International Consolidated Airlines Group, S.A. - Climate Change 2019
C0. Introduction
C0.1
(C0.1) Give a general description and introduction to your organization.
International Airlines Group (IAG) is one of the world's largest airline groups. It is the third largest group in Europe and the sixth largest in the world, based on revenue in 2018. IAG was formed in 2011 and is currently the parent company of: British Airways, the Spanish operators Iberia and Vueling, the Irish operator Aer Lingus and the European operator Level. In 2018, IAG had 573 aircraft flying to 268 destinations and carried over 113 million passengers, as well as cargo via the subsidiary IAG Cargo. IAG’s total revenue was €24.4billion with €3.2 billion operating profit and RoIC of 17%, and the group employed the average manpower equivalent of 64,734 people.
For the purposes of this survey, IAG Cargo operations are accounted for in both Iberia and British Airways disclosures. Level operations are accounted for in a separate disclosure.
As an airline, IAG’s largest impact on the climate comes from the burning of jet fuel in our aircraft fleet. This accounts for 99.8% of our Scope 1 emissions and 77% of our combined Scope 1, 2 and 3 emissions. We also have an impact via our ground operations – like the use of baggage trucks and escalators – and from the energy used in our hangers, offices, lounges and other buildings.
IAG sees sustainability as fundamental to our long-term growth and has identified climate change as our most material environmental issue. As part of working towards our vision to be the world’s leading airline on sustainability, we set short and long-term targets on our climate change impact and in 2018 we continued to take action to minimise our carbon footprint across our operations. We also have a rigorous approach to identifying and assessing climate-related risks. More details are in sections 2 and 3.
We believe that a collective response is the best way to address aviation’s climate-related impacts and are extremely active in helping to shape national, regional and international climate-related policy instruments that affect the airline industry. More details are in section 12.3.
C0.2
(C0.2) State the start and end date of the year for which you are reporting data.
Start date End date Indicate if you are providing emissions data for past Select the number of past reporting years you will be providing reporting years emissions data for Row January 1 December 31 No
C0.3
CDP Page 1 of 74 (C0.3) Select the countries/regions for which you will be supplying data. Austria France Ireland Spain United Kingdom of Great Britain and Northern Ireland
C0.4
(C0.4) Select the currency used for all financial information disclosed throughout your response. EUR
C0.5
(C0.5) Select the option that describes the reporting boundary for which climate-related impacts on your business are being reported. Note that this option should align with your consolidation approach to your Scope 1 and Scope 2 greenhouse gas inventory. Operational control
C-TO0.7/C-TS0.7
(C-TO0.7/C-TS0.7) For which transport modes will you be providing data? Aviation
C1. Governance
C1.1
(C1.1) Is there board-level oversight of climate-related issues within your organization? Yes
C1.1a
CDP Page 2 of 74 (C1.1a) Identify the position(s) (do not include any names) of the individual(s) on the board with responsibility for climate- related issues.
Position of Please explain individual(s) Board-level In terms of climate issues, the IAG Board is responsible for setting group sustainability commitments, reviewing the progress of climate-related committee objectives and strategy, agreeing plans to meet carbon-related regulatory compliance such as with the EU Emissions Trading Scheme, and ensuring management is effectively delivering on sustainability objectives and policies. All members of the board may also raise questions, or ask for evidence of action on, or challenge aspects of our climate change programme. Director on In terms of climate issues, a non-executive director on the IAG Board chairs the IAG Audit and Compliance Committee. This committee is board responsible for approving key aspects of climate-related strategy (such as whether to support carbon pricing), major climate-related projects (such as our investments in sustainable aviation fuel) and agreeing internal audit programmes. They also review climate-related risks within our Enterprise Risk Management (ERM) framework and determine whether these should be considered principal risks to IAG. They review how our sustainability commitments align with wider risks and opportunities, strategy, financial performance and compliance. Chief In terms of climate issues, the CEO is responsible for updating the Board, where decisions about our sustainability and climate change strategies Executive are agreed as well as decisions about major climate-related investments. The CEO chairs the IAG Management Committee and ensures that Officer decisions made at Board level are directed into action across the Group operating companies. (CEO)
C1.1b
(C1.1b) Provide further details on the board’s oversight of climate-related issues.
Frequency Governance Please explain with mechanisms which into which climate- climate- related related issues issues are are integrated a scheduled agenda item
Scheduled Reviewing and The Board is responsible for approving the IAG sustainability strategy and annual disclosures, all major climate-related investments, – some guiding and approving the risk management and control policy which also includes climate-related risks and opportunities. They approve meetings strategy climate-related proposals, set or agree Group level energy, sustainability or climate targets, and can ensure that wider business Reviewing and activity is aligned with sustainability objectives and priorities. They also review the general business plans of each operating company, guiding major which look ahead five years – and have the opportunity to raise issues or questions in relation to the sustainability aspects of these. plans of action The Board debates climate-related issues at least twice a year. Updates are scheduled as part of a rolling planner and we are Reviewing and reviewing ways to improve this process on an ongoing basis. During 2018, the Group Head of Sustainability reported twice on guiding risk sustainability issues to the Audit and Compliance Committee. The Audit and Compliance Committee and the Board reviewed management disclosures in our Annual Report & Accounts, including progress on our emissions intensity targets and the implementation of policies sustainability strategy. The mechanisms and processes described above ensure that IAG management has clear oversight of climate- Reviewing and related issues and plans at Group level and in each operating company. guiding business plans Setting performance objectives Monitoring implementation and performance of objectives Overseeing major capital expenditures, acquisitions and divestitures Monitoring and overseeing progress against goals and targets for addressing climate-related issues
CDP Page 3 of 74 C1.2
(C1.2) Provide the highest management-level position(s) or committee(s) with responsibility for climate-related issues.
Name of the position(s) and/or Responsibility Frequency of reporting to the committee(s) board on climate-related issues Chief Executive Officer (CEO) Both assessing and managing climate-related risks and opportunities Quarterly
Other, please specify (Management Both assessing and managing climate-related risks and opportunities Quarterly Committee (Executive level)) Environment/ Sustainability manager Both assessing and managing climate-related risks and opportunities More frequently than quarterly Other C-Suite Officer, please specify Both assessing and managing climate-related risks and opportunities More frequently than quarterly (Chief of Staff)
Risk manager Both assessing and managing climate-related risks and opportunities Half-yearly Other committee, please specify (Audit Other, please specify (Non-Executive Director on the IAG Board sits on the IAG Audit Half-yearly and Compliance committee (Executive and Compliance Committee which oversees delivery of the IAG sustainability strategy) level)) Non-Executive Director on the IAG Board is Chair of the IAG Audit and Compliance Committee which oversees delivery of the IAG sustainability strategy.
C1.2a
CDP Page 4 of 74 (C1.2a) Describe where in the organizational structure this/these position(s) and/or committees lie, what their associated responsibilities are, and how climate-related issues are monitored (do not include the names of individuals).
The CEO of IAG has ultimate responsibility for climate related issues. The CEO has influence over all operating companies (“OpCos”) and provides a direct link between the IAG Management Committee (MC) and the Board of directors. Because climate change is a group-wide strategic issue for us, this ensures that the highest level of management holds ultimate accountability for directing IAGs response.
The CEO reports quarterly to the IAG Board, who are responsible for approving the strategies and general policies of IAG as well as approving the risk management and control policy which includes climate-related risks. The CEO is responsible for ensuring that Board-approved strategies and risk management plans are put into action across the Group and its operating companies. The CEO also chairs the IAG Management Committee, which provides the channel to direct decisions made at the Board into action across the Group operating companies. Via the Management Committee, the CEO is able to feed climate-related updates, proposals and requests back up to the Board.
The IAG MC is the next highest level of governance for overseeing climate-related strategy. It is responsible for assessing progress against our climate targets and providing sign-off and guidance on projects such as sustainable fuels and fuel efficiency initiatives. They also support the CEO in assessing and managing climate related risks and opportunities within their respective areas of responsibility across the Group. This Committee includes the Director of Strategy, Group Chief Finance Officer, Chief of Staff, General Counsel, and CEOs of the Group operating companies. The IAG MC can check that our climate-related programmes align with wider aspects of the business such as IAG strategy, risk management process and innovation programme. They can channel updates, proposals and requests relating to our climate programmes via the CEO back up to the Board.
The IAG Chief of Staff sits on the IAG MC and has overall responsibility for the development and implementation of sustainability strategy, including climate-related issues. The IAG Group Head of Sustainability reports into the IAG Chief of Staff. There is a direct line of accountability for our climate change programmes to be managed from director level to management level. In 2018, the IAG Group Head of Sustainability reported to the IAG Audit and Compliance Committee twice, to review progress and gain approval for the group sustainability strategy.
Each of the operating company CEOs are also responsible for presenting their climate change progress and plans to the IAG MC. This happens as part of an annual business planning process, with submitted plans covering a timeframe of the next five years. This ensures that the highest level of management are made aware of best practice that can be shared group-wide or where collective action is required to ensure progress against our goals. The MC provides a forum to discuss and agree proposed new policies and strategies before presenting these for approval to the IAG Board (see answer to section 1.1b).
Further down the management structure, climate change programmes are maintained under the control of each airline and their respective Boards and management teams.
The IAG sustainability governance structures were published in our annual report 2016 and will be restated if there any future changes.
C1.3
(C1.3) Do you provide incentives for the management of climate-related issues, including the attainment of targets? Yes
CDP Page 5 of 74 C1.3a
(C1.3a) Provide further details on the incentives provided for the management of climate-related issues (do not include the names of individuals).
Who is entitled to benefit from these incentives? Environment/Sustainability manager
Types of incentives Monetary reward
Activity incentivized Efficiency project
Comment Environment and Sustainability Managers have KPIs around successfully delivering carbon pricing, fuel efficiency, carbon efficiency and sustainable alternative fuels projects. For example, IAG, British Airways and Vueling sustainability and environment teams have these KPIs. Examples of key policy deliverables include successful lobbying for a market-based measure to regulate emissions from international flights, and lobbying for policy support to attract low-carbon fuel project developers to build their refineries in the UK and EU. A key climate mitigation project deliverable is achieving a sustainable aviation fuels production facility in the UK. In addition, delivery of key projects such as the implementation of new Group-wide fuel efficiency software is incentivised through individual performance related pay.
Who is entitled to benefit from these incentives? Energy manager
Types of incentives Monetary reward
Activity incentivized Energy reduction target
Comment IAG offers monetary rewards for the successful delivery of energy reduction and efficiency targets. For example the Fuel Efficiency Working Group of British Airways is tasked with delivering a series of fuel savings projects in an effort toward meeting annual fuel savings targets. This is a KPI-based deliverable and strong performance can result in a performance bonus. The Aer Lingus Fuel Management Committee is also assigned an annual fuel efficiency target and has implemented a number of fuel efficiency initiatives and projects towards delivering those targets. Delivery of key projects such as the adoption of more fuel efficient lighting in engineering and maintenance buildings is incentivised through individual's performance related pay.
Who is entitled to benefit from these incentives? Facilities manager
Types of incentives Monetary reward
Activity incentivized Energy reduction target
Comment Some facilities managers within IAG are offered financial reward for successful delivery of energy reduction targets. For example British Airways facilities management contractor in the UK is given an annual energy savings target as part of the contractual agreement.
C2. Risks and opportunities
C2.1
CDP Page 6 of 74 (C2.1) Describe what your organization considers to be short-, medium- and long-term horizons.
From To Comment (years) (years)
Short-term 0 2 For our Enterprise Risk Management process, we assess the potential impact of risks over the next two years versus our business plan.
Medium- 2 5 As part of our business planning cycle, risks are considered over the five-year business plan. term
Long-term 5 30 Group-wide emerging risks are considered as they are identified. For climate risk assessment we look at a range of timescales including 2030 and 2050.
C2.2
(C2.2) Select the option that best describes how your organization's processes for identifying, assessing, and managing climate-related issues are integrated into your overall risk management. Integrated into multi-disciplinary company-wide risk identification, assessment, and management processes
C2.2a
(C2.2a) Select the options that best describe your organization's frequency and time horizon for identifying and assessing climate-related risks.
Frequency How far into Comment of the future monitoring are risks considered?
Row Six-monthly >6 years The IAG Management Committee reviews risks regularly during the year, including the Group risk map semi-annually, in advance 1 or more of reviews by the Audit and Compliance Committee. IAG has an Enterprise Risk Management (ERM) policy which has been frequently approved by the Board and climate change risks have been embedded in the ERM framework since 2017. In line with our commitment to the Task Force on Climate-Related Financial Disclosure, we also undertake climate-related scenario analysis to review the resilience of our business strategies in the context of climate change. In 2018, we considered the implications of a 2 degree and 4 degree scenario on our business in 2030. Twice a year, the IAG Group Head of Sustainability reports to the IAG Management Committee and Audit and Compliance Committee on climate-related risks. They also regularly report risks to the IAG Chief of Staff.
C2.2b
CDP Page 7 of 74 (C2.2b) Provide further details on your organization’s process(es) for identifying and assessing climate-related risks.
Twice a year, the IAG Group Head of Sustainability reports to the IAG Management Committee and Audit and Compliance Committee on climate-related risks. Risks are regularly reported to the IAG Chief of Staff. The Group Sustainability team works with sustainability representatives and managers in each operating company to regularly assess new risks from a range of sources including from national and international climate policy, the EU ETS, carbon trading & compliance, and future low carbon transition plans.
At Group level, key risks from the operating companies, together with Group-wide risks, are maintained in a Group risk map. As risks are identified, they are considered and plotted on the risk map based on an impact and probability scale. For each risk, key controls and mitigating actions are documented including appropriate response plans. The IAG Management Committee reviews these risks semi-annually, in advance of reviews by the Audit and Compliance Committee. The impacts of potential risks are assessed against the group business plan and strategy. IAG reports these in accordance with 2016 UK Corporate Governance Code and the Spanish Good Governance Code for listed companies.
These risk maps are also reviewed by management committees in each operating company/”OpCo”, who consider the accuracy and completeness of the map, significant movements in risk and any changes required to the response plans addressing those risks. The IAG Board has overall responsibility for ensuring that IAG has an appropriate risk management framework and internal controls in place to manage risks. The Board has approved an Enterprise Risk Management (ERM) policy, which is a comprehensive risk management process to ensure a robust assessment of the risks facing the Group. This process is led by the Management Committee and supported by the Head of ERM.
Guidance is provided in our Annual Report on principal risks which could threaten the Group’s business model, future performance, solvency and/or liquidity. In 2018, these risks were reported across four categories and include airports and critical infrastructure, brand reputation, cyber-security, digital disruption, IT systems, political and economic conditions, and tax.
Climate-related risks have been integrated in the IAG Enterprise Risk Management (ERM) process since 2017. These risks are identified and assessed by the Group Sustainability Team, in conjunction with the ERM team. These risks are assessed over short, medium and long-term time horizons and against a range of criteria:
• Four risk categories (strategic, business and operational, financial, and compliance and regulatory)
• Four risk likelihoods (remote, possible, probably and likely)
• Four risk impacts (manageable, moderate, serious and critical)
• Three risk trends (stable, increasing or decreasing)
We also undertake climate-related scenario analysis in line with our commitment to the Task Force on Climate-Related Financial Disclosure. The aim of this is to review the resilience of our business strategies in the context of climate change. For example, in 2018 we carried out scenario analysis on the implications of a 2 degree and 4 degree scenario on our business in 2030. As part of this analysis we identified that a 4 degree scenario would increase our operational costs, the impact of carbon-related regulation would be much greater. Three key impacts of this scenario analysis were to raise awareness internally, drive engagement with Hanger 51 – an internal accelerator programme which supports new innovative companies – and to identify and disclose several new climate-related challenges in 2018. See section 3.1d for more details.
C2.2c
(C2.2c) Which of the following risk types are considered in your organization's climate-related risk assessments?
CDP Page 8 of 74 Relevance Please explain & inclusion Current Relevant, Current regulatory risks are relevant to IAG because a breach of compliance with climate-related regulation could have a financial impact regulation always on our business. For example, IAG operates flights to European countries which are subject to the EU Emissions Trading Scheme. included Inadvertently breaching compliance with the EU ETS, by inaccurate reporting of emissions, could lead to a civil penalty being imposed by the UK Environment Agency. In 2018, we identified and assessed the potential impact of current climate-regulated regulation on our business as part of our ERM framework. We disclosed it as a sustainability challenge in our Annual Report under “environment regulation compliance”. Some of the ways that we manage this challenge are by factoring ETS carbon prices into business plans, continued investment in modern fleet and innovations to ensure continual improvements in operational fuel efficiency, and engaging with carbon market advisors to understand and mitigate compliance challenges.
Emerging Relevant, Emerging regulatory risks are relevant to IAG because uncoordinated national and regional climate policies could lead to increased regulation always compliance costs, competitive distortion, and inconsistent monitoring requirements. For example, IAG is part of the global CORSIA included carbon offsetting scheme from 2021-2035, which requires airlines to purchase offsets for emissions above a 2020 baseline, but the EU is considering additional regulation during that period which could lead to additional costs and complexity. A second example is the potential risk of the EU mandating a set proportion of sustainable aviation fuel (SAF) to be used in jet fuel. This action could result in an increase in SAF production, but would force airlines to purchase SAF at premium prices compared to conventional fuels, leading to additional costs and potentially creating competitive distortion. In 2018, we identified and assessed the potential impact of emerging climate-related regulation on our business through the ERM framework, and conversations between IAG Sustainability and the Board. We disclosed it as a sustainability challenge in our Annual Report under “emergence of a global patchwork of uncoordinated national and regional climate policies”, “climate regulation – regional application”, “sustainable aviation fuels – regulation” and “higher carbon price and strong policy incentives challenge and opportunity”. Some of the ways we manage this challenge are by allocating resources to engage with governments, IATA and ICAO, to advocate for and deliver a single effective global carbon pricing solution for aviation. We also lobby to prevent mandates that create competitive distortion, both directly and through industry organizations at EU and UK levels.
