentives for
business units to evaluate the cost-benefit trade-offs of travel. While simple
metrics such as those provided in air emission calculators may be helpful,
companies may also need to develop new metrics to balance other performance
objectives with reduced air travel emissions; focusing on air travel emissions
without considering other business objectives could lead to suboptimal travel
decisions.
Laws and public policies have played a role in many areas of environmental
performance, and aircraft emissions and the environmental impact of air travel
may come under increased regulation and taxation. Climate change is a
high-profile social issue, and a broad set of stakeholders are currently
focusing attention on the climate change impact of air travel. In the face of
regulatory uncertainty, businesses may benefit from modifying their behaviors
and leading the way. Entities that have commitments to and/or reputations for
social and environmental responsibility are especially likely to find themselves
being challenged to explain their air travel decisions, in terms of climate
change impact.
This challenge also creates opportunities for leadership in a high-profile
emerging issue, increased internal environmental awareness and burnished
external environmental reputations. Fortunately, there are many opportunities
for businesses to design and communicate metrics that will help answer
stakeholder questions and make decisions that support sustainable flying.
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Dr. Katherine Campbell is the Kulas Koppenhaver Faculty Endowed Professor of Accountancy at the University of North Dakota.
Published Aug 2, 2019 8am EDT / 5am PDT / 1pm BST / 2pm CEST