Sustainability Report We're Reducing Our Climate Impact for Long-Term
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Sustainability Report SAS welcomes an open debate about aviation and the environment. On the basis of scientific findings we will present a nuanced picture of the airlines’ actual environmental impact and help ensure a competition- neutral policy framework. Important events in 2009 COP15 concluded with the “Copenhagen Accord,” a political goal of a maximum temperature rise of two degrees Celsius. SAS and IATA were active in the process. IATA and the aviation industry agreed on specific and relative targets for reducing greenhouse emissions. SAS’s MRV (Monitoring–Reporting–Verifying) plan, which represents the basis for calculating carbon dioxide and tonne kilometers for the EU ETS, was approved. SAS’s climate index improved by four points to 93 (97). Blue1 was certified and Cargo recertified according to ISO 14001. SAS stepped up its environmental communication internally and externally. The phasing out of older aircraft resulted in a substantial improvement in the fleet’s total environmental performance. Sustainability-related KPIs1 2009 20082 2007 Operating revenue, MSEK 44,918 52,870 50,598 EBT before non-recurring items, MSEK –1,754 –339 1,234 EBT margin before non-recurring items, % –3.9 0.6 2.4 Average number of employees 18,786 24,635 26,5383 of which women, % 45 42 413 Sick leave, % 6.9 6.5 6.43 Climate index 4 93 97 95 Carbon dioxide (CO2), emissions, 1,000 tonnes 3,784 5,840 6,295 Nitrogen oxides (NOX), emissions, 1,000 tonnes 15.0 24.2 25.6 Grams of carbon dioxide (CO2)/RPK 127 129 130 Total fuel consumption, 1,000 tonnes 1,208 1,857 1,999 Fuel consumption, liter/RTK 0.46 0.47 0.48 Water consumption, 1,000 m3 175 176 2083 Energy consumption, ground, GWh 207 213 2093 Unsorted waste, 1,000 tonnes 1.5 0.9 1.03 External environment-related costs, MSEK 368 453 414 Number of passengers, 1,000 5 27,382 41,741 44,772 1 We’re reducing our climate impact for All financial key data follow the financial portion of the Annual Report. Wherever possible, all sustainability KPIs include operations owned during the reporting year. 2 Apart for average number of employees, all key data for 2008 exclude airBaltic. 3 Data have not been examined by an external auditor. 4 The climate index has been corrected in the Internet version and thus departs from long-term, responsible traffic growth the index in the print version. 5 Including paying, bonus and charter passengers 102 and non revenue passengers. SAS Group Sustainability Report 2009 Aviation sector a key player at UN climate conference Our world – our stakeholders In 2006 the airline industry began to examine industry positions on being included in the European emissions trading scheme. Already then advantages were identified of seeking global SAS’s activities include flight operations and ope- During the period 2008-09 SAS reduced its capacity by 15%, solutions to avoid competition-distorting rules rations on the ground. Actual flights account for the resulting in an increase in the passenger load factor from 72.3 to and purely regional systems. 72.7% in 2009. IATA estimates that demand fell by around 8% in At the end of 2008/beginning of 2009, SAS invited the IATA and biggest environmental impact by far, yet ground ope- a number of industry players to attend the World Business Summit 2009, with growth picking up again by 2011 at the earliest. rations and onboard customer service also impact the climate conference, held in Copenhagen in May 2009. Subsequently, environment. In 2009 the environmental debate intensified with a contin- IATA was able to present an initial proposal for a global strategy for the ued focus on global emissions of greenhouse gases, primarily airlines’ greenhouse emissions. IATA then obtained industry accept- ance of the strategy ahead of the UN climate summit in New York in carbon dioxide (CO2). There is growing agreement that a consid- SAS believes in sustainable development as a concept both for erable effort is required to limit and eventually reduce emissions. September 2009. Since SAS played a leading role in the process, SAS Group CEO Mats Jansson was one of three airline chiefs tasked with taking responsibility and as way of creating value for sharehold- However, major emitters such as the U.S., China and India have presenting the strategy. In September 2009 the strategy was also ers. Continuously improving processes and optimizing produc- difficulty reaching a consensus on specific targets and a time- presented at a preparatory climate conference, Nordic Climate Solu- tion in a sustainable way creates value, not only in the form of table for taking action. See also the report from COP15 at right. tions, in Copenhagen. SAS was a “greening partner” at both the World growth for shareholders but also for outside stakeholders, sup- Business Summit and Nordic