Technology Relevant, Climate-related technology risks are relevant to IAG because our programmes of aircraft fleet modernization and investments in always sustainable aviation fuels rely on policy support to enable technological advancements.. We have a plan for biofuels to meet around included 115,000 tonnes of our fuel supply by 2030 based on existing project commitments, and up to 25% of our fuel supply by 2050. A lack of technological development to increase production volumes could affect the cost of these fuels and our exposure to carbon regulation. In 2018, we identified and assessed the potential impact of climate-related technology on our business as part of our ERM framework. We disclosed this as a sustainability challenge in our Annual Report under “sustainable fuels production opportunity”. A key way that we manage this challenge is by supporting policy incentives that help deliver SAF at prices competitive with conventional fuels through new technologies reaching scale and becoming cost competitive. Legal Relevant, Climate-related legal risks are relevant to IAG because inadvertent breaches of environmental compliance, either directly or via an IAG always supplier or third party, could lead to fines. In 2018, we identified and assessed the potential impact of climate-related legal risks on our included business via our ERM framework, and conversations between IAG Sustainability and the Board. We disclosed this as a sustainability challenge in our Annual Report under “environmental compliance - regulation” and “supply chain CSR compliance”. We manage this challenge via a range of measures including, as part of our internal guidance, running training and workshops to help staff identify supply chain risks and mitigate them. We also have in place CSR screenings for new suppliers, Know Your Counterparty due diligence for third parties deemed higher risk, supplier compliance audits, and IT systems for suppliers and higher risk third parties.
Market Relevant, Climate-related market risks are relevant to IAG because the ethical and sustainability concerns of consumers could mean some always customers fly less frequently or to different destinations. In 2018, we identified and assessed the potential impact of climate-related included market risks on our business via our ERM framework and via conversations between IAG Sustainability and the Board. We disclosed this as a sustainability challenge in our Annual Report under “consumer behavior challenge and opportunity” and “destinations becoming unattractive for visitors”. We manage this challenge by working towards ambitious goals on carbon efficiency, using all the tools at our disposal to minimize our carbon footprint, and improving communication of our practices to customers and suppliers.
Reputation Relevant, Climate-related reputational risks are relevant to IAG because investors, banks, passengers, staff, regulators and other stakeholders all always want to see evidence of robust climate action and plans to decarbonise. Inadvertent breaches of environmental compliance could also included lead to fines. In 2018, we identified and assessed the potential impact of climate-related reputational risks on our business via our ERM framework, and conversations between IAG Sustainability and the Board. We disclosed this as a sustainability challenge in our Annual Report under “supply chain CSR compliance” and “environment regulation compliance”. Some of the ways that we manage this challenge include internal governance, training and assigning ownership for environmental compliance obligations, management IT systems for suppliers and higher risk third parties, and actively engaging with industry partners and associations, policy makers shareholders, investors and governments to influence policy and drive action to meet our sustainability objectives.
Acute Relevant, Acute physical risks are relevant to IAG because an increased frequency and intensity of weather events such as snow, flooding, storms physical always and extreme heat events could result in lost demand and revenue and additional costs if customers and employees are unable to travel included In 2018, we assessed the potential impact of climate-related acute physical risks to our business via our ERM framework and conversations between IAG Sustainability and the Board. We have disclosed a principal risk around “events causing significant network disruption” of which an example scenario includes adverse weather conditions. Management has business continuity plans to mitigate this risk to the extent feasible. We also disclosed a sustainability challenge in our Annual Report under “extreme weather impact on operating costs”. In 2018 we also assessed the potential impacts of acute climate-related physical risks through TCFD-aligned scenario analysis. The scope of this analysis was out to 2030 and based on a 2 degree and 4 degree global average temperature rise. We found that adverse weather events would cause business interruption and damage to our operations and supply chain with consequences for our costs, revenues, asset values and insurance claims. Some of the ways we manage these challenges are via the IAG climate strategy, and partnerships to find solutions to mitigate operational disruption. One example of such a project is with NATS and Heathrow Airport to implement innovative technology, the “Time Based Spacing” system, enabling landing rates at Heathrow to be maintained in the event of strong winds. This additionally has the benefit of mitigating any climate-related weather events.
CDP Page 9 of 74 Relevance Please explain & inclusion
Chronic Relevant, Chronic physical risks are relevant to IAG because climatic changes such as drought, forest fires, coral bleaching, rising sea levels and physical always reduced snow cover could make destinations unattractive for visitors and reduce customer demand. Sustained extreme heat events or included stronger jet streams would increase IAG’s operating cost by increasing delays, fuel burn and additional cooling and maintenance costs. In 2018, we identified and assessed the potential impact of chronic climate-related physical risks via our ERM framework and disclosed this as a sustainability challenge in our Annual Report under “extreme weather impact on operating costs” and “destinations becoming unattractive to visitors”. We manage this challenge via contingency planning teams who anticipate and prepare for extreme events and build in operational recovery plans, and teams dedicated to assessing and understanding changes in customer demand and managing network developments by responding to such changes. We also engage in ongoing lobbying and engagement in projects and initiatives designed to reduce the industry’s impact on climate change. Upstream Relevant, Upstream climate-related risks are relevant to IAG because we are dependent on many third parties for goods and services e.g. fuel always suppliers, aircraft and engine manufacturers, airport operators and air traffic controllers (ATC). Potential breaches of compliance could included lead to fines and legal or reputational risks as identified above. Inefficiencies could also affect our overall carbon footprint and so exposure to climate-related regulation. In 2018, we identified and assessed the potential impact of climate-related upstream risks via our ERM process and via conversations between Sustainability and the Board. We disclosed this as a sustainability challenge in our Annual Report under “supply chain CSR compliance”. Some of the key ways we manage this challenge are by having CSR screening for new suppliers, Know Your Counterparty due diligence for higher risk parties, Supplier Code of Conduct and supplier compliance audits. We are interacting with fuel suppliers to reduce the transport-related emissions of our fuel (see section 12), factoring carbon prices into our aircraft purchasing decisions, engaging with ATCs to identify efficient flight paths, and lobbying to ensure that the ATC issue gets addressed by ATC operators.
Downstream Relevant, Downstream climate-related risks are relevant to IAG because our downstream operations include subcontracted haulage of air freight, always subcontracted ground vehicles, and transport of our fuel supply, all of which have a climate impact and affect our exposure to climate- included related regulation. In 2018, we identified and assessed the potential impact of climate-related downstream risks via our ERM framework and via conversations between IAG Sustainability and the Board. We disclosed this as a sustainability challenge in our Annual Report under “supply chain CSR compliance”.
C2.2d
CDP Page 10 of 74 (C2.2d) Describe your process(es) for managing climate-related risks and opportunities.
Risks are plotted on the Group risk map, which is based on an impact and probability scale. Risk owners are responsible for managing risk in their area of responsibility. For each risk, key controls and mitigating actions are documented including appropriate response plans. Risk maps are reviewed by each operating company’s management committee, who consider the accuracy and completeness of the map, significant movements in risk and any changes required to the response plans addressing those risks.
The identified climate-related challenges and opportunities are disclosed in our Annual Report. Risk owners make decisions or recommendations to respond to climate-related challenges and opportunities. These decisions are communicated to the relevant management team/s at airline level for approval. These are also reported to IAG Management Committee through the annual business planning process.
Two examples of managing specific climate related risks and opportunities are described below:
1. Management of a transition risk – “Global patchwork of climate policy for aviation”
Risk and potential impact on IAG: International climate change regulation for the aviation sector could mean a patchwork of uncoordinated national and regional policies including inappropriate tax instruments. Although the global market based mechanism CORSIA has been agreed, there is still a risk of regulatory duplication e.g. EU ETS may continue to apply to international aviation during the early phases of CORSIA after 2021.
This could lead to increased costs, competitive distortion including potential carbon leakage (where inappropriate policy leads to inadvertent increase of carbon emissions across state boundaries) and a failure to address the climate impact of aviation’s emissions. Based on IATA forecasts, a policy patchwork could cost IAG up to six times more than a single market mechanism like CORSIA.
Management case study: Commencing in 2011, and following annual review, IAG controls climate-related risk by allocating resources to engage with Governments, IATA and ICAO to help deliver a single effective carbon pricing solution for aviation. Regular updates are provided to the MC and Board.
2. Management of a physical risk – “Operational disruption due to increased extreme weather”
Risk and potential impact for IAG: An increase in extreme weather events such as increased frequency of high winds and low visibility of fog events, at British Airways’ home base airport Heathrow, have the potential to increase disruption to our operations, preventing customers and employees from travelling, closing airports and increasing flight diversions.
Management case study: IAG Sustainability appraised various options for mitigating delays and improving our punctuality in the face of weather events. A costed business case was presented to the British Airways management committee demonstrating how we could collaborate with partners from National Air Traffic Services (NATS) and Heathrow airport to find a solution. The BA management committee decided to progress with a “Time Based Spacing” technology, which enables landing rates at Heathrow to be maintained in the event of strong winds. This additionally has the benefit of mitigating any climate-related weather effects. Since implementation, this system has reduced delays, reduced fuel burn and emissions and avoided extra costs due to disrupted operations.
CDP Page 11 of 74 C2.3
(C2.3) Have you identified any inherent climate-related risks with the potential to have a substantive financial or strategic impact on your business? No
C2.3b
(C2.3b) Why do you not consider your organization to be exposed to climate-related risks with the potential to have a substantive financial or strategic impact on your business?
Primary Please explain reason
Row Risks exist, IAG has identified and assessed climate-related risks specific to our business via our Enterprise Risk Management (ERM) framework and 1 but none through the application of scenario analysis for climate-related risks. In line with the ERM framework for assessing business risks, we assessed with the scale and likelihood of each climate related impact on the Group’s business model, future performance, solvency and liquidity. Specific potential to climate-related challenges included emergence of an inappropriate global patchwork of uncoordinated national and regional climate policies, the have a regional application of climate regulation, sustainable aviation fuels regulation, consumer behavior challenges, higher carbon prices or taxes, substantive operational restrictions and charges, supply chain CSR compliance, extreme weather affecting operating costs, destinations becoming financial or unattractive to visitors, environmental regulation compliance, and being a potential target for direct action protests. In 2018, we published a list of strategic key sustainability challenges and opportunities in our Annual Report. All of these have been assessed against our business plan and we have impact on appropriate response plans in place. IAG Sustainability continues to review climate risks and management responses on an ongoing basis and business with the Management Committee at least annually. The IAG Management Committee and Board have visibility of the assessment. An example of a specific potential climate related risk to which our process has been applied is the risk of a global patchwork of climate policy. This could impact IAG via increased costs, competitive distortion including potential carbon leakage (where inappropriate policy inadvertently means higher carbon emissions across state boundaries) and a failure to address the climate impact of aviation’s emissions. To manage these potential impacts, we incorporate changes into our business plan and lobby for effective responses to aviation’s climate impact. In 2018, IAG is applying direct political lobbying in the UK and EU as well as through industry groups IATA, A4E and Sustainable Aviation to help secure CORSIA as the robust market-based mechanism to address aviation’s carbon emissions. This builds on 2017 work, when three IAG representatives participated in negotiations to develop CORSIA implementation plans and IAG Group Head of Sustainability chaired IATA’s CORSIA working group.
C2.4
(C2.4) Have you identified any climate-related opportunities with the potential to have a substantive financial or strategic impact on your business? No
C2.4b
CDP Page 12 of 74 (C2.4b) Why do you not consider your organization to have climate-related opportunities?
Primary Please explain reason Row Opportunities IAG has identified and assessed climate-related opportunities, including through the application of scenario analysis. We published a list of 1 exist, but climate-related opportunities in “Sustainability challenges and opportunities” in our Annual Report. These included “consumer behaviour none with challenge and opportunity”, “sustainable aviation fuels production opportunity”, higher carbon price and strong policy incentives challenge and potential to opportunity”. Changes in consumer behaviour could offer us an opportunity to differentiate our brand by showing leadership and innovation. have a Producing sustainable aviation fuel (SAF) could offer us commercial and environmental opportunities to source cost effective fuel and reduce substantive our compliance costs. A higher cost of carbon could create a corresponding opportunity by strengthening the business case for investment in financial or low carbon technologies. We also included “destinations becoming unattractive to visitors” as an opportunity as well as a challenge, because strategic climate change could make some destinations more attractive or accessible to visitors e.g. a longer summer season. Sustainability and climate impact on opportunities are monitored by IAG Sustainability. They are also reviewed by the ERM Team and reported at least annually to IAG business Management Committee. An example of a key climate-related opportunity to which our assessment process has been applied, is the early production of sustainable aviation fuels. The lifecycle emissions of these fuels are lower than for fossil fuels, so use of these in our aircraft could offer IAG a commercial and environmental advantage. They help source cost effective fuel and reduce our CO2 emissions, reducing our compliance costs for the EU ETS and/or CORSIA schemes. We have managed this opportunity effectively for many years and achieved significant success in 2017. The UK’s Department for Transport has now established policy incentives that will prioritise the production of sustainable aviation fuel beyond 2020. The UK government has also established a new Special Interest Group to support new research and development programmes for sustainable aviation fuels. These important policy incentives are vital for IAG to be able to invest in sustainable fuel production in the UK. With the progress and success we have made to date, we believe our current management strategies are appropriate and effective.
C3. Business Strategy
C3.1
(C3.1) Are climate-related issues integrated into your business strategy? Yes
C3.1a
(C3.1a) Does your organization use climate-related scenario analysis to inform your business strategy? Yes, qualitative and quantitative
C-AC3.1b/C-CE3.1b/C-CH3.1b/C-CO3.1b/C-EU3.1b/C-FB3.1b/C-MM3.1b/C-OG3.1b/C-PF3.1b/C- ST3.1b/C-TO3.1b/C-TS3.1b
(C-AC3.1b/C-CE3.1b/C-CH3.1b/C-CO3.1b/C-EU3.1b/C-FB3.1b/C-MM3.1b/C-OG3.1b/C-PF3.1b/C-ST3.1b/C-TO3.1b/C-TS3.1b) Indicate whether your organization has developed a low-carbon transition plan to support the long-term business strategy. Yes
C3.1c
(C3.1c) Explain how climate-related issues are integrated into your business objectives and strategy.
IAG takes a strategic approach to tackling climate-related issues and has set the vision to become the world’s leading airline group on sustainability. We established a Group sustainability function in 2015, and in 2017 carried out a materiality assessment which highlighted climate change as our top environmental priority. We set annual climate-related targets at a group level, have an annual review of climate-related risks, set a 2020 fuel efficiency target in 2014 and are working towards climate goals to 2050.
CDP Page 13 of 74 Our key targets are:
• Improve our fuel efficiency from 97.5 grammes CO2 per passenger-km in 2014, to 87.3g CO2/pkm in 2020.
• Deliver an annual fuel efficiency improvement of at least 1.5%. This is an industry-level target agreed in 2009.
• Achieve carbon neutral growth for international aviation from 2020. This is an industry-level target agreed in 2009.
• Reduce net CO2 emissions by 50% by 2050 versus a 2005 baseline. This is an industry-level target agreed in 2009 and consistent with the ambition to limit climate change to less than 2 degrees temperature increase above pre-industrial levels.
To deliver on these targets and wider objectives, IAG has a Group Sustainability programme which is co-ordinated centrally. Each operating airline – British Airways, Iberia, Aer Lingus, Vueling and Level – maintains individual environmental programmes under the control of their respective Boards. Established Group-wide working groups on fuel and carbon efficiency and environmental management also share expertise and best practice, and meet quarterly to review performance in relation to climate change, carbon efficiency and fuel efficiency among other sustainability measures. These working groups are co-ordinated by the IAG Group Head of Sustainability and key outputs are reported to the Management Committee and the IAG Board. Our ERM process gives us a robust framework to assess and act on climate-related risks and this process feeds back in to the business strategy, risk management function, finance and sustainability governance structures to inform future decisions.
As well as driving climate change action internally, IAG has a strategic priority to enhance our global leadership position, by setting the industry standard for environmental stewardship. In practice this means:
• Taking a leadership position advocating carbon pricing for aviation. IAG and British Airways were instrumental in designing and securing support for the global aviation offsetting scheme CORSIA, which commences in 2019.
• Supporting the implementation of CORSIA and mentoring other airlines to ensure CORSIA is adopted successfully. We continue to actively support the delivery of CORSIA through our collaboration with the airline association IATA and UN body ICAO.
• Providing leadership on sustainable aviation fuels (SAF). We spent almost a decade lobbying for SAF inclusion in renewable fuel policies at the Global, EU, and UK levels and continue to invest in a partnership with Velocys that can help us scale up our biofuel volumes, in the UK, via advanced technology waste-to-fuel production projects.
• Maintaining leadership in carbon disclosures. The CDP awarded IAG an A score in 2017, making us the only airline on the A-list that year, and we also received the award for the “most improved” disclosures that year for a UK company.
We have already seen a decoupling of our growth from our environmental impact. Between 2012-18, IAG’s available seat kilometres (ASKs) increased by 48% while our Scope 1 CO2e emissions increased by 30% and our carbon intensity, measured in grammes of CO2 per passenger-kilometre, reduced by 9%. We estimate that we have saved almost 10 million tonnes of CO2 during this period as a result of higher fuel efficiency.
