Submitted by

Anastasiia Sochneva

Submitted at

Institute of Innovation Management

Supervisor

Univ.-Prof. Dr. Robert. J. Sustainable development Breitenecker Co-Supervisor in EU and Russia - Mag. Andreas Krawinkler A comparative analysis in March 2021 the airline industry

Master Thesis to obtain the academic degree of Master of Science Global Business in the Master’s Program Joint Master Program Global Business - Russia/Italy

JOHANNES KEPLER

UNIVERSITY LINZ

Altenberger Str. 69

4040 Linz, Austria

www.jku.at

STATUTORY DECLARATION

I hereby declare that the thesis submitted is my own unaided work, that I have not used other than the sources indicated, and that all direct and indirect sources are acknowledged as references. This printed thesis is identical with the electronic version submitted.

Nizhny Novgorod, 05/03/2021

Signature

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Abstract

The increased social consciousness concerning the need for sustainable development has led to the changes in production technologies, consumption, decision-making processes, management initiatives and legislation. According to the related literature there is no common approach how to achieve sustainable development, which has resulted in uneven level of sustainability across countries worldwide. Due to this, the current master thesis aims to investigate the peculiarities in sustainable development approaches in developed and developing countries, and in particular in Russian Federation and in European Union. The study combined a comprehensive comparative analysis of primary data, in addition to an empirical case study. Firstly, the thesis will carry out a literature review on sustainable development concept formation, comparison of current laws and other legal instruments that are regulating sustainability initiatives in Russian and European Union and the role of private sector in achieving sustainable development. Secondly, a multiple case study of six major Russian and European airline companies is conducted. The analysis will provide the information on which UN Sustainable Development Gals are addressed by each considered company as well as comparison of tree main directions of sustainability policies in Russian and European companies. The research findings will illustrate that sustainable development in advanced economies (based on EU example) is already well-established concept, whereas in developing countries (based on Russia example) there is no broad and full understanding of sustainability nature.

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Table of Content I. List of figures ...... 5 II. List of Tables ...... 5 1. Introduction ...... 6 1.1. Motivation for the research ...... 7 1.2. Problem statement and research questions ...... 9 1.3. Structure of the thesis ...... 10 2. Theoretical background ...... 11 2.1. Sustainable Development and Sustainable Development Goals...... 11 2.2. The role of public sector in sustainable development ...... 17 2.3. The role of private sector in sustainable development ...... 25 2.4. Sustainable development indicators and indexes ...... 29 2.5. Synopsis ...... 34 3. Methodology...... 36 3.1. Case study approach ...... 36 3.2. The rationale of case study methodology ...... 37 3.3. Case selection ...... 39 3.4. Data collection ...... 41 3.5. Framework of empirical study ...... 42 4. Case study ...... 43 4.1. Case study of Russian airline companies ...... 43 4.1.1. Aeroflot ...... 43 4.1.2. UTair ...... 48 4.1.3. Ural Airlines ...... 50 4.2. Case study of European airline companies ...... 54 4.2.1. Lufthansa ...... 54 4.2.2. Scandinavian airlines ...... 61 4.2.3. Virgin Atlantic airways ...... 65 5. Discussion ...... 70 5.1. Comparative analysis ...... 70 5.2. Summarized Results ...... 78 6. Conclusion ...... 80 6.1. Main implications ...... 80 6.2. Future research and limitations ...... 81 7. Reference list ...... 83 8. Appendix ...... 93

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I. List of figures

Figure 1 - The road to Agenda 2030 (Sustainable development index report, 2019) ...... 7 Figure 2 - GDP per capita annual growth (%), 1990-2011 (Bulman et al., 2014) ...... 8 Figure 3 - Carbon dioxide emissions in developed and developing countries, 1990-2010 (Peters et al., 2012) ...... 8 Figure 4 - Triple bottom line concept (Elkington, 1998) ...... 11 Figure 5 - Sustainable development goals (Sustainable Development Report, 2020) ...... 16 Figure 6 - Rank of countries according to SDG index (SDG Index and dashboards report, 2018) ...... 40 Figure 7 - Basics types of case study methods (Yin, 2009) ...... 41 Figure 8 - Direct and indirect GHG emissions of Aeroflot Group airlines (Aeroflot Annual Report, 2019) ...... 45 Figure 9 – Ecological footprint of the Lufthansa Group in 2018 (LH Balance Sustainability Report, 2019) ...... 57 Figure 10 - Airline companies by addressed (both directly/indirectly) SDGs (own depiction) ...... 72 Figure 11 - Addressed SDGs by EU and Russia (own depiction) ...... 73 Figure 12 - Structure of internal social initiatives in EU and Russian airlines (own depiction) .....75 Figure 13 - Airlines’ corporate sustainable governance measures (own depiction) ...... 77

II. List of Tables

Table 1 – The concept of sustainable development in EU law (Adapted from Leptien et al., 2006) ...... 20 Table 2 - Key characteristics that explain the choice of case study method (Adapted from Yin 2009) ...... 38 Table 3 - Main data on selected airline companies (Airlines’ annual reports) ...... 43 Table 4 - Initiatives of Lufthansa in noise abatement. (LH Balance Sustainability Report, 2019) 56 Table 5 - Addressed Sustainable Development Goals by airline companies (own depiction) .....70 Table 6 - Summary of comparative analysis of Russian and European airline companies (own depiction) ...... 78

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1. Introduction

In the XX century, there was substantial growth of market demand for wide range of products, which led to more risky models of supply generation. In fact, big amount of companies ventures to more profitable concepts of production process resulting in negative long-term consequences in social and environmental spheres (Rajeev et al., 2017). Releases of toxic waste, tragedies at nuclear power plants, gas and oil lacks and other accidents have made all participants of business process think about the consequences from economic activities. This industrial approach had to be reformed and new transformations required the most significant parts of society participate consciously and responsibly (Klarin, 2018; Dobrovolska, 2018; Wang et al., 2019).

The concept of sustainable development has its roots in ideas of ecological movements that were actively promoting their ideas in 1970-es in Europe. Concerns over the limitations of natural resources led to the establishment of vide range of international non-governmental scientific organizations with the aim to investigate global processes on the Earth (Stern, 2007; Klarin, 2018). The bright examples of such organizations are the International Federation of Institutes for Advanced Study, the Club of Rome (with its report «the Limits to Growth» (Meadows et al., 1972)), the International Institute for Applied Systems Analysis, and in Russia the Institute for Systems Analysis of Russian Academy of Sciences. In 1980, during World Conservation Strategy (that was organized by the United Nations Environment Program (UNEP), the International Union for Conservation of Nature and the World Wildlife Fund (WWF)) the concept of Sustainable Development firstly widely introduced and defined as a main global priority. In 1987, “Our common future” report issued within World Commission on Environment and Development (WCED) firstly introduced the most common nowadays definition of Sustainable Development and highlights the importance of effective and continuous interaction of all parts of human’s socio-economic life (WCED, 1987).

In the framework of this research Sustainable Development should have been perceived beyond the initial intergenerational concept and focus more on social partnership principles and was defined as the development that «meets the needs of the present without compromising the ability of future generations to meet their own needs» and guarantees a stable and progressive development of a state, society and global wellbeing (WCED, 1987). This definition currently used as a baseline in all countries and international organizations. Currently the main roadmap for Sustainable Development is the document of the United Nations Development Program (UNDP) “Transforming our world: the 2030 Agenda for Sustainable Development” that was issued in 2015 (UN General Assembly, 2015). Figure 1 illustrates the main international activities towards Sustainable Development framework and to Agenda 2030.

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Figure 1 - The road to Agenda 2030 (Sustainable development index report, 2019)

Sustainable Development became one of the most discussed topics among various actors in social, economic and political processes. Stakeholders all around the world consider sustainable development as an approach that should be followed globally. Big amount of related studies claimed that private sector could influence more on the implementation of sustainable development. The main mission is to take into account interests of all stakeholders, develop mutually beneficial sustainability strategies and implement them in the most effective manner (Caiado et al., 2017; Miklian, 2019). As it was stated by Nagel et al. (2017) commercial endeavors influence directly on social and environmental aspects of human life, accordingly these three dimensions should be considered together. It is vital that business community adopt sustainable approach with the aim to eliminate the negative impact on global well-being. Consequently, it is important that sustainable development concept should be promoted not only by states and international organizations but also by private companies and civil society.

1.1. Motivation for the research

Geopolitical, demographic, climatic, technological, social and economic dynamics have contributed to strong economic growth, created conditions for poverty reduction, and influenced the improvement of living standards around the world (Sachs et al., 2020). Emerging economies have gained more economic growth opportunities from the globalization process because developed countries began to outsource their production volumes to poor countries where the cost of labor is much lower (UN, 2013). According to the report of UN Department of Economic and Social Affairs over the past 40 years, per capita income growth indicators in developing countries have been consistently higher than growth rates in the developed world (Figure 2). The figure shows that the income inequity among countries is decreasing however there is still a big gap between developed and developing countries in the level of life (UN, 2013).

The expansion of global trade, improvement of living standards, development of production technologies and other global trends led to serious consequences in all spheres (UN, 2013). The unbalanced nature of these phenomena has led to high-income concentration and extreme inequality. Competition for resources and weaknesses in its governance undermine social cohesion and institutional sustainability and contribute to violent conflicts. Terrorism, international organized crime and disregard for the law are real threats for current society. Climate change

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affects economies and nations and the entire ecosystem of our planet. The world spends much more energy and resources managing crises than preventing them (Sachs et al., 2020).

Figure 2 - GDP per capita annual growth (%), 1990-2011 (Bulman et al., 2014)

For instance, Figure 3 illustrates emission level of CO2 in developed and developing countries. It can be seen the rapid growth of emissions in emerging countries and more stable situation in high- income economies (Peters et al., 2012). According to Economist Intelligence Unit private investors will forfeit approximately 4 trillion $ of their asses due to impacts of global warming by 2100 (Rajeev et al., 2017). Social inequity and climate change can have negative effects on economic stability of both developed and developing economies mainly because commercial sector is most vulnerable in current global processes (Wang et al., 2019). A clear strategy for minimizing the problems described above is reflected in the program for achieving sustainable development goals and other international agreements on this issue. However, the transition towards sustainable development does not happen consistently everywhere.

Figure 3 - Carbon dioxide emissions in developed and developing countries, 1990-2010 (Peters et al., 2012)

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1.2. Problem statement and research questions

Since sustainable development process implies a global nature, such development has its own limits. Many experts express their concerns about different level of industrialization and socio- economic development of some regions and countries. According to some studies such differentiation limits the possibilities of transition to sustainable development for some regions and open prospects in this field for others (Spaargaren, 2011; Rajeev et al., 2017; Wang et al., 2019). For instance, in the USA, Europe and Australia, the principles for sustainable development have been applied for a long time, as well as the culture of CSR (the corporate activities towards sustainability) in companies has been formed decades ago, whereas for India, China, Russia or African counties this area is a relatively new phenomenon that is just beginning to appear (Hou & Li, 2014). It is becoming clear that countries with different levels of economic development are now at different stages of implementing the principles of sustainable development. In contrast, such inequity can play an important role in the improvement and expansion of sustainability initiatives. Namely, the experience of developed countries can be used to improve sustainable development in emerging economies.

In this regard, it is important to consider the experience of leading countries in implementing sustainable development principles at the national and international levels. The most important aspects in this context are the localization of sustainable development goals in developing and developed countries, as well as parameters for the integration of SDGs objectives into national legislation, conceptual and strategic documents, and governmental policies at the federal and regional levels.

The main problem of this master thesis is the inconsistency of approaches to sustainable development among countries with different level of economic performance, with the main research question and two sub-questions being:

What characterizes different approaches to sustainable development in countries with emerging and advanced economies?

• What are the main differences in legislation/policy strategies of developed/developing countries to address sustainable development? • What are the main differences in approaches towards sustainability in Russian and European airline companies’ strategies?

In order to answer this research questions the main objective has been framed as follows: to examine differences in approaches to sustainable development in European Union countries

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where sustainability principles have been followed for a long time, and in Russian Federation, where this is a relatively new phenomenon.

1.3. Structure of the thesis

With the aim to achieve the mentioned above research objective, firstly, the literature review will be accomplished. In the framework of this analysis it would be tracked the sustainability concept development, the role of private sector in sustainability achievement will be examined, the main tools of sustainable development measurement will be considered as well as legislative measures and policy strategies in developed and developing regions will be covered. The empirical part of current thesis will be based on mentioned above theoretical background. Secondly, the qualitative approach would be applied with multiple case study design. As an exploratory case, the comparative analysis European and Russian air carriers will be conducted. From a sustainable development perspective, the air transport sector is ambiguous. Big amount of airline companies has long-term strategies for sustainable development and are actively working with it in various ways and areas. The focus of current research will be on six airline companies coming from Russia and European Union with their sustainable development corporate strategies and initiatives in this field. The multiple case study will provide the overview of air carriers’ approach towards sustainability and will help to elaborate on companies’ activities comparison. Using secondary data such as corporate annual and sustainability reports, articles and reviews the key differences and similarities between Russian and European sustainability strategies will be identified.

The structure of the current study could be divided into two parts: theoretical framework and empirical research. Chapter 2 is related to theoretical part and divided into four main subchapters that will cover the sustainable development formation and SDG’s description, the role of public and private sector in sustainability achievement and the sustainable development measurement approaches discussion. The next chapter dedicates to the main implications form the literature review resulting in addressing the first research sub question. Chapters 4-6 address the empirical research of current thesis. Chapter 4 gives an overlook on multiple case study method with its advances and limitations and explanation of selected cases relevance. The next chapter includes three Russian and three European airline companies’ case study analysis. The discussion part with main implications, graphs and research findings is presented in Chapter 6. The last chapter coves the obtained outcomes and limitations of current master thesis. In general, the interpretation of the results achieved in the framework of this study will help to understand the major strengths and weaknesses of Russian and EU approaches in achieving the sustainable development goals and to suggest strategies for their enhancement.

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2. Theoretical background

With the aim to provide the theoretical base, this part will define concept of Sustainable Development as well as outline the stages of this framework formation within international arena. This chapter will also describe private sector as the main contributor to sustainable development. Furthermore, there will be considered the ways to monitor sustainability achievement with the main problem of inconsistency of approached towards sustainable development in developed and developing economies.

2.1. Sustainable Development and Sustainable Development Goals

Over the past century, civilization has caused irreparable damage both to nature and to humanity in general. Widespread biosphere degradation is occurring everywhere and is taking over new areas, including socio-economic aspects of human life (Rajeev et al., 2017). From today’s perspective, it can be undoubtedly stated that humanity has faced the most serious problems of its development and the most acute is the problem of economic and environmental crises, which have serious negative consequences at both micro and macro-level (Dobrovolska, 2018; Klarin, 2018; Wang et al., 2019).

Figure 4 - Triple bottom line concept (Elkington, 1998)

Despite the environmental problems, it is undeniable that society still depends on the efficiency of the economy. However, according to Rammel (2003) the background of the global contradictions between society and nature, environmental problems have become even more pressing and increasingly prominent. In the XIX century, these challenges served as the prerequisites for the formation, development and promotion of a new concept that should have found a balance between natural processes and effective economic activity of modern society. In order to maintain

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this balance, three aspects of sustainable development (social, economic and environmental – the Triple Bottom Line, Figure 4) arose to apply effective measures to sustainable development issues (Joyce & Paquin, 2016).

Big amount of literature singles out two, three or even four stages of sustainability concept development (Krasnoshhekov & Rozenberg, 2008; Belousov, 2013; Pashkevich & Shapoval, 2014; Klarin, 2018). However, in the framework of this research it would be considered two major stages: 1) from the middle of XX century till 1992 year – the stage of separate ideas, approaches and elements establishment; 2) from 1992 till our time – the stage of normative consolidation and further improvement of the concept (Pasenov, 2017; Dobrovolska, 2018).

The premises of sustainable development concept have their roots in 60-s of XX century, when public concerns began to grow regarding ecological issues. Increased attention had been paid to the simultaneous development of social and economic activities which have led to the negative consequences on the environment. Public had become more resistant to this problem, which was led to an extensive examination on the environmental topic since 50-s of XIX century (Klarin, 2018). For instance, in her book “Silent spring” (1962), Rachel Carson firstly substantiated that the environment has limits on the accumulation of pollution. Moreover, it was established big number of projects, initiatives, and science clubs, which aimed to develop ways, approaches and tools to address ecological threats that international community had faced. In 1963 for instance, the UN initiated the International Biological Program. The ten-year program was aimed to analyze the reasons for the environmental destruction as well as mechanisms that are facilitates it. Using the results of this program, in 60-s it was conducted the study that helped to establish a database that served as a basis for the development of science-based environmental protection (Pasenov, 2017). Later, in 1968, Aurelio Peccei and Alexander King founded the Club of Rome. A great importance for the sustainable development concept formation was the club's repot "the Limits to growth" that described the theories of dynamic growth, organic growth, and dynamic equilibrium and, also, analyzed negative consequences from economic activities on the environment (Meadows et al., 1972; Bernstein, 2019).

According to Pasenov (2017) and Klarin (2018), the 1960-s can be characterized as a period of formation and promotion of ideas about the need to change the industrial approach. Society became aware that existing models could not meet the changing conditions of socio-economic development and recognized the environment preserving importance. Due to this, the first research on sustainable development were carried out as well as conferences devoted to the interrelation of industrial activity, population growth and environmental conditions were held.

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In the 1970-s, the foundation of international and domestic organizations, movements and programs related in one way or another to the exploration of global processes on Earth and establishment of environmental assts protection program were held. The first attempts were made to normatively consolidate the idea of sustainable development and to form specific roadmaps to achieve success in this field (Pasenov, 2017; Dobrovolska, 2018). For example, in 1970 in the USA, the Natural Resources Defense Council was founded with the aim of achieving the completeness of the US environmental policy. In the same year, the First Earth Day was held as a national seminar on environmental protection. The most important event of this period was a Conference on the Human Environment held in Stockholm in 1972 under the auspices of the United Nations where the Sustainable Development concept was firstly widely recognized by international community. The outcome of the meeting was the adoption of a Declaration that consolidated the need to plan and manage natural resources more effectively, to prevent irreparable damage to the Earth's ecosystem, to combat pollution and support economic and social development (Klarin, 2018; Mensah & Casadevall, 2019). In addition to the Declaration, the Conference on the Human Environment issued an action plan that included 109 recommendations and it was established the World Environment Day (5th June) (UN, 1972). After the Conference, many states established special agencies to deal with nature protection issues, new direction of legislation on environmental law appeared, and such diplomacy as environmental diplomacy began to develop.

According to Dobrovolska (2018), the 80-s can be characterized as a period when society have tried to recognize the need for sustainable development promotion, designed sustainability criteria, and established sustainable development strategies. In 1980, International Union for Conservation of Nature and Natural Resources (IUCN) firstly merged environmental aspect with economic benefits in the framework of single concept: Sustainable Development (IUCN, 1980). Therefore, in 1982, it was published the UN World Charter for Nature that emphasized the humanity's dependence on natural resources and stated the need to monitor and effective management of mining operations. The World Commission on Environment and Development (WCED), known as the Brundtland Commission, led by Gro Harlem Brundtland, was initiated also in 1982. The initiative was aimed to increase understanding about detrimental effects on global environment form socio-economic activities and to provide the action plan for achieving sustainable development in accordance with the environmental protection and conservation (WCED, 1987; Klarin, 2018). For three years, the commission has been working on the study of the mutual influence of economic, socio-cultural, and environmental aspects. The result of this work was a report “Our common future report”, which provides, for the first time, directions for addressing global challenges from all these perspectives, as well as definition of sustainable development

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(Mensah & Casadevall, 2019; Dehghanian & Mansour, 2009). "Sustainable development is the development that meets the needs of the present without compromising the ability of future generations to meet their own needs." (WCED, 1987, p.43). This statement contains the key idea of sustainability – the balance between generations and became the most popular and widely used definition in literature.

The concept of sustainable development was adopted directly at the United Nations Conference on Environment and Development held at the level of Heads of States and Governments in Rio- de-Janero in June 1992. The conference was organized to develop a global agenda that will help to manage environmental degradation by means of sustainable development principles (UNCED, 1992a; Klarin, 2018). Two main documents were adopted after the conference: the Rio Declaration on Environment and Development (UNCED, 1992b) and Agenda 21 (UNDSD, 1992). The Rio Declaration on Environment and Development defines 27 sustainability principles, which specify the rights and responsibilities of the United Nations. Moreover, these principles became the baseline for UN global policy and improve the decision-making process as well as build the balance between environment and socio-economic progress (UNCED, 1992b). The Agenda 21 is a document consisting of 40 chapters that define the sustainable development goals, guidelines to achieve them, and the resources necessary for their widespread implementation (UNDSD, 1992). The signed agreement also emphasizes the importance of the balance between protection of environment and socio-economic development, that should be maintained by governments and other stakeholders by implementing related sustainability policies, plans and programs. The key idea of the document is the international cooperation of developed and developing countries and their mutual financial and managerial support.

