Sustainability Report — 2020 2 — CONTENTS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020 — Contents

Introduction

03 Letter from the 04 Letter from the Chair 05 About Air New Zealand 06 Strategy & Governance Air New Zealand of Air New Zealand’s of Sustainability at Chief Executive Officer Sustainability Air New Zealand Advisory Panel Sections

08 01. 12 02. 16 03. 20 04. 24 05. Caring for Tackling climate Championing Strengthening Sustainability our people change & carbon sustainable sustainable dashboard & & communities emissions tourism & regions supply chains performance & reducing waste metrics 3 — INTRODUCTION — LETTER FROM THE CHIEF EXECUTIVE OFFICER AIR NEW ZEALAND SUSTAINABILITY REPORT 2020 — Letter from the Chief Executive Officer

It has certainly been a very decarbonisation will be required, and ensure long-term industry in the past year – through our challenging year for the especially because family competitiveness. And we are up voluntary carbon offsetting aviation sector and for Air New connections, business, tourism for this challenge – because there function FlyNeutral, together and New Zealand’s key export are equally strong environmental, we have contributed close to Zealand. We have worked hard industries rely on international social and economic benefits to $1.5 million towards permanent to ensure the actions we have air transport. be gained. Investing in sustainable native forestry projects across taken over past months will alternative fuels will create skilled New Zealand and achieved an Being able to decarbonise our jobs benefiting regional New average uptake rate across all enable the airline to emerge business is considered vital to our Zealand; enable more resilient retail storefronts of 7.1 percent. competitively and sustainably long-term success and remains fuel supply chains; and utilise from the Covid-19 crisis. But an important part of our business Air New Zealand has a fantastic waste materials as feedstock from model, even as we navigate the story about what it has achieved some of the decisions we have forestry and landfills or municipal most challenging economic over the past decade and I’m had to make as an organisation solid waste, with the ability to circumstances we have ever seen as especially proud this year of our have been painful and I am transition to other feedstock gases an airline. Acting on climate change continued support for strong using green hydrogen in the future. grateful to the entire Air New is not something we consider to biodiversity outcomes with the Zealand whānau – both those be a choice; it is an integral part New Zealand’s high mix of Department of Conservation Greg Foran — Air New Zealand who are still employed with of the recent company-wide renewable energy, reliance on and to supporting regional Chief Executive Officer us, and those who are not – for strategy reset we have called Kia aviation for domestic connectivity, communities through domestic their incredible efforts and Mau (“get ready” in te reo Māori). and high proportion of relatively tourism – including advocating for Through this work it has become short distance regional flights better, more sustainable, tourism personal sacrifices through increasingly clear that as an airline also mean it is uniquely placed outcomes for New Zealand this really difficult time. and as a country, if we are to meet to be an early adopter of next communities. In the coming year The pandemic we are together our shared net zero by 2050 goal generation aircraft (electric, we will continue to build on the facing has accentuated the and take decisive action in the hybrid and/or hydrogen). Air New actions we have taken, leading importance of connection, and coming decade, we need to pursue Zealand is working with several and advocating for action on the crucial role international trade sustainable alternative fuels. aviation equipment manufacturers decarbonisation and in turn, to accelerate development and fulfilling our promise of taking links and international tourism play Sustainable fuels and the deployment of future aircraft and care further than any other airline. in the New Zealand economy. The infrastructure they rely on require engine technology. Establishing impact of the global pandemic significant upfront capital and new Ngā mihi New Zealand as a hub for aircraft has resulted in Air New Zealand policy settings to give producers innovation and an attractive operating significantly fewer confidence there will be long-term location for the trialling of future flights in the past year, which has demand and to ensure commercial aircraft technologies will accelerate seen our carbon emissions reduce viability to the end user. These fuels the commercialisation of next by 19 percent. While we will rebuild currently cost two to three times generation aircraft while also our airline, there is no doubt our that of traditional fuel – but that providing employment and regional emissions profile in the coming commercial gap can be narrowed. development benefits. years must be lower than it was Making this a reality will require Greg Foran pre-Covid. Air New Zealand is one close collaboration, investment A big thank you to our customers Air New Zealand of the most fuel-efficient operators from both the public and private too for your continued support. Chief Executive Officer in the world with a very modern sectors, and strong enabling We have been especially delighted fleet – but further significant policy to attract investment with voluntary offsetting rates October 2020

< BACK TO CONTENTS 4 — INTRODUCTION — LETTER FROM THE CHAIR OF THE SUSTAINABILITY ADVISORY PANEL AIR NEW ZEALAND SUSTAINABILITY REPORT 2020 — Letter from the Chair of the Sustainability Advisory Panel

This has been a terrible year it’s going to have to be on a steeply shocked aviation into a more acute for the global aviation industry. declining trajectory by then, and realisation both of its vulnerabilities And there will be no immediate capable of demonstrating exactly and of its obligations. what its contribution would be to Hopefully, it will have simultaneously bounce-back either. The avoiding the nightmare of runaway shocked governments into a lingering effects of Covid-19, climate change. A nightmare that realisation of how much smarter quarantine controls, residual will make the impact of Covid-19 they now need to be in providing on the global economy look like nervousness in some people the right policy settings to make it a minor market perturbation. about getting back on a plane, possible for airlines to do what they even after a global vaccination It is therefore very encouraging need to do. The new Government programme – it all points to a to see Air New Zealand doubling in New Zealand now has a precious slower recovery for aviation down on its Carbon Reduction opportunity to show what real than for almost every other Programme and its overall leadership looks like in that regard, Sustainability Strategy, as reflected working closely with Air New sector of the economy. in Greg Foran’s introductory Zealand to ensure that one of New It also points to the imperative, words. It would be so easy, facing Zealand’s most iconic companies Sir Jonathon Porritt — Chair of for all airlines, of positioning such incredibly difficult head can indeed continue to thrive Air New Zealand’s Sustainability strategically for that post- winds, having to take such painful indefinitely into the future. Advisory Panel decisions to ensure the company’s pandemic world. There are many And that, of course, is exactly what future success, just to put uncertainties about what that world sustainability means. will look like. But one thing that sustainability ‘on the backburner’. is absolutely guaranteed is that I can say categorically that this is there will be a far greater sense of not happening, and that all of us on urgency in addressing the Climate Air New Zealand’s Sustainability Emergency in which the world finds Panel (page 7) are impressed at itself engulfed. the leadership being shown here both by the Board and by the whole Many governments have – at Executive Team. long last woken up to the scale Sir Jonathon Porritt of this Emergency. And to the I have been deeply critical of the aviation sector in the past. Chair of Air New Zealand’s fact that we can no longer defer Sustainability Advisory Panel immediate radical action. The Ever since governments chose Intergovernmental Panel on to exempt international shipping October 2020 Climate Change tells us, quite and aviation from the binding agreement of the Kyoto Protocol straightforwardly, that emissions back in 1997, the response to of greenhouse gases need to halve accelerating climate change on over the course of the next decade. the part of both sectors has been The aviation sector will not be able complacent and obstructive. to halve its emissions by 2030. But If nothing else, Covid-19 has

< BACK TO CONTENTS 5 — INTRODUCTION — ABOUT AIR NEW ZEALAND AIR NEW ZEALAND SUSTAINABILITY REPORT 2020 — About Air New Zealand Prior to the 2020 Covid-19 pandemic, Air New Zealand operated a global network, with a Pacific Rim focus, connecting passengers and providing cargo services to, from, and within New Zealand.