In line with our targets, strategy and vision, in 2018 we continued to make decisions to reduce our climate impact. Key achievements included:
• Improving our flight carbon efficiency by 0.9% to 91.5g CO2/pkm, giving us a rolling average over five years of 1.5% per year and moving us closer to our 2020 target of 87.3g CO2/pkm.
• Delivering on our sustainable aviation fuels projects, with a view to these fuels reaching 115,000 tonnes of our fuel supply by 2030 based on current commitments and up to 25% of our fuel supply by 2050. We are investing over 400 million dollars in sustainable aviation fuels over the next 20 years.
• Launching new monitoring software to support fuel-saving initiatives, with the Honeywell GoDirect Fuel Efficiency software going live in British Airways, Aer Lingus and Iberia in November 2018. This software represents an investment of over 1 million euros over five years.
CDP Page 14 of 74 • Continuing our programme of fleet modernisation by introducing three new types of fuel-efficient aircraft to the IAG fleet, 42 new more fuel efficient aircraft, and selling, leasing back or retiring 21 less efficient aircraft.
• Running a “Future of Fuels” competition in conjunction with UK universities in order to support innovation in sustainable aviation fuels projects
• Actively working with industry associations to support effective regulatory and policy approaches to aviation-related climate issues.
• Electrifying our vehicles on the ground. Our investments at BA, Iberia and Aer Lingus included electric baggage trackers and 30 new electric Mototoks to replace fossil-fuel burning ground vehicles that push back aircraft from airport parking stands.
• Increasing the use of renewable electricity for our buildings and making a commitment to further action in 2019. 50% of our Group electricity use in 2018 was from renewable electricity, up from 48% in 2017 and 11% in 2016.
We also strengthened our assessment of how climate-related issues will affect our business. In addition to the ERM process mentioned in Section 2, key activities in 2018 included:
• Adopting the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) for disclosures and carrying out scenario analysis.
• Scenario analysis of how our business would be affected in 2030 as a result of a 2 degree and 4 degree warmer world. The cross- functional climate scenario analysis workshop included input from internal strategy, risk, finance, treasury, digital and operational experts to review opportunities and risks. The analysis included an initial qualitative assessment of potential IAG response in terms of changes to our business model, portfolio mix, investments in transition capabilities and technologies and the potential impact on strategic and financial plans.
• Continuing to incorporate carbon prices into purchasing decisions and fuel sensitivity analysis for new aircraft.
• Incorporating the future costs of the CORSIA carbon pricing scheme and EU Emissions Trading Scheme into our five-year business planning process.
We continue to review and build on these efforts in 2019.
C3.1d
CDP Page 15 of 74 (C3.1d) Provide details of your organization’s use of climate-related scenario analysis.
Climate- Details related scenarios
RCP 2.6 In 2018 we followed the TCFD six step scenario analysis process to consider two contrasting scenarios on our business: • A 2⁰C scenario, consistent with meeting the Paris Agreement Goal (Representative Concentration Pathway ‘RCP 2.6’) • A 4⁰C scenario as an alternative high emission scenario (RCP 8.5) We judged these IPCC reference scenarios to offer well described and plausible climate scenarios that provide two contrasting cases against which to test impacts for IAG. We considered the implications of these two climate scenarios on our business in 2030, assuming we have the same business activities as we do today. 2030 was selected as a nearer term consideration en-route to 2050, which is the target year for our 50% net CO2 reduction target. Internal stakeholders participating in the workshop were IAG Strategy, Treasury, Enterprise Risk Management, Investor Relations, Digital Innovation, Procurement and Sustainability and our operating company sustainability and fuel efficiency managers. The analysis included an initial qualitative assessment of potential IAG response in terms of changes to our business model, portfolio mix, investments in transition capabilities and technologies and the potential impact on strategic and financial plans. Areas of our organisation we considered as part of our climate- related scenario analysis include finance, strategy, operations, procurement, innovation and risk. We also assessed the effects on input costs, operating costs, revenues, supply chain, and business interruption. Broadly, the 2 degrees scenario demonstrated that IAG would incur additional operating costs, mainly as a result of the increased cost of carbon or other policy interventions. One key outcome of this process was to invite external companies with ideas to support operational resilience (including to more extreme weather events), to apply to our innovations programme ‘Hangar 51’. Hanger 51 is an IAG accelerator programme that provides 10 weeks of support to innovative companies with products that could improve our business. In 2018 two companies with climate-related products were accepted for and successfully completed this programme. One company used weather data to inform flight planning and the other used behavioural interfaces to incentivise pilots to make fuel efficiency savings. IAG is still in contact with these companies and their inclusion was one factor that led to a dedicated sustainability category for Hanger 51 in 2019. Other key outcomes of this process were: • Raising awareness of climate-related impacts by engaging multiple teams. • By agreeing to continue to work collaboratively on this iterative process, integrating scenario analysis into existing strategic business planning processes. • Identifying and disclosing several new climate-related challenges in 2018.
RCP 8.5 IAG followed TCFD recommendations to use: • A 2⁰C scenario, consistent with meeting the Paris Agreement Goal (e.g. RCP2.6) • An alternative high emission scenario (e.g. RCP8.5, a 4 degree scenario) to understand our stressed exposure to plausible physical climate change. We judged these IPCC references to offer well described and plausible climate scenarios that provide two contrasting scenarios against which to test impacts for IAG. IAG qualitatively assessed implications of these two climate scenarios on our business in 2030 assuming we have the same business activities as we do today. 2030 was selected as a more tangible nearer term consideration on route to 2050 which is the target year for our 50% CO2 reduction target. In the 4⁰C (RCP8.5) scenario we assumed: • From 2018 to 2030 climate policy is less ambitious, aligned to business as usual. • However, emissions are high so the physical manifestations of climate change are increasingly apparent by 2030. • Carbon price just a little more than today of $20 per tonne in 2030. The 4 degrees scenario demonstrated that, compared to a 2 degree scenario, IAG would incur additional operating costs which were more likely to arise from an increased cost of operational disruption e.g. due to increased frequency of extreme weather events. A key outcome of this process was to invite external companies with ideas to support operational resilience (including to more extreme weather events), to apply to our innovations programme ‘Hangar 51’. Hanger 51 is an IAG accelerator programme that provides 10 weeks of support to innovative companies with products that could improve our business. In 2018 two companies with climate-related products were accepted for and successfully completed this programme. One company used weather data to inform flight planning and the other used behavioural interfaces to incentivise pilots to make fuel efficiency savings. IAG is still in contact with these companies and their inclusion was one factor that led to a dedicated sustainability category for Hanger 51 in 2019. Other key outcomes of this process were: • Raising awareness of climate-related impacts by engaging multiple teams. • By agreeing to continue to work collaboratively on this iterative process, integrating scenario analysis into existing strategic business planning processes. • We identified and disclosed several new climate-related challenges in 2018.
C-AC3.1e/C-CE3.1e/C-CH3.1e/C-CO3.1e/C-EU3.1e/C-FB3.1e/C-MM3.1e/C-OG3.1e/C-PF3.1e/C- ST3.1e/C-TO3.1e/C-TS3.1e
(C-AC3.1e/C-CE3.1e/C-CH3.1e/C-CO3.1e/C-EU3.1e/C-FB3.1e/C-MM3.1e/C-OG3.1e/C-PF3.1e/C-ST3.1e/C-TO3.1e/C-TS3.1e) Disclose details of your organization’s low-carbon transition plan.
Climate change is IAG’s most material sustainability issue. With global demand for air travel expected to at least double by 2050, we are using all the tools at our disposal to decouple aviation growth from a growth in greenhouse gas emissions and to minimise our carbon footprint.
IAG wants to secure long-term success by readying our industry for the move towards a low carbon economy. We were instrumental in developing the aviation industry’s joint declaration on climate change which was signed in Geneva in 2009 by our CEO and others from across the aviation industry at the Global Sustainable Aviation Summit. The industry declaration, which we have adopted as IAG policy, follows a three-goal, four-pillar strategy to set aviation on the transition pathway to a low carbon economy.
These three goals are to deliver:
1. Annual fuel efficiency improvement of at least 1.5%
CDP Page 16 of 74 2. Achieve carbon neutral growth for international aviation from 2020
3. Reduce net aviation CO2 emissions by 50% by 2050 versus 2005 baseline (although our goal predates the Paris Agreement it is consistent with the ambition to limit climate change to less than 2 degrees temperature increase above pre-industrial levels)
The four 'pillars' are the mechanism to deliver these targets:
1. Technology
2. Operations
3. Infrastructure and
4. Market based measure to enable carbon pricing and reduction
In delivering this transition plan, IAG is driving action across all four areas, for example, we are:
• Investing in modern aircraft with typically 10-20% lower carbon emissions than the aircraft they replace. This includes the Airbus A320neo and the new A350 for example.
• Leading innovation for sustainable aviation fuels, deriving jet fuel from waste, with at least a 70% reduction in CO2 compared to fossil-jet fuel by investing in two partnerships to build Europe’s first waste-to-fuel plants in the UK. • Applying the latest fuel efficiency measures and using our strength as a Group to benchmark and ensure we apply best operational practice across our airline fleets. In IAG we have delivered a rolling average of 1.5% annual efficiency since 2012.
• Engaging with partners including air traffic control, airport operators and aircraft manufacturers to deliver better flight profiles and procedures to enable more efficient flying.
• Influencing national and global policy to promote global carbon pricing for aviation and actively participating in IATA and ICAO efforts to develop CORSIA, the market based mechanism that will enable delivery of the target of carbon neutral growth from 2020 and net reduction of 50% CO2 by 2050. We completed our first CORSIA Emissions Monitoring Plans in September 2018 and have started monitoring our emissions for CORSIA from 1st January 2019.
IAG is also supporting low-carbon transition plans in the wider aviation industry. We are a founding partner in the UK Sustainable Aviation (SA) coalition group – which brings together airlines, manufacturers, air traffic controllers and airport operators – to drive cleaner, quieter and smarter solutions for aviation . Key IAG sustainability staff have had roles as the Chair of SA and current chair of the SA Climate group and we have actively contributed to the development of a UK Sustainable Aviation Carbon Roadmap to 2050. We are now working on further inputs to this plan using the latest information.
The important ground work that has already been achieved with the establishment of CORSIA and our innovation in sustainable fuels means we already have in place the fundamental tools needed to deliver our low carbon transition plan. We are continuing to focus on realising the goals and influencing the external factors such as global and domestic policy on carbon pricing and sustainable fuels to ensure our transition plan is delivered.
C4. Targets and performance
C4.1
CDP Page 17 of 74 (C4.1) Did you have an emissions target that was active in the reporting year? Intensity target
C4.1b
(C4.1b) Provide details of your emissions intensity target(s) and progress made against those target(s).
Target reference number Int 1
Scope Scope 1
% emissions in Scope 76.8
Targeted % reduction from base year 10
Metric Grams CO2e per revenue passenger kilometer*
Base year 2014
Start year 2014
Normalized base year emissions covered by target (metric tons CO2e) 25219827
Target year 2020
Is this a science-based target? No, but we are reporting another target that is science-based
% of target achieved 59
Target status Underway
Please explain The target is to reduce the intensity of our flight operations by 10% by 2020 (87.3 gCO2/pkm) compared to 2014 (97.5 gCO2/pkm). This represents an equivalent CO2 reduction of 4.9 million tonnes CO2e by 2018 (compared to 2014 levels of efficiency). In 2018, we brought 42 more efficient aircraft into the fleet, which along with fuel efficiency initiatives represented an 0.9% improvement on the previous year. In 2018 we saved around 2 million tonnes of CO2e compared to 2014 levels of efficiency. We are now 4 years into our 6 year programme, with 59% of the target achieved and our 2018 fuel efficiency at 91.5 gCO2/pkm.
% change anticipated in absolute Scope 1+2 emissions 8.5
% change anticipated in absolute Scope 3 emissions 0
Target reference number Int 2
Scope Scope 1
% emissions in Scope 82
Targeted % reduction from base year 1.5
CDP Page 18 of 74 Metric Grams CO2e per revenue passenger kilometer*
Base year 2017
Start year 2017
Normalized base year emissions covered by target (metric tons CO2e) 28698902
Target year 2018
Is this a science-based target? No, but we are reporting another target that is science-based
% of target achieved 58
Target status Expired
Please explain Our target is to achieve 1.5% improvement in fuel efficiency per year. This is delivered through a basket of measures including investment in aircraft modernisation and operational efficiency. The 1.5% target is an aviation industry agreed target supported by the international airline association IATA and agreed by UN civil aviation body ICAO in 2009.British Airways was instrumental in developing and gaining industry support to adopt it. In 2018, we achieved an 0.9% increase in year-on-year fuel efficiency, so did not meet the target that year. This was due to the rate of fleet renewal, changes in the weight of cargo carried, as well as challenging operating conditions including disruption caused by European ATC strikes. However, IAG has delivered a 1.5% rolling average improvement in fuel efficiency since 2012. This has provided cumulative savings of 4.9 million tonnes of CO2e in the 6 years to 2018, based on our predicted 2018 emissions if we had maintained 2012 levels of efficiency. We brought 42 new more efficient aircraft into the fleet in 2018, which when combined with fleet retirements and operational efficiency measures delivered a saving of around 260,000 tonnes of CO2e compared to 2017 levels of efficiency.
% change anticipated in absolute Scope 1+2 emissions 1.5
% change anticipated in absolute Scope 3 emissions 0
C4.2
(C4.2) Provide details of other key climate-related targets not already reported in question C4.1/a/b.
Target Other, please specify (net emissions reduction (Abs 1))
KPI – Metric numerator Scope 1 + Scope 2 (location based) tonnes CO2e combined.
KPI – Metric denominator (intensity targets only) Not relevant - not an intensity target
Base year 2005
Start year 2009
Target year 2050
KPI in baseline year 23237182
CDP Page 19 of 74 KPI in target year 11618591
% achieved in reporting year 0
Target Status Underway
Please explain IAG has a target to achieve a 50% net reduction in emissions by 2050 versus a 2005 baseline. We consider this to be an absolute reduction target but due to CDP guidance on offsetting we are reporting this here. This is also an aviation industry-wide target which British Airways was instrumental in developing and securing industry support for in 2009. The reduction required is based on aviation emissions in 2005 and the scientific requirement as stated by the IPCC that global CO2 emissions would need to reduce by 50% by 2050 to remain within the desired maximum of no more than 2 degrees increase in global average temperature by 2050. Base year emissions are available for BA and Iberia. For Aer Lingus, who were acquired by IAG in 2015, Vueling who were acquired by IAG in 2013, and Level, which did not exist in 2005, we will include their emissions within the scope of our target. IAG plans to achieve direct emission reductions via investment in: • more efficient aircraft technology • more efficient operations • adoption of sustainable aviation fuel, which have lower lifecycle CO2 emissions Together these measures will see us achieve emissions broadly level with 2005 levels by 2050. To achieve a 50% net reduction on 2005 levels, for aviation the only option is to employ a market based measure to allow the industry to reduce carbon emissions more cost effectively in other sectors. As part of this, IAG has a target to achieve carbon neutral growth (CNG) from 2020, meaning that any emissions from international flights above the 2020 emissions baseline will be offset. This is also an aviation industry agreed target supported by IATA, which British Airways was instrumental in developing. The target of CNG 2020 was ratified by the industry in 2009 and remains the focus of medium term action to address climate change emissions. The mechanism to achieve CNG 2020 will be the global CORSIA scheme. From 2021, airlines will be required to buy emissions units to offset their share of the sector’s growth in emissions. These emissions units will fund sustainable carbon reduction projects around the world. Successfully implementing CORSIA will allow us to develop further plans to deliver on our longer-term target of a 50 per cent reduction in CO2 emissions by 2050.
Part of emissions target n/a
Is this target part of an overarching initiative? Other, please specify (IATA Industry Targets)
Target Other, please specify (Net emissions reduction (abs 2))
KPI – Metric numerator Scope 1 emissions tCO2e
KPI – Metric denominator (intensity targets only) Not relevant - not an intensity target
Base year 2019
Start year 2019
Target year 2050
KPI in baseline year 32000000
KPI in target year 32000000
% achieved in reporting year 0
Target Status Underway
Please explain IAG has a target to achieve carbon neutral growth (CNG) from 2020, meaning that any emissions from international flights above the 2020 emissions baseline will be offset. This is also an aviation industry agreed target supported by airline industry association
CDP Page 20 of 74 IATA, which British Airways was instrumental in developing. The target of CNG 2020 was ratified by the industry in 2009 and remains the focus of medium term action to address climate change emissions. While an end-date was not specified, we have listed 2050 here for consistency with CDP’s answer requirements. The mechanism to achieve CNG from 2020 will be the global CORSIA scheme. In 2016 the UN civil aviation regulator ICAO achieved agreement from 191 countries to develop CORSIA, the world’s first global market based measure to address aviation’s carbon emissions. Baseline monitoring for CORSIA began on 1st January 2019 and the target takes effect from 2020. From 2021, airlines in CORSIA-participating countries, which collectively represent around 80% of international aviation emissions, will be required to buy emissions units to offset their share of the sector’s growth in emissions. These emissions units will fund sustainable carbon reduction projects around the world. Successfully implementing CORSIA will allow us to develop further plans to deliver on our longer-term target of a 50 per cent reduction in CO2 emissions by 2050 (i.e. Abs1 above). Due to different regulations, aviation's international and domestic aviation emissions are regulated separately - international aviation is regulated by the UN agency ICAO and domestic emissions are managed by states. The latter happens through Nationally Determined Contributions (NDCs) which contribute to the Paris Climate agreements, as well as through the EU where aviation emissions are managed through the EU Emissions Trading System. 32 million tonnes of CO2 is the current forecast for IAG absolute emissions in 2020. This number could change due to changes in our fleet plan or routes, and will be revised closer to the time, but is a reasonable estimate. Our target to achieve carbon neutral growth from 2020 means that our net emissions in each year after 2020 will be at or lower than 2020 levels.
