During our fifth quarterly webinar, we invited Marion Chivot-Legris, Head of Sustainability North America at Air France-KLM, to discuss environmental initiatives in the air travel industry, the alignment of stakeholders for a net-zero future, and the role of technology innovation towards these goals. The discussion was conducted by our Strategy Analyst, Fred Gatali. Below we have summarized some of the questions that were asked.
For the full interview recording, please follow the video below.
Fred: Thank you for being with us today, Marion. We’ll jump right in. Could you tell us a bit about Air France-KLM and its sustainability strategy and as well what is at stake with your industry when it comes to sustainability?
Marion: Thanks, and thanks to the team for the invite for today so I’m Marion Chivot. I’m Head of Sustainability for Air France-KLM North America and I’m based in Montreal, and I work closely with my colleague from Delta because we work as a joint venture in North America. I joined in April 2020 so right at the beginning of the pandemic.
A figure that I wanted to share with you first is the status quo for industry of our sector while considering the global carbon emission. The commercialization is responsible for two to three percent of the global carbon emission. Most of the time people think that our industry represents 20-25% of the global carbon emission but it’s not the case yet. [The reason] I’m saying that is because we do know that based on the air traffic growth pre-pandemic, that ratio is going to increase for sure and other industries already have some decarbonization solutions much more advanced than our industry. For example, although we have solutions, it might take a longer time to fully help to decarbonize our sector. I want to also share a commitment from the global air transport industry with IATA that puts an objective of net zero emission by 2050. One of the questions I usually have is what does it mean net zero? Net zero is the situation where the volume of CO2 emissions produced by our activities as an airline is equal to the volume of co2 captured in the air in the atmosphere by artificial or natural carbon sinks.
Air France-KLM’s commitment towards sustainability is not something new as both airlines have had commitments from a very long time. In 2008, we introduced our first climate action plan to reduce our carbon footprint, so we have a long track history of commitments and achievements towards the fight of climate change. Most of the time we use a common language such as the United Nations Sustainable Development goals. These are 17 goals that set a standard, so a common language to talk about society and the issues that we can see across the globe, and we use that language to make sure we have a strategy aligned with these issues. We have four pillars at air France-KLM: (1) environment which is quite of the obvious one, (2) employee journey when it comes to our employee and staff towards diversity equity inclusion etc., (3) social value and how we can give back to the community but also employability ,and the the economic impact that we have in our destinations but also (4) customer trust and ethics that is a very important pillar for us and these pillars are aligned. These are the recent targets and I think it’s great for you to have an overview that it’s ongoing and that we didn’t stop our efforts during the pandemic.
Fred: You talked a lot on the high levels of sort of the standardization of the industry and the sustainable development goals, giving us the big picture. Could you share with us some more concrete examples of what is currently done to some of these objectives specifically?
Marion: On the concrete examples, we worked, and we completely aligned with our joint venture partner, Delta, in North America. I will say our main driver right now is to continue investing in new generation fuel and carbon efficient aircraft. So, for example for the airbus fleet, it’s the A350 for long haul, the A220 for medium haul and for Boeing we have the 787 Dreamliner. These new aircrafts are aimed for 20 to 25 percent carbon emission reduction compared to the previous generation. You saw during the pandemic some aircrafts parked at airports, so we took an opportunity to put [some] in early retirement, especially those aircrafts that are the most polluting. We also continue our efforts to offer responsible catering options but also to develop recycling on-board in our lounges to reduce our waste across the whole supply chain and value chain.
Our second main driver to sustainability is our investment in research and development for sustainable aviation fuel (SAF). This innovation will help to reduce up to 80 percent [of emissions], depending on the pathway and the technology. We have also the train plus air tickets in France and these air tickets are a good driver as well to reduce our impact. We offer programs through B2B and B2C and, we work on diversity for inclusion but also on social value making sure we invest in rehabilitation ecosystem initiatives. We took our responsibility a while ago to reduce the fuel consumption per passenger per kilometer through fleet renewal and through the operational measure so everything that we can do at airports but also the waste management or eco piloting software on board our aircraft to reduce our emissions. We invest in the new technology of sustainable aviation fuel, and we also respect some commitments with the carbon offset and reduction scheme for international aviation (CORSIA), a standard developed from ICAO and the European Emission Trading System. All these efforts are important to help reduce our CO2 emissions but we also encourage our clients to be part of the solution with us.