As a small island nation in the Pacific, air travel provides a vital We carried more than 35,000 tonnes of New Zealand exports in the connection to the rest of the world and this became even more past year, transporting high value products to international markets evident as global air travel reduced in the past eight months in and supporting New Zealand businesses. We also facilitated urgent movements of medical and infrastructure supplies. response to the pandemic. While passenger numbers have dropped significantly since March 2020 due to Covid-19, we operated five repatriation flights to get returning Kiwis home to New Zealand’s shores as well as 26 repatriation charter flights for stranded visitors in New Zealand. This included flying to ports we had never flown to before.

Winner 20 3.18m 3.49m 35,045 tonnes of the 2019 Deloitte 200 domestic destinations social media fans, up from 3.08m Number of Airpoints™ members, Annual volume of New Zealand Sustainable Business Award in the prior year up 9% from the prior year exports carried. Under the in New Zealand International Airfreight Capacity Scheme, 20,000 tonnes of cargo has been moved

< BACK TO CONTENTS 6 — INTRODUCTION — STRATEGY & GOVERNANCE OF SUSTAINABILITY AT AIR NEW ZEALAND AIR NEW ZEALAND SUSTAINABILITY REPORT 2020 — Strategy & Governance of Sustainability at Air New Zealand Our purpose at Air New Zealand is to enrich our country by connecting New Zealanders to each other and New Zealand to the world.

Our Sustainability Framework has helped to guide our Internally, we regularly monitor and track performance against targets in each of our framework areas. In the actions and is aligned with the United Nations Sustainable past year we had a four-member Sustainability Executive Steering Group comprising our Executives responsible Development Goals (SDGs), the blueprint to create a better and for Strategy; Ground Operations; Marketing & Customer; and Operational Integrity and Safety. Moving forward, the full Executive will meet monthly to discuss advancement of our decarbonisation plans and sustainability more sustainable future for all. We have identified nine SDGs agenda given their significance within our new company-wide strategy. that we have the greatest ability to positively impact.

Sustainability Framework

Manaakitanga Kaitiakitanga Ōhanga Ora 2020 marks the final year for many of our targets as articulated in our Sustainability Framework Our people Our place Our economy and in 2021 we will be sharing our new strategy, focus areas and associated goals and targets. Air New Zealanders Carbon Tourism Key learnings over past years include: Communities Nature & Science Trade & Enterprise • The importance of ensuring • The critical roles that • The need to get started, even at a strong cross-business organisational culture and small scale, to generate learnings collaboration and holding building sustainability and eventually build momentum relevant senior leaders jointly knowledge within senior for larger scale impacts. An accountable for achieving leadership, delivery teams, and example here includes our small the company’s sustainability partners play in achieving our initial substitutions for single-use targets, coupled with strong sustainability objectives. In the plastic inflight materials, which shared governance at the past year, the Sustainability have subsequently encouraged Executive level to ensure Masterclass (see page 10), hosted the exploration of new suppliers delivery within the organisation. for key Air New Zealanders and and products to deliver more external parties, helped to drive widespread waste reductions. more personal and therefore This led us to removing 55 business-wide ownership of the million single-use plastic items sustainability agenda. from our operations through transitioning items to lower- impact alternatives or removing them entirely.

< BACK TO CONTENTS 7 — INTRODUCTION — STRATEGY & GOVERNANCE OF SUSTAINABILITY AT AIR NEW ZEALAND AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

Sustainability Advisory Panel

Our Sustainability Advisory Panel provides an independent forum by which expert guidance and critique is provided on our sustainability agenda.

The Panel is currently made up of four external members who Panel members have been selected based on their unique sets of skills to assist us with driving our sustainability meet with relevant Executives and senior leaders twice a year agenda forward. Current Panel members include Sir Jonathon Porritt, Dame Anne Salmond, Dr Susanne Becken, to hear about our current progress on sustainability targets, and Professor Tim Jackson. We were also deeply saddened by the passing of Sir Rob Fenwick in early 2020. Sir Rob was a member of our Panel since 2015 and we valued him hugely for his contribution, support and provide updates on new developments in the sustainability challenge on our sustainability agenda. He had incredible vision and took significant actions to improve New space, and debate and develop new opportunities. Zealand’s biodiversity, climate and waste reduction outcomes and was fundamental in accelerating corporate sustainability progress across the country. To read more about our Panel members click here. The Panel also provides continuing advice on sustainability matters outside of these bi-annual meetings, including supporting us on sustainability aspects of our new Kia Mau (‘get ready’) strategy. Material issues for 2020

Ongoing engagement with our internal and external stakeholders allows us to consider the key issues they care In this report we focus on the following: about and identify material issues that are relevant to Air New Zealand in the current operating context. Consultation takes 01. Caring for 04. Strengthening place with our employees, customers, investors, suppliers, our people & sustainable industry partners and the communities we operate in. communities supply chains & The identification of our material issues is further supported by our Board reducing waste of Directors, Executive, and Sustainability Advisory Panel who assess 02. Tackling climate the issues that are most material to our operations, the environment, our customers and other stakeholders. Our Executive also reviews the change & carbon 05. Sustainability risks identified in our Enterprise Risk Process and annual and long-term emissions dashboard & strategic planning cycles. performance The material issues identified as part of this canvassing of multiple 03. Championing stakeholders then forms the backbone of our direction as a company, metrics including strategic priorities, sustainability initiatives, mitigation of risk, sustainable and reporting. tourism & regions

< BACK TO CONTENTS 8 — SECTION 01 — CARING FOR OUR PEOPLE & COMMUNITIES AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

– Caring for our people & communities

People are and have always been the heart of our airline – he tāngata, he tāngata, he tāngata. Manaaki or caring for our people is inherent in who we are – that care carries through to our customers which is why they choose to fly with us. This year our people have proven yet again how resilient and dedicated they are as we have faced one of the most difficult times in the airline’s history. Despite saying goodbye to friends and colleagues and adapting to Covid-19 Alert Levels, they continue to deliver exceptional service to our customers and outstanding work.

< BACK TO CONTENTS 9 — SECTION 01 — CARING FOR OUR PEOPLE & COMMUNITIES AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