Part of emissions target
Is this target part of an overarching initiative? Other, please specify (IATA Industry Targets)
C4.3
(C4.3) Did you have emissions reduction initiatives that were active within the reporting year? Note that this can include those in the planning and/or implementation phases. Yes
C4.3a
(C4.3a) Identify the total number of initiatives at each stage of development, and for those in the implementation stages, the estimated CO2e savings.
Number of initiatives Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *)
Under investigation 4 2134 To be implemented* 0 0 Implementation commenced* 0 0
Implemented* 13 30708 Not to be implemented 1 4468
C4.3b
(C4.3b) Provide details on the initiatives implemented in the reporting year in the table below.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 5300
Scope Scope 1
CDP Page 21 of 74 Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 963490
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment An alternative airway found north of the restricted airspace in Iraq - saving approximately 20 minutes flying time on certain routes.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 1591
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 289163
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment No longer avoiding airspace from Fukushima Nuclear incident meaning more efficient flight paths.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 4237
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 770330
Investment required (unit currency – as specified in C0.4) 0
Payback period
CDP Page 22 of 74 No payback
Estimated lifetime of the initiative Ongoing
Comment A truncation of the Standard Instrument Departure (SID) procedure at Heathrow airport, reducing the distance travelled and fuel planning requirement for lower elevations.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 1591
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 289163
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment A truncation of the Standard Instrument Departure procedure at Gatwick airport, reducing the distance travelled and fuel planning requirement for lower elevations.
Initiative type Energy efficiency: Processes
Description of initiative Please select
Estimated annual CO2e savings (metric tonnes CO2e) 452
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 82122
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment Reduced track miles on arrival at Heathrow airport.
CDP Page 23 of 74 Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 996
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 181016
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment Reduced track miles on arrival in Gatwick airport.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 334
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 70266
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment More accurate matching of fuel volumes to the fuel needs of flights which reduced the weight of fuel carried.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 238
Scope
CDP Page 24 of 74 Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 50100
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment Optimising the water load per fleet and route which reduced the weight of water carried.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 14934
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 2733464
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment Collated flight efficiency initiatives in Vueling.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 575
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 89496
Investment required (unit currency – as specified in C0.4) 0
CDP Page 25 of 74 Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment Reduction in drag by reducing the time when landing lights are extended into the airflow.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 67
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 10489
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment Reduction in fuel rounding. Fuellers had a habit of rounding fuel load up to 100 litres. Behaviour was measured and reported back and instances reduced significantly.
Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 220
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 34232
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment Reduction in extra fuel planning – ending the practice of flight planners adding fuel to flight plans. Monetary savings listed above are based on reductions in fuel purchases.
CDP Page 26 of 74 Initiative type Energy efficiency: Processes
Description of initiative Process optimization
Estimated annual CO2e savings (metric tonnes CO2e) 173
Scope Scope 1
Voluntary/Mandatory Voluntary
Annual monetary savings (unit currency – as specified in C0.4) 26958
Investment required (unit currency – as specified in C0.4) 0
Payback period No payback
Estimated lifetime of the initiative Ongoing
Comment Liaising with Air Navigation Service Providers (ANSPs) to secure earlier altitude release on departure procedures from airports, so that lower fuel loads may be planned. Monetary savings listed above are based on reductions in fuel purchases.
C4.3c
(C4.3c) What methods do you use to drive investment in emissions reduction activities?
Method Comment
Internal price on Carbon prices are embedded in the annual business planning process and used for forecasting business investment over a five-year cycle. carbon In 2018, an EU ETS carbon price of 20 Euros/tonne was used. Business cases are required to identify appropriate carbon costings (e.g. the EU ETS cost of allowances) for projects that affect energy consumption, fuel efficiency or aircraft weight or aircraft purchasing. Operational decisions, such as the need to carry potable water or to tanker fuel when fuel supply is uncertain at destination airports, are made with a price of carbon included in the business case.
Internal Fuel efficiency, energy, and environmental managers are rewarded for achieving fuel/energy efficiency KPIs or climate change policy incentives/recognition KPIs. programs Employee engagement The Fuel Efficiency teams engage with local station managers and provide instructions on fuel efficiency procedures. For example, British Airways Fuel Efficiency Working Group provides station managers with instructions on the procedure for using the Auxiliary Power Unit (APU). Stations receive monthly reports on APU performance. In addition, pilots attend professional standards assessments. These assessments include a component of commercial awareness, highlighting the importance and potential impact of fuel saving activities. In Vueling annual training sessions are held to brief all pilots on fuel efficiency opportunities and priority initiatives. In Aer Lingus employees including pilots are engaged using the fuel management system to demonstrate data that underpins the need for best operational practices. Dedicated budget for At British Airways there is a central finance mechanism to drive investment across departments for aircraft fuel efficiency projects. energy efficiency Compliance with Emissions trading costs allocation and accounting across departments within IAG carriers. regulatory requirements/standards
Compliance with EU-ETS compliance has incentives attached for departments in Vueling. regulatory requirements/standards
C4.5
CDP Page 27 of 74 (C4.5) Do you classify any of your existing goods and/or services as low-carbon products or do they enable a third party to avoid GHG emissions? Yes
C4.5a
(C4.5a) Provide details of your products and/or services that you classify as low-carbon products or that enable a third party to avoid GHG emissions.
Level of aggregation Product
Description of product/Group of products British Airways has a “Carbon Fund” which uses customer donations from flight bookings on ba.com to invest in renewable energy and energy efficiency projects. These projects provide community benefits and mitigate climate change. The Carbon Fund issued 17 grants in 2018, bringing the total number of completed projects to 38; with another 5 presently being delivered (with 10 more in the pipeline for 2019). The scheme has now provided more than £3,000,000 of lifetime community benefits and completed projects have also impacted the lives of 450,000 people across the UK and in Africa. We post details of the scheme and projects on www.ba.com/carbonfund
Are these low-carbon product(s) or do they enable avoided emissions? Avoided emissions
Taxonomy, project or methodology used to classify product(s) as low-carbon or to calculate avoided emissions Other, please specify (Avoided emissions)
% revenue from low carbon product(s) in the reporting year 0
Comment The money raised through the Carbon Fund goes to external projects. Further work is being done to revise the Carbon Fund pages on BA.com to encourage wider customer uptake .
C5. Emissions methodology
C5.1
CDP Page 28 of 74 (C5.1) Provide your base year and base year emissions (Scopes 1 and 2).
Scope 1
Base year start January 1 2011
Base year end December 31 2011
Base year emissions (metric tons CO2e) 22578170
Comment
Scope 2 (location-based)
Base year start January 1 2011
Base year end December 31 2011
Base year emissions (metric tons CO2e) 121561
Comment
Scope 2 (market-based)
Base year start January 1 2011
Base year end December 31 2011
Base year emissions (metric tons CO2e) 91800
Comment
C5.2
(C5.2) Select the name of the standard, protocol, or methodology you have used to collect activity data and calculate Scope 1 and Scope 2 emissions. The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition)
C6. Emissions data
C6.1
CDP Page 29 of 74 (C6.1) What were your organization’s gross global Scope 1 emissions in metric tons CO2e?
Reporting year
Gross global Scope 1 emissions (metric tons CO2e) 30138236
Start date January 1 2018
End date December 31 2018
Comment Direct emissions associated with our flying, vehicles and generators. • Scope 1 CO2e emissions have increased versus last year by 4.8% but at a lower rate than airline activity (+6.1% available seat kilometres and +7.7% passenger numbers). • In line with industry commitments which we were instrumental in securing in 2009, we have two targets designed to address our direct CO2 emissions over different timescales. These are to achieve carbon neutral growth for our international aviation from 2020 and a 50% net reduction in CO2 emissions by 2050 versus a 2005 baseline (which is 23.25 million tonnes).
C6.2
(C6.2) Describe your organization’s approach to reporting Scope 2 emissions.
Row 1
Scope 2, location-based We are reporting a Scope 2, location-based figure
Scope 2, market-based We are reporting a Scope 2, market-based figure
Comment We monitor energy consumption throughout the year at physical locations in the UK, Ireland and Spain. Relevant buildings include offices, cargo buildings, hangers, data centres and airport terminal lounges. British Airways also leases office space in more than two hundred properties in over 60 countries, and Iberia leases space in over 20 countries, so for these separate locations electricity use is estimated using a benchmark kWh/square meter figure for different building types. We apply Spanish Government conversion factors for relevant electricity use in Spain and have improved the robustness of our methodology since 2017. In 2018, 50% of Group electricity use was from renewable sources, up from 48% in 2017 (both numbers are revised estimates) and 11% in 2016. The breakdown across the group is as follows: British Airways 75% (up from 65%), Aer Lingus 52% (up from 49%), and Iberia and Vueling 0% due to relying on grid electricity. Emission trends can fluctuate year-on-year due to changes in the use of different locations and changes in contracts. IAG is committed to further action, with Iberia and Vueling moving to 100% procured renewable electricity in 2019 and Aer Lingus moving to 100% renewable electricity for key buildings in Dublin and Cork
C6.3
CDP Page 30 of 74 (C6.3) What were your organization’s gross global Scope 2 emissions in metric tons CO2e?
Reporting year
Scope 2, location-based 82271
Scope 2, market-based (if applicable) 46812
Start date January 1 2018
End date December 31 2018
Comment Our Scope 2 emissions have reduced again in 2018. The location-based emissions are down by 11% versus last year and our market based emissions have reduced by 24% in the same period. The location-based Scope 2 emissions reported here reflect the national grid mix for the UK, Spain and Ireland. We have been reporting Scope 2, location-based emissions since 2011 while 2016 was our first year for reporting Scope 2, market based emissions. Some key points: • Year-on-year trends can fluctuate and are influenced by airline acquisitions, contracts with energy suppliers, and national trends towards less carbon intensive electricity across Spain, the UK and Ireland. • 50% of Group electricity use in 2018 was from renewable sources, up from 48% in 2017 and 11% in 2016. • Renewable electricity use across the Group in 2018: British Airways 75%, Aer Lingus 52% and Iberia and Vueling 0% each. Iberia and Vueling didn’t contract any renewable electricity from renewable electricity suppliers in 2018 but are moving to procuring 100% renewable electricity in 2019.
C6.4
(C6.4) Are there any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included in your disclosure? Yes
C6.4a
(C6.4a) Provide details of the sources of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included in your disclosure.
Source Scope 2 emissions from Level, a new low-cost airline in the IAG Group with bases in France, Austria and Barcelona.
Relevance of Scope 1 emissions from this source No emissions excluded
Relevance of location-based Scope 2 emissions from this source Emissions are not relevant
Relevance of market-based Scope 2 emissions from this source (if applicable) Emissions are not relevant
Explain why this source is excluded Level is the newest airline in the IAG Group and is less than two years old. While we are making efforts to capture Level’s Scope 2 emissions, there is limited data available, and these emissions are calculated to be less than 1% of the Group’s emissions at this time so are determined as not relevant. As Level grows and data availability improves in future, we will aim to include more detailed estimates
Source Iberia and Vueling - GHG emissions from natural gas and electricity use at non-Spanish facilities (e.g. from a small office leased at a destination airport).
Relevance of Scope 1 emissions from this source Emissions are not relevant
CDP Page 31 of 74 Relevance of location-based Scope 2 emissions from this source Emissions are not relevant
Relevance of market-based Scope 2 emissions from this source (if applicable) Emissions are not relevant
Explain why this source is excluded GHG emissions from natural gas and electricity use at non-Spanish facilities (e.g. from a small office leased at a destination airport) are very small (significantly less than 1 % of Scope 1 and 2 emissions) and anticipated at less than 5% of Scope 2 emissions so determined as not relevant. As data availability improves over time, we will endeavour to include an estimate for these emissions in upcoming years.
Source Unintentional leakage of fluorinated gases used for refrigeration, fire suppression, and as engineering solvents (i.e. gases not intentionally emitted) - specifically HFCs, Methylene Chloride, and Halons (though Halon emission from deployment of fire extinguishers is included).
Relevance of Scope 1 emissions from this source Emissions are not relevant
Relevance of location-based Scope 2 emissions from this source No emissions from this source
Relevance of market-based Scope 2 emissions from this source (if applicable) No emissions from this source
Explain why this source is excluded IAG operator British Airways reported these emissions for 2012. From 2013 onward, we have flagged that this emissions data is not material (less than 10 tonnes C02e in total), that gathering the data related to unit servicing and leakage is very time consuming, and that the calculation was a best guess (but not very precise). It was decided to exclude these potential emissions and we instead focus on capturing the actual emissions of halons from deployment of fire suppression devices, which is included in 2016, 2017 and 2018 reporting.
Source An element of Aer Lingus energy and water consumption/emissions data at destination airports.
Relevance of Scope 1 emissions from this source Emissions are not relevant
Relevance of location-based Scope 2 emissions from this source Emissions are not relevant
Relevance of market-based Scope 2 emissions from this source (if applicable) Emissions are not relevant
Explain why this source is excluded The Aer Lingus energy and water consumption/emissions data is for Dublin and Shannon buildings only. Data is not available for Cork. Aer Lingus do not manage the destination airports, there is no direct metering of the leased space, and energy costs are included in miscellaneous charges, making values difficult to estimate. Key data from destination airports which has not been provided is from the main stations at London Heathrow (two offices, a lounge, and a line maintenance facility of 340 m2, New York (offices at Jericho, lounges) and Belfast. These locations are estimated to be less than 5% of Scope 2 emissions so determined as not relevant. However, as data availability improves over time, we will endeavour to include an estimate for these emissions in upcoming years.
C6.5
(C6.5) Account for your organization’s Scope 3 emissions, disclosing and explaining any exclusions.
CDP Page 32 of 74 Purchased goods and services
Evaluation status Relevant, calculated
Metric tonnes CO2e 688
Emissions calculation methodology The supply and treatment of water emits CO2e. Data from suppliers and from invoices has been used to calculate water usage. Conversion factors were applied to calculate CO2e according to guidance from the UK government. Level’s Scope 3 emissions has been excluded due to being relatively small (less than 1% of the IAG footprint), a lack of data and for a consistent approach.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 94.7
Explanation IAG uses water in buildings such as offices, lounges, hangers and engineering centres and potable water on flights. The above figures relate to water supply and water treatment.
Capital goods
Evaluation status Relevant, calculated
Metric tonnes CO2e 1567171
Emissions calculation methodology Aircraft manufacture and disposal comprises 18% of our scope 3 emissions. Values for OpCos have been calculated based on the document “EU Transport GHG: Routes to 2050”, which specified the relative share of emissions from aircraft production and disposal compared to their fuel burn in flight. Level’s Scope 3 emissions has been excluded due to being relatively small (less than 1% of the IAG footprint), a lack of data and for a consistent approach.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 100
Explanation The processes of making aircraft, and disposing of aircraft at the end of their life, can produce emissions. Aircraft manufacture and disposal comprises 18% of our scope 3 emissions.
Fuel-and-energy-related activities (not included in Scope 1 or 2)
Evaluation status Relevant, calculated
Metric tonnes CO2e 6232336
Emissions calculation methodology This aspect includes Fossil fuel production and Fuel production for energy generation. The first of these, Fossil fuel production, accounts for 71% of our total Scope 3 CO2 emissions. Values for each airline have been calculated based on the volume of energy content of fuels used, multiplied by relevant well-to-tank (WTT) conversion factors from the UK government. Level’s Scope 3 emissions has been excluded due to being relatively small (less than 1% of the IAG footprint), lack of data and for a consistent approach.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 100
Explanation This aspect includes Fossil fuel production and Fuel production for energy generation.
CDP Page 33 of 74 Upstream transportation and distribution
Evaluation status Relevant, calculated
Metric tonnes CO2e 7557
Emissions calculation methodology Values for BA and Iberia have been calculated. The calculation includes cargo trucks, fuel trucks from supplier DHL, and aircraft fuel trucks. Values for Aer Lingus and Vueling have been estimated based on a ratio of their jet fuel use compared to BA’s jet fuel use. Level’s Scope 3 emissions has been excluded due to being relatively small (less than 1% of the IAG footprint), a lack of data and for a consistent approach.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 82
Explanation Upstream transportation and distribution emissions include fuel burn from vehicles used for fuel or cargo trucking, subcontractors' ground vehicles, and vehicles used in hub operations.
Waste generated in operations
Evaluation status Relevant, calculated
Metric tonnes CO2e 2060
Emissions calculation methodology The BA value has been calculated, and includes emissions from waste landfill gases, combustion, incineration and recycling. Values for Iberia and Aer Lingus have been calculated based on their available information, while a value for Vueling has been estimated based on a ratio of waste to tonnes of fuel compared to the same ratio for BA. Level’s Scope 3 emissions has been excluded due to being relatively small (less than 1% of the IAG footprint), a lack of data and for a consistent approach.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 96
Explanation The BA value has been calculated, and includes waste landfill gases, combustion, incineration and recycling. Values for Iberia and Aer Lingus have been calculated based on their available information, while a value for Vueling has been estimated based on a ratio of waste to tonnes of fuel compared to the same ratio for BA.