In the documents of the UN Conference governments of each country was offered to develop and adopt its national sustainable development strategy (Allen et al., 2018). Another outcome of the Conference was the establishment of the he United Nations Division for Sustainable Development (UNDSD) aimed to encourage, coordinate and evaluate progress in the implementation of sustainable development at the global, national and regional levels and to promote integrated international cooperation in this field (Klarin, 2018). The Rio Conference is completing the first phase of the sustainable development concept formation.

After Rio Conference in 1992 certain negotiations and activities were held reporting some positive results in implementing Agenda 21, however the problem of sustainability implementation at a global level have remained unsolved (Dobrovolska, 2018). Several global problems were highlighted during Rio+10 Conference in Johannesburg in 2010: further degradation of the environment, ecosystem losses, natural disasters and deepening the gap between developed and

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underdeveloped countries. During the conference it was agreed to implement additional measures to reach objectives set out in Agenda 21, so it was developed a new strategy for sustainable development implementation and achievement trough eight UN Millennium Development Goals (MDGs) set in year 2000 (UN, 2010).

According to UN Millennium Declaration all UN members should follow and maintain goal achievement. However, progress towards goals has been uneven, while developed countries have already achieved great success in many directions, developing economies have faced with serious challenges to sustainable development (Allen et al., 2018; Klarin, 2018). The mostly in need of changes were sub-Saharan African countries that still had to make radical improvements in the quality of life. In the same period as China, sub-Saharan African countries have reduced poverty by only 1% (Hall et al., 2019). In order to acheive the MDGs, the G-8 finance ministers in June 2005 agreed to provide the World Bank, the International Monetary Fund, and the Asian Development Bank with sufficient funds to repay a portion of the HIPC (Heavily Indebted Poor Countries) debt of $40-55 billion (Henri, 2019). Thus, by 2015, 36 countries had completed the program and had their external debt was canceled in full (IMF, 2015). The participation in the expanded HIPC initiative has enabled big amount of countries to redirect the savings resulting from debt relief to social programs, to improve health, energy, and education systems, as well as reduce poverty (Hall et al., 2019). In Ghana, for example, as a result of reduced debt service and interest payments on external loans, 509 new school premises for primary schools were built in all districts. In Senegal, the funds released by the HIPC initiative were aimed at developing a community-based health service, which allowed for the establishment and strengthening of basic health infrastructure in rural areas (Henri, 2019).

In the report dated 5 July 2015 the UN Secretary-General summarized the final outcomes of the eight goals in all regions and countries around the world. The report notes that the worldwide poverty rate has reduced by more than half, from 1.9 billion in 1990 to 836 million in 2015. Furthermore, through the efforts to implement the MDGs, 2.6 billion people have gained an access to clean drinking water and many young girls have had an opportunity to get an education. The great results were achieved in reducing maternal and child mortality, in the fight against HIV, malaria and other diseases. Since 2000, the new HIV cases decreased by about 40%, from 3,5 million to 2.1 million. In 2015, 95% of the world's population can use mobile communication services (Allen et al., 2018; Dobrovolska, 2018; Hall et al., 2019).

Despite the progress made in Millennium Development Goals achievement, there was wide range of unresolved global issues in 2015. For example, 800 million people were still living under the poverty line, and 57 million primary-school-age children didn’t have access to education (Costanza

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et al., 2016). In this regard, the UN General Assembly was on the threshold of a new development agenda for the period after 2015. In September 2015, it was issued the 2030 Agenda for Sustainable Development that was agreed by 193 countries-members of the UN General Assembly (UN, 2015). Allen et al. (2018) states that tree pillars of sustainability (social, economic, and environmental) became more balanced because the new agenda provides the global framework that covers 7 Sustainable Development Goals (SDGs) and 169 related targets (Allen et al., 2018).

Figure 5 - Sustainable development goals (Sustainable Development Report, 2020)

Form today’s perspective it is not yet possible to assess progress towards the SDGs, however it is obvious that different states develop big amount of measures to achieve these goals, business community is making efforts to support and promote sustainable development, and society has become more conscious to sustainability issue (Klarin, 2018). It can be stated that the formation of a new paradigm of sustainable development and development of innovative model of the world economy will take place only if the world's commercial sector will be transformed forwards global agenda. Sustainable development goals address the business community by encouraging it to use its ingenuity, innovation, and dynamism to meet the challenges of sustainable development. The universal scope of the directions stated in the UN Sustainable Development Agenda allows companies to choose the set of goals that can be integrated to their business processes, both globally and at the level of each country (Miklian, 2019).

To sum up, at the first stage of sustainable development concept formation, starting from the middle of the 20th century, the main baselines of the future concept were formed. On the international level the main definition of sustainable development was established as well as the criteria of sustainability were defined. The first stage ended with the normative consolidation of the provisions developed earlier at the theoretical level. The second stage of the concept is characterized by further specification of the main provisions.

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Thus, the necessity to more responsible activities was underlined and the need for sustainability actions was defined in the framework of the World Commission for Environment and Development (WCED, 1987). It was emphasized that sustainability can be reached only if actions would be taken on different social levels (Klarin, 2018). Described above numerous actions, plans, strategies, standards, measurement initiatives adopted by international organizations lead to significant result in sustainable development promotion. On the other hand, sustainability principles are also implemented at the national level in most countries. However, local initiatives are usually do not produce significant results and big amount of countries are still on the initial stage of sustainability principles adoption (Klarin, 2018). It is vital to underline the importance of local measurements towards sustainable development and to understand the reasons for the gap between countries in the questions regarding sustainability.

2.2. The role of public sector in sustainable development

Nowadays, most developed countries are integrating sustainable development strategies into their long-term perspectives. However, in recent years, many developing countries have also begun to incorporate sustainable development principles at their strategic planning levels (Wang et al., 2019). While sustainable development practices have received considerable attention for over past three decades, there is a high disparity in understanding and involvement of governments in sustainable development (Rajeev et al., 2017). According to Spaargaren (2011) strategies for implementing measures for sustainable development is not the same across countries due to economic level of development, social-cultural differences, and demographical factors. However, as mentioned above, sustainable development is global in nature and therefore requires the contribution of each country. For the modern world, the problem of such inconsistency is pressing, but very little research has been done on the differences in performance between developing and developed countries.

Wang et al. (2019) states that the focus on sustainable development principles and contribution to the achievement of sustainable development varies depending on economic conditions of a particular country. According to Akenji and Bengtsson (2014) efforts towards sustainable development can be divided into «top-down» (where the state is the initiator) and «bottom-up» (where the private sector is partially responsible for mainstreaming sustainable development into their business processes) activities. Generally, in developed economies there are actively used «top-down» and «bottom-up» activities. National programs are being developed by states to achieve SDGs and maintain sustainable development with nationwide participation. It is also influence that in advanced economies some aspects of sustainability were implemented much earlier (Wang et al., 2019). Production technologies in developed countries that consider

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responsible business activities were implemented years ago and have reduced the environmental negative effects form manufacture processes. In addition, models of responsible consumption of resources and energy have been developed to avoid excessive, wasteful and inefficient resource use (Jonkute & Staniskis, 2016). Hence, apart from «bottom-up» efforts, developed economies are active in «top-down» that is positively affected to sustainability achievement. The «top-down» efforts mainly influence the formation of stricter environmental and social laws in developed countries. Development of new, stricter laws in different spheres results in business activities relocation. The changing economic conditions in developed countries lead to the fact that big amount of companies started to relocate some segments of their production stages to other less developed countries (both emerging and underdeveloped), where environmental and social laws was not properly (Rajeev et al., 2017). According to Rajeev et al. (2017) and Meyer (2004) less developed countries tend to compromise their social and environmental issues because the main goal is to address and support economic growth. Usually, developing countries lack the resources to meet basic needs, resulting in people are facing under-consumption (Clark, 2007). Therefore, national policies are aimed at developing the economy and improving living conditions of citizens rather than addressing environmental or gender inequality issues. (Manohar & Kumar, 2016). In this regard less developed economies are in need to attract foreign investment to stabilize the economic situation. As material wellbeing of population increases, the consideration of social and environmental issues is also increasing (Vergragt et al., 2016). However, in most emerging economies there is no such a broad and clear roadmap how to implement sustainability principles and follow the achievement of SDGs as in developed countries (Wang et al., 2019; Wong et al., 2016). Eventually, in emerging economies predominate «bottom-up» activities, for instance development and realization of Sustainable Development policy strategies (Wong et al., 2016) or implementation of cleaner technologies (Manohar & Kumar, 2016). In some states it is also possible to trace «top-down» efforts, but they are managed in not effective manner and are not implemented properly. However, according to Schroeder (2014) governmental management of sustainable development does not allow these countries to fully recognize the need for change and make a gradual transition toward sustainability.

Political orientation mainly affects how a region, or a country contributes to sustainable development. Policy strategies not only contribute to the country's social well-being and environmental problems resolution but also stimulate private sector to improve sustainability performance and introduce sustainable discloser initiatives (Almagtome & Nima, 2018). The main goal of sustainable development is the rational management of physical, natural and human resources, in another words the balance between economic, social and environmental aspects of society. Accordingly, ensuring sustainable development does not require separate actions on

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introduction of new technologies into business processes or investments into ecology, but a complex transition of the whole society to understanding and implementation of this concept (Klarin, 2018). Promoted by the United Nations, big amount of Resolutions, Declarations, Conventions, and international judicial decisions over the past three decades, have called on governments to adopt the principles of sustainability to the realities of their country. In the face of persistent social and economic crises and volatile political situations, each country has developed its own, mostly unique concept of sustainable development that reveals sustainability challenges (Shevchenko & Litvinskiy, 2007). The main objective of this study is to compare sustainable development practices in developed and developing countries, using the example of the European Union and the Russian Federation. At present, both in Russia and in Europe there are different interpretations of sustainable development that determine their long-term strategies in this area.

Speaking about European Union legislative aspects of sustainability began to be developed already in the 90th. The term «Sustainable Development» was firstly referenced in the Treaty of Maastricht (1993) with a call to sustainable growth, but it was far from the Brundtland definition. Later in 1997 the Treaty of Amsterdam introduced new definition of sustainable development as a «balanced and sustainable development of economic activities» with a clear focus on economy. The most recent document that considered sustainable development as one of the primary goals of the EU is The Lisbon Treaty (2007) (Leptien et al., 2019). However, the first time all tree pillars of sustainability (economic, social, and environmental) was recognized as equal in the Treaty on the European Union (TEU) in Articles 3 and 21 (Hees, 2014). In Article 3 it is stated that EU agenda should be developed under the balanced social, economic and environmental aspects by means of environmental improvement, internal markets enhancement, social justice maintaining and gender discrimination liquidation (Lenz & Borchardt, 2012). It also should be noted that both articles are focused on the international nature of sustainability and EU obligation to maintain developing countries with the main problem poverty eradication and in all tree spheres of sustainable development (Leptien et al., 2019). A third reference, and the most far-reaching if implemented consistently, to sustainable development in EU primary law is the Treaty on the Functioning of the European Union (TFEU) in Article 11. According to this article sustainable development is interpreted as an objective that the EU as an organization should be maintained and followed by means of different policy areas integration. It can be stated that this article emphasizes more the importance of environmental protection. The main idea of this document is that EU should develop environmental protection measures and in order to stimulate sustainable development these measures should be integrated into EU policy-making process (Hees, 2014). All mentioned above documents establish sustainable development as an objective, while one

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more reference to sustainable development that can be founded in the European Charter on Fundamental Rights (EUCFR) in Article 37 considers this concept as a principle (Table 1).

The name of The meaning of sustainable development referenced legislative EU document Article 3(3)–(5) TEU Shows that sustainable development is one of the main goals of the EU as an international organization. The priority is to contribute to global sustainability Article 21(2)(d)–(f) TEU Sustainable development should be maintained via international cooperation and focus should be towards developing countries Article 11 TFEU Integration Principle states that protection of the environment and sustainable development should be considered in all EU policymaking Article 37 EUCFR Sustainable development is a principle that should be integrated in policy-making process Table 1 – The concept of sustainable development in EU law (Adapted from Leptien et al., 2006)

However, in the treaties there is no reference on how Members of State should integrate sustainable development into their strategies, according to the article 11 of TEU particular measures should be elaborated by such law-making EU institutions as the Commission, the Council and the Parliament (Leptien et al., 2019). Despite the above-mentioned legislation addresses the main aspects of sustainable development, they do not provide a clear definition of sustainable development or guidance for its implementation (Lenz & Borchardt, 2012). Therefore, it is necessary to consider rather EU strategic aspects that provide the measures to achieve sustainability.

After Agenda 21 was adopted in 1992, during the winter summit of the European Union Council (1997) the establishment of the Commission aimed at designing a new strategy towards sustainability was done. As a result, European Council in 2001 issued the first EU long-term “Strategy for Sustainable Development (SDS)” that was implemented at all levels with the main goals to support international partnership, to comply with international agreements and maintain political leadership (Jenkins, 2002). According the new strategy there were six major challenges to sustainability: poverty, climate change, threats to public health, an ageing population, the loss of biodiversity, and transport congestion. However, the priorities are effective distribution and management of natural resources, responsible nature use, implementation of the Kyoto Protocol (management of chemicals and care about public health, in accordance with REACH, Reg. EC/1907/2006), development of measures to prevent global warming, improvement of transport systems performance (European Commission, 2001). At the level of Member States, the strategy establishment led to creation of Sustainable Development Councils with the main goal to consult governments and engage in indicator setting and monitoring system (Hees, 2014). In 2006,

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European Council issued the updated general strategy that provided a broader roadmap for EU members for sustainable development support – The Renewed EU Sustainable Development Strategy (Council of the European Union, 2006). In this and other following official documents, sustainable development concept was based on Brundtland Commission (1987) sustainable development definition. At the same time while the previous SDS was focused more on the balance between economic and environmental aspects, in the new EU strategy they also consider social issues. The definition of economic development had been revised to also consider promotion of human rights, public health support, cultural diversity, gender inequality preservation, poverty reduction and other social issues (Kenig-Witkowska, 2017). All these aspects were covered in sustainable development definition of the EU Sustainable Development Strategy: «sustainable development aims at the continuous improvement of the quality of life and well-being on the Earth for present and future generations». The Renewed EU Sustainable Development Strategy document provides eight policy-guiding principles as tools to achieve sustainability in EU (Council of the European Union, 2006):

1. Policy integration and policy coherence. According to this principle, the EU policy should consider all policy objectives related to sustainable development. In other words, EU policies in one sphere should not interfere with other ones, but ideally complement them. (Council of the European Union, 2006; Hees, 2014). 2. Polluter pays principle suggests that «the real costs to society of consumption and production activities and that polluters pay for the damage they cause to human health and the environment» (Council of the European Union, 2006). That is, the potential polluter covers costs of pollution prevention and control (regardless of whether the producer or the state is responsible for this). Also, the TFEU (article 191/2) states that this is EU-wide binding principle for all institutes when enacting environmental policy initiatives (Lindhout & Broek, 2014). 3. The precautionary principle and the taking of preventive action can be used when policy decisions could influence negatively public health or there is a scientific uncertainty about consequences form a certain policy decision. In accordance with this principle "measures based on the precautionary principle must not be disproportionate to the desired level of protection and must not aim at zero risk, something which rarely exists" (De Sadeleer, 2010; Hees, 2014) 4. Using the best available knowledge. According to this principle during the decision-making process towards problems of sustainability the EU members should consider the best available knowledge and that the certain decisions are economically sound and cost-effective (Council of the European Union, 2006). 5. The involvement of business and social partners. The EU considers private business as an important element in achieving sustainable development. By introducing social and ethical

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initiatives, addressing environmental issues, and protecting consumer interests, business can address a number of important sustainability issues (Leptien et al., 2019). 6. The involvement of citizens & creating an open and democratic society. Within the EU it is important that citizens are involved in democratic life of the Union as illustrate in Article 10/3 of the TEU. It also states that “Decisions shall be taken as openly and as closely as possible to the citizen.» (Kenig-Witkowska, 2017). 7. Promotion and protection of fundamental rights. One more important policy-guiding principle that is stated in the EU Sustainable Development Strategy is poverty elimination and human rights protection. In the articles 2 and 3 of the TEU emphasize the relevance of social exclusion liquidation and poverty elimination (Hees, 2014). 8. Solidarity within and between generations. This principle is impossible to perceive as a tool to achieve sustainability, it is more the primary goal that should be followed by Members of States. According to Hees (2014) it is astonishingly that the EU include this as a separate policy-guiding principle

The updated EU sustainability strategy “Europe 2020: A move championing bright, sustainable and broad growth” was adopted in 2010. The new SDS defined five interconnected targets: employment opportunities, R&D spending increase, education of sustainability awareness, environmental targets and poverty alleviation measures. In general, European sustainability targets have shifted form only economic focus to social problems and environmental perspective (European Commission, 2010).

In 2016, the EU response to the international document Agenda 2030 with the Communication “Next steps for a sustainable European future: European action for sustainability” (European Comission, 2016a). In this document, the EU identified two most important areas of work for the effective implementation of the Sustainable Development Goals. Firstly, it was analyzed the most relevant sustainability problems that should be promoted by the EU by means of SDGs framework integration to the European policy priorities. Secondly, the document highlighted the need to assess the outcomes of the SDGs achievement, both in general and at a level of different policy areas (Leptien et al., 2019). According to Kenig-Witkowska (2017) document Europe 2020 and the EU Sustainable development strategy is complementing each other in the SDGs implementation and achievement. The European Commission’s communication document provides a clear overview that EU legislation contributes significantly to the initiatives for sustainable development of the Union (European Commission, 2016b; Hees, 2014). For instance, the Habitats Directive (92/43/EEC) and the Birds Directive (2009/147/EC) are the first nature conservation documents in EU law that can be referenced to the SDG 15 “life on land». These directives aim to protect the environment by 18% of EU land. One more bright example is the

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Youth Guarantee program, 25 and Erasmus funding that are developed under the EU cohesion policy and can be reflected to SDF 4 «Quality education».

The example of the European Union leads to the conclusion that a well-designed sustainable development strategy complicates the work of the private sector in developed economies. On the contrary, in developing countries enhancing the overall economic situation is always the main priority while sustainability has been overlooked over the last decades. Mainly these countries are more focused on “bottom-up” activities (Wang et al., 2019). This can be tracked by the example of Russian Federation strategy for sustainable development.

The first documents that mentioned sustainable development in Russian legislation was the Decree of the President № 236 of 1994 «On the State Strategy of the Russian Federation for Environmental Protection and Sustainable Development», Decree of the President № 440 of 1996 «On the Concept of the Transition of the Russian Federation to Sustainable Development» and the National Environmental Action Plan for 1999-2001 (approved by the Government in 1998). The Russian Federation’s 1996 concept of sustainable development provided a fundamental basis for Russia’s transition to sustainable development. In particular, four main areas were identified: legal (changes in legislation in the field of natural resources management and environmental protection); economic (promotion of responsible natural resource management), environmental (assessment of the capacity of ecosystems) and educational (Oldfield, 2001). The important provisions on indicators of sustainable development were stated in section V of the document in order to track the changes in sustainable development: quality of life; level of economic development; and level of environmental well-being. The 1996 Concept of sustainable development in Russia distinguished main lines of Russia’s domestic policy on the transition to sustainable development, but with the domination of ecological approach (Bobylev & Perelet, 2013).

The ecological approach in Russia should be considered through the analysis of some strategic national documents. Firstly, the Environmental Doctrine of the Russian Federation of 2002 views environmental management in the context of equitable access to natural resources for present and future generations, as well as decelerates the use of natural resources only on a fee-for- service basis. Another dimension of environmental management is the fullest possible extraction of minerals and biological resources, minimization of waste during mining and processing (Henry, 2009). The second document is Federal Law «On Environmental Protection» that was also issued in 2002, which introduced the term «rational use of nature» into the system of ecological and natural resources legislation of Russian Federation. It was also included a large number of

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secondary legislation and methods, supporting the implementation of sustainable development and rational environmental use (Gladun & Zakharova, 2017, Sudas, 2017).

Since the 1998 default, Russian government has been actively pursuing the ideas and principles of sustainable development. The Federal Law of 2000 «On Environmental Protection», the Ecological Doctrine (approved by the Government Decree in 2002) and a series of strategic documents on individual directions were adopted. Specific measures have been taken to improve social and environmental situation. For instance, in 2005, Russia ratified the Protocol of the Kyoto Conference of the Parties to the United Nations Framework Convention on Climate Change of 1997. According to this document, Russia should keep its greenhouse gas emissions at the level of 1990 (Garbuzova & Madlener, 2012). In the same year, the UNDP office adopted the Millennium Development Goals of the 2000 UN Millennium Summit to Russian realities. However, the global financial and economic crisis in 2008-2009 has slowed down Russian transition towards sustainability, as well as in many other countries of the world. Attention to the concept of sustainable development in Russia has been further strengthened by the preparations for the United Nations Conference on Environment and Development, in 2012. In 2011, the National Agency for Sustainable Development was founded and in April 2012, the State Policy Framework for the Environmental Development of the Russian Federation for the period up to 2030 was approved.