more than 1,000 others have donations from employees. More isolation in hotels while on layover, Our 10 employee networks Supporting our taken voluntary periods of leave than 1,000 Air New Zealanders then more testing and self-isolation connect, support and give a voice without pay or reduced hours to have received a grant so far. We on return. Our Chief Medical Officer to our employees, driving an people through support the airline. also worked with AMP to enable works closely with the Ministry of inclusive workplace where people our FlexiSaver members to make Health to make sure we have the of all genders, sexual identities We have put in place a number of Covid-19 withdrawals of up to 30 percent most up-to-date practices and and abilities are respected, measures to support people exiting from their superannuation account. precautions to ensure safety. The accepted and valued. They have the business and safeguard the The past eight months have been team recently established in- been instrumental in us attaining wellbeing of all Air New Zealanders. Internal secondment opportunities exceptionally challenging – the house compliance and surveillance the Gender, Rainbow and This included promoting our were maximised to keep people impact of Covid-19 on the aviation testing for employees to make it Accessibility Ticks. wellbeing resources: employed for as long as possible. and tourism industries has been easier for them to get tested. We For example, cabin crew and airport In addition, we have learning heart-breaking. Over this time our are also working with overseas • Wellbeing Hub with customised workers supported the Contact modules on understanding our priority has been the health, safety hotels to make sure crew have Covid-19 toolboxes on financial Centre team in answering the tens different communities, what being and wellbeing of our people and access to fresh, healthy food and wellbeing, managing stress of thousands of queries we received inclusive looks like and awareness our customers. rooms with outlooks to improve the and anxiety, self-isolation and every week. The Learning team of the impact of unconscious bias working remotely layover experience. We have worked closely with the partnered with tertiary education on decision-making. Ministry of Health to implement • Weekly wellbeing check-in text providers to promote reskilling We are extremely grateful for measures to keep our crew and messages and emails – people courses and funding options for the professionalism Air New the New Zealand public safe. could tell us how they and their impacted employees. Learning Zealanders have shown throughout Gender Such measures have included whānau were feeling and request materials were also created along this crisis. They have been the extensive use of personal a wellbeing check-in. More than with curated LinkedIn Learning steadfast through the constantly balance protective equipment (PPE), 28,000 responses were received modules. Career transition support changing environment and remain on-site Covid-19 testing for our was provided through: the backbone of our business. We pride ourselves on developing • Thrive mental health app people, isolation of international air • 1:1 Careerdesk advice women and promoting gender crew, and the cleaning of aircraft • Employee Assistance diversity, creating a culture that with antiviral products. Programme • Career livestream sessions, Our diverse empowers women. We have workbooks and videos increased the proportion of women The difficult economic • Peer Assistance Networks circumstances meant we had to • Promotion of external job people in senior leadership positions over make the tough decision to right- • Our Special Assistance Team opportunities – more than the past year, with 51 percent of size our organisation to match was deployed to support 1,000 jobs shared with nearly Diversity creates a better our Airline Leadership Team now the reduced flying demand and vulnerable employees 45,000 views culture, drives innovation and is women. Our gender pay equity gap prepare the airline to be smaller ultimately good business. With shows men are paid 0.89 percent • Health & wellbeing livestreams • Staying Connected Register for for at least a time. We worked more than 132 known ethnicities, more than women in comparative on managing stress, financial departing employees to receive with our unions and employees to we strive to create a workforce roles, so we will continue to review wellbeing and mental health future job opportunities find alternative ways of reducing that represents Aotearoa and is a our processes and policies to costs to minimise the number The Āwhina Trust was set up to It has been enormously challenging place Air New Zealanders can be ensure they promote equality. of redundancies. Unfortunately, provide employees with hardship for our international crew flying our themselves and thrive. we still had to farewell more than grants, using funds provided cargo and repatriation flights. They 4,000 Air New Zealanders and through salary sacrifice and undergo testing before departure,

< BACK TO CONTENTS 10 — SECTION 01 —01 CARING — CARING FOR OUR FOR PEOPLE OUR & PEOPLE COMMUNITIES & COMMUNITIES AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

of our people leaders and key • The Airpoints for Schools PPE were delivered, with dedicated Māori & stakeholders (suppliers, airport programme had some travel PPE flights on average containing: operators, key customers and that was impacted. We are • 416,000 masks Pasifika investors) to build awareness working with the chosen schools and capability to deliver on our to reschedule them on their • 8,300 sterilised gowns development sustainability agenda. In November educational travel • 23,000 medical alcohol wipes 2019, Sir Jonathon Porritt, Chair of • Our internal team of • 5,000 plastic face shields Our commitment to growing and Air New Zealand’s Sustainability conservationists, called the developing Māori and Pasifika Advisory Panel, facilitated a two day • 16,600 litres of hand sanitiser Greenteam, supported several leaders continues, with 17 percent Sustainability Masterclass, where volunteering activities this year, These logistically complex of leaders now of Māori or Pasifika world-class local and international including the Department of operations provided vital PPE descent1. We are well on track to contributors provided expert Conservation Pāteke release in reserves for New Zealand at a meet, and hopefully exceed, our insights and facilitated discussion – the Arthur Valley time when there was substantial target of 20 percent by 2022. assisting participants to build their demand for such supplies Mango Pare, our programme to knowledge and explore ideas and As we look to 2021 we will continue to around the world. Across April develop aspiring Māori and Pasifika actions to meet the sustainability rebuild our community programmes and May alone, we moved leaders through indigenous challenges confronting both Air around the Covid-19 restrictions, around 1,200 tonnes of cargo values, kicked off last year. The New Zealand, the aviation sector adapting where we can. from Shanghai to New Zealand, first 16 participants shared and partners across New Zealand. the majority of it PPE. We continue overwhelmingly positive feedback to keep these key cargo links – check out what they had to say Playing our open to ensure adequate PPE here. We are running another Community supplies globally. course this year and are grateful for part to deliver the funding received from Te Puni support Kōkiri to support this. essential As an airline we endeavour to Over the past year our TupuToa personal intern programme (which aims to extend manaaki to the communities create career pathways for Māori we fly to and support New protective and Pasifika students) had eight Zealanders through a number of interns, four of whom have stayed initiatives. Unfortunately many of equipment employed with Air New Zealand our programmes were impacted following their internships. by Covid-19, but some of the successes were: As the Covid-19 pandemic grew in impact and reach, we worked • Our Carepoints™ programme with the business sector and Embedding launched in May enabling the Government under tight Airpoints™ members to donate timeframes to arrange 80 sustainability Airpoints Dollars™ to three dedicated cargo flights from charity partners – KidsCan, Shanghai to Auckland. Many of Pre-Covid-19, a key strategic focus Women’s Refuge and New Zealand these flights contained PPE for was on embedding sustainability Red Cross. Nearly 250,000 health workers and other essential and enabling more than 100 Airpoints Dollars were donated services. In total millions of items of

1 Based on those Air New Zealanders that have elected to fill out their descent details.

< BACK TO CONTENTS 11 — SECTION 01 — CARING FOR OUR PEOPLE & COMMUNITIES AIR NEW ZEALAND SUSTAINABILITY REPORT 2020 — Key metrics

WOMEN IN LEADERSHIP/ MĀORI & PASIFIKA LEADERS MANAGEMENT % % % 13 15 17 36% 2018 2019 2020 2020

EMPLOYEE NETWORKS IN OPERATION WOMEN IN SENIOR LEADERSHIP

1. Pride 4. Women’s 7. Young 9. WINGs (Women 10. Women in Professionals Inspiring the Engineering, % 2. Manu 5. Kiwi Asia Next Generation) Maintenance 51 8. Women in Digital – Pilots & Supply Chain 3. Enable 6. Ex-Services 2020

EMPLOYEE ASSISTANCE PROGRAMME (EAP) UTILISATION RATE1 WELLBEING HUB VISITS 9.8% 10.5% 1,165 2019 2020 average unique users each month

TOTAL RECORDABLE RATES (TRR) OF INJURIES2 5.1/million hours 2020 (down from 10.3 in 2019)

1 EAP Association Guidelines indicate that a utilisation rate (the percentage of new and re-opened cases, based on FTE) over 6% is an indication EAP is being used as a proactive wellbeing tool. 2 Based on injuries (medical treatment and lost time incidents) x 1,000,000 / actual hours worked.

< BACK TO CONTENTS 12 — SECTION 02 — TACKLING CLIMATE CHANGE & CARBON EMISSIONS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

– Tackling climate change & carbon emissions

Despite Covid-19 clipping the wings of the global aviation industry in the past eight months, the importance and urgency of climate action remains as pressing as ever. While the Covid-19 pandemic essentially grounded a significant proportion of the global aviation industry in 2020, the climate has continued to warm. World over, devastating climate-related weather events have gained momentum and intensity. From wildfires in Australia, the United States and the Arctic, to flooding in New Zealand, the climate crisis has not stopped for the pandemic.