Business travel
Evaluation status Relevant, calculated
Metric tonnes CO2e 202
Emissions calculation methodology The value for BA has been calculated, and includes business travel mileage claims and flying on non IAG carriers. For other operators, values are estimated based on the BA ratio to average manpower equivalent (number of staff). Level’s Scope 3 emissions has been excluded due to being relatively small (less than 1% of the IAG footprint), a lack of data and for a consistent approach.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 95
Explanation The BA, Iberia and Aer Lingus values have been calculated, and include business travel mileage claims and flying on non IAG carriers. Staff travel on IAG carriers is captured in scope 1. For Vueling, values are estimated based on the BA ratio of business travel to average manpower equivalent (number of staff).
CDP Page 34 of 74 Employee commuting
Evaluation status Relevant, calculated
Metric tonnes CO2e 1218
Emissions calculation methodology The BA value has been calculated based on employees commuting on staff buses.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 100
Explanation The BA value has been calculated based on employees commuting on staff buses.
Upstream leased assets
Evaluation status Relevant, calculated
Metric tonnes CO2e 3376
Emissions calculation methodology Estimated from supplier data where available and only where IAG operators have relevant activities. Level’s Scope 3 emissions has been excluded due to being relatively small (less than 1% of the IAG footprint), lack of data and for a consistent approach.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 100
Explanation Includes seasonal lease of aircraft and fuel upstream emissions.
Downstream transportation and distribution
Evaluation status Relevant, calculated
Metric tonnes CO2e 198856
Emissions calculation methodology This value includes the following types of emissions: • 3rd party air freight haulage for IAG Cargo • IAG Cargo's Road Feeder Service trucking (Global) • Cargo trucking from upstream transportation • IAG cargo emissions from subcontracted air freight and subcontracted ground fleet. We primarily calculated these emissions using actual fuel burn
Percentage of emissions calculated using data obtained from suppliers or value chain partners 100
Explanation This value was calculated by multiplying actual fuel burn data by the relevant DEFRA conversion factors for diesel and aviation turbine fuel. For a few instances of subcontracted airfreight, we could not access primary fuel burn data. To estimate the emissions, we multiplied the total CTK (cargo-tonne kilometres) by our GSS freighters' average 'tonnes C02e per CTK' ratio.
CDP Page 35 of 74 Processing of sold products
Evaluation status Not relevant, explanation provided
Metric tonnes CO2e
Emissions calculation methodology
Percentage of emissions calculated using data obtained from suppliers or value chain partners
Explanation This category does not apply to IAG. IAG offers air travel and transport services. As our 'product' is a transportation service rather than a physical item, the 'processing of sold products' is not relevant.
Use of sold products
Evaluation status Not relevant, explanation provided
Metric tonnes CO2e
Emissions calculation methodology
Percentage of emissions calculated using data obtained from suppliers or value chain partners
Explanation This category does not apply to IAG. IAG offers air travel and transport services. As our 'product' is a transportation service rather than a physical item, the 'use of sold products' is not relevant.
End of life treatment of sold products
Evaluation status Not relevant, explanation provided
Metric tonnes CO2e
Emissions calculation methodology
Percentage of emissions calculated using data obtained from suppliers or value chain partners
Explanation This category does not apply to IAG. IAG offers air travel and transport services. As our 'product' is a transportation service rather than a physical item, there is no relevant 'end of life' waste disposal-related emissions. If interested in our suppliers' product emissions, we estimate the emissions from aircraft manufacturing and disposal in the 'Capital Goods' section above.
CDP Page 36 of 74 Downstream leased assets
Evaluation status Not relevant, explanation provided
Metric tonnes CO2e
Emissions calculation methodology
Percentage of emissions calculated using data obtained from suppliers or value chain partners
Explanation As a general rule IAG does not lease it's aircraft to other operators. The short-term lease of an aircraft to a 3rd party does occur from time to time. For example, in 2015 Vueling operated an ACMI for Evelop in wet lease modality (Technical Crew + Cabin Crew) from the bases of Tenerife, Barcelona and Palma de Mallorca. However, this is incidental rather than a core business activity. Due to the infrequent and small scale nature of this, the emissions associated with downstream leased assets are not materially relevant.
Franchises
Evaluation status Relevant, calculated
Metric tonnes CO2e 774720
Emissions calculation methodology Estimated using fuel burn per km travelled for specific aircraft types.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 100
Explanation The airlines Sunair and Comair are British Airways franchises but not within British Airways operational control although they are still relevant emissions sources. 2015 was the first year we have calculated these emissions and they are included again for 2018. Similarly, Air Nostrum is an Iberia franchise not under Iberia operational control and Stobart Air is an Aer Lingus franchise, also not under Aer Lingus operational control. Air Nostrum and Stobart Air emissions are included for the first time in 2017.
Investments
Evaluation status Relevant, calculated
Metric tonnes CO2e 132
Emissions calculation methodology Emissions from natural gas and electricity consumption at properties with the BA Pensions property portfolio. The natural gas and electricity kilowatt figures are multiplied by the relevant UK Gov conversion factors into CO2e.
Percentage of emissions calculated using data obtained from suppliers or value chain partners 100
Explanation BA Pensions owns a portfolio of properties across the UK. This figure represents the CO2e emissions resulting from natural gas and electricity consumption at these sites.
CDP Page 37 of 74 Other (upstream)
Evaluation status Not evaluated
Metric tonnes CO2e
Emissions calculation methodology
Percentage of emissions calculated using data obtained from suppliers or value chain partners
Explanation
Other (downstream)
Evaluation status Relevant, calculated
Metric tonnes CO2e 22571
Emissions calculation methodology Iberia scope 3 'other'
Percentage of emissions calculated using data obtained from suppliers or value chain partners 0
Explanation To capture the sum of total IB total scope 3 emissions consistent with verified.
C6.7
(C6.7) Are carbon dioxide emissions from biologically sequestered carbon relevant to your organization? No
C6.10
CDP Page 38 of 74 (C6.10) Describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tons CO2e per unit currency total revenue and provide any additional intensity metrics that are appropriate to your business operations.
Intensity figure 0.0012382
Metric numerator (Gross global combined Scope 1 and 2 emissions) 30220507
Metric denominator unit total revenue
Metric denominator: Unit total 24406000000
Scope 2 figure used Location-based
% change from previous year 1.82
Direction of change Decreased
Reason for change Our CO2 intensity per unit of revenue improved in 2018. While our total revenue increased 6.7% in 2018 versus 2017, and available seat kilometres flown increased 6.1%, our scope 1 emissions only grew 4.8%. This reflects improvements in operational fuel efficiency from the introduction of new more efficient aircraft, retirement of older aircraft and delivery of multiple operational fuel efficiency initiatives. Significant reductions in our location-based scope 2 emissions (-11%) were also achieved through efficiency initiatives, although scope 2 comprises just 0.2% of our combined Scope 1 & 2 emissions. Initiatives to reduce Scope 1 emissions are detailed in section 4.3a and 4.3b.
C-TS6.15
CDP Page 39 of 74 (C-TS6.15) What are your primary intensity (activity-based) metrics that are appropriate to your emissions from transport activities in Scope 1, 2, and 3?
Aviation
Scopes used for calculation of intensities Report just Scope 1
Intensity figure 91.5
Metric numerator: emissions in metric tons CO2e 29774627
Metric denominator: unit p.km
Metric denominator: unit total 325410320249
% change from previous year -0.9
Please explain any exclusions in your coverage of transport emissions in selected category, and reasons for change in emissions intensity. Grammes of CO2 per passenger kilometre is a standard industry measure of fuel efficiency. Note that this metric is CO2 and not CO2e in line with industry standard practice. In 2018 IAG improved annual fuel efficiency by 0.9% compared to 2017, with our average over the last six years equaling the industry target of 1.5%. These reductions are due to fuel efficiency initiatives and an ongoing programme of fleet modernization, with 42 new more fuel efficient aircraft introduced in 2018 and 21 less efficient aircraft retired, sold or leased back. The lower rate of fuel efficiency improvement in 2018 was due to the rate of fleet renewal, changes in the weight of cargo carried, as well as challenging operating conditions including disruption caused by European ATC strikes. The improvement in flight only emissions intensity of 0.9% is notable given that equivalent passenger kilometers flown increased by 5.7% in the same period.
ALL
Scopes used for calculation of intensities Report Scope 1 + 2
Intensity figure 0.25
Metric numerator: emissions in metric tons CO2e 82271
Metric denominator: unit p.km
Metric denominator: unit total 325410320249
% change from previous year -16
Please explain any exclusions in your coverage of transport emissions in selected category, and reasons for change in emissions intensity. This is a Scope 2 intensity figure but due to CDP categories has been listed as Scope 1 + 2 here. The metric is energy efficiency per passenger kilometre (gCO2e/pkm) This became a new metric for IAG in 2017, designed to monitor our energy efficiency (Scope 2) as a function of our business activity (equivalent passenger kilometres). It complements our flight only emissions intensity metric described above. The 16% reduction in location-based Scope 2 emissions intensity is particularly notable given that equivalent passenger kilometres flown increased by 5.7% in the same period. An increase in the use of renewable electricity affected this metric.
C7. Emissions breakdowns
CDP Page 40 of 74 C7.1
(C7.1) Does your organization break down its Scope 1 emissions by greenhouse gas type? Yes
C7.1a
(C7.1a) Break down your total gross global Scope 1 emissions by greenhouse gas type and provide the source of each used greenhouse warming potential (GWP).
Greenhouse Scope 1 GWP Reference gas emissions (metric tons of CO2e)
CH4 16039 Other, please specify (UK Department for Transport) We have reported CO2 emissions using state approved emissions factors across our operations in the UK, Spain and Ireland. The relevant emissions factors for CH4 is not provided by the Irish SEAI or the Spanish government. As a result we have used the UK Department for Transport's figures. This has resulted in a small disparity between our overall scope 1 as measured in CO2e and the sum of the reported emissions. We are confident that this is simply due to the lack of available conversion factors. We have therefore made a small adjustment so that the overall scope 1 data reconciles.
N2O 285321 Other, please specify (UK Department for Transport) We have reported CO2 emissions using state approved emissions factors across our operations in the UK, Spain and Ireland. The relevant emissions factors for CH4 is not provided by the Irish SEAI or the Spanish government. As a result we have used the UK Department for Transport's figures. This has resulted in a small disparity between our overall scope 1 as measured in CO2e and the sum of the reported emissions. We are confident that this is simply due to the lack of available conversion factors. We have therefore made a small adjustment so that the overall scope 1 data reconciles. CO2 29857108 IPCC Fifth Assessment Report (AR5 – 100 year)
C7.2
(C7.2) Break down your total gross global Scope 1 emissions by country/region.
Country/Region Scope 1 emissions (metric tons CO2e)
United Kingdom of Great Britain and Northern Ireland 19056578 Spain 8693620
Ireland 2217750
Austria 53000 France 90081
C7.3
(C7.3) Indicate which gross global Scope 1 emissions breakdowns you are able to provide. By business division
C7.3a
CDP Page 41 of 74 (C7.3a) Break down your total gross global Scope 1 emissions by business division.
Business division Scope 1 emissions (metric ton CO2e)
British Airways 19056578
Iberia 5982458 Vueling 2738370
Aer Lingus 2217750
Level 143081
C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4
(C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4) Break down your organization’s total gross global Scope 1 emissions by sector production activity in metric tons CO2e.
Gross Scope 1 Net Scope 1 Comment emissions, metric emissions , metric tons CO2e tons CO2e Cement production
Oil and gas
C7.5
(C7.5) Break down your total gross global Scope 2 emissions by country/region.
Country/Region Scope 2, location- Scope 2, market- Purchased and consumed Purchased and consumed low-carbon electricity, heat, based (metric tons based (metric tons electricity, heat, steam or steam or cooling accounted in market-based approach CO2e) CO2e) cooling (MWh) (MWh) United Kingdom of 46309 12903 163597 122812 Great Britain and Northern Ireland
Spain 32387 32222 82619 0
Ireland 3575 1687 8187 4290
CDP Page 42 of 74 C7.6
(C7.6) Indicate which gross global Scope 2 emissions breakdowns you are able to provide. By business division
C7.6a
(C7.6a) Break down your total gross global Scope 2 emissions by business division.
Business division Scope 2, location-based emissions (metric tons CO2e) Scope 2, market-based emissions (metric tons CO2e) British Airways 46309 12903
Iberia 31698 31536 Vueling 689 685 Ireland 3575 1687
C-CE7.7/C-CH7.7/C-CO7.7/C-MM7.7/C-OG7.7/C-ST7.7/C-TO7.7/C-TS7.7
(C-CE7.7/C-CH7.7/C-CO7.7/C-MM7.7/C-OG7.7/C-ST7.7/C-TO7.7/C-TS7.7) Break down your organization’s total gross global Scope 2 emissions by sector production activity in metric tons CO2e.
Scope 2, location-based, metric tons Scope 2, market-based (if applicable), metric tons Comment CO2e CO2e Cement production activities
Steel production activities
Transport OEM activities
Transport services activities 82271 46812
C7.9
(C7.9) How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to those of the previous reporting year? Increased
C7.9a
CDP Page 43 of 74 (C7.9a) Identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined) and for each of them specify how your emissions compare to the previous year.
Change in Direction Emissions Please explain calculation emissions of change value (metric (percentage) tons CO2e) Change in 4867 Decreased 0.02 In 2018, IAG’s total Scope 1 & 2 emissions (location-based) increased by 1,363,442 tonnes of CO2e – up renewable from 28,867,205 tonnes to 30,220,507 tonnes Co2e. Our Scope 2 location-based emissions were just energy 82,271 tonnes. British Airways and Aer Lingus increased their use of renewable electricity in 2018 (from consumption 65% to 75%, and 49% to 52% respectively), saving 4,867 tonnes of CO2e. IAG is committed to further action on this and expects a further decrease in 2019 as Iberia and Vueling move to providers which offer 100% renewable electricity. The calculation used here is: 4,867/28,867,205 = 0.02% Other 30708 Decreased 0.11 In 2018, specific initiatives to improve fuel efficiency and reduce emissions, as detailed in section C4, emissions delivered 30,708 tonnes of CO2e savings. IAG also invests in fuel efficient aircraft as part of a fleet reduction modernisation programme, but the savings from this are not included here. The calculation used here is: activities 30708/28,867,205 = 0.11% Divestment
Change in
Change in
Change in
C7.9b
(C7.9b) Are your emissions performance calculations in C7.9 and C7.9a based on a location-based Scope 2 emissions figure or a market-based Scope 2 emissions figure? Location-based
C8. Energy
C8.1
(C8.1) What percentage of your total operational spend in the reporting year was on energy? More than 20% but less than or equal to 25%
C8.2
CDP Page 44 of 74 (C8.2) Select which energy-related activities your organization has undertaken.
Indicate whether your organization undertakes this energy-related activity Consumption of fuel (excluding feedstocks) Yes Consumption of purchased or acquired electricity Yes
Consumption of purchased or acquired heat No Consumption of purchased or acquired steam No Consumption of purchased or acquired cooling No
Generation of electricity, heat, steam, or cooling No
C8.2a
(C8.2a) Report your organization’s energy consumption totals (excluding feedstocks) in MWh.
Heating value MWh from renewable MWh from non-renewable Total MWh sources sources Consumption of fuel (excluding feedstock) LHV (lower heating 0 119650836 119650836 value) Consumption of purchased or acquired electricity
Consumption of purchased or acquired heat
Consumption of purchased or acquired steam
Consumption of purchased or acquired cooling
Consumption of self-generated non-fuel renewable
Total energy consumption
C8.2b
(C8.2b) Select the applications of your organization’s consumption of fuel.
Indicate whether your organization undertakes this fuel application Consumption of fuel for the generation of electricity No Consumption of fuel for the generation of heat No
Consumption of fuel for the generation of steam No Consumption of fuel for the generation of cooling No Consumption of fuel for co-generation or tri-generation No
C8.2c
(C8.2c) State how much fuel in MWh your organization has consumed (excluding feedstocks) by fuel type.
Fuels (excluding feedstocks) Jet Kerosene
Heating value LHV (lower heating value)
Total fuel MWh consumed by the organization 119355450
CDP Page 45 of 74 MWh fuel consumed for self-generation of electricity
MWh fuel consumed for self-generation of heat
MWh fuel consumed for self-generation of steam
MWh fuel consumed for self-generation of cooling
MWh fuel consumed for self-cogeneration or self-trigeneration
Comment
Fuels (excluding feedstocks) Natural Gas
Heating value HHV (higher heating value)
Total fuel MWh consumed by the organization 115570
MWh fuel consumed for self-generation of electricity
MWh fuel consumed for self-generation of heat
MWh fuel consumed for self-generation of steam
MWh fuel consumed for self-generation of cooling
MWh fuel consumed for self-cogeneration or self-trigeneration
Comment
Fuels (excluding feedstocks) Gas Oil
Heating value HHV (higher heating value)
Total fuel MWh consumed by the organization 9579
MWh fuel consumed for self-generation of electricity
MWh fuel consumed for self-generation of heat
MWh fuel consumed for self-generation of steam
MWh fuel consumed for self-generation of cooling
MWh fuel consumed for self-cogeneration or self-trigeneration
Comment Gas oil used in vehicles.
CDP Page 46 of 74 Fuels (excluding feedstocks) Gas Oil
Heating value LHV (lower heating value)
Total fuel MWh consumed by the organization 66235
MWh fuel consumed for self-generation of electricity
MWh fuel consumed for self-generation of heat
MWh fuel consumed for self-generation of steam
MWh fuel consumed for self-generation of cooling
MWh fuel consumed for self-cogeneration or self-trigeneration
Comment Gas oil used in generators/boilers.