After UN Sustainable Development Goals adoption, the activities of various agencies in the field of SDGs were coordinated by the Interdepartmental Working Group under the Administration of President on Climate Change and Sustainable Development (Bobylev & Grigorev, 2016). In 2016, together with the federal executive authorities, the working group analyzed the consistency of the SDG and objectives of the Russian policy documents for the period 2007-2016. The Working Group reviewed the consistency of the Russian Federation’s policy documents with sustainable development goals. The issued Human Development Report (2016) stated that Russian strategic documents in force, including those adopted in 2017 (the Economic Security Strategy and the Environmental Security Strategy) are not fully cover sustainable development principles and require further action to integrate the content of the SDGs into national development agenda. Importantly that Russian government has not adopted documents dedicated specifically to the implementation of SDGs. Most of national sustainable development objectives were implemented through the State Programs of Social and Economic Development (Government of the Russian Federation, 2015).

The President’s message in 2018 and to the Federal Assembly and the May Decree issued in 2018 reflected the urgency of implementing the SDC’s in Russia (Message of the President of the

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Russian Federation, 2018; Government of the Russian Federation, 2010). The objectives set out in these documents are linked to the UN Sustainable Development Goals and underline the importance of integrating the SDG into strategic planning documents. May Decree of 2018 is a policy document defining a strategic goal to advance the scientific, technological and socio- economic development at the national level, by increasing real incomes of citizens, halving poverty, improving the living conditions of 5 million families every year, creating conditions and opportunities for the self-realization. It is planned that the goals of the May Decree 2018 will be achieved by 2024 through national projects in 12 strategic development areas (Government of the Russian Federation, 2018) in demography; health development (SDG 3); education (SDG 4) Housing and urban environment (SDG 11); environment (SDG 13, 14, 15); safe and quality roads (SDG 9); productivity and employment support (SDG 8 and 9); science (SDG 4, 6, 7, 8, 9, 11, 12, 13, 14, 15); digital economy (SDG 8 and 9); culture (SDG 4, 8, 9); support to small and medium enterprise development and Self-employment (SDG 2, 3, 8, 9); development of international cooperation and exports. Some of the projects have been transformed from the already existing priority projects in health care, education, housing construction since 2016 or the new projects have been launched, such as in the digital economy.

Russian government is currently implementing separate initiatives towards sustainable development that are related more to environmental context, mainly natural resources management. Such a one-sided approach would not yield meaningful results in achieving the SDG and would in the long-run perspective cast doubt on the chosen strategy. This approach slows down Russia's progress in sustainable development achievement and leave Russia on the bottom positions in Sustainable Development Index rank among other countries. Furthermore, the chosen strategy does not develop the great potential of the Russian possible contribution to global problems resolving, and in addition has negative impact on Russian economic stability.

Thus, it can be stated that national strategies and legislation in the field of sustainable development are the main national instruments for regulating the achievement of sustainable development. Through these instruments, states are engaging private sector and citizens in achieving sustainability. New legal instruments enable private sector to rethink their business strategies and to incorporate sustainability principles into their business processes. Therefore, private sector also received a significant part in sustainable development enhancement.

2.3. The role of private sector in sustainable development

Sustainable development concept is global in nature, however main drivers of sustainability are not only international organizations, funds and states, but also private sector (from large multinational companies to small and medium-sized enterprises) (Nagel et al., 2017; Caiado et

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al., 2017; Miklian, 2019). Initially, the main contribution of business to the country’s economic growth was job creation and tax payments. However today, commercial sector has enlarged, reinforced and integrated role in the practical implementation of Agenda 2030 and Sustainable Development Goals (Sudas, 2017). According to experts’ estimates, the SDG achievement requires annual funding of $5-7 trillion. The resources that the world’s governments are able to provide are about $132 billion per year. (Sustainable Stock Exchanges Initiative, 2016) Thus, business and renewed financial markets that can deliver responsible financing for sustainable development will have to play a key role in financing the achievement of the SDGs. Companies that place environmental, social and managerial performance (ESG criteria — environmental, social and governance) and ESG-investments at the center of their business strategies could take the lead positions in this matter (Hiss, 2013; Nagel, et. al., 2017).

Investors and portfolio managers have become more interested in factors such as exposure to climate change risks, natural resource efficiency, product safety and quality, fair labor practices when assessing investment potential of a company. In order to attract funding, it becomes useful for companies to report on a wider range of factors, including ESG-criteria (Louche & Hebb 2014; Nagel et. al., 2017). In 2011, only 20% of S&P 500 companies reported on ESG, while in 2015, the share increased to 81%. 30 of the world’s 50 largest countries already have mandatory ESG reporting requirements (Sustainable Stock Exchanges Initiative, 2016) For instance, in 2014 the Council of Europe issued the Non-financial Disclosures Directive stating that non-financial reporting is the obligatory requirement for all EU companies and this document should be adopted and introduced into the legislation of the EU members. As a result of legislative regulation, non- financial reporting becomes the norm in vide range of countries (Sudas, 2017).

The world’s largest sustainable development initiative for private sector is the United Nations Global Compact. The UN Global Compact currently account 13,500 companies and organizations from 170 countries and 88 national networks, including the National Network of the UN Global Compact in Russia based in the Russian office of UNDP (UN Development Program) (since 2008) (Orzes et al., 2020). Companies that join this initiative commit to a sustainable open economy and open business community and align their business model with the socially relevant goals (UNGC, 2017). The main mission of the UN Global Compact is to stimulate companies to organize their business operations in the context of corporate responsibility and understanding the correlation between their commercial perspectives and activities in environmental and societal improvements (UNGC, 2017; Orzes et. al., 2020). As stated by Rasche et al. (2013) and Orzes et al. (2018), the Global Compact initiative brings big amount of potentially useful outcomes for private sector such as reputational effects, investor attraction and environmental and social activities development. Global Compact is a voluntary initiative, it does not control its participants, but it provides some

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measures of companies’ involvement in sustainable development movement and their compliance with obligations and commitments according to this pact. The monitoring tool is the annual progress report (about non-financial activities, sustainable development, etc.) in collaboration with the Global Reporting Initiative (GRI) where a company should report in detail on its activities in accordance with the 10 principles and priorities of the UN Global Compact (Gleeson-White, 2015; GRI, 2015).

The UN Global Compact network in Russia is a part of the European regional network. Since 2016, it conducts 50-60 different activities in the field of sustainable development per year. Almost 80 participants from 16 regions of Russia concluded an agreement with the United Nations (Sudas, 2017).

In 2016, the UN Global Compact together with Accenture conducted a survey of CEOs of major global companies. The findings helped researchers to conclude that business leaders are ready to accept a mandate for global development actions. Business leaders are already reorienting their companies to create values not only for their shareholders, but also for society and sustainable development. 70% of CEOs confirmed that SDGs could be a clear basis for structuring efforts towards sustainability. Moreover, it is noted that since the research conducted in 2013 «frustrated expectations have given way to optimism, with which CEOs view the mandate to solve social problems as a key element in the search for competitive advantages» (Hayward et. al., 2013). Thus, business leaders use the UN SDGs as a universal «road map» for actions and accept the need for radical changes (UNGC, 2016).

Moreover, financial market incentives could make the transition to sustainability investment a stable trend. According to Morgan Stanley Institute for Sustainable Investing research made in 2015, a growing number of investors are mastering sustainable investment: in 2012, 1 out of 9 dollars of professionally managed assets were channeled into various forms of sustainable investment, while in 2014 - already 1 out of 6 dollars, for a total of $ 6.57 trillion. In Europe, more than 60% of professionally managed assets are already covered by sustainable investment strategies (Sudas, 2017). Researchers have noted growing interest among institutional investors in climate change and sustainable development investments (Rajeev et al., 2016; Caiado et al., 2017; Nagel et al.).

A financial system capable of both sustainable economic growth and the achievement of SDGs, combining profit maximization with the achievement of long-term economic, social and environmental goals, is gradually being established. There is a direct statistically significant correlation between sustainable development performance of companies and their financial

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outcomes (Ganson, et. al., 2019; Miklian, 2019). In 2017, another PwC flagship survey was conducted, involving about 1,500 top management worldwide. The aim of the project was to identify key trends and patterns in the world economy that influence important decisions of enterprise’s management. According to the survey, 74% of CEOs felt that an integrated presentation of the company’s performance (both non-financial and financial) contributed to its successful long-term development (PWC, 2017).

It can be stated that corporate commitment to SDGs is becoming not only a market value but also a moral imperative. According to the research «Investor Resilience» conducted by the Morgan Stanley Institute for Sustainable Investing, 72% of individual investors believe that companies are profitable to focus on sustainability. The study revealed gender differences in investment preferences: 76% of women and 60% of men consider SDGs to be important factor for business when making investment decisions. The so-called Millennium generation (the age group 18-32 in this study) also shows a greater commitment to sustainable investment than average sample. They tend to seek employment in socially and environmentally responsible companies three times more often than people in other age groups, at twice to invest in companies or funds with specific social or environmental objectives and also at twice are more oriented in their consumption to the brands of ESG-responsible companies etc. (Morgan Stanley Institute for Sustainable Investing, 2015a). According to Orzes et al. (2020) as generations change in business, the transition to sustainable development will accelerate and private sector has to perform better withing the ESG criteria and build their business strategies as of socially responsible business.

This trend is sustained and reinforced also by the changes in public attitude towards different social institutes. According to 2017 Edelman Trust Barometer, the 17th Annual Trust and Reputation Study conducted in 2016 by the world’s largest PR company Edelman, confidence in all institutions - government, business, the media and non-governmental organizations - has fallen to the lowest level ever. None of these social institutions are in the confidence zone (more than 60% of respondents with a positive attitude) among citizens of 28 countries around the world. According to the research, non-governmental organizations and private sector can be classified to the neutral zone of confidence (50-60% of respondents have positive attitude). In the zone of distrust (below 50%) is the media (43%, in 17 countries, trust has reached a minimum) and authorities (41%, in half of the 28 countries studied, authorities are the least trusted). The study confirmed that the credibility of the government authorities is declining: in 14 countries there has been a loss of confidence in authorities; in 21 countries (75%) authorities do not trusted, only in 5 countries public trust in government authorities and in 2 countries there is a neutral attitude. The attitude to business is also not trustworthy among respondents: 18 countries have lost confidence

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in business; 13 countries maintain distrust; 8 countries trust private sector; and 7 countries maintain neutrality.

More than half of the population (53%) has lost confidence in the global system with the feeling that it does not work properly to maintain their well-being and there is no chance for sustainable development. Due to major changes in economic and social spheres, respondents are concerned about the following problems related to private sector: loss of jobs due to the effects of globalization (60%); loss of jobs due to the lack of training or personal skills for implementing innovations (60%); loss of jobs due to big amount of immigrants working for small salaries (58%); loss of jobs due to cheaper markets outsourcing (55%); and loss of jobs due to automation (54%). At the same time, of the four institutions, business is seen as the only one that can make a difference (Edelman, 2017). Therefore, according to the respondents, business leaders should intensify work on issues that are vital to society. Three out of four respondents agree that «companies can take measures to increase profits and improve economic and social conditions in the community where they operate».

Accordingly, private sector takes the biggest part of the common responsibility for creating a better world. At the same time financial markets should provide incentives to ensure the transition to responsible investment for sustainable development.

2.4. Sustainable development indicators and indexes

The concept of sustainable development can be perceived as a tool for improving social well- being. As a result of Sustainable Development Goals establishment, it became necessary to monitor their achievement (Morgan et al., 2008). However, as was mentioned above, sustainable development is global in nature, so it is difficult to control progress towards its goals. At the same time there is general consensus about complexity, uncertainty and multidimensional character of sustainable development, which requires an in-depth analysis in the framework of different magnitudes (time, space, function), multiple players (economic, social) and diverse systemic interrelations (Kemp & Martens, 2007). The establishment of a unified system of sustainability indexes was necessary in order to track the progress of sustainable development and optimize decision‐making processes under the consideration of its three dimensions: social, economic and environmental. Therefore, since 2016 there has been a flood of research literature with authors proposing their own models for calculating sustainability indicators and guidelines for implementation of such models (Kroll, 2015; Costanza et al.; 2016; Allen et al., 2017). However, despite all the efforts of many national, international organizations and governments there has not

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been theoretical consensus on how to measure current well-being or sustainability (Hak et al., 2015).

The UN Statistical Commission with the High Level Expert Group on SDGs indicators and the various repository agencies (such as UNEP, OECD, etc.) work with different stakeholders for the statistical coverage of the indicators, which classifies the UN official SDGs indicators on the basis of their level of methodological development and data coverage. Thus, as part of the development of 17 SDGs and 169 targets, the United Nations General Assembly agreed that their achievement should be monitored and tracked through the Global Framework for the Sustainable Development Goals, which was accepted by the United Nations Statistical Commission in March 2016 (Diaz‐ Sarachaga et al., 2018). Global Framework for the Sustainable Development Goals currently includes 232 indicators grouped based on ESG criteria and divided into in three tiers according to statistical value, calculation methodology and data availability. The parameters included in the Global Indicator Framework can be divided into several groups. Each group constitutes a set of indicators characterizing a particular aspect of society's performance in achieving the SDGs. It should be noted that almost all indicators included in the Global Indicator Framework were borrowed from existing evaluating systems (Bell & Morse, 2004).

• Human development index (HDI) evaluates tree dimensions, namely life expectancy and health, level of living conditions and educational accessibility. There are four levels of human development categories according the HDI: very high (>0.8), high (0.7–0.799), medium (0.55– 0.699) and low (<0.55) (Diaz‐Sarachaga et al., 2018). • Environmental sustainability development assessed by several indices. The most popular one is Ecological Footprint (EF) that shows the Earth’s surface that is needed to provide required the natural assets consumption by current population (Wackernagel, 1994). Another one is the Living Planet Index (LPI) developed by the Worldwide Wildlife Foundation (WWF) and the Zoological Society of London (ZSL) that evaluates state of the Earth’ natural diversity on the basis of approximately 18,000 vertebrate populations analysis (WWF, 2016). The most recent one is Environmental Performance Index (EPI) that includes more than 20 indicators (on environmental protection and human health analysis). In the framework of EPI calculation 180 nations are ranked and compared regarding their environmental performance (Diaz‐Sarachaga et al., 2018). • Human wellbeing Index (HWI) evaluated the quality of life on the basis on 36 indicators, which cove health and population, wealth, knowledge and culture, community and equity. • Among urban sustainability indices the most recent once is City Prosperity Initiative (CPI) that is based on spatial analyses that can support local, regional and national decision‐makers (UN‐Habitat, 2015) and the Wheel of Urban Prosperity (Janouskova et al., 2018).

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• Economic sustainability indices mostly include GDP as an income framework and are adjusted by adding or subtracting non-economic values. For instance, Measure of Economic Welfare (MEW) metric excludes valued environmental degradation, while add valued leisure time and unpaid work for GDP. Further Daly and Cobb (1989) had modified the MEW to the Index of Sustainable Economic Welfare (ISEW) adding into analysis the value of diminishing natural resources and costs of ecosystem damages (Janouskova et al., 2018). Another one is the Genuine Progress Indicator (GPI), which is also based on GDP but includes additional adjustments such as inequality, crime costs, consumer durables, public infrastructure, volunteering and household works (Talberth et al., 2006).

After publication of Global Indicator framework for the SDGs and targets of the 2030 Agenda for Sustainable Development, it was agreed, that based on this framework the SDG Index and Dashboards report would be published every year since 2016 (Allen, et. al., 2017). This report represents the calculation of the indicators selected by the committee regarding data availability on publicly available official databases (World Bank, WHO, ILO and others) and represent each SDG on a scale of 0–100. The main aim of this report is to summarize the achievements in the field of sustainable development for all countries and provide the tendencies in terms of each goal (Diaz‐Sarachaga et al., 2018).

Despite the fact that Global Indicator framework for the SDGs has been formally adopted at the global level, it is not the only indicator system in the world that can measure progress towards sustainable development. There are alternative baselines for measuring SDG achievement. There is a big amount of SDIs frameworks, initiatives, systems and metrics aiming to collect, process and analyze big data for more effective sustainable development policy solutions. Such abundance of different ways to measure sustainable development has resulted in a lack of consensus among experts in the field on the best approach to develop, use and analyze existing SDI models (Strezov, 2017).

In terms of private business' sustainability analysis, there are also key indicators that can assess company's activities in terms of commitment to sustainability. For example, at the end of the 20th century, significant number of indices was designed to assess economic performance of companies that met certain sustainability and corporate social responsibility requirements. These indices became the tools of financial institutions: firstly, to define this benchmark for companies involved in sustainable development initiatives; secondly, to become a guide for investors in their investment decisions the ESG aspects (Environment, Social, Governance) (Batista et al., 2018). The homeland of the sustainable development concept is the USA, so the American company Dow Jones developed the first Sustainability Index (SI) in 1999. Later CSR index was published

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by the second American Calvert fund, and already in 2001, the British company FTSE launched the first European index FTSE4Good (Yu & Zhao, 2015). Today, there are many companies that issue their own sustainability index. Namely, they are developing their own methodology for assessing certain indicators, as well as selecting companies that will be analyzed. Usually, companies are ranked based on their results in economic, environmental and social areas. Due to differences in methodologies, it would be relevant to consider the most popular sustainable development indices in the world:

• Dow Jones Sustainability Index series (DJSI) is the most influential among investors in the global sustainability rating and responsible business activities. The index assesses the financial performance of the world's leading companies in terms of main sustainability principles and evaluates general and industry-specific criteria, taking into account the latest economic, environmental and social trends. This index is based on a very comprehensive questionnaire that tracks enterprise performance in 20 different categories, starting with business activities and ending with environmental and social responsibility. • Calvert Social Index (CSI) is a stock index created by Calvert Investments as a benchmark of American largest companies that are considered socially responsible or ethical in 2000. It currently consists of 680 companies weighted by market capitalization selected from among the approximately 1,000 largest publicly traded companies in the United States using Calvert's social criteria. These criteria relate to the environment, jobs, product safety, public relations, arms contracts, international operations and human rights. • FTSE4GOOD Index created in 2001 by FTSE Russell, a data provider of the London Stock Exchange, and assigned to organizations with a strong environmental, social and corporate governance performance. The Index is designed to evaluate issuers' environmental, social and governance practices (ESG) based on an analysis of more than a hundred indicators, including labor relations, human rights, impact on local communities, anti-corruption measures, responsible supply chain management, climate and environmental impact. • FTSE Johannesburg Stock Exchange Socially Responsible Index (JSE SRI) was launched in 2004. The main goal was to promote the responsible approach among private sector in emerging markets in addition, to running socially responsible business the basic selection criterion for companies was the respect for human rights. • Sao Paolo Stock Exchange BOVESPA has developed and launched two sustainability indices in 2005. The ISE Index (Corporate Sustainability Index) shows the profitability of sustainability-oriented companies and is one of the leading sustainability indices in Brazil and in the world. To be included in the index base, issuers participate in a competitive selection process. The second index, IC02 (Carbon Efficient Index), tracks the profitability of stocks issued by 1BrX-

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50 companies that agree to participate in the IC02 index by committing to provide greenhouse gas emissions data. These indexes were launched with the aim to promote CSR amongst Brazilian companies

Speaking about Russian practices in this area, the concept of sustainable development is a comparatively new topic for Russian business. After Russia joined the UN GC, a new state body, the Russian Union of Industrialists and Entrepreneurs (RUIE), was formed. In 2014, the Moscow Exchange and RUIE launched the calculation of 20 sustainable development indices based on the analysis of the largest Russian companies in the field of ESG (Environmental, Social, Governance): "The MosEx Index - RUIE Responsibility and Openness" and "The MosEx Index - RUIE Vector of Sustainable Development".

It should be noted that research into the quality and level of sustainable development of various stakeholders is very relevant for current development. The considered above rating systems helped experts to conclude about the quality of life, the level of sustainable development, the presence and absence of growth in a particular country. The monitoring of the quality of life provides the basis for regulatory measures in the relevant areas of economic and social policy.

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2.5. Synopsis

This chapter was designed in order to summarize the information obtained from the literature review and to answer the related research question of current study. International institutions and their initiatives described in paragraph 2.1 are ideological representatives of sustainable development and are initiators of this complex process discussion. However, due to lack of power and resources, they cannot directly influence the effective global transition to sustainable development and rapid achievement of the SDGs. Hence, the drivers of sustainability are governments (with their internal strategies) and businesses (with their voluntary initiatives and commitments under national legislation).