Climate Solutions. During the year, global pliers and passengers. To communicate these efforts and their On the way to zero emissions industry organizations for airports, air traffic management and aircraft results, SAS strives to continue to be a leader in sustainability In 2007 the industry organization IATA formulated a vision and engine manufacturers also endorsed IATA’s global strategy. This means that the global aviation industry stands united on com- reporting, work that is propelled by the demands of the outside whereby it will be possible to fly commercially without impact- mon goals, a situation, by the way, that is unique in the world, since no world and by the expectations of stakeholders. ing the climate by 2050. This vision is to be realized through a other global industry had succeeded in agreeing in this way, ahead of The airline industry is sensitive to outside disruptions. These combination of new technology, more efficient air traffic manage- COP15. ICAO, the UN civil aviation body, held a meeting prior to the have been amplified during the most recent decade, with the ment, new fuels and measures to improve infrastructure and climate conference where environmental issues topped the agenda. market affected by cyclical fluctuations, acts of terrorism, war other external conditions under which the airlines operate. Despite initial differences, during COP15 it became clear that ICAO and the aviation industry are largely in agreement on basic principles. and the current financial crisis. At the same time, competition is Realizing zero emissions requires the total replacement of increasing, which puts additional pressure on falling margins in a existing aircraft fleets with a new generation of aircraft not yet in Conclusion: less than two degrees labor- and capital-intensive industry. production. The lead time for such a changeover is 20-30 years, Following serious problems reaching agreement in the negotiations SAS’s long-term objectives remain firm, and reporting of sus- which is why the vision of zero emissions should be interpreted to among 192 countries, the world had to settle for the final report, the tainability work is to maintain the same high standards that have mean that the necessary technology is to be commercially avail- “Copenhagen Accord”. Despite the lack of targets and plans, it is how- been garnering praise for SAS from sustainability analysts and able and adopted by the airlines at a financially proper pace. ever, positive that COP15 resulted in a political pledge to keep the global temperature increase under two degrees Celsius. Moreover, almost all other outside commentators. On the way to this vision, IATA and the rest of the aviation countries in the world endorsed the declaration to establish and report industry agreed on joint recommendations and a target scenario national targets. Market performance ahead of the COP15 climate conference: While aviation was on the policy agenda at the summit, it was not The airline industry is now seeing lower demand from business included in any agreement. In the short term this may be seen as an ad- Improving energy efficiency by an average of 1.5% per year travelers in particular, the most important segment for the estab- vantage, since aviation avoided the tax measures that many countries until 2020. had proposed, but a more long-term assessment is that a clarification lished network carriers. would have been best, preferably in the form of a global framework for Carbon-neutral growth starting in 2020. This has led to greater competition and increasing pressure regulating aviation. 50% reduction in greenhouse CO emissions by 2050, on fares, affecting margins and profitability for the entire indus- 2 try. At the same time, substantial capacity has been mothballed, compared with 2005 levels. Intensive industry collaboration and many airlines have put new investment on hold. ACARE (Advisory Council for Aeronautical Research in Europe) During the entire COP15, SAS was part of an IATA team, which worked In the long term, however, a continued uptick for the airline has set a goal for developing technology for aircraft, engines and intensively to establish contacts with negotiators and decision-makers from all over the world. The aim was to create a dialog on the needs and industry is expected with average passenger growth of 3-4% per better air traffic management to reduce greenhouse CO emis- We’re reducing our climate impact for 2 requirements of aviation and present the industry’s own recommenda- year. Most of the growth is expected in Asia, primarily in China sions by 50% per revenue passenger kilometer and nitrogen ox- tions. Particular weight was given to industry desires for a global agree- and India, while the mature markets in the industrialized West will ides (NOx) by 80% by no later than 2020. In addition, noise levels ment and for ICAO regulation of airline emissions.