< BACK TO CONTENTS 13 — SECTION 02 — TACKLING CLIMATE CHANGE & CARBON EMISSIONS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

At the same time, the pandemic movement of pandemic response Carbon Offset and Reduction VOLUNTARY OFFSETTING UPTAKE RATES IN FY201 has exposed the criticality of air equipment, PPE, and facilitating Scheme for International Aviation transport to New Zealand’s trade, repatriation of people. However, (CORSIA) requiring carbon neutral export, investment and tourism continued fleet substitution growth from 2020 and annual industries. The importance and challenges caused by the Rolls- measurement and reporting. pitfalls of global connectivity Royce Trent engine issues coupled Read more about our climate- % % have never been more stark and with the unique challenges related governance, strategy, 7.0 14.0 the enormous economic benefit posed by the Covid-19 operating risk management, metrics and New Zealand (up from 4.6% in FY19) UK (up from 9.8% in FY19) created by air travel has never environment, ultimately eroded targets in our 2020 Taskforce been more apparent. It is clear some of the hard won efficiency for Climate Related Financial that aviation remains vital to our gains in the first part of the year, as Disclosures (TCFD) contained in future prosperity, but the industry the operation responded to a new our 2020 Annual Financial Results % % must evolve and operate in a more network, new destinations, new available here. sustainable manner. social distancing guidelines, fewer 10.3 9.0 Covid-19 has not dampened our passengers and more cargo. US (up from 7.3% in FY19) Canada (up from 6.0% in FY19) Through our dedicated Carbon customers’ awareness of the Reduction Programme, we have Air New Zealand continues to be effects of climate change or continued to focus on making a participant in the New Zealand their commitment to travel in a the operation as fuel efficient as Emissions Trading Scheme and has more sustainable manner. More % % possible, both in the air and on the an obligation to report greenhouse customers than ever before chose ground. This focus has helped us gas emissions generated from to voluntarily offset their flight- 6.3 4.8 improve fuel efficiency by more fuel use on all domestic flights and related carbon emissions in the Australia (up from 4.3% in FY19) Singapore (since launch 4 Oct 2019) than 18.3 percent since 2009. then purchase and surrender to the year, either by “ticking the box” The Covid-19 pandemic and New Government an equal number of when booking, or by offsetting Zealand’s elimination strategy New Zealand Units to match those through our FlyNeutral programme and border closure, required the emissions. In the 2019 calendar for corporate and government % % airline to pivot and support the year, our Emissions Trading customers. Air New Zealand also 6.9 7. 1 recovery of the economy via its Scheme obligation was 628,408 continued to voluntarily offset all Japan (since launch 3 Mar 2020) Uptake rate across cargo operation. During the year, tonnes CO2-e. For emissions the carbon emissions attributable the airline operated hundreds generated in international to employees flying for work all activated storefronts (up from 4.6% in FY19) of charter flights, enabling the airspace, we participate in the around our network.

CORPORATE AND GOVERNMENT CUSTOMER ROLL OF HONOUR

Corporate and Governmental Massey University / Spark / Ministry of Social Development / Accident Compensation Corporation / organisations demonstrating Ryman Healthcare / AsureQuality / Health Quality and Safety Commission / PĀMU Farms of New Zealand / leadership by offsetting flight-related travel emissions Stuff / New Zealand Oil & Gas / Milford Asset Management / Information Leadership / Arvida / Bell Gully / in FY20 through FlyNeutral2 Hawkes Bay Regional Council / BLAKE / Co-op Bank / Office of the Clerk / Deloitte New Zealand

1 Number of bookings partially or fully offset as a percentage of all bookings through the relevant online storefront; New Zealand, United Kingdom, United States, Canada and Australia data for all FY20, other markets since functionality was available within the year.

2 Customers are listed in order of tonnes of CO2-e offset through the programme in FY20.

< BACK TO CONTENTS 14 — SECTION 02 — TACKLING CLIMATE CHANGE & CARBON EMISSIONS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

GREENHOUSE GAS INVENTORY Within FlyNeutral, half of the carbon Australia and China. Air New emitted was offset with emission Zealand keeps none of the funds Internal reduction units generated from collected via FlyNeutral. Total GHG emissions Tonnes Tonnes Tonnes permanent native forestry projects governance Despite the devastating impact of operational sources CO -e 2018 CO -e 2019 CO -e 2020 in New Zealand, including from the 2 2 2 the pandemic, customers chose emissions NZ Native Forest Restoration Trust, The Board of Directors is ultimately to voluntarily offset more carbon scope Wellington City Council’s Outer responsible for our response emissions than ever before through Green Belt, the Coatbridge Native to the risks and opportunities Scope 1 Aviation Fuel, 3,730,246 3,925,650 3,176,634 FlyNeutral in the year – along with Forest Project (Marlborough), presented by climate-related LPG, Natural the airline’s own voluntary offsetting the Tempello Biodiversity Project issues. Board oversight is through Gas, Ground commitments, customers elected Diesel, Ground (Marlborough), Hinewai Reserve the Audit and Risk Committee, to offset over 92,0002 tonnes of Bio Diesel, (Banks Peninsula) and Owenga which oversees key risks including CO -e up from over 63,000 tonnes Ground Petrol Reserve (Chatham Islands). The 2 climate change. This committee in the previous year. Scope 2 Electricity 3,044 3,098 2,832 airline and its customers supported meets quarterly and updates the permanent native afforestation The supply of permanent New Board following each meeting. Totals 3,733,290 3,928,748 3,179,466 throughout New Zealand by Zealand native forestry offsets Management has day-to-day contributing around $1.47 million is a clear challenge for New responsibility for identifying and Biomass Wood pellets 638 725 1,050 to these New Zealand projects in Zealand (and for the future of managing climate-related risks (CO ) 2 the past year. The other half of the Air New Zealand’s FlyNeutral and opportunities. Climate-related workstreams are the responsibility In 2019, New Zealand Ministry for the Environment released a new set of greenhouse gas emissions carbon emitted was offset with programme) and we have factors for organisational reporting, including for the first time an emissions factor for aviation fuel. emission reduction units generated encouraged and supported the of the full Executive team, the Air New Zealand has adopted this figure to stay consistent with national greenhouse gas inventory biodiversity workstream of the Executive Climate Committee and guidance, a process which has included updating our baseline inventory and inventories for financial from biodiversity and sustainable years 2016 to 2019. A correction was made to the use of this factor for the 2020 financial year, which has energy projects in New Caledonia, Aotearoa Circle to produce its the Sustainability team. For more been implemented for all previous years. report Native Forests: Resetting information please refer to our the Balance. The report explores TCFD disclosures contained in the opportunities and benefits our 2020 Annual Financial Results 1 FUEL EFFICIENCY: CO2-e PER REVENUE TONNE KILOMETRE that indigenous forestry presents available here. to New Zealand for carbon sequestration, biodiversity, soil health and other ecosystem Average annual fuel services, as well as potential %efficiency improvement solutions to encourage more 0.93 compared to 2009 baseline widespread native afforestation. 0.88 1.8 -e/RTK 0.85 2 0.81 2 Retail customers offset at the time of booking. Where flights have been cancelled due to Covid-19, customers 0.79 have been issued credits, including for the value of offsets purchased. This figure includes tonnes of carbon 0.78 4 purchased by retail customers in the year, the value of which was credited back to the customer due to kg CO 0.76 0.75 0.74 3 Covid-19 related cancellations. 0.73 0.72 0.73 3 In 2019, up to four of our most fuel-efficient aircraft, the Boeing 787-9 Dreamliner, were unavailable for use due to the global Rolls-Royce Trent 1000 engine issues. Air New Zealand leased two Boeing 777-200 and one 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Boeing 777-300 aircraft which, depending on flight route and duration, typically used 20 to 26 percent more fuel than the Dreamliner, resulting in the decline in fuel efficiency this year. 1 Revenue Tonne Kilometre (RTK) is a measure of the weight that has been paid for on the aircraft (freight and passengers) multiplied by the number of 4 In 2020, two of our most fuel-efficient aircraft, the Boeing 787-9 Dreamliner, were unavailable for use due to kilometres transported. Freight values are from Air New Zealand records, and passenger weights are estimated at 100kg per passenger (including checked the global Rolls Royce Trent 1000 engine issues resulting in less fuel-efficient Boeing 777-200 and Boeing

and carry-on baggage) as recommended by IATA for generating a fuel efficient target. CO2-e emissions are from Air New Zealand’s use of aviation fuel over 777-300 aircraft being substituted on routes. Additionally, the impact of Covid-19 on payloads, mandated the same time periods. social distancing requirements and network changes negatively impacted fuel efficiency.