In order to address the first research question “What are the differences in legislation/policy strategies of developed and developing countries in sustainable development?” a comparative study of governmental sustainability initiatives was conducted, on the example of the EU and Russia. According to the literature review, each country has an individual approach to implementing and achieving sustainable development mainly due to different levels of economic development. In Russia and the European Union, the range of legislative measures and goals aimed at implementing SDGs are set out in special national documents. Distinctive features of such documents are an adoption of the SDGs to national and regional specifics, establishment of responsible executive authorities, designation of targets/indicators for monitoring and setting specific deadlines for SDGs implementation and achievement.

The EU legislation can be characterized by a balance of economic, social and environmental aspects of the SDGs within the framework of sustainable development policies. The provided review of EU legislation shows that when primary law is not sufficient, it is complemented by Sustainable Development Strategies (SDS), the Lisbon process, and now by the structured implementation of the SDGs, which all provide guiding principles. The political strategies, in this case, are very useful additional tools to achieve sustainability, as they formulate specific goals measurable with the set of indicators. Moreover, EU legislation considers not only national, but also international sustainability objectives. According to the documents reviewed as part of the EU SDS, Members of State should address issues and challenges of less developed counties and support them in achieving SDGs. Even though EU’s current approach towards sustainable development designed in effective manner, there is one disadvantage: it mainly requires the implementation of a decision-making process, while it does not guarantee that this process also has a sustainable outcome. In general, the EU's political strategy for sustainable development is advisory in nature and provides a basis for the development of national sustainability strategies in the EU Members of States.

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Russian first attempts to introduce sustainable development concept were initiated much later than in the EU. Form todays perspective Russia had already introduced many initiatives, which are similar to those in the EU sustainability legislation. Nevertheless, it is not a systemic approach that merges social, economic and environmental aspects of sustainable development as currently Russian national sustainability strategy address mostly environmental challenges. It can be stated that Russia has huge potential to make national Sustainable Development Strategy more effective. Based on the findings of the accomplished comparison there are several recommendations for Russia. Firstly, it would be relevant to implement principles such as polluter-pays, preventive action, precautionary etc. because they help to maintain the balance in sustainability initiatives implementation. Secondly, as a communication channel and as an instrument to address the needs of all stakeholders the establishment of separate committee is needed. Currently, there is no such mechanism for public participation in the formation of state policy on sustainable development. Moreover, as sustainable development is global in nature Russian legislation should consider not only national but also international objectives.

With the aim to address the first research question the literature review was conducted. The considered sources helped to identify following dissimilarities in approach towards sustainable development in European Union (as a developed region) and Russian Federation (as a developing country):

• Russian approach does not properly cover all three dimensions of sustainability: social, environmental, economic, while European strategy does; • The EU initiatives address not only national but also global sustainability objectives, while for Russia only internal issues are in the main focus; • As a part of EU sustainability strategy, the dialogue with all stakeholders is build, while in Russia public participation in sustainable development is very limited; • Compared to European, in Russian legislation there is a lack of tools to achieve sustainability (such as policy guiding principle).

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3. Methodology

The aim of this chapter is to provide the conceptual framework of current study, to build the methodological background for future analysis and to describe ways on how the objectives are going to be addressed and the main research question answered. The main objectives of current research are: (a) describe and compare practices of developed and developing countries in the field of sustainable development; and (b) reveal the possible differences in approaches towards sustainability base on the case study of airline companies in European Union and Russian Federation. An important part of this chapter is the explanation of rationale for the chosen methodology, as well as relevance of selected cases. The research plan would be provided with the detailed cases and units of analysis description.

3.1. Case study approach

The analysis of multiple case studies was chosen with the aim to make a comprehensive research on how sustainable development practices are implemented in counties with different economic development. The purpose of current case study analysis is to compare the practices of developed and developing countries towards sustainability issues and to provide the clear overview on differences in approaches of particular regions.

The case study is typically qualitative research as it usually underlines the importance of present conditions while identifying social realities (Yin, 2009; Stake, 1995). It is widely used in social sciences as an inquiry that can help to generate qualitative data for a particular situation under consideration (Thomas, 2011). There are three research purposes to conduct case study: exploration, description, or explanation of a phenomenon (Yin, 2009). There is no consensus about the single definition and typology of the case study. According to Jacobsen (2002) case study is a research about a person, unit, event, which is aimed to summarize findings about several units. The case study can be also defined as an analysis of systems that are studied with a comprehensive view through single or multiple approaches (Thomas, 2011). In the framework of this research the more relevant definition of a case study approach is the one that was offered by Hyett et al. (2014): «explores a real-life, contemporary bounded system (a case) or multiple bounded systems (cases) over time, through detailed, in-depth data collection involving multiple sources of information». Thus, this approach is beneficial when there is no clear understanding of relation between the phenomenon under consideration and its wider causal link (Yin, 2009). In most cases, case studies are open-ended and are applicable for the problems when it is impossible to find single solution (Eisenhardt & Graebner, 2007). According to Yin (2009) case

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study approach usually seeks to answer the questions “why”, “what” “how” a specific situation occurs and exists.

In order to better cover the problem of inconsistency of approaches towards sustainability in developed and developing countries the multiple case study was chosen. According to Baxter and Jack (2008) multiple case study is a better method to identify and evaluate similarities and differences between cases. The main objective of this method is to replicate the outcomes form the case study based on the theoretical background (Yin, 2009). Multiple case study methodology has its advantages and disadvantages. By means of this method it is possible to generate and analyze information form two perspectives: within each setting separately and across both settings (Yin, 2009). Also, according to Baxter and Jack (2008) the evidences that are generated for this type of design are more reliable and robust. Another strong advantage that comes from multiple case analysis is that the outcomes are more convincing as they are substantiated by several empirical evidences. The multiple case method involves the conduct of comparative analysis with generation of similarities and distinctives that are backed by scientific literature (Vannoni, 2015). Thus, this approach enables to investigate the problem form different perspectives and trace theoretical evolution across topic under consideration (Eisenhardt and Graebner, 2007).

However, it is necessary to consider some disadvantages and difficulties that may arise when using multiple case study method. According to Gustafsson (2017) the hardest part is to present the findings after multiple case analysis. The outcomes should be carefully structured with a thoughtful research design and submitted for the reader in understandable manner. It is vital that a report on a case study should be applicable for the reader’s own situation (Stake, 1995). Eisenhardt and Graebner (2007) consider reliable case study as a research that provides relevant information for the reader (or the rich evidence base), especially graphs, figures, and tables. Gustafsson (2017) says that case study analysis needs to be focused on the main research question and deals with research objectives while redundant information should be avoided. An important part of the analysis is to compare the obtained data with the theoretical base to check the data validation. According to Yin (2009) this is achievable if the scientific audience or object was identified properly.

3.2. The rationale of case study methodology

The chosen methodology is an important part of any study as it linked the collected data and final conclusions made in order to answer main research question (Rowley, 2002). According to Yin (2009, p.14) case study methodology is “an empirical inquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon

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and context are not clearly evident”. In order to understand the differences between how developed and developing countries incorporate sustainable development within their business activities it would be relevant to consider same cases in one sector. The current study enables the researcher to analyze the real-life cases of aircraft companies in developed and developing countries consider their sustainability strategies and approaches as well as reveal the reasons of approaching particular sustainability strategies (Marshall & Rossman, 2006). Questions ‘how’ and ‘why’ and “what” helps to analyze the chosen sustainability methods of each considered entity. The choice to use the multiple case study can be also explained by the fact that it helps to investigate the same phenomenon through several perspectives (in the case of this research form two perspectives). Such method also substantially helpful when a research is needed to reveal similarities and differences between two phenomena (Yin, 2009).

Also, multiple case study was selected based on three characteristics of current research that are presented in the Table 2. The posed research question is the “what”-type, which does not contradict the theoretical basis for the use of this methodology; the study aims at examining contemporary events, but not the historical chronology; and it is designed in order to reveal the evident-based conclusions but not to influence or control events or behaviors.

The research question Current research question is: According to Yin (2009) the case What features characterize approaches to study methodology is an appropriate sustainable development in countries with strategy if the research questions are emerging and advanced economies in the ‘how’, ‘what’ and ‘why’ context of the aircraft industry? Case study implies that there is no Current research aims to analyze the possibility to control or influence differences in approaches towards over the event sustainability in countries with different economic development. So, it is no chance to control these differences or change them by means of this research

For case study analysis it is better Current research will consider the real-life the real-life context of the context of the sustainable development researched event concept adoption in Russia and EU in the context of the aircraft industry.

Table 2 - Key characteristics that explain the choice of case study method (Adapted from Yin 2009)

It is important to note that big amount of research on sustainable development was made based on case study methodology. For instance, Lavrinenko et al. (2019) made a research that confirms the positive relationship between economic growth and green initiatives promotion. The authors revealed the positive effect of “green economy” in sustainable development achieving by using the case study of EU countries’ the innovative “Quintuple Helix” model assessment that linked the natural environment with economic stability. The multiple case study design was used to elaborate

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on how companies introduce sustainability principles into project management of particular company. The analysis of four companies form Brazil and USA form different industries revealed that most companies consider the importance of sustainability initiatives however there is still a strong gap in implementation of such activities in practice (Martens & Carvalho, 2016). Thus, the multiple case study methodology is considered as the best way to answer the main research question and elaborate on objectives of current study.

3.3. Case selection

Case selection it the baseline for the current research. According to Miles and Huberman (1994, p. 25) case is “a phenomenon of some sort occurring in a bounded context”. The case is the selected situation or entity and its accompanying components to be analyzed in the study. Accordingly, case selection should be based on facts and characteristics form empirical literature and take into account the research problem that has been formed by research questions. In addition, Miles and Huberman (1994) explain that the case forms the framework of the analysis, in other words also defines what will not be examined in the research. For this research some of the principles offered by Miles and Huberman (1994) would be followed in order to choose cases correctly:

• Selected cases should respond to conceptual framework and the research questions; • Selected cases should reveal the contextual data about phenomenon under consideration; • Selected cases should reveal credible outcomes and interpretations.

This master thesis aims to study differences in sustainable development strategies of countries with different level of economic development and how it influences internal corporate policies in airline companies. Airline industry was selected as a main object for investigation for this thesis, as it can be evaluated as one of the most controversial sectors in transportation sector. The air transport sector is the main vehicle for not only tourism activities, but also for volunteering, job creation and investment attraction in facilities for destitute and neglected individuals (Chan & Barry, 2005; Park, 2019). However, it has undeniable effects on social and natural environments such as air and noise pollution are negative consequences for society (Cowper-Smith & de Grosbois, 2011). Airline industry emits approximately 5% of greenhouse gas and it will influence climate change more as air transport is growing. Russia and European Union were chosen for the analysis because this master thesis elaborated in the framework of double degree program of two universities in Russia and Austria. Moreover, Russia and EU are the bright examples of developing and developed regions. According to literature review made in the second part both regions have sustainable development policy strategies and are actively integrated sustainability principles.

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According to SDG Index and dashboards report (2018) the first ten places in the SDG Index rank are of countries members of the EU (Figure 6) and Russia is on the 57th place.

Figure 6 - Rank of countries according to SDG index (SDG Index and dashboards report, 2018)

Figure 7 explains the four basic types of case studies and it could help to elaborate on the case selection for current research. As mentioned above this research would be based on multiple case study design. Yin (2009) suggests that multiple case study should contain several contexts of the analysis. Based on the research question two contexts were developed: Sustainable development in European Union as a developed region and sustainable development practices in Russia as a developing region. As a main subject of the case study, the airline industry was selected with units of analysis being 6 airline companies coming from the EU and Russia. The main advantage of this is that on the one hand such approach compares the contexts which answers the main research questions but also compare within the cases (if there is any difference among the airlines in the region).

All companies have their own measures in order to achieve sustainable development and implement Corporate Social Responsibility practices. However, one could assume because of the economic conditions, the cultural differences, and some historical background that there is inconsistency of approaches towards implementing such strategy.

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Figure 7 - Basics types of case study methods (Yin, 2009) 3.4. Data collection

Current research was mainly elaborated on the basis of secondary data sources such as Internet, annual reports, presentations, articles, or airlines’ websites, which were considered. Current sustainability practices, strategies and policies of each selected company were evaluated in the framework of this research. Obtained information was used to compare the approaches within companies form countries with different level of economic development. It can be stated the secondary data used can be called an unobtrusive measure, because there is no need for the researcher to contact and cooperate with subjects (Marshall & Rossman, 2006; Yin, 2009). The main advantage of secondary sources is the easy access to all needed information via Internet, media, and libraries (Marshall & Rossman, 2006; Yin, 2003). Based on the background of the collected data the analysis of selected companies was made which provides valuable information for future comparison of sustainability practices in European and Russian companies.

The main aim of this research is to show strengths and weaknesses of European and Russian regions in sustainability practices. The comparative study will help to ‘benchmark’ sustainability practices of developed region with those of developing one. In current study European Union was chosen as a ‘benchmark’ because most member of states are currently the world’s leader in sustainability. Russian Federation was chosen as the alternative to compere and the researcher have a better overview of attitude towards sustainability in Russia being Russian. Case study

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comparative analysis will show the cross-case patterns where it would be possible to compare outcomes of multiple cases. At the end of the research there will be revealed differences and similarities across cases (here between the two EU and Russian cases in airline industry) (Eisenhardt, 1989). Moreover, the reason to choose the comparative study approach is that Russian stakeholders can employ the results to improve the approach to sustainable development and borrow some tools from the experience of European countries.

3.5. Framework of empirical study

The concept of sustainable development is a relatively new phenomenon and very complex research topic. The discussed above reasons for the need to implement sustainability into all spheres of social well-being are pressing. However, the transition towards sustainability is a complicated task for all parts of society. Both public and private sector should take a responsibility to continuously support sustainable development as well as to promote new sustainable development goals. States should develop a sustainable development strategy that corresponds to a country's real concerns, provide national monitoring systems to achieve sustainable development, and progressively incorporate sustainable development principles into legislation. In turn, business community must contribute to sustainable development through investment in initiatives, embed corporate social responsibility in companies' internal strategies, and operate with integrity under new laws. Even if big amount of sustainability initiatives has already been done all over the world, there is still the question on how to implement this concept evenly across all regions (both developing and developed). Some developed regions have already achieved a great success in the framework for SDG while developing countries have other targets and overshadow sustainability issues. This incoherence in approaches leads to a slowdown in the achievement of the SDGs and the resolution of many important problems in the modern society.

In the framework of this master thesis sustainable development would be considered form the perspective of developed and developing countries. How they are implementing this concept into their policy principles, into their legislation and how it is influence private sector. As it was already discussed in previous part, there is lack of the comparative research of the practices towards sustainability in countries with different level of economic development and it would be relevant to examine, which aspects of sustainability are integrated similarly and which are differentiate form country to country. Described in the first part sustainable development strategies for EU and Russia was taken as an example of developed and developing regions, and it is also illustrated in the conceptual framework of this research.

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4. Case study

This chapter examines the case study of sustainable development initiatives of six airline companies. The chosen companies for current research are Aeroflot, UTair, Ural Airlines, Lufthansa, Virgin Atlantic airlines, SAS Scandinavian airlines. Table 3 indicates the main data about each company in order to provide the company size information.

Airline Fleet Revenue, 2019 Passengers, 2019 Aeroflot 359 9,7 bill euro 60,7 mil Ural Airlines 49 1,26 bill euro 9,6 mil UTair 64 0,847 bill euro 7,8 mil Lufthansa 763 35,8 bill euro 142,3 mil Virgin Atlantic 46 3,1 bill euro 5,4 mil Scandinavian Airlines 158 4,18 bill euro 28,4 mil Table 3 - Main data on selected airline companies (Airlines’ annual reports)

The main activities of the selected air carriers in the framework of sustainable development will be reviewed. Companies will also be characterized by the availability and number of initiatives to achieve each of the 17 SDGs.

4.1. Case study of Russian airline companies

The following subchapter will consider tree major Russian airline companies and the sustainability initiatives they implement into business activities. Aeroflot, Utair, Ural Airlines has an individual approach to sustainable development so each paragraph will cover the majority of sustainability activities that are presented in official documents and public data sources.

4.1.1. Aeroflot

As one of the biggest and progressive air carriers in Russia Aeroflot conducts an active sustainable development policy. According to annual reports Aeroflot has a clear sustainable development strategy since 2014. Also, in 2014 Aeroflot Public Council was established as a consulting and advisory body to help the company to formulate its position on key sustainability issues with maximum consideration of the interests and demands of society. Moreover, according to Russian Union of Industrialists and Entrepreneurs and Moscow Exchange in 2019 Aeroflot was ranked 22nd in the “Responsibility and Openness Index” (Russian Union of Industrialists and Entrepreneurs, 2019). The main sources of information on the company's sustainable development activities are the company's website (subsection in the investor information section) and the chapter in the company's annual report. Based on these secondary sources, currently

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Aeroflot conducts sustainable development activities in 4 directions: environmental policy, social policy, HR policy, combating corruption policy.

Aeroflot’s environmental policy is aimed at increasing energy and environmental efficiency of the company's end product - transportation of passengers, luggage, mail and cargo. The main goal is to increase fuel efficiency of the airline's aircraft fleet, which allows reducing the environmental impact and minimize one of the main elements of production costs – fuel consumption. Company’s environmental policy involves several initiatives that would be described below.

Firstly, the company maintains the environmental management system, which helps to bring production facilities and operations in line with international environmental protection standards (ISO 9001 and the IATA’s industry programs). In order to minimize the poor-quality risks and ensure the fight safety Aeroflot is a member of IATA pools (ATA Fuel Quality Pool, IATA De- Icing/Anti-Icing Quality Control Pool, IATA Safety Audit for Ground and Operations Pool). The internal quality management system was designed to evaluate the compliance with internal and external management system standards both as part of IATA and SkyTeam alliance. Company annually conducts the necessary activities in order to complete all the requirements of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Being a member of International Aviation (CORSIA) since 2017, the company has incorporated compensation obligations for the produced CO2 emissions.

Secondly, reducing energy intensity of operation activities is achieved by Aeroflot Group by means of implementation of new fuel-efficient technologies. Almost all aircrafts meet ICAO standards of noise levels and air pollution levels. The company has internal Green House Gas (GHG) emission management system that monitor and counts the CO2 emissions. In order to reduce emissions, all aircrafts are periodically maintained, the possibility of using alternative energy sources and biofuels is assessed, the route network is optimized, and more efficient piloting techniques are introduced. Moreover, a Fuel Efficiency Improvement and Fuel and Energy Cost Reduction Program is developed and implemented every year. The program calculates standard fuel consumption volumes and minimizes the difference between actual and projected fuel use. Aeroflot has developed and is implementing a set of energy-saving measures to save up to 1.5 million tons of aviation fuel per year. In 2019, mentioned above initiatives helped Aeroflot to reduce fuel consumption by 17.7 thousand tons, which is equivalent to decreasing CO2 emissions by 55.7 thousand tons СО2 (Figure 8). In accordance with the methodology adopted under the European Greenhouse Gas Trading Scheme (EU ETS), the company reports annually on CO2 emissions.

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Aeroflot Group is also taking part in international rank Carbon Disclosure Project (CDP), that obliges companies to provide the corporate information disclosure on managing climate change and greenhouse gas emissions. In 2019, the company’s CDP score was D level of disclosure.

Figure 8 - Direct and indirect GHG emissions of Aeroflot Group airlines (Aeroflot Annual Report, 2019)

Thirdly, the Group implements several initiatives to optimize water resources use and waste management system. Sustainable water use initiative implies the control of quantity and quality of wastewater discharged from treatment facilities of Aeroflot office complex. In accordance with national requirements, Aeroflot prepares reports on quality and volume of wastewater discharge to regulatory authorities. Water resources planning system for each flight is also in place. Reduction of industrial and commercial waste activities aimed at minimizing of production and consumption waste released into the environment and an increase in the share of waste released for recycling. Waste sorting points have been installed at the home airport and in the office complex for further recycling. Regular seminars are held for the company's employees on industrial and consumption waste management. At the end of 2019, the total mass of waste transferred for recycling was 9.2 thousand tons. No significant spills of Aeroflot contaminants were registered in 2019.

Human resources policy seeks to promote the rights and freedoms of its employees. In the framework of International and Russian laws, the company undertakes the necessary measures to provide equal rights and opportunities for each employee and excludes the possibility of any form of discrimination. According to the company's official resources, activities are pursued to support gender equity. The result is that in 2019 год 55.5% of Aeroflot Group companies’ total headcount were women, as well as there were 86 female pilots.