Fuels (excluding feedstocks) Diesel
Heating value LHV (lower heating value)
Total fuel MWh consumed by the organization 60913
MWh fuel consumed for self-generation of electricity
MWh fuel consumed for self-generation of heat
MWh fuel consumed for self-generation of steam
MWh fuel consumed for self-generation of cooling
MWh fuel consumed for self-cogeneration or self-trigeneration
Comment
Fuels (excluding feedstocks) Petrol
Heating value HHV (higher heating value)
Total fuel MWh consumed by the organization 3087
MWh fuel consumed for self-generation of electricity
MWh fuel consumed for self-generation of heat
MWh fuel consumed for self-generation of steam
CDP Page 47 of 74 MWh fuel consumed for self-generation of cooling
MWh fuel consumed for self-cogeneration or self-trigeneration
Comment
C8.2d
(C8.2d) List the average emission factors of the fuels reported in C8.2c.
Diesel
Emission factor 2.5918
Unit kg CO2e per liter
Emission factor source UK Department of Transport, Spanish Government, Irish SEAI
Comment There are slight differences between the emissions factors used by the three states where IAG conducts business. The emission factor stated above is an average value that takes the proportion of consumption by state in to account.
Gas Oil
Emission factor 277.9
Unit kg CO2e per MWh
Emission factor source UK Department of Transport, Spanish Government, Irish SEAI
Comment The value here relates to gas oil used in generators and vehicles. There are slight differences between the emissions factors used by the three states where IAG conducts business. The emission factor stated above is an average value that takes the proportion of consumption by state in to account.
Jet Kerosene
Emission factor 3.18115
Unit metric tons CO2e per metric ton
Emission factor source UK Department for Transport
Comment Ireland and Spain do not report an emissions factor for CO2e so the UK factor is assumed for all areas.
CDP Page 48 of 74 Natural Gas
Emission factor 0.18404
Unit metric tons CO2e per MWh
Emission factor source UK DfT, Spanish Government, Irish SEAI
Comment There are slight differences between the emissions factors used by the three states where IAG conducts business. The emission factor stated above is an average value that takes the proportion of consumption by state in to account.
Petrol
Emission factor 2.20164
Unit kg CO2e per liter
Emission factor source UK Department of Transport, Spanish Government
Comment There are slight differences between the emissions factors used by the states where IAG conducts business. The emission factor stated above is an average value that takes the proportion of consumption by state in to account.
C8.2f
CDP Page 49 of 74 (C8.2f) Provide details on the electricity, heat, steam and/or cooling amounts that were accounted for at a low-carbon emission factor in the market-based Scope 2 figure reported in C6.3.
Basis for applying a low-carbon emission factor Contract with suppliers or utilities ( e.g. green tariff), supported by energy attribute certificates
Low-carbon technology type Solar PV Wind Nuclear Other low-carbon technology, please specify (Unknown renewables)
Region of consumption of low-carbon electricity, heat, steam or cooling Europe
MWh consumed associated with low-carbon electricity, heat, steam or cooling 112812
Emission factor (in units of metric tons CO2e per MWh) 0
Comment In 2018, 50% of IAG’s electricity across the Group was provided from renewable sources. British Airways (BA) procures electricity for various facilities from multiple suppliers. Power at Heathrow, Glasgow and Gatwick airports is provided via renewable suppliers, and energy certificates are provided certifying the power source. For example, the power source for BA facilities at Heathrow airport is wind, and the power source for BA facilities at Glasgow is wind and solar. BA’s main facilities are on a separate green tariff with Haven Energy. Haven Energy does not provide a full breakdown of their energy sources but state that 84.3% is from renewable sources and 3.1% from nuclear. Source: https://www.havenpower.com/help/regulatory-fuel-mix/.
Basis for applying a low-carbon emission factor Contract with suppliers or utilities (e.g. green tariff), not supported by energy attribute certificates
Low-carbon technology type Wind
Region of consumption of low-carbon electricity, heat, steam or cooling Europe
MWh consumed associated with low-carbon electricity, heat, steam or cooling 4290
Emission factor (in units of metric tons CO2e per MWh) 0
Comment In 2018, 50% of IAG’s electricity across the Group was provided from renewable sources. 4,290MWh was from Aer Lingus, who has a supply agreement for the provision of 100% renewable energy from Energia’s certified renewable portfolio. The source of this energy is wind. The following buildings benefit from this renewable energy Dublin Airport, Air Cargo Building Shannon Airport, Iolar House Dublin Airport and Lismacleane, Shannon Industrial Estate.
C-TS8.4
CDP Page 50 of 74 (C-TS8.4) Provide any efficiency metrics that are appropriate for your organization’s transport products and/or services.
Activity Aviation
Metric figure 91.5
Metric numerator Other, please specify (gCO2 per passenger kilometre)
Metric denominator
Metric numerator: Unit total 29774627
Metric denominator: Unit total 324893807249
% change from last year -0.9
Please explain The metric is the focus of our activity targeting a reduction in the intensity of our flight operations by 10% by 2020 (to 87.3 gCO2/pkm) compared to 2014 (97.5 gCO2/pkm). The numerator is flight only CO2 emissions which increased 4.8% from 28,416,398 in 2017 to 29,774,627 in 2018.. The denominator is equivalent passenger kilometres which increased 5.7% from 307,856,297,603 in 2017 to 325,410,320,249 in 2018. . In the reporting year we introduced three new types of fuel-efficient aircraft to the IAG fleet, 42 new aircraft which had higher levels of fuel efficiency, and sold or leased back 21 less efficient aircraft. Along with fuel efficiency initiatives, these collectively delivered a 0.9% fuel efficiency improvement compared to 2017, representing a saving of over 260,000 tonnes of CO2 relative to 2017 levels of efficiency.
C9. Additional metrics
C9.1
(C9.1) Provide any additional climate-related metrics relevant to your business.
C-TO9.3/C-TS9.3
(C-TO9.3/C-TS9.3) Provide tracking metrics for the implementation of low-carbon transport technology over the reporting year.
Activity Aviation
Metric Yearly purchase
Technology
Metric figure 6
Metric unit
Explanation British Airways (BA) purchased 6 Nissan Leaf vehicles in 2018 to replace conventional petrol/diesel vehicles at Heathrow airport. In
CDP Page 51 of 74 2017 BA also purchased 28 Mototok units, which are zero emission electric devices used to move planes around at airport terminals. The Mototoks are used on approximately 170 short-haul flights a day, replace conventional fossil fuel burning vehicles, and save 7,400 tonnes of CO2 a year.
Activity Please select
Metric Yearly purchase
Technology
Metric figure 61
Metric unit
Explanation In 2018 Aer Lingus purchased 61 electric baggage tractors, belt loaders, passenger stairs and pushback tugs. Electric vehicles currently comprise 38% of the Aer Lingus Dublin Ground Operations Fleet, up from 27% in 2017.
Activity Aviation
Metric Fleet adoption
Technology
Metric figure 38
Metric unit
Explanation 38% of Iberia Airport Services vehicles are now electric, up from 29% last year.
Activity Aviation
Metric Other, please specify (Percentage of Sustainable Aviation Fuel)
Technology
Metric figure 0.01
Metric unit
Explanation IAG is working to increase the share of Sustainable Aviation Fuel (SAF) used in aircraft across the Group. These fuels, over their lifecycle, have 70-90% lower carbon emissions than standard fossil kerosene and so are an important way to reduce IAG's absolute Scope 1 emissions*. However, the supply of these fuels is very limited with only one small refinery in the USA regularly producing SAF at the present time. There are a number of plants planned and under construction but overall fuel volumes will still be low. In 2018, changes in UK and global policy have provided incentives which should increase production. In the UK, the Renewable Transport Fuels Obligation included aviation fuels within incentives from 2019. Internationally, CORSIA’s Alternative Fuels Task Force produced the framework for fuels to claim emission reductions from SAF use in the CORSIA scheme. A number of airports trialled new fuel supply chains and some states announced SAF incentives and legislation. Many of the most promising technologies are not yet operating at commercial scale, e.g. municipal waste residues to fuel. Without further investment and policy support, securing commercial volumes of SAF will be very difficult. For more detail see case study at C11.3a. BA also sponsored a Future Fuels competition for UK universities to identify promising technologies that can decarbonise aviation. The competition
CDP Page 52 of 74 identified a number of technologies that have the potential to deliver negative emissions. BA continues to work with the top three projects to help them to scale up and derisk their projects. IAG is also investing in SAF and demonstrating leadership in this area through projects such as the British Airways and Velocys Waste to Jet fuel joint venture. *Fuel GHG savings are based on a lifecycle GHG assessment so emission savings actually accrue in Scope 3. However, regulators count these fuels as low carbon in the airline’s Scope 1 reporting under EU ETS and CORSIA.
C-TO9.6/C-TS9.6
(C-TO9.6/C-TS9.6) What is your investment in research and development (R&D), equipment, products and services and which part of it would you consider a direct investment in the low-carbon transition?
Activity Aviation
Investment start date January 1 2017
Investment end date December 31 2037
Investment area R&D
Technology area Alternative fuels
Investment maturity Large scale commercial deployment
Investment figure 360000000
Low-carbon investment percentage 81-100%
Please explain IAG is investing in sustainable Aviation Fuels (SAF) projects which turn waste into fuel. IAG is part of a pioneering project with UK renewable fuels specialist Velocys to produce jet fuel from household waste which will then be supplied to British Airways. Over the long-term we have committed over $400m USD over 20 years for SAF development, which equates to around 360m euros. Launched in September 2017, the first stage involves the engineering design of the plant and selecting the UK location for the facility alongside stringent environmental and lifecycle carbon analysis of the technology. Once preparations are completed, building should begin in 2020, with production starting in 2024, making it one of the first plants in the world dedicated to producing bio jet fuel on a commercial scale. Ultimately, IAG hopes SAF could provide up to 25 per cent of its fuel by 2050. The fuel emits 70 per cent less greenhouse gases and 90 per cent fewer particulates than fossil fuels, and the planned plant will produce around 45,000 tonnes of jet and road transport fuels a year – delivering CO2 savings of over 95,000 tonnes annually. Recent changes to the UK Renewable Transport Fuel Obligation, which sets targets for sustainable fuel use in transport, means the new fuel will qualify for government incentives to help develop the technology – something for which IAG and Sustainable Aviation (see Section 12.3) has lobbied for nearly a decade. The incentives will bring down the fuel’s cost, making it more price competitive with traditional fuels, helping make the business case for its adoption. The government has shown further support for the project by awarding Velocys a grant on the grounds of sustainable fuel’s potential to help meet the UK’s low-carbon vision. These projects support the UK’s strategic decarbonisation strategy, diverting waste from landfill and incineration. The initiative will be game- changing in terms of making waste-based fuels commercially viable and helping the industry reduce the impact it has on the environment.
Activity Aviation
Investment start date January 1 2017
Investment end date December 31 2022
Investment area
CDP Page 53 of 74 Services
Technology area Operations
Investment maturity Large scale commercial deployment
Investment figure 3000000
Low-carbon investment percentage 81-100%
Please explain IAG is investing in the Honeywell GoDirect Fuel Efficiency software tool across our operating companies British Airways, Aer Lingus, Iberia and Vueling. This new tool will help identify further fuel efficiency opportunities and enable group-wide benchmarking and reporting on aircraft fuel efficiency performance. The software went live in Iberia, British Airways and Vueling in November 2018. Our investment represents over 3 million euros over a period of five years.
C10. Verification
C10.1
(C10.1) Indicate the verification/assurance status that applies to your reported emissions.
Verification/assurance status
Scope 1 Third-party verification or assurance process in place Scope 2 (location-based or market-based) Third-party verification or assurance process in place Scope 3 Third-party verification or assurance process in place
C10.1a
(C10.1a) Provide further details of the verification/assurance undertaken for your Scope 1 and/or Scope 2 emissions and attach the relevant statements.
Scope Scope 1
Verification or assurance cycle in place Annual process
Status in the current reporting year Complete
Type of verification or assurance Reasonable assurance
Attach the statement BA-GHG verification statement 2018.pdf
Page/ section reference Page 4 - British Airways emissions
Relevant standard ISO14064-3
Proportion of reported emissions verified (%)
CDP Page 54 of 74 63
Scope Scope 2 location-based
Verification or assurance cycle in place Annual process
Status in the current reporting year Complete
Type of verification or assurance Reasonable assurance
Attach the statement BA-GHG verification statement 2018.pdf
Page/ section reference page 4 - British Airways emissions
Relevant standard ISO14064-3
Proportion of reported emissions verified (%) 62
Scope Scope 2 location-based
Verification or assurance cycle in place Annual process
Status in the current reporting year Complete
Type of verification or assurance Limited assurance
Attach the statement 2018-statement-of-non-financial-information-en.pdf
Page/ section reference Page 26 - table of contents mentioning GHGs. page 54 - confirmation of limited assurance, 2018 timeframe, and notice of scope (IAG and subsidiaries). page 40 - mention of scope of reporting, Scope 1 & Scope 2 emissions (but note footnote 1, and see note in section C14) Page 42 - Scope 3 emissions (but see note in section C14) Page 56 - conclusion that IAG is in accordance with relevant standards. Our verifiers provided assurance on the whole content of the Non-Financial Assurance Statement.
Relevant standard ISAE3000
Proportion of reported emissions verified (%) 38
Scope Scope 1
Verification or assurance cycle in place Annual process
Status in the current reporting year Complete
Type of verification or assurance Reasonable assurance
Attach the statement INFORME EMISIONES 2018_ IBERIA LINEAS AEREAS_FIRMADO_AESA.pdf IV_IBERIA_EXPRESS_02_958_256910_signed.pdf
CDP Page 55 of 74 Page/ section reference Informe de emisiones Iberia - page 1 - 916943 tonnes Iberia Express - page 2 - 329653 tonnes
Relevant standard European Union Emissions Trading System (EU ETS)
Proportion of reported emissions verified (%) 4
Scope Scope 1
Verification or assurance cycle in place Annual process
Status in the current reporting year Complete
Type of verification or assurance Reasonable assurance
Attach the statement IV_VUELING_02_958_257749.pdf
Page/ section reference Page 1 - Vueling - 2167198 tonnes
Relevant standard European Union Emissions Trading System (EU ETS)
Proportion of reported emissions verified (%) 7
Scope Scope 1
Verification or assurance cycle in place Annual process
Status in the current reporting year Complete
Type of verification or assurance Reasonable assurance
Attach the statement Verified AEM Report 2018 Aer Lingus.pdf
Page/ section reference Page 15 - Aer Lingus - 848647 tonnes
Relevant standard European Union Emissions Trading System (EU ETS)
Proportion of reported emissions verified (%) 3
C10.1b
CDP Page 56 of 74 (C10.1b) Provide further details of the verification/assurance undertaken for your Scope 3 emissions and attach the relevant statements.
Scope Scope 3- all relevant categories
Verification or assurance cycle in place Annual process
Status in the current reporting year Complete
Attach the statement BA-GHG verification statement 2018.pdf
Page/section reference page 4 - Scope 3 emissions for British Airways.
Relevant standard ISO14064-3
C10.2
(C10.2) Do you verify any climate-related information reported in your CDP disclosure other than the emissions figures reported in C6.1, C6.3, and C6.5? No, we do not verify any other climate-related information reported in our CDP disclosure
C11. Carbon pricing
C11.1
(C11.1) Are any of your operations or activities regulated by a carbon pricing system (i.e. ETS, Cap & Trade or Carbon Tax)? Yes
C11.1a
(C11.1a) Select the carbon pricing regulation(s) which impacts your operations. EU ETS
C11.1b
CDP Page 57 of 74 (C11.1b) Complete the following table for each of the emissions trading systems in which you participate.
EU ETS
% of Scope 1 emissions covered by the ETS 23
Period start date January 1 2018
Period end date December 31 2018
Allowances allocated 3584964
Allowances purchased 4631233
Verified emissions in metric tons CO2e 7006182
Details of ownership Facilities we own and operate
Comment Aviation has been part of the EU ETS since 2012. We have been actively lobbying for aviation inclusion in global carbon pricing scheme since 2008. In 2016 we achieved a significant milestone with global agreement at ICAO to implement CORSIA. From 2021 we will participate in the CORSIA scheme and we await confirmation from the EU on coverage of the EU ETS. CORSIA is an important stepping stone for IAG and aviation as a whole to meet its sectoral climate targets of carbon neutral growth from 2020 and a net reduction of 50% by 2050, based on 2005 levels.
C11.1d
CDP Page 58 of 74 (C11.1d) What is your strategy for complying with the systems in which you participate or anticipate participating?
lAG's strategy is to fully comply with the requirements of the EU ETS and any subsequent emissions trading schemes or market- based measures installed by countries in which the Group's airlines operate.
Overall strategy for compliance with EU ETS and CORSIA is co-ordinated at Group level and IAG also has dedicated people responsible for EU ETS compliance in each airline managing the detailed monitoring, reporting and verification aspects. In addition, we engage third party verifiers to check and review our compliance reporting prior to annual submission to our regulators.
IAG manages the costs of compliance with EU ETS through our carbon management strategy applying the IATA four pillar strategy to minimise our emissions and exposure to compliance costs. This includes our investment in modern, fuel efficient aircraft, delivery of operational fuel efficiency, optimised airspace routing and investing in the production of sustainable aviation fuels to minimise our emissions and compliance costs.
In addition, we employ a hedging strategy for the EU allowances we purchase to protect against price volatility. lAG operators forecast anticipated fuel consumption within scope of EU ETS and subsequently purchase allowances with the aim of ensuring full compliance while minimising compliance cost.