< BACK TO CONTENTS 15 — SECTION 02 — TACKLING CLIMATE CHANGE & CARBON EMISSIONS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020 — Key metrics

TOTAL TONNES CO2 -e SAVED THROUGH CARBON REDUCTION PROGRAMME 11,468 15,084 10,557 2018 2019 2020

FLEET AGE IN YEARS (SEAT-WEIGHTED)

1

7.4 2017 7.5 2019 7.1

2016 2018 2020 7.0 7.1

1 Excludes the Boeing 777-200 fleet, which has been grounded for an indefinite period.

< BACK TO CONTENTS 16 — SECTION 03 — CHAMPIONING SUSTAINABLE TOURISM & REGIONS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

– Championing sustainable tourism & regions

The environment and New Zealand’s unique culture are at the heart of New Zealand’s tourism proposition and protecting it therefore remains critical. Our strong tourism partnerships have been vitally has been foreshadowed through the New Zealand important as tourism industry players pull together Tourism Futures Taskforce’s mandate and ongoing work. to face into the challenges of Covid-19. Pre-Covid-19, From March 2020 we saw international visitor numbers great inroads were being made in raising the value drop sharply due to global border closures. As a result, that international visitors provide to New Zealand. stimulating domestic tourism and maintaining cargo trade This strategy remains important once international links throughout Covid-19 have been major focus areas. A border restrictions ease. Going forward, the recovery key part of this work has been the resumption of flights to of the tourism industry from the substantial impact all 20 of the domestic destinations that we were flying to of Covid-19 must be one of collaboration and with pre-Covid-19. sustainability’s relevance more front of mind, as

< BACK TO CONTENTS 17 — SECTION 03 — CHAMPIONING SUSTAINABLE TOURISM & REGIONS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

to travel New Zealand safely and The Continued responsibly. As part of this work, a Developing summer campaign was launched importance partnering in November 2019 with Kiwi kids the next asking New Zealanders and of value with Tourism international visitors to care for generation New Zealand and act as kaitiaki over volume New Zealand for now and for future generations. of tourism As at March 2020, 84 percent of Growing the value of tourism has With international borders severely New Zealanders indicated that the leaders been a goal of the New Zealand restricted by the pandemic, our Tiaki Promise is important to help tourism industry and great progress partnership with Tourism New inform people how to travel New Recognising the key role that was being made towards this in Zealand shifted focus to promote Zealand responsibly2. sustainable tourism plays in 2019. Annual expenditure by domestic tourism. The “Do enabling prosperity within New international visitors increased 5.2 Something New, New Zealand!” Zealand’s regions coupled with percent to $17.2 billion, while campaign launched in May 2020, Championing the need to provide higher international visitor arrivals which we supported by promoting value and skilled employment increased by 1.3 percent, in the year the campaign in Kia Ora magazine, sustainable opportunities in the tourism 1 ended March 2019. There is also consumer communications and sector, in mid-2019 we established growing recognition that the ‘value’ retail marketing campaigns. activities a strategic partnership with of tourism needs to be evaluated in The campaign encourages New Queenstown Resort College’s different ways – beyond simply Zealanders to get out and see their In March 2020 we launched a new (QRC) Tai Tokerau Paihia campus. visitor expenditure in a monetary own backyard, with a particular Sustainable Activities Website, The goal of the partnership is sense – to include greater emphasis on travelling outside of profiling local sustainable tourism recognition of the social value that to build New Zealand’s tourism the peak holiday periods. operators committed to making tourism needs to deliver to talent pipeline and enable youth New Zealand a world-class travellers, individuals and local employment pathways, while We also continued sustainable visitor destination. communities. developing regional capability for our collaboration Over 245 sustainable activities Pre-Covid-19, tourism export the tourism sector. In addition to with the Department and attractions, endorsed by earnings were also boosted by the providing travel support to staff of Conservation, Qualmark, can be explored, and expansion of our international route and students, 45 QRC students Local Government booked on the website. network, connecting consumers in New Zealand, New have had the opportunity to visit North America, Asia and Australia Zealand Maori Air New Zealand’s Auckland directly with New Zealand. Tourism, Tourism operations to bring classroom Targeting high-value visitors in Holdings Limited, Tourism learning to life and hear stories large global markets requires Industry Aotearoa and Tourism about potential career pathways. significant marketing investment, New Zealand to promote the To get a sense for study and life which we undertook more Tiaki Promise to domestic and at QRC, 20 Tairāwhiti/Gisborne effectively by working in international visitors. Tiaki means students were flown to Tai partnership with Tourism New airnewzealand.co.nz/sustainable-activities/ to care and protect and the Tiaki Find and book quality, sustainable activities Tokerau to attend Experience Zealand and other airline and Promise guides visitors on how and attractions, endorsed by Qualmark QRC – a school holiday initiative tourism industry partners.

1 Source: Tourism Satellite Account 2019, Statistics New Zealand. 2 Source: Mood of the Nation, March 2020, Tourism Industry Aotearoa and Tourism New Zealand.

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Maintaining The future key cargo links of tourism

In 2020 and in response to the The New Zealand tourism industry Covid-19 pandemic impacting is demonstrating huge resilience in global supply chains and transport managing the impacts of Covid-19 networks, our cargo operation and no international visitors, while at repositioned to a cargo charter the same time focusing on building a business to enable high-value more sustainable tourism system for export products from regional the future. The impact of Covid-19 producers to continue to reach has only heightened the complex key global markets in the absence issues that long distance travel of passenger flying. In May, an creates for the industry, especially International Airfreight Capacity in terms of the related carbon Scheme commenced with the emissions. These complexities will Ministry of Transport to add need to be untangled and addressed capacity and maintain key trade for New Zealand to continue with a strong and authentic sustainable links. The agreement currently tourism proposition. It has also enables more than fifty Air New highlighted the importance of Zealand cargo flights per week domestic tourism as more New to carry Kiwi products (such as Zealanders are experiencing their lobster, salmon, flowers, and own country. New Zealanders meat) to strategic trading ports travelling domestically helps many in China, the United States of tourism businesses, saves jobs and America, Australia and the Pacific boosts regional economies. Our Islands. To date we have seen 500 for students in their final year of In November 2019 we partnered stories. After the camp, the work with Tourism New Zealand flights and 20,000 tonnes of cargo school. The experience enabled with the National Geographic students presented their photos and regional partners to promote moved under the scheme, which the group to better understand Society to run photo camps in and essays to their families, domestic tourism has also helped to has allowed exporters to keep their what residential tertiary study New Zealand communities to peers, and local communities. maintain regional air connectivity, position in valuable markets. entails. Of the 20 students who give underserved youth a voice We intend to conduct further with our domestic network ramping attended, nine enrolled in a QRC through photography. National photo camps in conjunction with back up to around 85 percent of programme (seven of these Geographic photographers National Geographic once border pre-Covid-19 demand. in Gisborne). In 2020, the first travelled from across the world to restrictions ease. The strong partnerships we have QRC student also completed provide guidance and expertise developed have been vital in their internship at Air New on photographic storytelling. allowing us to continue to support Zealand, assuming a variety The first camp, in Murupara, Bay and work towards a sustainable of responsibilities, including a of Plenty, involved twenty young tourism offering and successful placement in our Brand team, the locals spending five days exploring regions. Shared goals create a Academy of Learning and as an what it means to be a young Māori shared momentum that will keep airport-based Holiday Host. in Aotearoa, and learning how us all moving forward through to use a camera to tell personal challenging times.

