Airline Sustainability Assessment
What is Sustainability?
In the context of industry and business sustainability can be interpreted as the ability for a company to operate in the long term, continually, in a manner which is in itself sustainable.
Sustainable companies are able to effectively address the long term challenges in their Economic, Environmental and Social operating surroundings. These three elements are grouped together and are known as the Triple Bottom Line (TBL). The TBL is being used more and more to evaluate a corporation’s performance, where in the past purely financial performance would be considered.
Activities which contribute to the TBL can then be grouped under Corporate Social Responsibility (CSR). CSR is becoming increasingly visible in business. Companies are now in the practice of periodically releasing CSR Reports, summarising and highlighting all the CSR activities carried out by that company.
Two Examples of CSR reports from airlines are British Airways and Virgin Atlantic.
The cynic would argue that the current incentive to be socially responsible is monetary. A company with better CSR will generally attract more customers since it will be seen as more ethical, and a better choice to do business with. Companies live and die by their profit and loss, and as soon as sustainability issues could add to the profit side of the equation people took notice. Investors are now more than ever seeking sustainable investments, ones that will provide long and steady returns. Corporations visibly engaging in CSR can attract these types of investor.
Cynicism aside, reporting of sustainability performance is an important way for corporations to manage their impact on society and the community. Reporting leads to better sustainable development results since organisations can measure, track, and improve their performance directly.
The Dow Jones Sustainability Index (DJSI), and FTSE4Good are two (of not many) institutions which monitor and track and measure corporation’s sustainability. The information that these agencies hold is propriety however, and is not freely available to the general public. Therefore CSR metrics are not truly transparent and open to allow meaningful comparisons between industries and corporations.
The Airline industry is very interesting as there are a couple of key issues which it faces. Firstly, by its nature flights burn fuel, this is a big environmental point. Notwithstanding a scientific breakthrough the long term future of Airlines still involves burning significant amounts of fuel and producing a large volume of polluting emissions. Secondly, Airlines operate all over the World. Employees and offices are maintained overseas, so it is difficult to even begin to assess the CSR activities of these companies. Problems such as geographic boundaries arise, or questions such as should we include the Oil and Gas companies which provide the fuel into the sustainability assessments?
The Airline Sustainability Tool presented below was developed by a group of four students at the University of Bristol. The full report which accompanies the tool is available for download here*.
*The report is currently still under the marking and moderation process. Once this process is compete (July-September 2012) the report shall be available.