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The company conducts activities on personnel training/development and recruitment through cooperation with national research universities, colleges, and private educational organizations. There are some educational programs that are funded together by Aeroflot and federal government. For instance, in 2019, there were 78 students who was enrolled in universities of civil aviation and 50 of them received personal scholarships. Speaking about internal training initiatives Aeroflot organized 36 thousand internal training and professional development courses. Training pilots and flight attendants hold in Aeroflot's own simulator complex certified by EASA body.

For employees and their families, there are also social projects such as expanded occupational pension scheme, corporate sports development initiative (permanent football, volleyball, ice hockey and tennis sporting clubs; Fitness club memberships), corporate vehicle and parking provision, reimbursement of costs for kindergarten etc.. In the framework of HR policy Aeroflot leave the substantial part to occupational health and safety of employees. The company’s own medical center provides healthcare services as well as employees and their families can go to health resorts in Russia and abroad on medical indications. In order to resolve internal relationships and conflict Aeroflot has implemented multi-channel employee voluntary reporting system.

Aeroflot, as the national carrier of the largest country in the world, has made the priority of its social policy to provide opportunities for any resident of Russia to overcome the distance between cities and countries. Ensuring transport accessibility to especially remote regions of the country becomes possible due to the developed route network of the Aeroflot group.

Aeroflot also provides a program of "flat fares", implemented company's own expense, which offers equal low fares for flights to cities in the Far East, Kaliningrad and Crimea. Any citizen of Russia, regardless of age or region of residence, can participate in the program. The company is also involved in the program of state subsidized social transportation between cities of the European Part and Far East. According to the annual report, Aeroflot aims to promote more active movement of passengers, which also creates opportunities for the other industries development, including small and medium businesses. Aeroflot's business activities set in motion numerous industries related to transportation. For example, in 2019 the company carried out transportation of about 60.7 million passengers, who in turn booked hotels, rented cars, attended sporting events, used the sector of services.

In addition, Aeroflot sponsored many charitable programs, sponsors initiatives in the sphere of sport and culture, supports vulnerable groups of population (children and veterans). Thus, for 5

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years Aeroflot has been sponsoring two orphanages, and in 2019 thematic seminars were organized, gifts were bought, soccer trainings were held with national soccer teams, excursions were organized, and buildings and territories were renovated. Also, Aeroflot holds an annual action for free transportation of veterans of the Great Patriotic War to the places of their military slate. During the whole period of this program, 90 thousand veterans became its participants. Aeroflot provides monthly delivery of food packages to veterans - former employees of the company, as well as in 2019 it was held 6 meetings for veterans, timed to various holidays.

Aeroflot sponsors various national and private organizations: the Russian Geographical Society, the Russian Union of Industrialists and Entrepreneurs (RSPP), and the Tarasov Golden Puck Club. The airline also provided financial support to Saint Petersburg Children’s Hospice and the Association of Polar Explorers. In conjunction with Sberbank, Aeroflot organized recreation in the most prestigious children's camp for 154 children from families affected by the flood in Irkutsk region. Aeroflot has been providing financial support to many sports clubs in Russia (among them are the Russian Basketball Association, the Russian Golf Association, the Russian Volleyball Federation, the Russian Table Tennis Federation, the Russian Boxing Federation). Serving for many years as an official air carrier of the national soccer club CSKA, Aeroflot has gained access to a multimillion audience of fans and conducts a wide advertising campaign of the Aeroflot brand at CSKA games.

The main area of Aeroflot's combating corruption policy is control and efficiency of procurement activities. Aeroflot's procurement activities are conducted in compliance with the federal laws and the Regulations on Procurement of Goods, Works and Services of Aeroflot Group, the relevant provisions of its subsidiaries, as well as other applicable regulations approved by the Russian Government. In 2019 the main indicators of Aeroflot's procurement activities have significantly improved, as the share of competitive purchases increasing to 46.9% (in 2018 the indicator was 30.8%). Savings on purchases made amounted to RUB 51.1 billion. In 2019, the company implemented AP SRM-based solution Procurement Monitoring featuring both procurement data consolidation and easy access to the data, which combines the consolidation of data on procurement activities and the speed of access to this information. Implementations of SAP SRM allowed significantly reduce risks associated with the untimely placement of information on procurement activities in the Unified Information System due to the reduced labor intensity of this process. In order to increase the transparency and competitiveness of small purchases, starting from 2019 Aeroflot publishes notices of purchases worth up to 500 thousand rubles in corporate online stores on the basis of the largest certified electronic trading platforms - B2B-center.ru (from Sberbank-AST) and kim.tektorg.ru (from fuel and energy trades). In 2019, it was decided to conduct the procurement of leasing services and aircraft leasing on a competitive basis with the

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publication of the procurement procedure in the Aeroflot corporate system. This allowed reducing the volume of purchases from a single supplier, as well as ensuring transparency of procurement procedures. Moreover, it is vital to note that Annual Report has been prepared based on Aeroflot’s management reports and in line with Aeroflot’s consolidated IFRS financial statements for 2019. Sustainable development section was prepared based on the GRI Sustainability Reporting Standards (GRI). Aeroflot consolidated IFRS financial statements for 2019 were audited by PricewaterhouseCoopers Audit.

Sustainable development initiatives described above characterize Aeroflot as a company that contributes directly to the following UN Sustainable Development Goals: SDG 3 (Good health and well-being); SDG 4 (Quality education); SDG 8 (Decent work and economic growth); SDG 9 (Industry. Innovation and Infrastructure); SDG 11 (Sustainable cities and Communities); SDG 12 (Responsible consumption and production); SDG 16 (Peace, Justice & strong institutions), SDG 17 (Partnership for the goals). Moreover, there is indirect impact on the achievement of the following SDGs: SDG 5 (Gender equality); SDG 10 (Reduction inequities), SDG 13 (Climate action).

4.1.2. UTair

UTair airlines are one of the three leaders on the Russian air transport market. In 2019, the company's aircraft transported 8.5 million passengers to 110 destinations with 64 aircrafts in the UTair fleet. The main hub of the company is Vnukovo airport (Moscow), from which more than 100 flights are operated daily. Sustainable development of the company and its strategy in this direction can be assessed as not active. There is very little information about the company's sustainable development activities both on its corporate website and in its internal reports. In annual report 2019, UTair describes three areas in which it focuses on sustainable development: environmental initiatives, social programs and programs aimed at staff development.

In its activities UTair strives to adhere to the principles of sustainable development and pays special attention to environmental protection. The airline has introduced an environmental management system (EMS) aimed at minimizing negative impact on the environment. The company annually approves an environmental management program, which reflects objectives and resources in this area. The main environmental task set for 2019 was to establish specific consumption of aviation fuel at the level of 2.02 tons per hour and it was implemented in its entirety. In 2019 UTair achieved this target and specific air fuel consumption was 2.0 tons/hour. The implementation of a comprehensive program to optimize specific fuel consumption in the aircraft segment, which was adopted in 2017, showed the best results in 2019. During the year, measures

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were implemented to optimize aircraft weights (by abandoning unused equipment and freight), the principles of aircraft placement on routes were revised, the schemes of takeoff and landing at the main base airports were optimized, and a cost index control system was implemented (a flexible system of flight modes management, taking into account maintenance costs), a system of control over compliance with recommended flight modes was implemented (specialized software was purchased and implemented from Honeywell - the leader in this field). According to preliminary estimates, these measures ensured reduction of specific fuel consumption by about 3.3% compared to the previous year, while significantly improving the efficiency of own fleet management with optimal aircraft maintenance and repair costs. Big amount of initiatives was implemented to improve fuel efficiency:

• Implementation of the fuel motivation system criteria, and monitoring of the flight crew compliance with these criteria; • Control of compliance with the recommendations on the use of ground power supplies; • Aircraft are arranged for flights with due consideration of the Degradation Factor; • Analysis and control of MEL requirements (Minimum Equipment List - the document that specifies the list of failures with which the aircraft is allowed to fly) that are affecting the increase in fuel consumption.

As part of its environmental protection efforts, UTair also monitors the recycling of waste. According to the annual report, 453 tons of waste was collected in 2019, 7.8 tons of paper, 5 tons of glass and 20.5 tons of plastic were transferred for recycling.

UTair human resources policy is aimed at maintaining effective team of professionals, ensuring continuous development of staff, creating safe and favorable working conditions. In 2019, priority attention was given to the improving the personnel management system efficiency as well as to the optimizing the system of remuneration and motivation of employees. During 2019, the airline implemented measures to provide mandatory training and development courses of flight crews, cabin crews and engineering personnel. A corporate training plan for the airline's ground staff was also implemented. In 2019, total training and qualification maintenance costs for the airline's personnel was RUB 117,384,285.

The airline's system of labor protection minimizes occupational health and safety risks. In 2019, the airline organized special events for employees under occupational safety programs worth over RUB 56 million. 1,075 employees were provided with special clothing, special footwear and protective equipment. Medical examinations were arranged for over 2,000 employees. UTair airlines strives to meet high standards of social responsibility. The company has a system of

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rewarding employees and work teams for achieving the highest indicators of production activity and many years of conscientious work. In 2019, 6 employees of the UTair Group received departmental awards and 150 employees received awards from the General Director of UTair airlines. In 2019, the company organized the following social programs: - organization of health resort treatment of employees at the expense of the social insurance fund; - provision of discounted vouchers to children's camps for employees' children; - provision of gyms and swimming pools; - corporate recreational events; - provision of air tickets at reduced rates for employees and their families; - professional competition among flight units and flight attendants' services.

During 2019, UTair also implemented several charity and sponsorship projects. For instance, the "Veteran" campaign has been operating for 17 years. The airline transports the participants of the Great Patriotic War free of charge in any directions and gives a discount for the escorts. During this time, more than 13 thousand veterans of the Great Patriotic War were the participants of this campaign together with their attendants. The airline began cooperation with the Lisa Alert volunteer search and rescue squad. Moreover, for more than 7 years, UTair has been actively assisting the «Lisa Alert» search and rescue team. In 2019, volunteers of this organization made 334 flights with the airline to organize searches for people all over Russia. For 12 years UTair has been a partner of the charity found «Give life!». In 2019, the airline provided the opportunity for 373 beneficiaries to and from the place of treatment. Also, by annual tradition in December UTair holds a large-scale program to transport children from Anadyr, Noyabrsk, Surgut, Syktyvkar and Tyumen to Moscow to celebrate the New Year. UTair provided the transportation for more than 243 children to Moscow to visit the main children's New Year celebration - the Kremlin Tree.

The Company's annual reports or other corporate documents do not provide any reference to the UN Sustainable Development Goals, however the company's activities described above may directly affect the achievement of: SDG 3 (Good health & well-being), SDG 4 (Quality education), SDG 8 (Decent work and economic growth), SDG 9 (Industry innovation & infrastructure), SDG 10 (Reduction inequities), SDG 12 (Responsible consumption and production) and indirectly to: SDG 13 (Climate action), SDG 17 (Partnership for the Goals) .

4.1.3. Ural Airlines

Ural Airlines occupied the 5th place on the civil aviation market in Russia. Compared to the previous year, passenger turnover increased by 6.8%. Notwithstanding that the airline has no such turnover as Aeroflot Group, Ural Airlines is also gradually introducing the principles of sustainable development into its operations. However, the company has no clear strategy in this area. The

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main sources of information for sustainable initiatives are the 2019 annual report and the corporate web site. Mostly all considered entities in the framework of their sustainable development initiatives focused on tree main areas that will be further described.

Ural Airlines is implementing environmental initiatives aimed at increasing energy and environmental efficiency and compliance with permissible environmental impact standards; measures are being taken to upgrade the company's aircraft fleet, optimize its route network, and manage waste. Thus, in 2019, environmental protection expenditures amounted to 8.9 million RUB. The company's aircraft fleet consists of Airbus Group aircrafts, which are one of the leaders in the world aircraft industry in terms of fuel efficiency and low noise levels. In 2019, Ural Airlines added new generation Airbus NEO aircraft to its fleet (3 A320neo and 1 A321neo). Environmental advantages of this type of aircraft are the reduction of fuel consumption (by almost 20%), as well as a significant reduction in external noise (19 dB lower than ICAO requirements, the area of the sound track on takeoff is 50% less than that of the previous generation aircraft).

The use of modern, efficient fuel equipment allows the airline not only to reduce production costs for fuel and lubricants, but also to reduce the negative impact on the environment by reducing the level of transport noise and harmful gas emissions into the atmosphere: specific fuel consumption in 2019 was 2.758 tons per flight hour (-0.7% compared to 2018), greenhouse gas (CO2) emissions in 2019 were 1,115,644 tons, which is 7.66% lower than the previous year. The company's ecologists keep records and prepare reports on greenhouse gas (CO2) emissions via the company's route network in the Russian Federation. The company participates in the EU ETS system for accounting of CO2 emissions via its route network within the European Union. Ural Airlines is also working to implement a system for monitoring and reporting CO2 emissions within the global CORSIA system (ICAO).

In order to comply with the standards of admissible impact on the environment, Ural Airlines has arranged production waste sorting places by types and classes of hazard. Environmentalists of the company conduct inspections of the territories and places of temporary waste accumulation, keep quarterly records of production waste generation and movement, prepare and submit reports to environmental protection and supervisory authorities. As a result of the transfer of 11.8 tons of wastepaper and cardboard for recycling, the airline has preserved about 117 trees, which in its turn has reduced CO2 emissions by 20.07 tons.

The social policy of supporting socially vulnerable categories of citizens is actively implemented by the company. The airline considers the social significance of transport support for disabled people, especially disabled children in need of medical care, and delivers these citizens to the

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place of treatment and back. In 2019, Ural Airlines became the winner of the Best Social Projects of Russia and took first place in the Charity category. The award was received for the joint project of the airline and the Charity Fund "Flight with Ural airlines is just a very good thing". The main objectives of the project were to attract passengers' attention to the simplest and most convenient way to help ill children and to the importance of charity in general. From each ticket sold by Premium Economy fare, part of the proceeds was transferred to the treatment and rehabilitation of the wards. During the six months of the campaign, more than two million rubles from the airline's passengers were transferred to the charity fund's account. These funds were spent on targeted assistance, treatment and rehabilitation of the Fund's wards. Every year the airline gives an opportunity to participants and disabled people of the Great Patriotic War to make a free flight to the places of military glory. The airline "Ural Airlines" participates in the state programs of subsidized transportation for passengers of the Far East, Crimea and Kaliningrad. Charitable project «Wings of Kindness» is joint project of Ural Airlines and Russian Relief Fund «Rusfond». Participants of the Wings bonus program can transfer bonuses from their account in the program to any of the funds. The airline issues tickets for donated bonuses for fund specialists, doctors, children and their relatives.

The main direction of Ural airlines HR policy is to maintain high qualification of its employees. Therefore, Ural Airlines has established a stable training system. The company's personnel systematically undergo professional training and development, improve their qualifications in specialized educational institutions, and participate in conferences and seminars. New online educational program for flight crews and flight attendants has been successfully implemented. In 2019, the total cost of professional development of employees was RUB 92 million. The airline also cares not only about improving the qualifications of its employees, but also about improving their health: every year the company provides employees with the opportunity to receive health resort treatment, and also organizes summer holidays for their children on the Black Sea coast in children's health camps. Considerable funds are being invested in occupational health and safety measures.

The Occupational Health and Safety (OHS) Department regularly trains its employees in basic safety procedures, develops internal instructions and monitors their performance. The OHS Department oversees training and conducts preliminary and periodic medical examinations of the airline's personnel. The organizational structure of Ural Airlines includes: Medical Service, which has all necessary certificates to provide medical services not only to airline personnel, but also to other employees and their family members; corporate Café, which provides high-quality, healthy and affordable meals to the airline's employees (including reserve crews).

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Ural Airlines also does not reference to any of UN Sustainable Development Goals in their annual reports, but the above described initiatives can directly influence achievement of SDG 3 (Good health & well-being), SDG 4 (Quality education), SDG 8 (Decent work and economic growth), SDG 9 (Industry. Innovation and Infrastructure), SDG 10 (Reduction inequities), SDG 12 (Responsible consumption and production). There are also some initiatives that may indirectly serve as a driver for the following goals: SDG 13 (Climate action), SDG 17 (Partnership for the Goals).

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4.2. Case study of European airline companies

This subchapter presents the information regarding sustainability initiatives of Lufthansa, Virgin Atlantic and Scandinavian airlines – the European air carriers. There are thee directions that would be covered for considered companies: environmental responsibility, corporate governance, and social policies.

4.2.1. Lufthansa

The Lufthansa Group accounts more than 550 daughter companies that operate worldwide. The company’s sustainability initiatives described in detail in Balance Sustainability report for 25 years. As was stated in paragraph 2.3 sustainable business activities can accelerate the commercial success. Corporate Responsibility of the LH can be divided into 3 dimensions: Corporate sustainable governance, Environmental Responsibility and Social policy.

The main directions of corporate sustainable governance in Lufthansa are building an effective dialogue with stakeholders, human right protection, transparent and sustainable supply chain maintenance and investments in sustainable innovations. According to big amount of literature (Louche, and Hebb 2014; Nagel et. al., 2017) mentioned in paragraph 2.3 in modern world company should build and effective sustainability strategy in order to cove the expectations of most groups of stakeholders. Lufthansa is a prime example in support of this theory, as the company maintains the continuous exchange of information with its stakeholders (employees, clients, suppliers and contractors, media and politicians). Maintenance of open and trusting dialogue with interested parties is built by means of various channels and provides for company an outlook on key issues and spheres of company’s development. LH regularly organizes external survey programs on socially important topics and the internal Group-wide employee survey “involve me!”.

Lufthansa corporate culture and membership in UN Global Compact implies the promotion of human rights protection within all group of companies. In 2017, the Group was issued the Code of Conduct that contains the principles of UN Global Compact and guidelines on human rights promotion that should be followed across the entire group. Moreover, all LH counterparts are expected to respect human rights as well. The company is implementing several measures concerning human rights obligations. In 2017, the human rights working group was established that serve to communicate information and develop a Group-wide position and strategy in this direction. In 2018, Lufthansa Group has published a mandatory declaration as required by the UK Modern Slavery Act 2015. In addition, an annual external audit of Lufthansa Group is conducted

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with respect to increased risks of human rights violation. In 2018, it was added to Code of Conduct that Lufthansa is promoting respect for each employee and provide the special working environment without discrimination, harassment and unequal attitude as well as it was held an extensive communications campaign to raise awareness about this topic.

Sustainability along the supply chain is another method to meet sustainability standards. Due to this Lufthansa cooperates with those suppliers, who follow national and international laws, regulations, comply with guidelines for fair competition and consider sustainability principles withing their business process. In order to minimize the risks suppliers’ contracts include several obligations. For instance, to comply with the ten principles of the UN Global Compact or to follow four principles of the International Labor Organization. In 2018, A special agency that evaluate companies’ sustainability supply chains (EcoVadis) awarded Lufthansa Group’s with the “Silver Status”.

Innovative research and development projects are also in the focus of LH Group sustainability initiatives. Lufthansa Technik developed and currently provides for other airlines a special digital platform AVIATAR for MRO (Maintenance, Repair and Overhaul) solutions that helps to monitor and evaluate the technical conditions of fleet (with 1000 registered aircrafts). In 2019, one more product AVIATION DataHub was presented, that allows all market participants to digitally gather, combine and process technical and flight operations data. Beyond that, Lufthansa Technik (a daughter company of LH group) is the world’s leading supplier of technical aviation services. Lufthansa Innovation Hub in Berlin (also a subsidiary of LH) is an innovation center that was developed 23 projects, implemented four partnerships and invested in tree tech start-ups in during 2019. In addition, the company works together with oil companies, air hubs and aircraft suppliers to steadily solve environmental issues by means of innovations promotion withing all industry.

In the framework of sustainable governance, the Group also fighting corruption and bribery. The main body of the Lufthansa Group that regulates implementation, development and communication of anti-corruption policy is Corporate Compliance Office. For all responsible employees Lufthansa organizes special IT-based anticorruption training and, in 2019, there were more than 1 200 participants. Also, the company set up an ombudsman that assumes that any employee can call (confidentiality if needed) a trustworthy person and report about suspicious activities of their colleagues, especially those concerning breaches of anti-corruption legislation and regulations.

Climate and environmental responsibility are the main areas of the company's activities in the framework of sustainable development. Lufthansa seeks to promote responsible consumption and

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production and undertakes measures to minimize environmental effects of its business activities since 1996. Central action areas are established in Environmental Guidelines focusing on emissions reduction, minimization of noise effects, management of energy and resources consumption and commitments to R&D initiatives.