< BACK TO CONTENTS 19 — SECTION 03 — CHAMPIONING SUSTAINABLE TOURISM & REGIONS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020 — Key metrics

FURRY AND FEATHERED Enhancing SUPPORTING OUR GREAT WALKS FRIENDS TRANSPORTED FOR DOC conservation Air New Zealand and DOC are working together to bring birdsong 498 threatened species and 42 conservation outcomes back to our Great Walks, currently covering six key projects. dogs relocated including: with DOC

Our longstanding partnership with Abel Tasman the Department of Conservation National Park (DOC) has enabled more than 1 3,330 hectares of 274 4 43,000 hectares of sustained pest sustained predator Pāteke / Brown Teal Native Falcon control on six of New Zealand’s control covered iconic Great Walks, including 400 predator control traps being Heaphy Track installed on the Paparoa Track on 6,421 hectares of the West Coast, which opened in 2 sustained predator 6 November 2019. In the past year, an control covered 23 27 additional 498 threatened species Takahē Kiwi were translocated by the airline and Milford Track 42 conservation dogs flown. A new 9,344 hectares of 2 1 safety video, A Journey to Safety, 3 sustained predator was released with an associated control covered campaign to highlight New 4 Zealand’s biodiversity crisis and 26 42 the need to protect native birds. The video received more than 27.5 Kākāpō Conservation dogs million views globally (the highest 5 Paparoa Track for an Air New Zealand video). 12,088 hectares of 3 4 sustained predator control covered OUR LONGSTANDING Routeburn Track RELATIONSHIP WITH DOC 8,300 hectares of 5 sustained predator control covered We have played a key role in establishing increased sustained pest control to: Whanganui Journey 64 hectares of 6 predator control 43,247 and 3,700 hectares of environmental hectares on six Great Walks (including the Paparoa Track maintenance covered which opened in November 2019)

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– Strengthening sustainable supply chains & reducing waste

In response to Covid-19, our supply chain had to adjust quickly to the changing demands of the business. Despite this, our suppliers continue to maintain achieving refreshed waste targets, Project Green sustainable business practices previously agreed has continued to deliver waste reduction and to ensure they remain compliant. As our supplier supply chain efficiencies. Reducing single-use base begins to recover, this will allow for future plastics and working with our partners to opportunities to be identified and the furthering of expand available recycling and composting our sustainability programme in this space. While infrastructure remain priorities. Covid-19 has provided obstacles to setting and

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have within various products. This and Los Angeles and will return reduce waste to landfill, including Working with is also hindered by regulation not Reducing to Christchurch, Wellington, and current initiatives, such as Project requiring more specific labelling. Queenstown once these ports Green, scoping the transition of our suppliers This has made the process of inflight waste resume international flights. While further single-use plastic items identifying palm oil within our we planned to roll out Project on our flights to more sustainable to create a supply chain a labour-intensive through Green in San Francisco, Chicago, alternatives, supporting the process. Despite these challenges, and Houston in 2020, this has not expansion of recycling and sustainable one of our caterers, Compass NZ, Project Green been possible due to the impact composting infrastructure, and was successfully certified as using of Covid-19 on our international embedding a waste minimisation supply chain 100 percent sustainable palm oil in Project Green continued to deliver network. We look forward to culture throughout Air New the past year. To provide ongoing waste reduction results in 2020. expanding the project to other Zealand. These initiatives, along Covid-19 has had an unparalleled governance in relation to palm oil, By reinjecting a range of sealed ports when able. with the new targets will further impact on Air New Zealand and Air New Zealand’s Palm Oil Position and completely untouched inflight assist us in our drive towards our diverse range of suppliers. Statement was refreshed in product back onto flights, in FY20 instilling a circular economy The repercussions of border December 2019 to include updated alone, Project Green has saved Resetting approach within our supply chain. restrictions and lockdowns on our Roundtable on Sustainable 11,378,925 units at a weight of 142.7 operations have had vast flow- Palm Oil (RSPO) principles for tonnes of product from going to waste targets on effects for our highly valued certification and provide more landfill and recycled 263 tonnes suppliers. Despite this, suppliers robust monitoring and measuring. of glass. Since Project Green’s To develop robust and ambitious representing 94.2 percent of Air To acknowledge the critical role inception, Air New Zealand has waste targets, consistent waste 1 New Zealand’s spend have now our suppliers play in palm oil reinjected 435 tonnes of product data is required. Unfortunately, due provided positive assurance of our identification processes, we now back onto flights and recycled to our rapidly changing operations Supplier Code of Conduct. This is insert contractual obligations 593 tonnes of glass. Combined, and the corresponding fluctuations an increase on the previous year in all catering agreements to this equates to over 25 A320 in waste output, the increased use (93.2 percent positive assurance) ensure palm oil compliance is aircraft and over 33,701,279 total of non-recyclable PPE, and the loss but falls short of our original 100 maintained in accordance with the units recovered. Project Green of in-house contractor resource percent target by 2020. Gaining requirements set by the airline. remains operational in Auckland from our waste management positive assurance from each of our supplier to work with us on suppliers is an intricate process. As minimising waste, such waste data such, we have focused resourcing was not sufficiently representative. on strategic and managed suppliers As such, while we were intending (contracted spend over $150,000). to have refreshed waste targets We are currently scoping different in place, these are still under digital tools to provide a more development. This will allow time seamless and comprehensive to obtain more representative assurance process that will support waste data and allow us to carry Air New Zealand in reaching the out waste audits to ascertain key 100 percent target. waste reduction opportunities. Palm oil identification in the supply Despite the new targets still being chain continues to be a challenge set, this has not fundamentally due to the many guises palm oil can changed our continued efforts to

1 This excludes fuel and labour and is based on contestable spend (over $150,000)

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Supporting Investing in local sustainable communities property

Due to our substantially reduced In 2020, our new distribution centre schedule, this year a range at Auckland Airport was awarded of inflight dry goods in our a 5-Star Green Star NZ – Industrial warehouses were surplus to Design certified design rating. The requirements. After working with Green Star rating demonstrates suppliers to return as much product New Zealand excellence and as possible, hundreds of thousands leadership in green building. of products remained that had To achieve the rating a range of limited shelf-life. This provided factors are considered including a unique opportunity to donate energy, water, materials, Indoor food products and materials to Environment Quality, transport, local New Zealand communities at land use and ecology, management, a time when it was most needed emissions, and innovation. and reduced unnecessary waste Particular sustainability highlights going to landfil. of the new warehouse include maximising natural ventilation and lighting, and using harvested rainwater for toilet flushing and water-efficient tapware. Given the long-term nature of built infrastructure, we recognise the importance of investing in new low-impact, sustainable builds to deliver ongoing efficiencies in our supply chain.