Fred: Clearly there are a lot of initiatives being undertaken by Air France-KLM and so when you’re thinking of demographics and specifically here on our webinar, we have a lot of attendees who are based in Canada, and so maybe if you could share a bit more about the state of mind of the travelers and the solutions you offer in Canada.
Marion: Thanks for asking. We wanted to have a better sense of what clients are thinking and we ordered a survey with IPSOS early last year in February to really ask clients and non-clients where their state of mind is when it comes to sustainability, and we found that we have roughly 60 percent of Canadian travelers who think they are more conscious about the environment now than before the pandemic. We heard that our clients want to have more information about what we’re doing and one of the feedbacks was saying that “oh you do things but maybe we’re not aware of it”. A few examples that I can share with you today is that KLM operates from various stations in Canada and is the first airline to take a responsible catering initiative. We offer a Beyond Meat option in our world business class from all Canadian stations. This type of option reduced drastically the CO2 footprint because as you know red meat has a stronger environmental footprint. The feedback is overall very positive as people again want to have more details about the actual impact so we are trying to find solutions to measure by figures regarding what could be the reduction of offering that type of option to a customer. We have also a pillar on responsible lounge so if you’ve been lucky to travel recently, we have renovated our lounge in Montreal and we did the renovation with sustainability specification criteria and consideration in the material recycling, the eco-responsible products. We also donate the former furniture to some local charities so we’re really trying to embed and illustrate sustainability in our lounge operations. And then also a new service that we offer to clients for late flights between Montreal and Paris since the beginning of December is the night service which offers the customer to take their meals at the lounge instead of having it on board and to be able to enjoy the flight and sleep. That service completely participates to our food waste reduction efforts. The feedback is overall positive as people are quite pleased with that service, and if you have access to the lounge then our teams contact you prior to your flight to ask you if you are willing to take that dinner in the lounge. The last pillar is international waste and a lot of feedback we see from our client is “you have a lot of waste plastic”. We’re doing as much as we can, and recycling is already done for flights from Canada to Paris and Amsterdam but we have some regulation here in Canada on international waste that put some constraint so we are working to really kind of test and see what we can do and challenge as well the regulation to make sure we’re going to be able to recycle tetra packs and plastic bottles going forward. The two main products offered to our client both b2b and b2c are offsets on how we can offset things through the reforestation programs. We make sure we align with the SDGS and not necessarily have an impact only on the climate but also on communities. The other product is the sustainable aviation fuel. Yes, you can plant a tree to reduce your carbon footprint, but a tree needs to grow before being able to capture CO2 in the atmosphere, so we tend to say that the CO2 compensation offer is a long-term, long-run solution up to 10 years. When you invest in sustainable aviation fuel, you basically reduce the carbon emission even before emitting them because reduction happens before boarding the aircraft, so these are a few products and initiatives that we’ve been offering towards sustainability.
Fred: Thank you Marion, sustainable aviation fuel is something that our clients would be interested in considering. One of the interesting points you made was on the impact of these small plastics and how your clients have expressed concern, and it really connects to the idea of the supply chain and the part that you play as a consumer to control the efficiency or the sustainability of the supply chain. With this consideration, we can see how the air travel industry’s impact goes beyond the one to two percent responsibility of CO2 emissions and the effect it can have on other industries. So, could you give us your vision for a world with sustainable travel and what that looks like for you and what you see in in the coming years ahead?
Marion: Well, I always say that I have a dream when I talk about waste. For example, we worked a lot here in Montreal to make sure we can recycle and collect waste much more and reduce [waste] whenever possible. I have a dream because of SAF, and the feedstock used to create SAF. One of the innovations would be to use municipal waste to create biofuel, and my dream would be that one day we will collect all waste from our aircrafts, and we will directly use that waste to create a biofuel to fly and that would be kind of a virtuous circle where everything is used and participates in the reduction of our carbon footprint. So hopefully in the short term, probably it will take longer than my expectation but hopefully we’ll be able to have some solutions in addition to aircrafts but we’re an airline so we’re not responsible for building aircraft, but we’ll have solution to really help shape responsible travel to another level. We already have solutions, but I think we need to accelerate, and we need to explain to the to the public, and to our customers, the challenges that we face. But the solutions are there, we have the solutions, we just need to accelerate and scale the industry towards the right direction.
Please follow the video attached for the full 30-minute discussion.