Environmental management systems according to ISO 14001 or EMAS are steadily implemented within the companies of Lufthansa Group. Lufthansa CityLine (the largest regional airline in Europe), Lufthansa Technik (in European locations) were the first companies in the Group that launch a professional environmental management system and pass European certification EMAS (Ecomanagement and Audit Scheme) and international environmental standard ISO 14001 in 1999. Lufthansa Cargo has been certified according to the environmental management standard ISO 14001 worldwide since the end of 2015, and in 2019 Deutsche Lufthansa AG approved its status with mentioned above certifications. The Group is going to expand the validated and certified environmental management system withing all locations in coming years.

The Lufthansa Group implements long-term activities designed to reduce the noise-related effects form aircraft operations with the main objectives to find optimized flying procedures and decrease noise effects. According to annual report the company work within five initiatives in in the framework of noise abatement that are presented in Table 4.

Investments in quieter Introduction of 29 aircrafts Airbus A320neo and Airbus A350-900, aircrafts which are equipped with modern engines with lower noise contour. Cooperation with aircraft manufacturers and contribution to specifications and the technical status of new aircrafts. Noise-reducing Updated noise-reducing vortex generators that are approx. 4 decibels technologies for the quieter on existing aircrafts existing fleet Participation in noise Continuous R&D projects of Lufthansa Technik in terms of noise- research reduction and participation in international and local research external projects MODAL (Models and Data for the Development of Active Noise Abatement Measures in Aviation); German Aerospace Center (DLR), Fraport AG and Flughafen München GmbH. Dialogue with Participation in local dialogue forums with residents of airport areas. stakeholders Optimization of flight Implementation of new navigation technologies procedures and routings

Table 4 - Initiatives of Lufthansa in noise abatement. (LH Balance Sustainability Report, 2019)

In 2018, 99.6% of the company’s aircrafts reached minus 10 decibel level according to ICAO Chapter 4 standard. Moreover, active initiatives towards noise minimization can bring cost-saving advantage such as lower fees for quieter aircrafts.

The Lufthansa Group also highly contributes to effective fuel consumption strategies and emissions reduction. The company is a participant in number of the International Air Transport

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Association (IATA) working groups. The company set an internal goal to reduce CO2 emissions by 25% by 2020 compared to 2006 (it is achieved 67% by 2018). All environmental projects are supervised by a special department Flight Operations Efficiency and Innovation. The company annually report on its carbon footprint on the basis of the Greenhouse Gas Protocol which is divided to tree scopes: direct emissions form air and ground operations; indirect emissions along the supply chain and suppliers; and indirect emissions form purchased electricity and energy. The figure 8 shows the most recent carbon footprint.

Figure 9 – Ecological footprint of the Lufthansa Group in 2018 (LH Balance Sustainability Report, 2019)

The initiatives that are aimed to reduce the negative influence form company’s business operations can be divided into four segments. The first one is investments in new technologies for aviation industry. Already described above fleet renewal not only contribute to noise abatement but also increase fuel-efficiency parameters by implementing new engine technologies.

The Group also invests in researching and testing alternative aviation fuels and initiate a cross sector project to establish international alliance that will highlight the importance of biofuel and renewable energy promotion. For instance, the company has signed the agreement with Raffinerie Heide in 2019 about future production and delivery of synthetic kerosene, which is to be produced with green electricity.

Secondly, Lufthansa is the main partner in the development of standardized airspace above Europe, the Single European Sky (SES) that will allow aircrafts not to fly detours, with the saving emission effect for the LH Group amounted 3 million tons per year. Lufthansa airlines and Lufthansa Systems actively cooperates with SESAR (Single European Sky ATM Research that is aimed at testing and Europe-wide implementation of new technologies, procedures and standards) as an IT provider and new technologies developer. In order to optimize also ground conditions and rise the ecological effectiveness it is implementing intermodal transport concepts that systematically interlink air, rail and road traffic.

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Thirdly, there were 21 fuel-saving projects implemented that comprise activities relating to weight reduction, flight route optimization and technical developments that was implemented in 2018. These initiatives helped Lufthansa save more than 24,000 tons of CO₂ emissions. Particularly Lufthansa Cargo is implementing numerous projects to reduce negative direct and indirect environmental effects. For instance, in 2019, the company has tested the use of lightweight recycled pallets and loading accessories. Moreover, they have launched paperless handling project with electronic air waybills that are currently implemented at approximately 150 LH Cargo locations and saves more than 7,800 tons of paper per year.

The fourth direction is economic measures. Since 2021, COARSIA agreement obligate all members to compensate the corresponding CO2 charges due to the increased CO2 emissions of growing number of international flights within the aviation industry. Furthermore, the company offers to the customers the option to offset CO2 emissions from the purchased flight by donating in favor of selected climate protection projects as well as Lufthansa provides the online CO2 calculator for all available routs. As a result, it was compensated a total of 6,539 tons of carbon dioxide. In addition to these all corporate flights of Lufthansa’s employees have flown CO2- neutrally and since 2019 corporate clients have had the option of flying CO2-neutrally with the airlines of the Lufthansa Group.

Another area for the company’s commitment to better environment is energy and resources management that is mainly focused on optimized ground operations. Active energy optimization initiatives in buildings are being carried out in accordance with the EU Energy Efficiency Directive. Every year all companies of the group undergo energy audits and evaluate measures to increase energy efficiency. A major project in 2017 and 2018 was the transition of all offices, hangars and warehouses to LED lighting. Each company in the Group individually implements initiatives that are aimed at increase energy efficiency individually as they can be adjusted to particular business sphere. For instance, the Lufthansa in Frankfurt location participated in the Business Energy Efficiency Network of energy provider Mainova and the Frankfurt Chamber of Commerce. The project is aimed at saving of 17,500-megawatt hours of electricity and 5,000 tons of CO2 annually. At the same time, LH Cargo Frankfurt implement 49 charges for electric forklift, with better energy efficient characteristics (annual conservation of about 235,000 kilo watt hours).

Speaking about waste management the Group is trying to develop and implement equilibrium between unavoidable waste volumes, striving for weight reductions, fulfilling hygiene related regulations and a perfect customer experience. Lufthansa implements “Flygreener” initiative towards this direction that helps to optimize the loading of beverage trolleys, to develop an onboard recycling trolley, to support crews with their knowhow and raise their environmental awareness.

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Additionally, the Company is trying to replace disposable plastic products to more environmentally friendly once, to optimize taking superfluous catering items on board by means of demand- oriented approach. Since 2019 Austrian airlines collect plastic cups and give them for processing to receive synthetic crude oil (up to 100 tones can be avoided). The energy of ground vehicles is also one of the most important questions for Lufthansa group. For example, under the eMove project it was developed the world’s first electrically powered tug for wide body aircrafts. The “eTug” helps avoid up to 75% of emissions in comparison with conventional, diesel powered aircraft tugs. In the framework of external partnerships, the LSG Group introduced in 2019 electric catering lift truck “LSG eLift”. Also, in 2019, it was organized the replacement of 12­tonne diesel forklift with a modern electric-powered forklift with weight bearing capacity of 15t.

Personnel policy of Lufthansa Group aims at continuous adaptation to the changing market conditions, industry development and digitalization. The company’s focus in this field is diversity and equal opportunities with its Diversity Oriented Personnel Policy. Speaking about gender diversity, the shape of woman on management positions is 15,9% and Lufthansa group introducing big amount of measures to increase this share. For instance, it was developed the mentoring program “GoAhead” that involves identifying strong female leaders with the necessary characteristics for a leadership position. Since 1960, the motivation system of employees in Lufthansa Group is based on the principle of “same pay for same performance”. The company is trying to inspire women for pilots’ positions and currently 15% of future pilots in training is female. In addition to this, the long-established informal LGBTI network was given a formal framework “Diversify – we color the air”. Since 2019, the company has advertised all vacancies by including the third gender.

In the framework of personnel policy Lufthansa group also aims to create a comfortable working environment for all employees. The work-life integration program offers flexible work-time models for employees with children and number of summer school vacation case programs. The group also actively supports disabled people by providing the necessary working conditions (in 2019 4,3% are the people with disabilities). Beyond that, with the aim to support professional reorientation, the program “myTurn” was launched. The main idea was to create the possibility for existing employees to move to another positions as well as recruit and find new talents (more than 1700 employees took part in this initiative). The Group initiates several programs annually (platform “Spotlight on Talent”, trainee program “ProTeam”, “Shared leadership” program) to reveal new talents, to provide the opportunities for professional growth and to motivate personnel.

Another action area of Lufthansa human development policy is occupational safety and health management. Group­wide health management includes counseling offers and information events

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for employees and managers alike. These address focal themes with Group­wide relevance, such as stress management and recovery capacities. Additionally, various seminars and learning modules are available. There are tree Medical Centers for Lufthansa, SWISS and Austrian Airlines employees that offer aviation and occupational medicine, vaccinations and travel medicine, outpatient care, a comprehensive social and medical advisory service, and other preventive and healthcare treatments. These centers met all requirements associated with the amendment of the German Civil Aviation Act and recertified in accordance with the quality management system DIN ISO 9001:2015.

The company also initiates big amount of philanthropic activities with central pillar “Help Alliance” – a charitable organization that currently supports more than 40 projects worldwide. Lufthansa Group concentrates its voluntary activities on two areas Education/Enabling and Life/Health. In the framework of the second area the Group has provided fast emergency flights and aid during crises and catastrophes. The cooperation agreements with German Red Cross, with emergency aid German association “Aktion Deutschland Hilft” aimed to simplify and speed up aid flights preparation. Education/Enabling support implies the provision of assistance for disadvantaged people to be able to lead successful, healthy and self-determined lives by means of educational projects worldwide, which organized by the «Help Alliance». In 2018 Lufthansa Group began to expand local help alliance projects oriented by the topic area Education / Enabling. The biggest project here is “iThemba” in South Africa that helps children to receive a high-quality primary education. Moreover, in 2018, 30 participants form the poorest areas of Sao Paulo International Airport in Brazil took part in the courses for future bakers and pastry chefs withing the program “Broadening Horizons. Moreover, it was built Happy Child Education Centre in Nairobi by the Cargo Human Care that was established by Lufthansa Cargo with the aim to help 100 children to receive primary school education. The company also supports employee’s commitment to corporate citizenship. LH provides the opportunity for employees to spend the defined number of working hours per moths for corporate volunteering activities. Another initiative is the possibility for employees to donate via salary deduction (more than 80 000 of employees took part in this project in 2018). In 2018, Lufthansa Group’s spending for all aid projects amounted in €2 million and helped more than 23,000 people worldwide.

As stated in sustainability report, Lufthansa Group supports all 17 UN Sustainable Development Goals with the highest focus on: SDG 4 (Quality education), SDG 5 (Gender equity), SDG 7 (Affordable & clean energy), SDG 8 (Decent work and economic growth), SDG 9 (Industry innovation and infrastructure), SDG 10 (Reduction inequities), SDG 11 (Sustainable cities and communities), SDG 12 (Responsible consumption and production) and SDG 16 (Peace, Justice &

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strong institutions) due to the impacts of its business model. Speaking about indirect effects the following goals are addressed: SDG 13 (Climate action) and SDG 17 (Partnerships for the goals).

4.2.2. Scandinavian airlines

According to the SDG index (Figure 6), Scandinavian countries occupy the first three places; so Scandinavian airlines (SAS) were chosen for this study. As an international company the airline actively promotes Agenda 21 and supports the continuous work of sustainability-related matters. SAS has introduced a clear sustainability strategy and the main goal for the company in this field is to increase the economic efficiency of all operations within the company and achieve annual targets, while considering the principles of sustainable development. Differentiated sustainability policy helps to find optimal way to achieve the current objectives, while annual sustainability reports enable monitoring of the company's sustainable performance. The company's website has a section on sustainable development and corporate social responsibility, which fully covers all aspects of the company's activities in this area. As in the previous reviewed airlines, the main directions of Scandinavian Airlines sustainable policy are: Environment, Employees, and Responsible business.

Environmental policy of SAS airlines was established according to all existing national and international ecological laws and is aimed at minimizing greenhouse gas emissions and other environmental impacts. In order to achieve this the environmental management system has been implemented since 2010 and certified according to ISO 14001. In the framework of this management system SAS has set long and short-term environmental goals. The 2030 goals include reduction of CO2 emissions by 25% compared to 2005, increase in biofuel use up to 17%, noise reduction by 50%, use of 100% sustainable materials in customer offering. The 2050 goal is 50% CO2 emission reduction compared to 2005.

The company’s environmental program focuses mainly on emission reduction, so it was established several initiatives arcos this topic. The first is increase fuel efficiency by means of continuous fleet renewal to more fuel-efficient aircrafts. In 2019, SAS purchased 27 the newest A320neo (with lower jet fuel consumption by almost 18% in comparison to the previous aircrafts generation). Moreover, since the airline has comprehensive network of destinations and routes, there is an internal system for schedule optimization to optimally meet demand, mainly on regional routes. In addition, depending on the number of booked seats on a flight, a size and model of the aircraft for a particular route is determined. This capacity enables to optimize fuel use and emissions per seat kilometer. In 2019, SAS has obliged all its long-term strategic partners to sign supplier code of conduct that requires organizing environmental initiatives such as fuel saving

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programs, CO2 emissions calculations etc. The company invests to prepare the Single European Sky project – the air traffic control system that aims to revolutionize airspace by optimizing flight paths and significantly reduce emissions. Additionally, an important objective for SAS airlines is to minimize the impact of CO2 and noise emissions to residential areas. The purchase of new, more innovative models of aircraft allowed the company to reduce emissions at take-off by 10% and noise effect by 15% compared to 2010.

Biofuel and emerging technologies development and support is a second intercompany initiative that promotes environmental-friendly business approach of SAS airlines. For 5 years, at jet-fuel tenders the company regularly requests updated information on the possibility of supplying biofuels in order to show interest in this direction in case prices are competitive and sustainability criteria is met. During 2019, SAS secured agreements amounting to 455 tons of biofuel supplement that gave an opportunity for customers to add biofuel to their tickets’ cost during online booking form September. The company is also discussing the potential for electrically propelled aircrafts commercialization after 2025 (both fully electric and hybrid). In 2019, it was signed a Memorandum of Understanding between Airbus (aircrafts’ world’s leader supplier) and SAS with the aim to speed up the development of technology, which would have facilitated the release of aircrafts with fully electric, hydrogen or hybrid engines by 2030. SAS airline also taking part in The Nordic Network for Electric Aviation that is aiming at promotion of electric aircrafts and alternative energy sources within the Nordic region.

The third initiative is sustainable products and services use that aims to develop the airline’s products and services as sustainable as possible in terms of resources and materials by means of implying sustainable supply chain and value chain management. In orders to develop sustainable solutions across all business operations vide rage of partnerships with key strategic suppliers of materials and fuels, with manufactures of ground vehicles and aircrafts was made in 2019. In addition, to optimize the use of aviation fuel and finding alternative sources, the airline addresses other environmental problems. For example, greenhouse gas emission calculator is available for all customers on company's official web site and all clients have carbon-offsetting option since 2006. In 2019, SAS has offset 1.2 million tons of CO2, or 32% of the passenger- related CO2 emissions.

Actions to minimize use of glycol, diesel and petrol are also being actively introduced into production processes of SAS. For example, in 2019 it was implemented a special tool that is optimize quantity of glycol use, resulting in reduction by 342 thousand liters. The company has an intension to switch to ground maintenance vehicles with lower environmental impact. Company continuously works on emissions from energy consumption in buildings. In 2019, LED lighting was

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installed in all SAS’s warehouses and hangars in Oslo. In addition, there are waste management measures, such as waste sorting in SAS offices as well as recycling initiatives of onboard waste. At all Scandinavian base stations there is a recycling procedure of aluminum cans and glass bottles that is organized by a third-party company. In order to significantly reduce plastic and food waste and ensure the correct amount of meals onboard, passengers have an option to pre-order meal services during booking procedure. MSEK 1,807 (EURO 1,693) was spent by external stakeholders to environment-related charges and travel taxes, in 2019, through the European Union Emission Trading Scheme (EU-ETS). Moreover, SAS airline выстаивает свою бизнес стратегию по аналогии с Renewed EU Sustainable Development Strategy and supports the Polluter Pays Principle and other related European legislation.

The main goal of Personnel Policy is to build decent working conditions for each employee as well as to provide personal and professional development opportunities. Moreover, according to sustainability report and Code of Conduct the company has zero-tolerance policy toward all forms of harassment. To disseminate this information across the company, a web-based training of the Code is conducted upon the recruitment process, and any changes in Code of Conduct are informed via internal channels of communications.

In the framework of personnel policy, SAS airlines conduct extensive training programs annually. In 2019, it was organized approximately 523,000 hours of training. To maintain the high quality of its services SAS airlines commits flight crews, technical- and operational ground staff to approve a number of license and competency requirements from EU-OPS, and the IATA through the IOSA (IATA Operational Safety Audit). Moreover, the company is working on expanding of collective agreements with labor unions. In 2019, SAS conducted negotiations and discussions with various unions to reduce costs and increase the flexibility of existing union agreements.

The airline is also care about occupational health of employees by improving processes for systematic follow-up and educational activities in collaboration with department heads, HR manages and labor-management joint safety committees that cover all employees in each country. In order to support the fast rehabilitation after work-related injuries or accidents, the company offers medical services through in-house or outsourced resources. The company conducts various health-promoting activities both in the workplace and during leisure time.

The problem of inequality is addressed by SAS Diversity Policy that ensures the equal treatment of all staff members and applicants. According to annual report, in 2019, gender distribution within the airline was 35% women and 65% men. Across civil aviation industry there is a traditional split between female-dominated and male-dominated professions. For example, SAS employed only

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4% women pilots and 5% technicians and aircraft maintenance staff, while female-dominated positions are cabin crew (71% women) and check-in and gate personnel (66% women). Nevertheless, SAS promotes gender equality in traditionally gendered positions by means of recruitment policy and annual people reviews as well as aimed at reorganizing top management positions by 2025 with 15% of women and 20% of Black Asian and Minority Ethnic.

According to SAS responsible business policy maintaining sustainable development can affect future financial success. In this regard, one of the key ideas of sustainable development is to conduct honest and transparent business, therefore SAS airlines apply management approach against all forms of corruption and anticompetitive behavior issuing SAS Code of Conduct, Legal Policy and SAS Antibribery Policy. An example is “Competition Law Compliance Program” that is applied in related to the purchase of goods and services business entities with the aim to conduct employee anti-bribery training and promote related legislation across interested business units. In addition, the company aims to build effective sustainable supply chain with additional requirements for suppliers and business partners. In general, SAS suppliers have to build and promote responsible and transparent business model, meet specific social and environmental requirements, follow general UN Global Compact principles and other specific sustainability conditions.

The company also understands that currently stakeholders become more sensitive to sustainability topics and as a result SAS is building a strong dialogue with all interested parties. SAS stakeholder dialogue is an opportunity to address the most discussed topics such as the importance of the aviation industry in globalization process, the negative environmental impact of air transport operations and strategies to reduce these effects, gender equality among pilots and cabin crew issues, and other problems of modern society. This approach promotes the involvement of everyone in these pressing societal issues of sustainable development agenda. Moreover, according to theoretical background (paragraph 2.3) of current master thesis, the engagement of different kind of stakeholders can also bring reputational effects as well as economic returns for the company.

SAS responsible business policy also involves the organization of socially significant initiatives that are directly related to company’s operations. For instance, every December since 1985, the company has participated in the Norwegian national charity event «Christmas flight». This aid campaign is organized and supported mostly by SAS employees, who spend a year collecting basic necessities and donations from outside organizations and private individuals, and then send a flight of aid to Poland, Latvia or Estonia. The airline provides the plane free of charge, jet fuel is sponsored by fuel suppliers, and the crew and pilots spend their free time on the flight. Secondly,

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in the framework of a commercial partnership with Swedish government, the airline provides Boeing 737s with special medical equipment in emergency situations. Another social program of SAS is the awarding of grants to Future Olympians sports teams for exchange program in Japan. Since 2019 this opportunity is available in Denmark, Norway and Sweden. Additionally, in 1979 it was organized another philanthropic initiative called SAS U-Assist, which includes numerous projects to support children from low-income countries in obtaining a quality education, better living conditions, and a chance for highly qualified medical care. In 2019, more than 500 children from developing countries around the world were supported through SAS charity projects.

In SAS annual report there is a reference only to four UN Sustainable Development Goals: SDG 5 (Gender equality); SDG 8 (Decent work and economic growth); SDG 12 (Responsible consumption and production); SDG 13 (Climate action). However, it can be stated that some initiatives also contribute SDG 3 (Good health and well-being), SDG 4 (Quality education), SDG 7 (Affordable & clean energy), SDG 9 (Industry innovation and infrastructure), SDG 10 (Reduction inequities), SDG 11 (Sustainable cities and communities), SDG 16 (Peace, Justice & strong institutions) and SDG 17 (Partnership for the Goals).