An example of how our strategy for compliance has been applied relates to our preparation for compliance with CORSIA, for which the baseline monitoring began on 1st January 2019. We have established an internal CORSIA working group comprising representatives from IAG Sustainability team and each airline’s EU ETS compliance manager, to share understanding of our new compliance requirement of CORSIA, co-ordinate action and share expertise between our airline operating companies. We have also held information sharing sessions and attended IATA CORSIA workshops to ensure we fully understand the compliance requirements of the scheme. As a result, all our airlines submitted their plans to the relevant national regulators by 30th September 2018.
C11.2
(C11.2) Has your organization originated or purchased any project-based carbon credits within the reporting period? No
C11.3
(C11.3) Does your organization use an internal price on carbon? Yes
C11.3a
CDP Page 59 of 74 (C11.3a) Provide details of how your organization uses an internal price on carbon.
Objective for implementing an internal carbon price Navigate GHG regulations Change internal behavior Drive low-carbon investment Stress test investments Identify and seize low-carbon opportunities
GHG Scope Scope 1
Application IAG employs an internal price of carbon in several areas of our business. including our business planning process which looks ahead five years. For example: • Group Treasury departments apply carbon prices for forward planning and risk management of our EU ETS and other emissions compliance obligations. • Fleet planning teams factor a carbon price into commercial decisions around aircraft fleet investments, engine investments and fleet retirement and renewal decisions to enable consideration of lifetime operating costs. • Sustainability teams apply carbon pricing including to future forecasts, and to inform scenario analysis of climate related risks and opportunities for IAG. Carbon prices are also applied to innovation and investment decisions, used to hedge ETS allowance purchases, for investments in fuel efficiency initiatives, and investment in Sustainable Aviation Fuel projects (see detail below).
Actual price(s) used (Currency /metric ton) 20
Variance of price(s) used Our forward planning team preparing for EU ETS compliance currently use an indicative carbon price for financial planning which is 20 EUR in 2018. Future carbon prices applied for scenario planning follow low, medium and high scenarios. We drew on multiple sources to inform our future assumptions including the UK Department for Transport, UK Government's Airports Commission, UK Committee on Climate Change and IPCC
Type of internal carbon price Shadow price Implicit price Offsets
Impact & implication An example of the impact of carbon pricing is IAGs investment in Sustainable Aviation Fuels (SAF): IAG applied carbon pricing to assess the future costs of fuel and climate-related compliance. The exercise identified that cost-competitive low-carbon aviation fuel could significantly reduce IAG's emissions compliance costs. Under the current rules of the EU ETS, sustainable fuels are zero-rated. SAF will also be eligible to reduce compliance obligations within CORSIA. In a future situation of high carbon prices, the availability of sustainable fuel could offer a lower-cost route to compliance with carbon emissions schemes (ETS, CORSIA, carbon taxes etc). The application of carbon pricing in this context has underpinned our business strategy and informed our policy position on SAF as well as shifting investments towards low carbon initiatives. It has enabled IAG to invest in a sustainable fuels team who have lobbied for policy incentives to support the production of sustainable aviation fuel and to make financial investments into innovative first-of-a-kind technologies for sustainable fuel production. See our response to Section 9.6 for more details.
C12. Engagement
C12.1
(C12.1) Do you engage with your value chain on climate-related issues? Yes, our suppliers Yes, our customers
C12.1a
(C12.1a) Provide details of your climate-related supplier engagement strategy.
CDP Page 60 of 74 Type of engagement Innovation & collaboration (changing markets)
Details of engagement Run a campaign to encourage innovation to reduce climate impacts on products and services Other, please specify (Transporting jet fuel by rail not road)
% of suppliers by number 0.4
% total procurement spend (direct and indirect) 12
% Scope 3 emissions as reported in C6.5 0.1
Rationale for the coverage of your engagement For this year’s CDP response, IAG has adopted a more rigorous definition of supplier engagement. IAG Global Business Services (IAG GBS) oversees the relationships with the Group’s more than 30,000 suppliers, of which 500 key suppliers make up 80% of our spend. IAG GBS prioritises engagement with those suppliers who have a material impact on our business and on the environment, including on our climate change emissions, and so have the largest opportunity to reduce our impact. In terms of reducing our Scope 3 emissions, we currently have collaboration and innovation projects with key fuel suppliers who represent around 12% of our overall procurement spend. The innovative collaboration ”Project Jigsaw” aims to shift the transport of jet fuel from road to rail for our London and Dublin hubs. Fuel, oil and emissions costs comprise 38 percent of supplier costs (EUR million 5,283 in 2018), and BA’s upstream transportation and distribution emissions represent 0.1% of our Scope 3 emissions, which is the basis for the numbers above. We have revised our methodology for calculating engagement compared to previous years.
Impact of engagement, including measures of success In terms of reducing our Scope 3 emissions, key measure of success is the CO2 savings via improvements in fuel transport. In 2018, Project Jigsaw saved around 5000 tonnes of CO2e.
Comment We collaborate with many suppliers to reduce our Scope 1 emissions via actions such as purchasing more efficient aircraft, operating along more efficient flight paths, and making changes to our ground operations. These collaborations are not included in our response to this question.
Type of engagement Compliance & onboarding
Details of engagement Included climate change in supplier selection / management mechanism Code of conduct featuring climate change KPIs Climate change is integrated into supplier evaluation processes
% of suppliers by number 18
% total procurement spend (direct and indirect) 28
% Scope 3 emissions as reported in C6.5 26
Rationale for the coverage of your engagement For this year’s CDP response, IAG has adopted a more rigorous definition of supplier engagement. IAG Global Business Services (IAG GBS) oversees the relationships with the Group’s more than 30,000 suppliers, of which 500 key suppliers make up 80% of our spend. IAG GBS prioritises engagement with those suppliers who have a material impact on our business and on the environment, including on our climate change emissions, and so the largest opportunity to reduce our impact. A requirement for environmental standards is included in the IAG Supplier Code of Conduct and shared with suppliers as part of the approval flow of the supplier onboarding process. There are two key ways we engage further with suppliers on their environmental impacts. Firstly, IAG GBS established in 2018 a more robust risk management process to facilitate due diligence and monitoring of IAG suppliers. IAG GBS has enlisted a major business intelligence provider to enrich understanding of our suppliers’ legal, social, environmental and financial compliance. To date, 5,500 suppliers have been screened during the first phase of deployment, which is 18% suppliers engaged by number. We have estimated that the screened suppliers are a representative sample from the categories of Scope 3 emissions, bar franchises and business travel, which is how we have calculated that 26% of Scope 3 emissions are covered. Secondly, IAG GBS conducts corporate social responsibility (CSR) audits for chosen suppliers on an annual basis. Independent
CDP Page 61 of 74 audits include assessments of environmental and business ethics. This engagement is aimed at providing standard framework, verifying of any corrective actions and requiring suppliers to improve environmental standards.
Impact of engagement, including measures of success Key measures of success for the screening process are being developed. However, one measure of success is the selection of local suppliers, which reduces carbon emissions from transport. On the project Catering London 2020 we appointed caterers located in a 5-7 mile radius of each London hub, which reduced CO2 emissions although we have yet to quantify this.
Comment We collaborate with many suppliers to reduce our Scope 1 emissions via actions such as purchasing more efficient aircraft, operating along more efficient flight paths, and making changes to our ground operations. These collaborations are not included in our response to this question.
C12.1b
(C12.1b) Give details of your climate-related engagement strategy with your customers.
Type of engagement Education/information sharing
Details of engagement Run an engagement campaign to education customers about your climate change performance and strategy
% of customers by number 16
% Scope 3 emissions as reported in C6.5 0
Please explain the rationale for selecting this group of customers and scope of engagement IAG transported 113 million passengers in 2018. In 2018, we shared sustainability insight with our passengers and customers in the following specific ways: • Regular columns in the British Airways in-flight magazine High Life to inform customers about activities on fuel efficiency and sustainability. • An Iberia website on the Iberia Sustainability Report 2017 which was launched in June 2018 (https://memoriasostenibilidadiberia2017.iberiacomunicacion.com/en/) • Collaborating with the UK aviation trade association Sustainable Aviation on social media communications. • Continuing to engage our customers by providing access to the British Airways “Carbon Fund” (see section 4.5a). This fund uses customer donations from flight bookings on ba.com to invest in renewable energy and energy efficiency projects, which provide community benefits and mitigate climate change. • Updating sustainability content on our websites The emissions of all these customers are captured in our Scope 1 footprint and so their contribution to Scope 3 emissions is listed as 0%. Climate-related engagement with corporate customers includes joint projects through the BA Carbon Fund e.g. funding a project in a location of mutual interest e.g. a sustainable agriculture project in Ghana for example that helps local people to set up new sustainable business models. Or supporting the corporate in understanding the carbon market and helping source a suitable project through our charity partner Pure Leapfrog.
Impact of engagement, including measures of success For individual customers, we measure the success of our engagement by the level of participation in our focus groups, voluntary offset or carbon reduction schemes, hits on websites and feedback received via social media. Around 2-3% of customers who book flights online choose to voluntarily use the BA Carbon Fund. The Iberia website on their 2017 sustainability report received 18,272 hits in 2018. On the basis of readership of British Airways in-flight magazines, which regularly feature sustainability articles, around 16% of IAG customers have access to material that periodically includes information on climate change.
C12.3
(C12.3) Do you engage in activities that could either directly or indirectly influence public policy on climate-related issues through any of the following? Direct engagement with policy makers Trade associations
C12.3a
CDP Page 62 of 74 (C12.3a) On what issues have you been engaging directly with policy makers?
Focus of Corporate Details of engagement Proposed legislative solution legislation position Cap and Support Policy makers engaged: • IAG continues to support the inclusion of aviation emissions in the EU ETS and has participated in the trade Civil servants in the UK, scheme since 2012. The full scope of the EU ETS is under review in order to allow the UN’s aviation body the European Union, and ICAO to establish and demonstrate the success of its Global Market Based Measure, CORSIA. IAG has the International Civil actively supported negotiations to secure ‘CORSIA’: the Carbon Offsetting & Reduction Scheme for Aviation Organisation International Aviation. IAG was instrumental in securing the original 2009 industry targets (carbon neutral (ICAO) Policies of interest: growth from 2020 and net reduction of 50% CO2 by 2050) which CORSIA is designed to address. Since then • EU policies: EU IAG has been active in the process to formalise the targets under ICAO, and in 2016 we saw significant Emissions Trading System success from this activity when ICAO secured political agreement to the scheme from 191 countries in (EU ETS) • Global policies: October 2016.IAG helped successfully lobby with IATA to secure the following elements in CORSIA: (1) clarity ICAO's development of a on the geographic scope a state could apply measures within, (2) agreement that all airlines flying a route Global MBM Method of would face equal treatment, (3) confirmation that the carbon offset concept is the most cost-effective engagement • Member of approach, (4) standardised requirements on monitoring and reporting & verification. CORSIA is the first Global MBM Task Force of global sectoral deal to tackle climate change. It is a landmark achievement, not just for aviation, but also for ICAO CAEP • the global carbon market and we are proud of the significant role that IAG has played in securing it. Our Founder/member of UK method of managing the opportunity to develop a single market mechanism for aviation emissions during Emissions Trading 2017 included our Group Head of Sustainability using his platform at the Gloval sustainable Aviation Summit Group(which is the primary in Geneva to encourage global political support for CORSIA. IAG also sent a delegation to participate in the interface between UK negotiations in ICAO as part of our industry trade association IATA’s delegation. IAG remains actively involved industry and government with three representatives developing the implementation plans and IAG Head of Sustainability chairing on emissions trading) • IATA’s CORSIA working group - to help ensure the success of CORSIA. We are also actively lobbying UK Direct meetings with policy- and EU Governments on the issue that CORSIA should replace aviation’s inclusion in the EU ETS and there makers should not be regulatory duplication. Other, Support Policy makers engaged: • IAG and operator British Airways have been actively advocating: 1. The prioritisation of advanced fuels please Civil servants in the UK manufactured from wastes and residues, which avoid the land use change impacts that are associated with specify (DfT, BEIS) and the crop-based fuels. 2. The work of the Roundtable on Sustainable Biomaterials (RSB) who have developed the (Investment EU.Policies of interest: • most robust project-based sustainability standard for biofuels. 3. The introduction of standards to mitigate low carbon UK Renewable Transport Indirect Land Use impacts such as the Low Indirect Impact Biofuels (LIIB) module offered by the RSB. 4. sustainable Fuel Obligation • EU Greater harmonisation of standards with respect to sustainability and life cycle assessment of low-carbon fuels) Renewable Energy fuels to ensure that these take account of the full life cycle impacts of fuel production. 5. Ensuring that a level Directive (EU RED), • EU playing field is provided by governments, so that aviation fuels are treated equally in relevant policy Fuel Quality Directive (EU frameworks and incentives – with significant success recently since the UK Government agreed policy FQD) Method of change to include advabnced aviation fuels as eligibly for subsidy under the RTFO incentives. 6. A role in the engagement :• Direct global market based mechanism for sustainable fuels that meet stringent sustainability criteria and deliver meetings with policy- robust greenhouse gas savings. makers• Consultation responses - submission of written responses to consultation documents and participation instakeholder consultation events • Engagement as an individual entity, or as a member of industry groups like 'Leaders for Sustainable Biofuels' and SAFUG ( Sustainable Aviation Fuel users Group).
C12.3b
(C12.3b) Are you on the board of any trade associations or do you provide funding beyond membership? Yes
C12.3c
CDP Page 63 of 74 (C12.3c) Enter the details of those trade associations that are likely to take a position on climate change legislation.
Trade association IATA International Air Transport Assiciation
Is your position on climate change consistent with theirs? Consistent
Please explain the trade association’s position The International Air Transport Association (IATA) 69th Annual General Meeting (AGM) agreed a resolution on "Implementation of the Aviation Carbon-Neutral Growth (CNG2020) Strategy". The resolution proposes a set of principles for a global climate agreement on aviation emissions, specifically covering: • Establishment of procedures for a single global market-based measure (GMBM) • Integration of a single GMBM as part of an overall package of measures to achieve CNG2020 • Policy support and incentives to enable the development of sustainable aviation fuels to commercial scale.
How have you influenced, or are you attempting to influence their position? We actively advocate an approach for the Global Market-Based Measure which is equitable, achievable, and that can be implemented by 2020. We take a leading role in relevant IATA environment committees and its climate change task force.
Trade association A4E - Airlines For Europe
Is your position on climate change consistent with theirs? Consistent
Please explain the trade association’s position Airlines for Europe (A4E) support a global approach to regulating CO2 emissions from the aviation sector which avoids competitive distortion and carbon leakage.
How have you influenced, or are you attempting to influence their position? IAG partnered with other major airlines to establish Airlines For Europe (A4E) in 2016. IAG has taken an active role in A4E environment committees and has provided guidance to shape communications and policy positions in relation to the EU ETS, CORSIA and sustainable aviation fuels.
Trade association LSB - Leaders for Sustainable Biofuels
Is your position on climate change consistent with theirs? Consistent
Please explain the trade association’s position LSB supports enhanced policy support for advanced fuel pathways (including aviation fuel). Types of policy support would include an EU-level sub-target for advanced biofuel.
How have you influenced, or are you attempting to influence their position? British Airways is a founding member and regular participant in group meetings and lobbying activities. We advocate for preferential policy support for sustainable fuels produced from waste materials (e.g. municipal solid waste) that offer robust lifecycle greenhouse gas reductions.
Trade association Sustainable Aviation
Is your position on climate change consistent with theirs? Consistent
Please explain the trade association’s position Sustainable Aviation (SA) is a coalition of UK aviation sector companies including airlines, airports, ATC and aircraft manufacturers. Sustainable aviation supports industry efforts to influence UK climate policy on carbon trading as well as sustainable aviation fuels.
How have you influenced, or are you attempting to influence their position? IAG is a founding member of SA and is a member of the SA Council as well as sponsor of the Climate group, and an active participant in the Noise and Communications working groups. In 2018, IAG staff chaired the Sustainable Fuels working group. We influence SA position by sharing our expertise and insight on the CORSIA and have successfully influenced SA partners to support the IAG and IATA positions. SA also supports IAG position on sustainable fuels and has actively lobbied UK Government to create a level playing field for aviation and road transport fuels. IAG has been a lead partner in the SA programme to establish, with other members of SA and UK Government, a sustainable fuels UK knowledge transfer network.
CDP Page 64 of 74 C12.3f
(C12.3f) What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate change strategy?
The IAG sustainability team’s role is to drive change towards a more sustainable company and to achieve sector leadership to meet our goal of being the world’s leading airline group on sustainability. Our Group-wide Sustainability Network comprises environmental representatives and managers from across the Group who ensure Group strategy is applied to and is consistent with operating company strategy. The IAG Sustainability Network meets regularly to develop work programmes and share learning and best practice across the Group and includes updates on direct and indirect engagement activities in relation to our climate change goals.
Climate change policy in IAG is governed at Board level and also through a sub-set of the Board: the Audit and Compliance Committee. This is where the Group’s strategic direction on sustainability and climate change policy are established, monitored and reviewed. The IAG Group Head of Sustainability is responsible for reporting on climate change aspects to the Chief of Staff and to the IAG Audit and Compliance Committee and IAG Management Committee which oversees the IAG risk management process including the assessment of and action on climate change-related risks.
IAG publishes its position on climate change policy including its involvement in ICAO's work on CORSIA for addressing aviation climate emissions in its Annual Report and Accounts integrated sustainability report.
IAG and British Airways have proactively worked with other airlines to build a consensus approach to climate change policy. This approach includes the position that a climate change regulation must achieve its intended environmental outcome in a cost effective way without causing competitive distortion between airlines.
IAG works with our Trade Associations to align consistent positions in relation to climate change wherever possible. For example during 2017 and 2018 we have been working with GRI and the International Air Transport Association (IATA), to identify material issues across the industry and develop a GRI Sectorial Guidance Handbook for airlines which will improve consistency and opportunities to benchmark our performance with other airlines.