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DONATIONS TO LOCAL COMMUNITY PROGRAMMES 8,900+ 150,000+ inflight blankets to a range of charitable organisations, including Cookie Time cookies shared with New Zealand Red Cross, SPCA, VisionWest, Foster Hope, charities, essential worker groups Middlemore Foundation and Kidz First Community Health Service and social enterprises 770,000+ dry goods such as muesli, crackers and sauces redistributed to New Zealand food banks

TOTAL WEIGHT OF ITEMS REINJECTED ONTO OUR AIRCRAFT AS A RESULT OF PROJECT GREEN IN THE 2020 FINANCIAL YEAR

Tonnes PROJECT GREEN Project Green has saved 11,378,925 units at a weight of 142.7 tonnes of product from going to landfill and recycled 263 tonnes of glass

< BACK TO CONTENTS 24 — SECTION 05 — SUSTAINABILITY DASHBOARD & PERFORMANCE METRICS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020 – Sustainability dashboard & performance metrics

Air New Zealanders 05Target Baseline Year 2018 2019 2020 Status Increase representation of Māori and Pasifika in Management 13% (FY18) 13% 15.4% 17% positions thorough the organisation to 20% by 2022

Reported rate of injuries 1 reducing by 15% year-on-year Reported rate of injuries of Reported rate of injuries of 11.2 and Reported rate of injuries of 10.3 and Reported rate of injuries of 5.1 and 103 resulting in a rate of less than 10 by end FY20 (against FY17) 14.8 (FY17) 215 employee injuries (25% decrease 179 employee injuries (38% decrease employee injuries (64% decrease from FY17) from FY17) from FY17)

90% execution of Critical Risk Management (CRM) Plans with 25% of CRM Plans in place All critical risks and controls are registered All critical risks and controls are registered All critical risks and controls were registered controls tested by end FY20 with controls tested (based in the Enterprise Risk Register in the Enterprise Risk Register in the Enterprise Risk Register on Critical Risks Gap Analysis) Risk control improvement plans now being (FY17) implemented

Achieve an average Flourishing Scale2 score of 45 or better Establishing baseline 47.0 47.0 N/A3 N/A by end FY20 against FY17 in FY17

75% employee engagement by end FY20 67% (FY14) 71% 71% (FY18)4 N/A5 N/A (The last survey was in 2018)

50% Senior Leadership Team (SLT) female by end FY20 16% (Jan 2013) 39% 44% 51%6

70% of our SLT alumni Executive level or Non-Executive Director 86% 86% 75% N/A7 N/A or SLT roles in organisations with New Zealand Interests

Increased proportion of employees who participate in N/A 276 employees participated in community 497 employees participated Many employees participated in community community programmes programmes in community programmes programmes in FY20 including volunteering with the New Zealand Red Cross to pack parcels for hope and the Department of Conservation with a pāteke release in the Arthur Valley. Employees also volunteered with local food banks and charitable organisations during Covid-19 alert levels 3 & 4. Due to Covid-19 and the restrictions on gathering sizes, the majority of our volunteering activity was paused in FY20.

1 Based on TRFIR rate: injuries (medical treatment and lost time incidents) x 1,000,000/actual hours worked. 2 The Flourishing Scale is designed to assess an individual’s psychological resources and strengths and their ability to live life with purpose and happiness. 3 Wellbeing 360 survey not conducted due to Covid-19. 4 Your Voice employee engagement survey conducted on bi-annual basis using Aon Global engagement methodology. 5 Your Voice employee engagement survey cycle paused due to Covid-19. 6 This percentage relates to the newly formed Airline Leadership Team (ALT) which replaced the SLT in the 2020 calendar year. Across all employees, 57.6% identify as a man, 42.4% identify as a woman, and 0.1% identify as gender diverse. 7 Data not able to be obtained due to the impact of Covid-19.

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Our Communities Target Baseline Year 2018 2019 2020 Status

Impactful projects implemented in East Coast (Tairāwhiti) and N/A • Product development project • Product development project • Air New Zealand, in partnership with Northland (Te Tai Tokerau) to drive social and economic benefit implemented to support capability to implemented in Tairāwhiti which Trust Tairāwhiti launched a destination bring three cultural tourism products to supported launch of two cultural tourism marketing campaign in February inspiring market (Mount Hikurangi, Waka Hourua products (Mount Hikurangi and Waka Kiwis to visit Tairāwhiti Gisborne. The and Chardonnay Express) Hourua). Both tourism experiences ‘See Gisborne in a new light’ campaign • Air New Zealand and Ngati Porou received Qualmark Gold accreditation showcased visitor experiences in the partnership agreement signed • Strategic partnership with Queenstown region; from spectacular beaches and Resort College’s Paihia campus launched cultural experiences to exceptional food • Scoping of measurement framework and wine commenced (to measure social, economic to support youth in regional New Zealand and environmental progress in region) 1 meet their potential by fostering clear • The Strategic partnership with Queenstown pathways into study and employment Resort College’s Paihia campus to support • Ngāti Porou smoked fish on board Tasman youth in regional New Zealand meet their and Pacific Islands flights potential by fostering clear pathways into study and employment continued and developed in FY20 • Ngāti Porou smoked fish on board Tasman and Pacific Islands flights 2

Community activities implemented in every New Zealand N/A • Activities implemented in 18 ports • Significant community activity throughout • The Airpoints for Schools programme region Air New Zealand flies to (20 ports) • Airpoints™ for Schools covered off the regions with the involvement of Koru had some travel that was impacted. We all but 7 ports Care Dreamliner flight are working with the chosen schools to reschedule them on their educational travel • Two ports were not delivered to — • Airpoints™ for schools in 10 schools, Blenheim and Hokitika located across 8 ports • Covid-19 also had a significant impact on our Koru Care partnership. With no possibility of offshore travel we had to cancel offshore Koru Care trips planned in FY20. We are working to continue our support in FY21

Full compliance with ICAO noise standards for aircraft fleet N/A No notified noise breaches in FY18 No notified noise breaches in FY19 No notified noise breaches in FY20 Achieved full compliance with ICAO Achieved full compliance with ICAO Achieved full compliance with ICAO noise standards noise standards noise standards

Red Cross supported to respond to all disasters in New Zealand N/A Cargo provided support to MFAT, Members of Air New Zealand’s Special Members of Air New Zealand’s Special and the South Pacific Red Cross, and UNICEF following Cyclone Assistance Team (SAT) were deployed to Assistance Team (SAT) were deployed to Gita in Tonga assist Air New Zealanders and their family assist survivors and their families affected by 17 tonnes of humanitarian relief including, and friends affected by the Christchurch the Whakaari White Island eruption. but not limited to, the following items; Mosque attack Blankets, Jerry Cans, Kitchen Sets, Solar Lamps, Mosquito Nets, Shelter Tool Kits, Tarpaulins and Generators

1 In FY19 target was adapted to focus approach on the East Coast to have maximum impact. 2 Served on flights up until March 2020, as menus had to be simplified due to the impact of Covid-19.