4.2.3. Virgin Atlantic airways

British airline Virgin Atlantic is part of the Virgin group of companies with the ownership of 51 % and 49% is owned by Singapore Airlines. The main hubs are London Heathrow and Gatwick airports. Already in 2007, the company launched sustainability program «Change is in the air» which is aimed at addressing global and local issues that can be influenced by corporate responsible operations. Information about the company's strategy in this direction can be found on the official website in the “corporate” sub-page. The company also publishes an annual sustainability report and highlights its sustainability achievements in its annual reports. Despite the broad and progressive strategy, Virgin Atlantic's reports make no mention of achieving certain UN Sustainable Development Goals. In order to assess the success of Virgin Atlantic sustainability campaign, the company's main initiatives in this area would be considered.

In the framework environmental initiatives Virgin Atlantic report on their Carbon Footprint for the emissions that are inside of company’s control. Virgin Atlantic carbon footprint consists of three scopes. Scope 1 – direct emissions from operating activities of all company’s fuel consumed vehicles, starting with flight emissions ending with emissions of corporate passenger car – has the largest part of company’s footprint – 71,2%. Scope 2 is indirect emissions, which occur as a result of electricity consumption and heating of all buildings, structures and electrical equipment of the company (accounts only 0,1% of the Virgin footprint). Scope 3 also consider indirect emissions

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but that are generated by external parties such as company’s suppliers, service companies, employee commuting etc. Scope 3 is responsible for the 28.7% of company’s Carbon Footprint. In order to minimize the CO2 emissions and negative environmental effects Virgin Atlantic, implement several initiatives.

Firstly, the airline is undertaking a fleet renewal, a 10-year program with the goal to replace four engine aircraft to more efficient two-engine aircrafts. The aim is to combine engine effectiveness, updated aircraft’s oil consumption levels with renewed network planning system of cargo and passengers’ flow. According to preliminary calculations, this will help to reduce fuel consumption by 30% per aircraft, and consequently reduce CO2 emissions. Moreover, the new fleet will also reduce the noise footprint over the next three years. Secondly, there is an efficient flying program implemented that should be followed by all pilots. The main improvement is that while moving from the stand to the airfield before a takeoff it can be used one or two engines, while previously there were used all engines. As a result, during 2019 this change saved 185 tons of CO2. Moreover, Virgin airlines entered into an agreement with a new provider of temperature and wind conditions data base. With the new program, pilots can plan flight routes more effectively due to more favorable wind conditions (with CO2 savings 3500 tons per year). In order to compensate the negative impact form the company’s operation activities (particularly form CO2 emissions), it was signed the partnership with sustainable development experts ClimateCare. Since 2018 responsible customers have the possibility to use the carbon-offsetting calculator to offset their flights by contributing to renewable energy and natural resource conservation projects. Moreover, in 2018, the company started the preparations to the UN agreed CORSIA commitment that would be fully implemented in 2021.

According to Virgin Atlantic, the next step of aviation carbon emissions reduction is investments in sustainable aviation fuels. The partnership with innovative cleantech company LanzaTech gave the Virgin Atlantic the opportunity to participate in projects aimed at development of new types of sustainable aviation fuels. In 2018, the airline flew the world’s first commercial flight using fuel that recycled carbon from industrial waste gases and other unavoidable waste streams. The company taking part in the development of the world’s first carbon recycling or carbon capture and utilization jet fuel plant in the UK (three plants will be launched in the UK by 2025). The estimated production capacity of these 3 plants is up to 125 million gallons of sustainable fuel per year that would be generated from waste carbon emissions and other waste-based feedstocks.

Speaking about noise reductions the airline sets the first Aircraft Noise Management Strategy. The main goal is to reduce noise output per aircraft movement by at least 6dB between 2012 and 2020 (a 75% reduction in noise energy on average). In order to achieve this goal an efficient flying

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program Continuous Descent was implemented. The next initiative is a continuous cooperation with airports to mitigate noise for local communities. Another project aims at noise abatement on night flight operations. Continuous control of time performance and the use of quietest aircraft, the 787, on routes that impact communities the most helps to achieve this goal. And the last pledge is engagement with the local communities that airline’s operations impact and carry on working collaboratively across industry groups.

The waste reduction and optimization program also have several directions. For example, the company actively monitors weight of products and other staff onboard. Direct correlation of fuel use and carbon emissions from loaded products weight emphasizes the importance of careful onboard weight planning. According to the annual sustainability report since 2016 careful galley planning resulted in 8% onboard weight reduction. For one year this new planning system helped to save 4260 tons of CO2 emissions and reduce fuel costs by 650 000£. Here are a few initiatives that contribute to these savings: providing amenity kits are now available only per request (saves 140 tons per year); removed plastic bags from our headsets (saves 16 tons per year); changed to FSC-certified wooden stirrers instead of plastic (saves 6.5 tons per year); no straws on flights (saves 125kg per year).

The one bright example is the cooperation with MNH Sustainable Cabin Services (consulting company for airlines in terms of transition to greener business practices) that propose some projects for more sustainable consumption and production. For instance, it has been suggested to recycle and reuse flight amenity kits, if the passengers have not used any items in the set. Old plaids are donated to homeless charities or kennels instead of being disposed of. The company has also developed for Virgin Airlines an "end of life" program to minimize high value recyclables in landfills. By means of stringent raw material segregation, quarterly MNH receives form the airline used headsets, amenity kits, plastics, old magazines, menus etc. and recycle it.

Virgin Atlantic environmental program also includes the control of emissions from ground operations including the energy use in buildings (electricity and gas) and the vehicles in ground fleet. The new VHQ office was built with modern sustainable technologies, extensive building management system, LED lighting throughout, and installation of heat pump technology. The new building already shows real energy savings, along with reduced water consumption. In 2017 the airline also starts the project to move to a fully hybrid and electric car fleet (currently the 59% of all cars were replaced).

Virgin Atlantic airline supply chain management program is a range of procurement policies and practices as well as the ways to communicate with partners to champion changes in supply chain.

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The company's main tool towards sustainable supply chain is the Responsible Supplier Policy, which states that all the company's suppliers must directly or indirectly comply with all international human rights laws and minimize the environmental impact form their activities. The collaboration with EcoVadis (a company that analyses sustainability performance of suppliers), allows the airline to understand the areas for improvement with suppliers and their internal sustainability performance. For instance, based on the EcoVadis assessment, around of 25% of Virgin Atlantic hotels currently have GSTC (Global Sustainable Tourism Council) recognized certification. In the framework of Responsible Supplier Policy, it was established the «Thoughtful Food» initiative which implies that all onboard food on Virgin Atlantic flights meet sustainable food criteria. Through the partnership with the Sustainable Restaurant Association (SRA), it is required for all food suppliers to meet a number of conditions including sourcing fairly traded products, promoting higher animal welfare standards etc.

Virgin Atlantic also tackling deforestation by following «Climate friendly» standard, which required that food suppliers should support biodiversity and act against deforestation. Particular attention in the company’s report is addressed to the care of cetaceans. Since Virgin Atlantic is engaged not only in flights, but also offers comprehensive solutions for recreation, the problem of animal protection in tourist areas is relevant for the company. The main principles of the airline in this direction is that the company does not advertise tours involving featuring captive animals. The company promotes more responsible activities such as watching animals in their native habitat places. Also, the airline has invested US$100,000 in the world’s first dolphin sanctuary and sign the partnership with the World Cetacean Alliance to develop Guidance for Responsible Whale and Dolphin Watching.

Virgin Atlantic social programs can be divided into HR policy and customer related programs. In 2018, the airline set an ambitious program to have 50% of women on top management positions and 12% of Black Asian and Minority Ethnic among employees by 2022. Last year the company launched an ambitions strategic program “Be Yourself” to address inequity issues and to attract a more diverse workforce and building a more inclusive environment. Also, in 2018, Virgin Atlantic registered as an apprenticeship employer provider and now they can provide the training and extension courses (for 6 months already 141 apprentices across the business were enrolled). In the reporting period Virgin Atlantic also launched a mental health first aid training for their employees with the aim to support mental health, to reduce stigma and discrimination within the workplace (including 22 mental health awareness courses, 11 sickness absence training workshops, 8 stress workshops and ran a trial of Headspace, a mindfulness app). Social minorities are supported by employee networks (women’s networking group with 450 members, LGBT+ community with 400 members etc.).

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Taking full care of its customers Virgin Atlantic address the most important social problems of modern society. Thus, collaboration with some hotels helps to slightly reduce prices for single parents, special tablets with increased text size and audio descriptive movies for entertainment onboard were designed for passengers with sight loss and hard of hearing. One more interesting initiative is a Hidden disability with the main idea to help people with autism. Such people have to use a special symbol (it can be pin badge or a sticker on a passport) that can be trucked by extensively trained Virgin Atlantic staff and they will provide an extra assistance if needed.

Another socially oriented program made by Virgin Atlantic is a continuous support numerous charity funds. In 2018, the airline and the Virgin Atlantic Foundation (established in 2003) distributed the equivalent of 1,2 million pounds in donations. The main partner here is “WE” charity found with two programs: WE Schools that is organizing educational programs for children aged from 7 to 18 years from low-income families; while WE Villages initiative addresses important issues such as limited access to water resources, lack of primary education and qualified medical care, hunger in poorest, rural and remote areas. More than 300 thousand pounds were spent for flight tickets to children requiring lifesaving and life changing medical treatment.

In the framework of Virgin Atlantic sustainability campaign there are several UN Sustainable development Goals addressed directly: SDG 5 (Gender equity); SDG 8 (Decent work and economic growth); SDG 9 (industry innovation and infrastructure); SDG 11 (Sustainable cities and communities); SDG 12 (Responsible consumption and production). Indirect impact from sustainability initiatives could be on SDG 3 (Good health and well-being), SDG 4 (Quality education), SDG 10 (Reduction inequities), SDG 13 (Climate action), SDG 14 (Life below water) and SDG 15 (Life on land).

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5. Discussion

This paragraph will provide the discussion on obtained data about how considered Russian and European airline companies implement sustainability initiatives and address 17 UN Sustainable Development Goals (SDGs).

5.1. Comparative analysis

As it was reviewed in paragraph 2.1 each SDG is covered by a number of related targets, which in turn should be maintained by governments and private sector. Before proceeding with the discussion of sustainability policies, it would be relevant to look at basic financial and general characteristics the above considered aviation entities. It is evident form the Table 3 that UTair, Virgin Atlantic and Ural airlines are less developed companies than other considered entities. This differentiation will allow companies to be analyzed from a different perspective, namely whether the size of the company affects how actively it supports sustainability. It should be noted that larger companies with bigger revenues may have greater capacity and economic resources to develop better internal sustainability policies.

In order to summarize the information form Chapter 4 and form Appendix as well as to provide data about which SDGs are addressed by certain airline, Table 5 was elaborated by the author. There is “X” sign, if the airline reports on projects, initiatives or programs directly corresponding to SDG and its targets. “O” sign means that considered airlines cooperates or impact to another companies, charity funds, communities or non-profit organizations that are in turn directly influence the achievement of certain SDG. If there are no initiatives or any other references to certain sustainability goal in considered secondary sources, there is a dash in the block. In order to answer the main research question and sub-question the data form Table 5 would be presented by means of graphs and visualizations.

Aeroflot UTair Ural LH Group SAS Virgin Airlines Atlantic SDG 1 (No Poverty) ------SDG 2 (Zero hunger) ------SDG 3 (Good health Х Х X O O X & well-being) SDG 4 (Quality X Х X X O O education) SDG 5 (Gender O - - X X X equity)

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SDG 6 (Clean water ------& sanitation) SDG 7 (Affordable & - - - X O X clean energy) SDG 8 (Decent work X Х X X X X & economic growth) SDG 9 (Industry X X X X O X innovation & infrastructure) SDG 10 (Reduction X Х X O O O inequities) SDG 11 (Sustainable X - - O O X cities & communities) SDG 12 X X X X X X (Responsible consumption/ production) SDG 13 (Climate O O O O O O action) SDG 14 (Life below ------water) SDG 15 (Life on ------land) SDG 16 (Peace, X - - X X X Justice & strong institutions)

SDG 17 (Partnership O O O O O O for the Goals) Table 5 - Addressed Sustainable Development Goals by airline companies (own depiction)

In the framework of current research different types of secondary sources were analyzed. The main sources of information on sustainability campaigns of airline companies were their websites. The first conclusions were drawn from the information on the corporate pages. For example, all airlines reviewed have a separate page for stakeholders that contains financial and non-financial reports, information for private investors and general description of a company. All entities apart from Ural Airlines and UTair have a sustainability section where a company describes its strategy in this area and provides information on each direction of its sustainability activities. The most extensive information is provided by one of the world's leading air carriers, the Lufthansa Group.

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The company annually publishes a dedicated sustainability report for more than 100 pages, where it discloses information in such areas as corporate responsible management, climate and environment, employees and society, product and customers. Moreover, a sustainability report is annually published by Virgin Atlantic, where the company is emphasizing its principles of sustainable and responsible business operations. SAS airlines, Aeroflot and Ural airlines provide non-financial reporting as part of their annual report, while UTair does not have separate chapter about sustainable development and CSR, but only a few paragraphs about charity events and fuel management.

Figure 10 depicts the number SDGs that are related directly or indirectly to company’s sustainability policy and sustainability initiatives. It is evident form the bar chart that all European air transporters address twelve SDGs within their operation activities. However, there are slight differences in direct or indirect actions towards these goals. It is because the focus on a target can differentiate across companies. 10 SDG goals supported by Aeroflot Russian airlines brings the company on the fourth place, while UTair and Ural Airlines with the same number of related SDGs are least involved into UN Agenda 2030. According to the information form Figure 10 it can be undoubtedly stated that European companies contributes more to sustainable development promotion and aligning their business activities and strategies with respect to SDG achievement.

14

12

10

8

6

4

2

0 LH Group SAS Virgin Atlantic Aeroflot UTair Ural Airlines

Total direct Total indirect

Figure 10 - Airline companies by addressed (both directly/indirectly) SDGs (own depiction)

As the results form Appendix indicate, all six aviation entities have similar sustainability target areas and actions, however they are differentiated in coverage levels and are grouped and categorized differently. All considered airlines have tree main target areas: environmental, social and corporate.

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Information in Chapter 5 and Appendix showing that air carriers are focused more on a certain area – climate and environmental responsibility. Figure 11 indicates that sustainable development of the reviewed companies is aimed at solving problems related to the reduction of environmental impact as all six airlines address SDG12 (Responsible consumption & production), SDG13 (Climate action). Thus, each of the 6 companies are active in optimizing the use of aviation fuel through the development of optimal routes, use of modern aircrafts with more energy efficient engines, implementation of programs to monitor fuel use and CO2 emissions.

SDG 17 SDG 16 SDG 15 SDG 14 SDG 13 SDG 12 SDG 11 SDG 10 SDG 9 SDG 8 SDG 7 SDG 6 SDG 5 SDG 4 SDG 3 SDG 2 SDG 1

0 1 2 3

EU Russia

Figure 11 - Addressed SDGs by EU and Russia (own depiction)

It is worth to note that only European companies imply activities towards development and implementation of alternative ecologic fuels (SDG7 - Affordable & clean energy). Nonparticipation of Russian companies in this matter can be explained by the fact that there is a lack of support from government to use alternative fuels. In general, Russian private sector is not interested in investing in the development and use of green energy sources, as there are few projects, subsidies, preferences, or special tax reduction programs in this area. One more distinctive feature of European companies’ environmental policies are the indirect efforts towards SDG 11 (Sustainable cities & communities) as one of the targets of this goal is to кeduce the negative environmental impact per capita. The actions of European companies on this task include noise abatement in close to airports areas initiatives: optimal route planning, night flights with quitter

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aircrafts, investment in modern engines with lower noise contour. Among Russian companies only Aeroflot has single initiative towards noise reduction: new piloting techniques. Speaking about the environmental aspect of SDG 9 (Industry innovation & infrastructure), then European airlines are also in the lead. Lufthansa, SAS as well as Virgin Atlantic are currently switching to use electric vehicles for ground operations and sustainable technologies for maintenance of buildings and other properties, which, in turn, contributes to the modernization of enterprises and industrial processes, increases the efficiency of resource use, and expands opportunities for the use of clean and environmentally friendly energy sources.

The material environmental effects of flight operations count among the industry’s significant targets. In the framework of environmental sustainability activities most companies have the same concept: emissions and fuel consumption, flight noise abatement as well as energy (and resource) management. These three targets are generally important in the aviation industry, and not only airline specific as the CO2 emissions of civil aviation currently account for 2.83% of all CO2 emissions caused by human activities, according to the International Civil Aviation Organization (ICAO) data (Annual Report of the ICAO Council, 2019).

The social aspect of sustainability can also be traced in the activities of all companies reviewed and can be divided into two areas: HR management and philanthropic projects. However, activities in these directions of European and Russian companies slightly different.

HR management in considered companies mostly corresponds with principles of the UN Global Compact which defines that the social sustainability of business is one of the key components of achieving sustainable development. The cornerstone of corporate social sustainability is human rights and business activities towards creation of comfortable work environment. Social principles of UN Global Compact correspond directly with the SDG 5 (Gender equity), SDG 8 (Decent work & economic growth) and SDG 10 (Reduction inequities). It can be also seen form the Figure 11 that mentioned above goals are more addressed by European airlines. For instance, Lufthansa group has comprehensive Human Right protection program with annual internal audits, group- wide communication campaign and human rights working group establishment. SAS airline Code of Conduct implies zero-tolerance policy toward all forms of harassment, while Virgin Atlantic supports gender, race and disability equity by means of corporate programs. On the contrary, among Russian companies only Aeroflot have started to address inequality issues in recent years, while Utair and UralAir have not yet report on similar activities.

Figure 12 illustrates structure of internal social initiatives of Russian and European companies. It is evident that activities of European air carriers are more extensive than of Russian companies.

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Russian companies' HR policy is more focused on providing a wide range of social benefits to their employees. These programs mainly include a pension supplement, an extended insurance package, covering part of the costs of childcare, health resort treatment etc. However, similar social programs are also run by European companies, which bring to the conclusion that Western companies are more actively involved in UN Global Compact agenda.

Personnel Personnel management management programms in EU programms in companies Russian companies

Gender equity Expanded support pension payments Huma rights protection Health and resort prpgramms treatement

Talent Partial coverage of management childrencare costs

Creation of comfortable work Medical environment maintainance

Occupational Medical health and safety maintainance measures

Training and Disabled people developement support programs

Training and developement programs

Cooperation with labour unions

Figure 12 - Structure of internal social initiatives in EU and Russian airlines (own depiction)

Philanthropic initiatives of Russian and European companies also have one very important difference: the object of charitable activities of Russian companies is also Russian companies, foundations, and social institutions. On the contrary European companies focus more on third world or developing countries. This peculiarity can be explained by the fact that Russia is a developing country with a wide range of social and economic problems. Financial support from the state is not enough for all municipal organizations and disadvantaged segments of society. In this regard, Russian companies primarily stand up for their philanthropic activities as part of the solution of national problems. For example, due to the vast territories and high prices of transportation services within the country, all three considered Russian carriers have a loyalty program for flights from remote parts of Russia. Participation in these programs gives the air carriers an advantage in terms of finding new routs as well as increasing the company's visibility

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in all regions of Russia. Moreover, all three companies support orphanages, seriously ill children that need expensive surgeries or medical assistance, people of retirement age etc. On the other hand, European considered airlines contribute more for low-income countries. In the framework of Lufthansa charity program, they build educational centers in South Africa and launch educational program in Brazil. SAS U-Assist non-profit initiative is aimed at help children in developing countries. We Villages campaign that is sponsored by Virgin Atlantic addressing such problems as lack of access to water, poor education, hunger, healthcare and economic opportunity in poor, remote and rural areas.

The social policy approaches of European companies correspond more with UN Agenda because its main idea is to help low-income countries to overcome all UN sustainability goals. In addition, considering the social impact of Russian airlines, the activities can also contribute to sustainable development, but only at the national level.

The main difference between sustainability policies of Russian and European companies is their responsible business approach, which includes building dialogues with stakeholders, anti- corruption measures, sustainable supply chain management and other business initiatives. Figure 13 summarizes the information regarding corporate business approach of European and Russian airlines. The most active airline in this area is Lufthansa Group. Continuous exchange of information with Lufthansa stakeholders helps the company to obtain information which spheres of their business activities are needed to be improved. As was stated in Chapter 2.3 of theoretical part this approach may also have economic benefits for the company. Anti-corruption policy is also an important aspect of the company's sustainable development which relates to the SDG 16 (Peace, Justice & strong institutions). The Lufthansa airline also aligns human rights protection programs and sustainable innovation initiatives with sustainable corporate governance. Supply chain management initiatives bring together all three European companies within the framework of the corporate sustainability measures. Implementation of green supply chain management practices helps airlines to gain sustainable competitive advantages and benefits in long-term perspective (Azevedo et al., 2011).