Airlines have incurred scrutiny on their role and efforts in reducing carbon emissions. It was imperative that there be an aggregated effort and plan in place towards greater environmental sustainability. In 2016, ICAO adopted the Carbon Offsetting and Reduction Scheme for International Aviation, in which airlines agreed to maintain carbon-neutral growth in international flights beyond 2020. The airline industry made a commitment of halving net emissions from 2005 levels, by 2050.
To achieve these goals, airplane carriers have started investing in fleet renewal plans by retiring older airplanes, to favor ones that are more fuel-efficient airplane. For example, American airlines made a $23 billion investment for over 500 new airplanes as a part of a sustainability-conscious renewal program. According to American, every generation of airplanes invested, comes with a fuel efficiency minimum target improvement of 10-15%. With the pandemic and the grounding of many aircrafts, it has allowed carriers to take the opportunity to retire older plans as they reduced their capacity. Delta alone has retired over 200 planes, which has created a 6% increase in fuel efficiency per seat.
Other innovations in the space include short haul electric aircrafts as well as carbon capture technology, all aimed to reduce the carbon imprint.
Another notable development has been sustainable aviation fuel (SAF), which can potentially reduce emissions by 80%. For example, SAF can be derived from recycling cooking oil used by McDonald’s to cook fries and turning it into renewable diesel. As it stands, the use of SAF is limited due to the high cost it incurs and complexity of the operational chain. However, many companies are working to streamline this process, and airlines are a big stakeholder.
Due to a lack of standard in the hotel industry regarding sustainability, new organizations and measurement methods have recently been drafted. For example, the Hotel Carbon Measurement Initiative, which is a tool that helps hotels measure daily carbon footprint per room, was formed in 2012 by the Sustainable Hospitality Alliance and the World Travel & Tourism Council. Another group is the Hotel Water Measurement Initiative which measures water usage in a hotel.
Hotel chains such as Hilton Worldwide and IHG Hotels & Resorts have expressed an increase in requests in sustainability efforts, and this effort varies based on the sustainability efforts of the client. Companies are generally looking for hotels to set a standard and show clarity.
Part of the hotel green initiatives is largely based on creating smart designs, reducing waste, and investments in local communities to shorten some of those supply chains and reduce impact. A hotel’s involvement in the surrounding economic system also helps the improve the customer’s experience beyond the hotel and can create a favorable loyalty towards that hotel.
A study by the Global Business Travel Association (GBTA) found that, of the companies surveyed,37% track the carbon footprint of their travellers, 23% use a sustainability index or scorecard system to understand the sustainability practices of key suppliers and 7% set carbon emission reduction targets. These numbers will grow fast as more companies set sustainability targets.
Companies can no longer remain stagnant in these efforts, and they are being asked to create sustainability plans that consider all stakeholders. As more customers make purchases based on brands that align with their values, including sustainability, this can create a big opportunity. According to Accenture, 66 percent of consumers said they are highly aware of sustainable or ethical purchasing, and 74 percent reported deciding where to spend based on values and ethical corporate practices. Inversely, employees have an expectation that the company operates responsibly and should be mandated to make sure employees are “net better off”.
Hotels keep track of water and energy use through utility companies, and airlines and cruise lines keep track of fuel, but the count of plastics are not made. To do so, companies need to apply pressure on all participants, including suppliers, producers, guests, and all the other stakeholders to stop creating and shipping products like food and cleaning supplies with plastic. The positive news is that there is increasing awareness that carriers and airports need to foster an omnichannel aggregated ecosystem and align their interests. For example, Marriott and IHG work closely with their supply chains, and using their market power to create change geared towards sustainability. This goes for non-travel companies as well, the sort of positive impacts made are often duplicated by competitors.
To achieve these goals, the relevant data needs to be analyzed and actioned. This could relate to carbon intelligence that reports on carbon footprint and its alternatives; the use of sustainable procurement hubs that report on suppliers with practices that align with company interests; it could also mean applying carbon information on all travel, which allows the traveler to make an informed decision and helps the company stay on its carbon emission target.
Every organization can now install certain initiatives, at low cost, which can alter behaviors that make climate action a part of the company culture. For instance, an organization can assign team “carbon” budgets, which points them to carbon-neutral transportation options once they’ve used up their allowance. Additionally, companies can reduce travel for single meetings and look to aggregate several meeting points on one trip to reduce environment impact.
Organizations also have an opportunity to incentivize travelers to avoid plastic by offering discounts or other rewards for using their own reusable containers, which can leader to stronger customer loyalty, for those considering a business’ ethical practices.