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Carbon Target Baseline Year 2018 2019 2020 Status

Increase number of customer journeys offset voluntarily FY18 130,282 183,624 243,132

1.5% average annual improvement in aviation fuel efficiency 0.93t CO₂-e per revenue 1.1% improvement compared to FY17 1.1% degradation compared to FY18 3.1% degradation compared to FY195 (2009-2020) 1 tonne kilometre (FY09) 21.4% improvement compared to FY09 20.3% improvement compared to FY09 18.3% improvement compared to FY09 (2.4% average annual improvement) (2.0% average annual improvement) (1.8% average annual improvement)

Carbon Reduction Programme implemented in line with N/A The Carbon Reduction Programme The Carbon Reduction Programme saved The Carbon Reduction Programme saved

IATA audit recommendations saved 3,633,950kg of fuel or 11,468 4,780,000kg of fuel or 15,084 tCO2-e. This 3,341 t of fuel or 10,557 tCO2-e. This is

tCO2-e. This is comprised from the is comprised from the following initiatives: comprised from the following initiatives: following initiatives: Acceleration altitude Acceleration altitude 574,600kg fuel (1,813 flight path efficiencies 698t fuel (2,203

415,936kg fuel (1,310 tCO2-e), Ground tCO2-e), Ground Power 2,637,000kg fuel tCO2-e), Ground Power 2,372t fuel (7,495

Power 2,015,000kg fuel (6,367 tCO2-e), (8,322 tCO2-e), Lightweight LD3 Unit Load tCO2-e), Lightweight LD3 Unit Load Devices

Lightweight LD3 Unit Load Devices Devices 1,219,000kg fuel (3,847 tCO2-e), 155t fuel (490 tCO2-e), and 116 t of fuel (366

1,128,014kgs fuel (3,553 tCO2-e) and RNP(AR) approaches in Christchurch tCO2-e) from on-board weight reduction.

RNP(AR) approaches in Christchurch 152,000kg fuel (480 tCO2-e), and

75,000kg fuel (237 tCO2-e). 197,000kg fuel (622 tCO2-e) from on-board weight reduction.

5% annual reduction in electricity use against 2011 baseline 56,210,433 kWh (FY11) 0% reduction compared to FY172 6.5% reduction compared to FY18 3.4% reduction compared to FY19 43% reduction compared to FY11 46% reduction compared to FY11 48.4% reduction compared to FY11

100% electric vehicles in light ground fleet (where feasible) 3 0% (FY15) Complete data for entire light vehicle fleet 92% Electric Vehicles where feasible 85% Electric Vehicles where feasible by end FY30 not available for 2018 56% of full fleet are Electric Vehicles (68 of the 80 applicable vehicles) 55% of full fleet are Electric Vehicles

100% electric Ground Service Equipment (where feasible) 3 32% (FY15) 51.5% 62.1% 69.0% by end FY23

82% diversion from landfill at Auckland ground sites by end 65% (FY15) 73.4% 75.0% 52.6% FY19 (zero waste to landfill by end FY20)4

75% diversion from landfill at non-Auckland ground sites by 71.8% (FY17) 68.3% 68.2% 36.0% end FY19 4

50% international inflight dry waste diverted from landfill at 49.6% (FY17) 46.2% 43.0% N/A6 N/A Auckland by end FY19

50% of domestic jet inflight waste diverted from landfill by 28.8% (FY17) 37.1% 39.6% 12.4% end FY19 4

1 IATA industry target. 2 Going forward future gains in electricity reduction will be incremental as our energy reduction program has reached the point where major reductions and easy wins have been achieved. We will continue to focus on maintaining achieved reductions. 3 Where feasible refers to availability of electric models for operational requirements. 4 Claim relates to the specific locations/sites that the waste contractor services directly. 5 Predominantly due to the global Rolls Royce Trent 1000 engine issues resulting in less fuel-efficient aircraft being substituted on routes and the impact of Covid-19 on payloads, mandated social distancing requirements and network changes negatively impacting fuel efficiency. 6 The facility that processes our international inflight dry waste has not been processing this waste since level 4 lockdown due to the risk of contact with Covid-19. This data is therefore not comparable to previous years. < BACK TO CONTENTS 27 — SECTION 05 — SUSTAINABILITY DASHBOARD & PERFORMANCE METRICS AIR NEW ZEALAND SUSTAINABILITY REPORT 2020

Nature & Science Target Baseline Year 2018 2019 2020 Status

Support six biodiversity projects with DOC and iwi partners Projects active on three Great Projects active on five Great Walks: Projects active on six Great Walks: Projects active on six Great Walks: on New Zealand Great Walks Walks (Lake Waikaremoana Whanganui River Journey, Abel Tasman Whanganui River Journey, Abel Tasman Whanganui River Journey, Abel Tasman on hold), species transfer Coastal Track, Heaphy Track, Milford Coastal Track, Heaphy Track, Milford Track, Coastal Track, Heaphy Track, Milford Track, programme fully supported Track, and Routeburn Track (Lake Paparoa Track and Routeburn Track (Lake Paparoa Track and Routeburn Track. Species (FY16) Waikaremoana on hold). Species transfer Waikaremoana on hold)1. Species transfer transfer programme fully supported. programme fully supported. programme fully supported.

Maintain zero environmental non-compliances Zero environmental Zero environmental non-compliances as One environmental non-compliance Zero environmental non compliances as at non-compliances as at end FY18 Underground fuel tanks (at Auckland end FY20. at end FY15 Engineering & Maintenance) failed to meet HSWA (Hazardous Substances Regulation). A compliant above ground tank was operational by the end of July 2019.

IEnvA stage 2 certification via IATA (Core activities-Flight N/A IEnvA stage 2 certification achieved IEnvA stage 2 certification achieved IEnvA stage 2 certification achieved. Operations & Corporate by end FY19) In FY20, the scope of the certification FY19 Target: IEnvA recertification via IATA with scope extended was extended beyond Flight Operations to include all activities and Corporate to include national Cargo; Maintenance Repair Organisations; Ground Services; and Auckland Airport. Tourism Target Baseline Year 2018 2019 2020 Status

Increase proportion of international visitors on Air New Zealand N/A 48.4% 47.8% N/A3 N/A travelling during shoulder season relative to peak2

Promote Tourism New Zealand's Qualmark certification and N/A Achieved Qualmark Gold Award A project was in development that would Air New Zealand supported the 100% certified organisations Investigating opportunities to promote enable Air New Zealand to promote and sell Pure Experience Awards that recognised Qualmark organisations through Air New Qualmark activities Qualmark endorsed tourism operators Zealand channels going above and beyond to create exceptional experience for visitors and local communities alike. A new website; airnewzealand.co.nz/ sustainableactivities, launched in March 2020 to promote activities and attractions awarded a Qualmark endorsement for their commitment to quality, safety and sustainability. Trade & Enterprise Target Baseline Year 2018 2019 2020 Status

100% of suppliers providing positive assurance of our 0% (FY15) New Code of Suppliers representing 93.0% of our spend4 Suppliers representing 93.2% of our spend4 Suppliers representing 94.2% of our spend4 Supplier Code of Conduct by 2020 Conduct launched provided positive assurance provided positive assurance provided positive assurance

Increase annual volume of New Zealand exports on 42,000 tonnes (FY17) 41,000 tonnes 38,600 tonnes 35,0455 tonnes Air New Zealand

1 The Lake Waikaremoana project did not proceed to full development and implementation phase. 2 Inbound shoulder season (April to November) arrivals on Air New Zealand Source: Statistics New Zealand, International Visitors. 3 Due to the impact of Covid-19 this data was not comparable to previous years. 4 This excludes fuel airport fees, aircraft, taxes, and labour. Where supply agreements are not in place, Air New Zealand’s purchase order terms and conditions are used to apply the Supplier Code of Conduct where the supplier spend is below $150,000. 5 The cancellation of Air New Zealand’s Shanghai service early in the 2020 calendar year due to Covid-19 in China, significantly impacted on volumes and the ability to move key perishable products to market in China, such as lobsters.

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