How are U.S. Airlines Flying to a Sustainable Future?

The U.S. airlines industry has a history of bouncing back from hard times, including the catastrophic impacts of the 9/11 terrorist attack and the Covid-19 pandemic. Air carriers are recovering gradually from the economic downturn caused by the pandemic.  As they do that, they’re doing something else: making the world more sustainable. On September 29, JetBlue announced plans to speed up its transition to sustainable aviation fuel (SAF) with an offtake agreement with SG Preston, a leading bioenergy developer. JetBlue said that the company is well ahead of pace on its target to convert 10 percent of its total fuel usage to SAF on a blended basis by 2030. On December 1, American Airlines said that it had completed a new SAF offtake agreement with Aemetis. On the same day, United Airlines upped the ante by became the first airline in history to operate a passenger flight using 100 percent SAF. These airlines are also actively discussing their sustainability commitments by following some marketing and communications best practices.

The Sustainability Imperative

Sustainability refers to the capacity for the earth's biosphere and human civilization to co-exist. And human beings are struggling to co-exist with planet earth. In 2018, the Intergovernmental Panel on Climate change said that the world has until 2030 to prevent irreversible damage resulting from climate change. Over the years, the public and private sectors have been taking steps to be better citizens of Earth. For example:

• 192 governments  have signed the Paris Agreement, a legally binding international treaty on climate change.
• President Joe Biden recently signed an executive order to make the federal government carbon neutral by 2050.
• More than 100 multinational corporations have signed up to The Climate Pledge, a public commitment to drastically reduce carbon emissions and achieve net zero by 2040.

Many more have undertaken their own efforts to invest in sustainability on their own.

The Airlines Challenge

Every industry faces its own distinct sustainability challenges, including airlines. Aviation within and departing from the United States contributes 11 percent of the country’s carbon emissions and 2 percent globally. Airlines are responding in many ways, but one effort in particular has gained more attention: using sustainable aviation fuel. SAF is made from feedstocks such as used cooking oil and household waste. Its adoption is crucial for the global aviation industry to reduce carbon emissions. Using SAF requires investments in new production facilities among other changes. The news about United Airlines flying an aircraft using 100-percent sustainable aviation fuel shows the entire industry that widespread adoption is within the industry’s grasp.

But SAF is only part of the story. Airline carriers are making many other important changes. Alaska Airlines, JetBlue, and Virgin recently reported on a number of sustainability efforts they have undertaken during the pandemic, ranging from adapting flying techniques to changing in-flight operations and even plane design. In addition, the airlines industry holds itself accountable. American Airlines, JetBlue, and United are three examples of airlines that publicly report on their own progress toward being sustainable businesses. United in particular does an effective job using its website to report its sustainability goals and then transparently reports its progress.

IDX recently analyzed and ranked how well companies share their sustainability practices on their websites. Our ranking was part of a broader Connect.IQ ranking report that evaluates the most successful global websites. At IDX, we help a number of businesses articulate their sustainability practices at a time when an increasing number of investors are using sustainability/ESG factors to guide their investment decisions. So, understanding how well businesses discuss sustainability/ESG is important to our business.

We found that businesses still have a lot of work to do sharing their sustainability practices. Of the 100 companies we examined from the New York Stock Exchange 100, only 10 companies provide any quantification of their sustainability ambitions. Only 44 percent have a dedicated climate change or carbon reduction page. Only 17 percent of companies provide an assessment of the major non-financial risks to their business, with only half of these companies quantifying the extent or impact of those risks. Meanwhile, only 15 percent of the NASDAQ 100 explain their sustainability strategy online. It’s critical for companies to connect the dots between sustainable business and sustaining business, but many companies fail to do so. And as a recently published Wall Street Journal ranking of sustainable businesses shows, being transparent is also essential to running your business effectively, period.

A new IDX report also offers insight into how companies can use digital most effectively to build their environmental, social, and governance (ESG) reputations. The findings are based on our analysis of websites as well as our work helping businesses develop and implement ESG communications strategies. I invite you to read the report for more insight into how businesses are being more accountable with their ESG communications.