C12.4
CDP Page 65 of 74 (C12.4) Have you published information about your organization’s response to climate change and GHG emissions performance for this reporting year in places other than in your CDP response? If so, please attach the publication(s).
Publication In mainstream reports, incorporating the TCFD recommendations
Status Complete
Attach the document IAG Annual Report and accounts 2018.pdf
Page/Section reference Page 51
Content elements Governance Strategy Risks & opportunities Emissions figures Emission targets Other metrics Other, please specify (Case studies)
Comment We have carried out further analysis and verification since the publishing of the Annual Report and revised some metrics. For example, we calculate our 2018 flight efficiency at 91.5g CO2/km, rather than the 91.9g CO2/pkm reported.
C14. Signoff
C-FI
(C-FI) Use this field to provide any additional information or context that you feel is relevant to your organization's response. Please note that this field is optional and is not scored.
As noted in a footnote on page 40 of our Non-Financial Assurance Statement, IAG carries out further analysis and verification of our emissions numbers after the publishing of the 2018 Annual Report. While all of our Scope 1,2 & 3 emissions have been verified to limited assurance, the totals used in the CDP response are different to the 2018 Annual Report due to re-verification of the British Airways numbers and the use of a revised methodology for Scope 3 emissions. We have also revised some metrics e.g. we calculate our 2018 flight efficiency at 91.5g CO2/km, rather than the 91.9g CO2/pkm previously reported.
C14.1
(C14.1) Provide details for the person that has signed off (approved) your CDP climate change response.
Job title Corresponding job category Row 1 Willi Walsh, Chief Executive Officer Chief Executive Officer (CEO)
SC. Supply chain module
SC0.0
CDP Page 66 of 74 (SC0.0) If you would like to do so, please provide a separate introduction to this module.
Please refer to our response to question C0.1
SC0.1
(SC0.1) What is your company’s annual revenue for the stated reporting period?
Annual Revenue Row 1 24406000000
SC0.2
(SC0.2) Do you have an ISIN for your company that you would be willing to share with CDP? No
SC1.1
(SC1.1) Allocate your emissions to your customers listed below according to the goods or services you have sold them in this reporting period.
Requesting member Accenture
Scope of emissions Scope 3
Allocation level Company wide
Allocation level detail
Emissions in metric tonnes of CO2e 14000
Uncertainty (±%) 10
Major sources of emissions Emissions from staff business travel with British Airways and Iberia . 52,611 flights were taken with British Airways group, of which: 6,192 were long haul premium, 6,103 were long haul non premium , 3,486 were short haul premium, 36,830 were short haul non premium31,298 flights were taken with Iberia group, of which: 506 were long haul premium, 654 were long haul non premium, 1,122 were short haul premium 29,016 were short haul non premium. Geographic distribution was: UK and Ireland: 32,845 BA flights , 930Iberia flights North America: 4,040 BA and 358 Iberia flights Latin America and Carribbea: 467 BA and 341 Iberia flights Africa, Middle East & South America: 2,693BA and 69 Iberia flights Asia Pacific; 485BA, 20 Iberia flights Europe: 12,165BA and 32,336 Iberia flights Spain: 1,443BA and 28,379 Iberia flights Revenue passenger kilometres: BA = 120,644,908 RPK Iberia = 30,845,390 RPK Overall Total = 151,644,908 RPK
Verified No
Allocation method Allocation based on the volume of products purchased
Please explain how you have identified the GHG source, including major limitations to this process and assumptions made We have applied our average 2018 IAG fuel efficiency of 91.5 grammes of CO2 per passenger kilometre (gCO2/pkm) to the flights undertaken by Accenture and used this as the basis for a CO2e total. This was calculated by estimating the distance of each flight
CDP Page 67 of 74 (km) multiplied by our Group fuel efficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This is supported by the figures above showing major emissions sources. If one or other travel class was favoured, the efficiency metric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.
Requesting member Bank of America
Scope of emissions Scope 3
Allocation level Company wide
Allocation level detail
Emissions in metric tonnes of CO2e 6383
Uncertainty (±%) 10
Major sources of emissions Emissions from staff business travel with British Airways and Iberia . 21,483 flights were taken with British Airways group, of which: 7,609 were long haul premium, 967 were long haul non premium , 8,558 were short haul premium, 4,349 were short haul non premium. 1,249 flights were taken with Iberia group, of which: 85 were long haul premium, 50 were long haul non premium, 704 were short haul premium 410 were short haul non premium. Geographic distribution was: UK and Ireland: 14,953 BA flights and 662 Iberia flights North America: 4,869BA and 243 Iberia flights Latin America & Caribbean: 72 BA and 5 Iberia flights Africa, Middle East & South America: 430 BA and 6 Iberia flights Asia Pacific; 265 BA, 2Iberia flights Europe: 917BA and 533 Iberia flights Spain: 28 BA and 121 Iberia flights Revenue passenger kilometres: BA = 66,881,544 RPK Iberia = 2,183,151 RPK Overall Total = 69,064,695 RPK
Verified No
Allocation method Allocation based on the volume of products purchased
Please explain how you have identified the GHG source, including major limitations to this process and assumptions made We have applied our average 2018 IAG fuel efficiency of 91.5 grammes of CO2 per passenger kilometre (gCO2/pkm) to the flights undertaken by Bank of America Merrill Lynch and used this as the basis for a CO2e total. This was calculated by estimating the distance of each flight (km) multiplied by our Group fuel efficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This is supported by the figures above showing major emissions sources. If one or other travel class was favoured, the efficiency metric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.
Requesting member Endesa
Scope of emissions Scope 3
Allocation level Business unit (subsidiary company)
Allocation level detail
Emissions in metric tonnes of CO2e 3280
Uncertainty (±%) 10
Major sources of emissions Emissions from staff business travel with British Airways and Iberia. 1,763 flights were taken with British Airways group, of which: 646 were long haul premium, 21 were long haul non premium , 653 were short haul premium, 443 were short haul non premium. 24,565 flights were taken with Iberia group, of which: 953 were long haul premium, 334 were long haul non premium, 1,044were
CDP Page 68 of 74 short haul premium, 22,234 were short haul non premium. Geographic distribution was: UK and Ireland: 0 BA flights , 0 Iberia flights North America: 16 BA and 11 Iberia flights Latin America & Caribbean: 41 BA and 1,413 Iberia flights Africa, Middle East & South America: 0 BA and 0 Iberia flights Asia Pacific; 0 BA, 0 Iberia flights Europe: 1,723 BA and 24,373 Iberia flights Spain: 102 BA and 19,999Iberia flights Revenue passenger kilometres: BA = 5,938,094 RPK Iberia = 29,553,227 RPK Overall Total = 35,491,321 RPK
Verified No
Allocation method Allocation based on the volume of products purchased
Please explain how you have identified the GHG source, including major limitations to this process and assumptions made We have applied our average 2018 IAG fuel efficiency of 91.5 grammes of CO2 per passenger kilometre (gCO2/pkm) to the flights undertaken by Endesa and used this as the basis for a CO2e total. This was calculated estimating the distance of each flight (km) multiplied by our Group fuel efficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This is supported by the figures below showing major emissions sources. If one or other travel class was favoured, the efficiency metric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.
Requesting member KPMG UK
Scope of emissions Scope 3
Allocation level Company wide
Allocation level detail
Emissions in metric tonnes of CO2e 8657
Uncertainty (±%) 10
Major sources of emissions KPMG UK emissions sources are from staff business travel with British Airways and Iberia . 37,422 flights were taken with British Airways group, of which: 6,958 were long haul premium, 1,554 were long haul non premium , 2,851 were short haul premium, 26,059 were short haul non premium. 10,476 flights were taken with Iberia group, of which: 290 were long haul premium, 147 were long haul non premium, 480 were short haul premium 9,559 were short haul non premium. Geographic distribution was: UK and Ireland: 28,693 BA flights , 303 Iberia flights North America: 3650BA and 275 Iberia flights Latin America and Carribbean: 233 BA and 37 Iberia flights Africa, Middle East & South America: 342 BA and 9 Iberia flights Asia Pacific; 873BA, 13 Iberia flights Europe: 3,660 BA and 10,021 Iberia flights Spain: 325 BA and 9,743 Iberia flights Revenue passenger kilometres: BA = 84,107,851 RPK Iberia = 9,565,831 RPK Overall Total = 93,673,682 RPK
Verified No
Allocation method Allocation based on the volume of products purchased
Please explain how you have identified the GHG source, including major limitations to this process and assumptions made We have applied our average 2018 IAG fuel efficiency of 91.5 grammes CO2 per passenger kilometre (gCO2/pkm) to the flights undertaken by KPMG and used this as the basis for a CO2e total. This was calculated by estimating the distance of each flight (km) multiplied by our Group fuel efficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This is supported by the figures below showing major emissions sources. If one or other travel class was favoured, the efficiency metric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.
Requesting member Stanley Black & Decker, Inc.
Scope of emissions
CDP Page 69 of 74 Scope 3
Allocation level Company wide
Allocation level detail
Emissions in metric tonnes of CO2e 377
Uncertainty (±%) 10
Major sources of emissions Emissions from staff business travel with British Airways and Iberia . 2,083 flights were taken with British Airways group, of which: 57 were long haul premium, 389 were long haul non premium 68 were short haul premium 1,571 were short haul non premium. 92 flights were taken with Iberia group, of which: 0 were long haul premium, 10 were long haul non premium 0 were short haul premium 82 were short haul non premium. Geographic distribution was: UK and Ireland: 1130 BA flights, 1 Iberia flights North America: 284 BA and 5 Iberia flights Africa, Middle East & South America: 21 BA and 0 Iberia flights Asia Pacific; 29 BA, 0 Iberia flights Europe: 615 BA and 74 Iberia flights. Spain: 40 BA and 41 Iberia flights Revenue passenger kilometres: BA = 3,914,732 RPK Iberia = 161,826 RPK Overall Total = 4,076,558 RPK
Verified No
Allocation method Allocation based on the volume of products purchased
Please explain how you have identified the GHG source, including major limitations to this process and assumptions made We have applied our average 2018 IAG fuel efficiency of 91.5 grammes of CO2 per passenger kilometre (gCO2/pkm) to the flights undertaken by Stanley UK Holdings Inc, and used this as the basis for a CO2e total. This was calculated by estimating the distance of each flight (km) multiplied by our Group fuel efficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This is supported by the figures above showing major emissions sources. If one or other travel class was favoured, the efficiency metric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.
Requesting member TD Bank Group
Scope of emissions Scope 3
Allocation level Company wide
Allocation level detail
Emissions in metric tonnes of CO2e 384
Uncertainty (±%) 10
Major sources of emissions Emissions from staff business travel with British Airways and Iberia. 1,590 flights were taken with British Airways group and 27 were taken with Iberia Group. Geographic distribution was: UK and Ireland: 1,355 BA flights , 22 Iberia flights North America: 235 BA and 11 Iberia flights. Latin America and Caribbean: 0 BA and 0 Iberia flights Africa, Middle East & South America: 0 BA and 0 Iberia flights Asia Pacific; 0 BA, 0 Iberia flights Europe: 0 BA and 0 Iberia flights Spain: 0 BA and 0 Iberia flights Revenue passenger kilometres: BA = 4,122,547 RPK Iberia = 37,129 RPK Overall Total = 4,159,676 RPK
Verified No
Allocation method Allocation based on the volume of products purchased
Please explain how you have identified the GHG source, including major limitations to this process and assumptions made
CDP Page 70 of 74 We have applied our average 2018 IAG fuel efficiency of 91.5 grammes of CO2 per passenger kilometre (gCO2/pkm) to the flights undertaken by Toronto Dominion Bank and used this as the basis for a CO2e total. This was calculated by estimating the distance of each flight (km) multiplied by our Group fuel efficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This is supported by the figures below showing major emissions sources. If one or other travel class was favoured, the efficiency metric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.
Requesting member Vodafone Group
Scope of emissions Scope 3
Allocation level Company wide
Allocation level detail
Emissions in metric tonnes of CO2e 4631
Uncertainty (±%) 10
Major sources of emissions Emissions from staff business travel with British Airways and Iberia . 22,309 flights were taken with British Airways group, of which: 2523 were long haul premium, 589 were long haul non premium 741 were short haul premium 18,456 were short haul non premium. 12,363 flights were taken with Iberia group, of which: 213 were long haul premium, 7were long haul non premium 331 were short haul premium 11,812 were short haul non premium. Geographic distribution was: UK and Ireland: 14,755 BA flights ,909 Iberia flights North America: 310BA and 18 Iberia flights Africa, Middle East & South America: 549 BA and 33 Iberia flights Asia Pacific; 179 BA, 8 Iberia Europe: 6,517 BA and 11,952 Iberia Spain: 468 BA and 10,970 Iberia flights Revenue passenger kilometres: BA = 39,034,142 RPK Iberia = 11,081,514 RPK Overall Total = 50,115,656 RPK
Verified No
Allocation method Allocation based on the volume of products purchased
Please explain how you have identified the GHG source, including major limitations to this process and assumptions made We have applied our average 2018 IAG fuel efficiency of 91.5 grammes of CO2 per passenger kilometre (gCO2/pkm) to the flights undertaken by Vodafone Group and used this as the basis for a CO2e total. This was calculated by estimating the distance of each flight (km) multiplied by our Group fuel efficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This is supported by the figures above showing major emissions sources. If one or other travel class was favoured, the efficiency metric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.
Requesting member Wells Fargo & Company
Scope of emissions Scope 3
Allocation level Company wide
Allocation level detail
Emissions in metric tonnes of CO2e 1211
Uncertainty (±%) 10
Major sources of emissions Emissions from staff business travel with British Airways and Iberia 4,473 flights were taken with British Airways group, of which 1,213 were longhaul premium, 292 were longhaul non-premium, 379 were shorthaul premium, 2,589 were shorthaul non-premium.
CDP Page 71 of 74 75 flights were taken with Iberia group, of which 5 were longhaul premium, 10 were shorthaul premium and 60 were shorthaul nonpremium.Geographic distribution was: UK and Ireland: 2,884 BA flights , 59 Iberia flights North America: 1,431 BA and 70 Iberia flights Latin America and Caribbean: 0 BA and 0 Iberia flights Africa, Middle East & South America: 153 BA and 0 Iberia flights Asia Pacific; 12 BA, 0 Iberia flights Europe: 0 BA and 0 Iberia flights Spain: 0 BA and 0 Iberia flights Revenue passenger kilometres: BA = 12,979,841 RPK Iberia = 123,642 RPK Overall Total = 13,103,483 RPK
Verified No
Allocation method Allocation based on the volume of products purchased
Please explain how you have identified the GHG source, including major limitations to this process and assumptions made We have applied our average 2018 IAG fuel efficiency of 91.5 grammes of CO2 per passenger kilometre (gCO2/pkm) to the flights undertaken by Wells Fargo & Co and used this as the basis for a CO2e total. This was calculated by estimating the distance of each flight (km) multiplied by our Group fuel efficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This is supported by the figures below showing major emissions sources. If one or other travel class was favoured, the efficiency metric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.
SC1.2
(SC1.2) Where published information has been used in completing SC1.1, please provide a reference(s).
The principle metric used for calculating the CO2e emissions above are IAG's fight only CO2 efficiency for 2018 of 91.5 grammes of CO2 per passenger kilometre (gCO2/pkm). Our performance and trends on this measure over five years is reported in the IAG Annual Report and Accounts 2018, reference is page 58. In our Annual Report we reported our flight only CO2 efficiency as 91.9 grammes of CO2 per passenger-km, but have since revised this following further analysis.
SC1.3
(SC1.3) What are the challenges in allocating emissions to different customers, and what would help you to overcome these challenges?
Allocation Please explain what would help you overcome these challenges challenges Other, please It would be extremely complex and time-consuming to determine an exact measurement of emissions for an individual passenger on any given specify flight and route. Each flight can vary by its aircraft seating configuration and travel class, aircraft types, weather conditions, holding patterns, load (Factors factors, and haulage of bellyhold cargo. The challenge is to provide data which is representative of a given passenger's emissions, and our affecting flight preferred method of emissions allocation is using an aggregate efficiency figure based upon externally verified data. efficiency)
SC1.4
(SC1.4) Do you plan to develop your capabilities to allocate emissions to your customers in the future? Yes
SC1.4a
CDP Page 72 of 74 (SC1.4a) Describe how you plan to develop your capabilities.
We continue to work on standardising the greenhouse gas emissions and efficiency calculations across the Group. This ensures that the allocated emissions we report to customers continue to be consistent and accurate.
SC2.1
(SC2.1) Please propose any mutually beneficial climate-related projects you could collaborate on with specific CDP Supply Chain members.
SC2.2
(SC2.2) Have requests or initiatives by CDP Supply Chain members prompted your organization to take organizational-level emissions reduction initiatives? No
SC3.1
(SC3.1) Do you want to enroll in the 2019-2020 CDP Action Exchange initiative? No
SC3.2
(SC3.2) Is your company a participating supplier in CDP’s 2018-2019 Action Exchange initiative? No
SC4.1
(SC4.1) Are you providing product level data for your organization’s goods or services? No, I am not providing data
Submit your response
In which language are you submitting your response? English
Please confirm how your response should be handled by CDP
Public or Non-Public Submission I am submitting to Are you ready to submit the additional Supply Chain Questions?
I am submitting my response Public Investors Yes, submit Supply Chain Questions now Customers
Please confirm below I have read and accept the applicable Terms
CDP Page 73 of 74 CDP Page 74 of 74