Aviation Puts New Emphasis on Climate-Related ESG
New “Scope 3” Reports Focus on Clean Aircraft in Near Future
In the past few decades, companies around the world have announced grand goals to reduce their footprint on the environment. In recent years, the trend has accelerated as companies push forward their carbon reduction timelines, refocus on tangible impacts of new technology, and report on the “Scope 3” impacts of their business up and down their value chain.
In the aviation sector, the focus on environmental concerns has taken a front seat as the industry reportedly produces about 2% of all human-induced carbon dioxide CO2 emissions and 12% of CO2 from transport, according to data from Air Transport Action Group. Now, not only are many aviation companies reporting on their “Scope 1” and “Scope 2” emissions—or those which relate to their direct impacts–as part of their GHG Corporate Protocol, but they are also putting an emphasis on the “Scope 3” emissions from suppliers and customers. Scope 3 emissions can often represent the greatest portion of a company’s greenhouse gas emissions.
Reporting on “Scope 3” business challenges has become a key priority as global expectations from governments, consumers and investors have evolved, raising expectations for serious action higher than ever. More and more, investors are demanding real transparency on goals and want evidence of actionable steps that have financial consequence. Government officials are increasingly pressing the issue through regulatory and legislative efforts, including the UK with its new climate change commitments that seek a cut in carbon emissions of 78% by 2035. A lot of this interest is driven by public perception. A survey by Markstein and Certus Insight from 2019 also found that 70% of consumers want to know if the companies they support are directing attention to social and environmental issues.
In response, leading aviation companies like Airbus, a longtime Xenophon client, have begun to voluntarily report on “Scope 3” emissions as part of a larger effort to spur zero-emissions within the aerospace industry. In the Airbus report, the world’s largest aircraft manufacturer estimated the emissions of aircraft it delivered in 2019 and 2020 and outlined its program to address carbon emissions.
As part of this, Airbus allied itself with other global programs that seek to reduce emissions. Overall, the aviation industry had committed to a decarbonization movement that caps net carbon emissions based on 2020 numbers, and cuts net aviation carbon emissions by 50% of 2005 levels by 2050.
To make up the other 50%, Airbus has detailed a collective set of actions that will have a material impact on the environment and clean travel. Some of the initiatives include:
- Development of ZEROe, hydrogen-powered aircraft by 2035 but the company is also looking into electric and solar technology to power aircraft;
- Working with engine manufacturers to develop next-gen engines that consume less fuel;
- Optimized aerodynamics, which include reducing wing friction by 50% and lowering CO2 emissions by 5% through the BLADE project (Breakthrough Laminar Aircraft Demonstrator in Europe); and
- Creating an all-electric, four-seat, multi-copter known as CityAirbus.
Additionally, by 2030 Airbus wants to reduce its own Scope 1 and 2 emissions by cutting energy consumption 20% and emitting 40% less CO2 from its 70-plus global aerospace facilities, when compared with 2015.
Although Airbus was the first aircraft manufacturer to report on Scope 3 emissions in February 2021, it is not alone in prioritizing cleaner manufacturing and travel. Also, in February of this year, French-aerospace company and leading engine manufacturer Safran released its “Scope 3” report, and has been focusing on reducing emissions for several years. One of the company’s top environmental priorities is a 30% reduction in CO2 emissions by 2025 as compared to 2018.
Boeing also released a “Scope 3” emissions report in July 2021, which included how much emissions its aircraft will produce. And like Airbus, Boeing is looking at various avenues for reducing its emissions in the coming years with a goal of 100% sustainable aviation fuels by 2030.
The emission-reduction goals set by Airbus and Boeing are important particularly because of their leadership position in the industry. But, moreover, the target deadlines are far sooner than they were 20 years ago. 2030 is less than 9 years away and will be here as quickly as an A350 taking off. And 2050 will be here before we know it.
Plus, the technology to make change and progress beyond a reliance on fossil fuels is far more mature. Engines and renewable fuels have advanced dramatically in the past 20 years, allowing Airbus, Boeing, and Safran to produce the most advanced aircraft ever.
The focus on Scope 3 emissions marks a new effort to ultimately replace fossil fuels and re-shape the future of clean travel, clearing the way for others to follow.