Among Russian air carriers, only Aeroflot reports on anti-corruption measures within their sustainability policy. The company is also introducing special technological tools for efficient and transparent procurement activities. In corporate disclosure documents of Utair and Ural airiness there are no references to any activities towards corporate sustainable management.

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Sustainable supply chain management Human rights protection Anti-corruption measures Sustainabe innovation Dialogue with stakeholders

Anti-Corruption policy Sustainable Supply Chain management Dialogue with stakeholders

Sustainable upply chain management

Anti-corruprion measures

No references to responsible business approach

No references to responsible business approach

Figure 13 - Airlines’ corporate sustainable governance measures (own depiction)

This gap between European and Russian approaches might be due to the fact that Russian companies have just begun to incorporate sustainability principles into their business operations. Building an effective and sustainable supply chain in Russia means huge investments and a long search of partners adopting sustainable practices. Moreover, in these conditions, it is also difficult to get a feedback from stakeholders who are not yet aware of the importance and need for sustainable development.

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5.2. Summarized Results

Summarizing the insights on comparison of European and Russian sustainability activities of airline companies can be found in Table 6. Russian Airlines European Airlines The most sustainable Aeroflot Group Lufthansa Group airline Number of UN SDGs 10 out of 17 12 out of 17 supported Managing fuel efficiency, alternative Main environmental Managing fuel efficiency fuels implementation, control of initiatives emissions for ground operations, noise abatement Diversity support, comfortable work Social benefits for employees Main social environment initiatives Charity projects in Russia Charity projects in low-income counties The corporate Sustainable Supply Chain - initiatives management

Table 6 - Summary of comparative analysis of Russian and European airline companies (own depiction)

Thus, sustainable development activities in Russian and European companies have both differences and similarities. The analysis revealed that the industry specific target in sustainable development policies is reduction of environmental effects as all six companies implement broad environmental campaigns. According to the data obtained, this is the only valuable similarity that Russian and European companies have in the framework of a sustainable business model. It was revealed more differences in sustainable development approaches, so it would be relevant to answer the second research sub-question “What are the main differences in approaches towards sustainability in Russian and European airline companies’ strategies?”:

• In general, sustainable development policies of European airline companies include all tree sustainability dimensions: environmental, social and economic. On the contrary, Russian companies are more focused on environmental perspective. • In the structure of environmental programs of all six companies it can be seen some similarities. However, European companies applying more technological methods for reducing negative ecological impact by means of electric aircrafts development, implementation of electric vehicles for ground operations, investments in alternative fuels, cooperation with airplanes manufactures for updated engines with low noise contour. • Reviewing the external social practices of Russian and European companies it was revealed that Russian are more active in philanthropic activities within national targets, but not

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address global international issues, while European entities aims their charity programs at providing support for poor countries. • Internal social policies of European companies are based on UN Global Compact principles with the focus on human rights protection and diversity support. Russian airlines are not active in this area. • The approach towards corporate responsibility is understood differently in each considered company and include different initiatives. However, all European companies apply sustainable supply chain models, that are disseminate the sustainable development ideology within and outside of aviation industry. Among Russian companies only Aeroflot reports on responsible business approach that is limited only by anti-corruption initiatives.

The outcomes of the multiple case study show that European airline companies are more integrated into UN Sustainable Development Agenda. Russian airlines' practices in this direction are still very superficial and do not have a comprehensive approach.

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6. Conclusion

This chapter will provide the summary of obtained results as well as limitations current master thesis and the possibilities for future research.

6.1. Main implications

The current master thesis was elaborated on the sustainable development measures implemented by developed and developing counties by means of using primary comparative study. The research probers the question: What characterizes different approaches to sustainable development in countries with emerging and advanced economies? Russia and European Union were chosen as bright examples of regions with different level of economic development. In the framework of literature review it has been presented and studied Russian and European sustainable legislation and sustainable development policies, while practical part examines 6 chosen airline companies on be basis of multiple case study method. The obtained insights show more differences then similarities in approach towards achieving sustainable development in considered regions. Thus, the main findings based on theoretical and practical analysis are:

• Legislation and national strategy of European countries towards sustainable development corresponding with triple bottom line framework and cover all tree pillars of sustainability: environmental, social, economic; • Russian legislation and sustainable development national strategy mainly aiming at environmental aspect of sustainability that is also corresponding with outcomes of case study analysis; • The EU legislation and SDS address not only national but also global sustainability objectives, while for Russia only internal issues are in the main focus; • As a part of EU sustainability strategy, the dialogue with all stakeholders is build, while in Russia public participation in sustainable development is very limited; • Lufthansa Group is the most active in corporate sustainable development among considered European companies, and in Russia it is Aeroflot; • Sustainable development in European airlines is more complex and cove all spheres of a company's business activities; • The solution of problems related to the reduction of the negative impact on the environment is industry specific feature, as all considered companies implement extensive environmental policies; • The fuel of efficiency is at the top of environmental agenda in all considered airline companies;

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• Social policies In European companies are based on UN Global compact principles; • For European companies, sustainability is linked to the commercial success of the company. Western developed countries see sustainability as a competitive advantage rather than a legal obligation.

The results illustrate that sustainability strategies of European Union are balanced between tree main pillars of sustainability: social, economic and environmental, while in Russia they are more fragmented and does not imply a comprehensive approach. At the same time Russia has also introducing many initiatives and measures towards sustainability that are similar to European ones. In general, Russia has a great potential and possibilities to develop more effective sustainable development approach by applying triple bottom line framework.

The described above outcomes of current master thesis can have both theoretical and practical implications. First of all, the differences in approaches to sustainable development between developed and developing countries are not sufficiently covered by scientific literature. With a more detailed analysis of the reasons for these differences, it is possible to build a more effective approach to the transition to global sustainability, taking into account the peculiarities of all regions. Secondly, the experience of developed countries in achieving sustainable development goals can be applied to developing countries. Thirdly, this thesis provides the comparative study only Russian and European airline companies in terms of sustainable development, so this topic has a great potential for future research among airlines form other countries or other industries.

6.2. Future research and limitations

This paragraph aims to consider the limitations of current study and identify possibilities for future research. Due to the nature of the applied research method – a multiple case study and limited sample – 3 Russian and 3 European airline companies, there are three main limitations. Firstly, the conclusions obtained were formulated as a result of secondary data analysis. However, in order to develop more aligned and reliable research the quantitative method, with the use of such methods as surveys, focus groups or interviews, could be applied in the future.

Secondly, the results can be hardly applied to other companies or countries. In order one could fully comprehend how developed and developing countries address UN Sustainable Development Goals and evaluate the effectiveness of approaches to sustainable development it would be relevant to expand the sample size. For instance, it would be interesting to analyze sustainability initiatives of such developing countries as Qatar or The United Arab Emirates. National air carriers in these countries are leaders in the considered industry and may, as part of their sustainability policies, be ahead of their competitors from developed regions.

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Thirdly, civil aviation is controversial form sustainability perspective due to this the final outcomes of current research could not be applied to other industries. For more valuable and illustrative results for the differences in sustainable development approach in developed and developing regions it is better to conduct cross-sectoral analysis.

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8. Appendix

Appendix A: Aeroflot airlines case study Policy Key Main implications Related Standart/ Results directio Initiatives SDG legislation n • Ensures that products and services comply with internal and international ISO 9001 In 2019 reduce fuel consumption by Environment regulations and standards; EU ETS 17.7 thousand tons = decreasing al • Third-party service control in the framework of IATA pools; CO2 emissions by 55.7 thousand Management SDG12 tons. System • Control of compliance with the EU ETS requirements; SDG17 • Monitoring of compliance with CORSIA (the Carbon Offsetting and Reduction Total environmental protection costs (EMS) in 2019 were 36,7 million rub. Scheme for International Aviation). • Use of modern and fuel-efficient aircraft reduces greenhouse gas emissions; Pursuant to Decree of the CO2 emissions reduction by 55.7 • СО2 emission monitoring reports; President of the Russian thousand = 286 flights between • Scheduled maintenance of aircraft (repair and replacement of aircraft parts; Federation No. 889 On Moscow and Vladivostok. implementation of energy-efficient technologies; testing of energy resources with Selected Measures to lower carbon intensity; evaluation of possible use of certified biofuel; use of new Improve Energy and Managing piloting techniques to reduce noise and emissions); SDG9 Environmental Efficiency fuel • Annual program of fuel efficiency and CO2 emissions reduction (standard SDG12 of the Russian Economy efficiency volumes for refueling aircraft; lower fuel consumption through reducing water SDG13 supplies on board; improving aerodynamics through surface washing etc..); Order No. 300 of the Environme • Provides passengers with information on the carbon footprint of its flights via Ministry of Natural ntal policy corporate website. Resources and Environment of the Russian Federation

• Disclosing climate change management and GHG emission data; SDG9 ISO 14064 N/A Carbon • In 2019 CDP score was D level of disclosure; SDG12 disclosure SDG13 project • Greenhouse Gas Emission Management Guidelines were approved in 2019 to achieve higher score in CDP. • Monthly control of the efficiency of wastewater and surface water discharged N/A N/A Sustainable SDG9 from treatment plants of the Aeroflot main office; water use SDG12 • Timely replacement of filter elements, cleaning and painting of storage tanks; SDG13 • Efficient water supply planning system for each flight. Reducing • Waste sorting points at home airport and in the office complex; N/A A total of 10.2 tons of paper and SDG9 of industrial/ • Waste sorting from each flight; cardboard was utilized in 2019 = SDG12 commercial • Provision of reporting documents to environmental authorities; reduce CO2 emissions by 17.4 tons. SDG13 waste • Utilization and neutralization of highly hazardous waste;

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• Seminars and webinars on environmental issues with employees.

Gender • Women account for 55.5% of companies’ total headcount; N/A . N/A SDG5 equality • In 2019 company employed 86 female pilots support • Cooperation with educational centers, with specialized higher and secondary In 2019, it was arranged educational institutions and employment centers; training for over 36,000 current and • Participation in the targeted training program from the federal budget. In 2019, future employees. Personnel 78 applicants entered the program; SDG4 training and • The company annually assigns 50 personal scholarships per month to the SDG8 development cadets of civil aviation industry educational institutions;

• In 2019, organized internal training for more than 36 thousand listeners; • Own simulator complex for training pilots and flight attendants certified by HR policy EASA body. Topped Forbes 2019 ranking of Social • Expanded occupational pension scheme; Russia’s best employers in the programs for • Corporate Sports Development Program (permanent football, volleyball, ice SDG8 Average Salary and Social Benefits employees hockey and tennis sporting clubs; Fitness club memberships); categories • Reimbursement for daycare costs. • Medical center providing healthcare services to employees and their families; In 2019, 4,300 people benefited Health and • Multi-channel employee voluntary reporting system (related to operational from rehabilitation treatment at safety improvement proposals. workplace atmosphere, working conditions, employee SDG3 health resorts. measures for development, safety and security requests); A total of 18.8 thousand employees employees • Health-resort treatment for employees. took the regular medical check-up in 2019. • The «flat fare» program run at the Aeroflot own cost (fixed N/A 2.3 million passengers Transport • low prices for economy class tickets to cities in the Far East, Kaliningrad and were carried under the «flat fare» accessibility Simferopol) program in 2019. to all regions • Government-sponsored programs that maintains airline passenger services of Russia between the Far East and European Russia • Miles of Mercy program. Donated miles are transferred to charity organizations SDG11 Social for seriously ill children in need of treatment in other cities or countries; policy Support to • Providing material assistance to orphanages; 10 million RUB went towards charities • Aid to Great Patriotic War veterans and annual celebration of the Victory Day charitable support for orphanages in and socially (the program provides veterans with monthly food packages and flights to SDG10 celebrate the day of victory in the Great Patriotic War); 2019. oriented 6.8 million RUB went towards campaigns • Targeted aid to passengers and various organizations; veteran food packages in 2019. • Sponsorship to sports organizations and cultural project.

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• In 2014, the company joined the Anticorruption Charter of Russian Business; Federal Law No. 223-FZ In 2019, procurement totaled RUB • Aeroflot Group Anti-Corruption Policy, Aeroflot Code of Corporate Ethics and On Procurement of 606.0 billion. other documents are in force; Goods and Services by Competitive procurement share Combating • The modern competitive methods of procurement (B2B-center.ru and SDG16 Certain Legal Entities increased to 46.9% (by value). corruption kim.tektorg.ru) with a wide range of suppliers are used; SDG 17 2011 Savings on competitive policy • Procurement activities are monitored on the basis of SAP system; procurement were RUB 51.1 billion. • Purchases from small and medium business entities amounted to 86.2%; • IAS disclosures, GRI sustainability reports.

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Appendix B: UTair airlines case study

Policy Key Main implications Related Standart/ Results direction/ Initiatives SDG legislation Ares implemened • Establishment of specific consumption of aviation fuel (2.02 tons per hour); No references Reduction of specific fuel consumption • Aircraft weight optimization measures; by about 3.3% compared to the • Implementation of the control system on compliance with the recommended previous year flight modes; Annual • The principles of aircraft placement on routes were revised, the schemes of Environmental takeoff and landing at the main base airports were optimized, the cost index Management SDG9 Enviromnetal management system was introduced; Program SDG12 protection • Aircraft are arranged for flights with due consideration of the Degradation SDG13 Factor; • Analysis and control of MEL requirements that are affecting the increase in fuel consumption; Disposal for recycling of different types of waste. 7.8 tons of paper, 5 tons of glass and Waste recycling 20.5 tons of plastic were transferred for program recycling • Optimizing remuneration and motivation of employees; No references Total training and qualification • Organizing mandatory training and development courses of flight crew; maintenance costs for the Airline's • Implementation of corporate training plan for the Airline's ground staff; personnel was RUB 117,384,285 • Organizing of special events for employees under occupational safety programs; Personnel SDG3 HR policy management • Medical maintainance of emploees; SDG4 system • Rewarding system of employees for achieving the highest KPIs; SDG8 • Social progarms for emploees: -provision of gyms and swimming pools; -corporate recreational events; -provision of air tickets at reduced rates for employees and their families; -professional competition among flight units and flight attendants' services. • «Veteran» campaign. The transportation of the participants of the Great No references Patriotic War free of charge; Charity and Social • Cooperation with search and rescue team "Lisa Alert" providing free of sponsorship SDG10 programms charge flights for volunteers; projects • Partnership with charity found "Give life!”; • Kremlin tree campaig.

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Appendix C: Ural airlines case study

Policy Key Main implications Related Standart/ Results direction/ Initiatives SDG legislation Ares implemened Fuel and noise • Modern aircrafts in terms of fuel efficiency and low noise levels; ICAO Fuel consumption in 2019 was 2.758 efficient use requirements tons per flight hour (-0.7% compared to • Annual reports on greenhouse gas (CO2) emissions via the Company's EU ETS 2018). route network in the Russian Federation; CO2 emissions in 2019 were 1,115,644 • The company participates in the EU ETS system for accounting of CO2 tons (7.66% lower than in 2018). emissions; SDG9 Envitonpemntal SDG12 protection • Implementation of a system for monitoring and reporting CO2 emissions within the global CORSIA system (ICAO). SDG13 11.8 tons of wastepaper and cardboard, were transferred for recycling = 117 Waste recycling • Arrangement of waste sorting points; trees = reduction CO2 emissions by initiative • Recycling of different types of waste; 20.07 tons. • Annual reports to environmental protection and supervisory authorities. Charity and • Joint project with charity fund «Flight with Ural Airlines is just a very good No references Approx. 2 million RUB were sent for sponsorship thing»; helping the participants in this fund. Social initiatives projects • Annual program for veterans of Great patriotic War; SDG10 • State programs of subsidized transportation; • Charitable project «Wings of Kindness». Social programs • Professional training and development program; No references In 2019, total cost of professional for employees • Arrangement of health resort treatment for employees; SDG3 development of employees was RUB HR policy • Organizing summer holidays for employee's children; SDG4 92 million. • Investments in occupational health and safety measures; SDG8 • Medical maintainance of emploees.

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Appendix D: Lufthansa Group case study

Policy Key Main implications Related Standart/ Results direction Initiatives SDG legislation • Establishment of Environmental Guidelines within the Group in tree ISO 14001

directions: fuel efficiency and climate protection, active noise abatement, energy EMAS SDG 12 and resource management; (Ecomanagement SDG17 • Implementation of certified EMS step-by-step across all companies of LH and Audit

Group. • Investments in quitter aircrafts equipped with modern engines with lower ICAO In 2018, minus 10-decibel criterium noise contour and cooperation with aircrafts manufactures; achieved. • Implementation of new engine technologies to the existing fleet (vortex generators up to 4 decibels quieter); Noise • Participation in noise research and development projects together with all SDG9 abatement group airlines and LH Technik; SDG11 initiatives • Active participation in measurement packages aimed at noise abatement in the framework of dialogue forums; • Development of approaches that would optimize the tale-off and lending operations and flight routings. Environmental • Participation in working groups of IATA such as the Environmental GHG Protocol Est. CO2 reduction would be 3 initiatives Committee and the Industry Affairs Committee as well as the Board of million tons per year. Governors; A total of 6,539 tons of carbon • Set of internal goals to reduce its specific CO2 emissions by 25% by 2020; dioxide was compensated in 2019. • Annual report on carbon footprint based on the Greenhouse Gas Protocol; • Investments in new technologies for aviation industry (new aircrafts purchasing, new engines development); SDG7 Strategies of • Investments in researching and testing of alternative aviation fuels; SDG9 effective fuel • Development of standardized airspace above Europe – SES, which will allow SDG12 consumption aircrafts not to fly detours; SDG13 • Adoption of intermodal transport concepts that systematically interlink air, rail and road traffic into ground operations; • 21 fuel-saving projects implemented relating to weight reduction, flight route optimization and technical developments; • COARSIA agreement that obligates to pay the corresponding CO2 compensation costs; • The option for customers to offset CO2 emissions for the purchased flight.

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• Energy optimization initiatives in buildings; EU Energy Energy and • Annual energy audits to evaluate measures to increase energy efficiency; Efficiency SDG7 resource • Transition of all offices, hangars and warehouses to LED lighting; Directive SDG9 management • eMove project: the world’s first electrically powered tug for wide body SDG12 aircraft;

• Development of fully electrified catering lift truck “LSG eLift” • Replacement of a diesel-powered forklifts with a modern electric forklifts; • “Fly greener” initiative: optimization of loading of beverage trolleys, No references developing a recycling trolley to establish alternative options for the disposal of liquids, support crews with their knowhow and raise their environmental Waste awareness; SDG13 management • Replacement of disposable plastic products to more environmentally friendly, optimization of taking superfluous catering items on board by means of demand- oriented approach; Dialogue with • Continuous exchange of information with LH stakeholders; SDG17 UN Global stakeholders Example: Group-wide employee survey “Involve me!” Compact • Established in 2017 Code of Conduct protects human rights; • Suppliers must respect human rights according to procurement policy; • Establishment of human rights working group in 2017; SDG5 Human rights SDG8 protection • Annual external audit of Lufthansa Group with respect to increased risks of human rights violation; SDG10 • Group-wide communications campaign dedicated to the topic of human rights; • According to procurement policy Lufthansa cooperates with those suppliers, who comply with current law, guidelines and regulations concerning fair Corporate Sustainable competition and sustainability principles; SDG17 sustainable supply chain governance • Standardized contracts with specific obligations for suppliers; • “Silver status” confirmed by EcoVadis; • Developed by Lufthansa Technik AVIATAR platform for digital MRO (1000 aircrafts registered); • Development of AVIATION DataHub, a data platform on which all market participants can digitally gather, combine and process technical and flight Sustainable operations data; SDG9 innovation • LH Technik is the world’s leading supplier of technical aviation services; • Lufthansa Innovation Hub is developing 23 innovation projects for aviation industry; • Cooperation projects with aircraft manufacturers, airports and fuel producers to advance;

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• Establishment of Corporate Compliance Office as a coordinating body of anti-corruption policy; Fighting • Online anticorruption training of responsible employees; SDG16 corruption and • Business partners are annually reviewed for corruption and antitrust risks by bribery means of a compliance risk internal assessment; • System of ombudsman is used. • Promotion of diversity and equal opportunities for each employee; DIN ISO Shape of woman on management • Mentoring program “GoAhead” that involves identifying strong female SDG5 9001:2015 positions is 15,9%. leaders with the necessary characteristics for a leadership position; SGD10 Share of woman on pilots' position is Diversity policy • Following the principle of “same pay for same performance”; German Civil 15%. • LGBTI network was given a formal framework “Diversify – we color the air”; Aviation Act • Lufthansa Group has advertised all vacancies by including the third gender. • The work-life integration programs for employees with children (offers In 2019, 4,3% were the people with flexible work-time models, summer school vacation case programs); disabilities.

• Support for disabled people by providing the necessary working conditions; Social policy Talent • Professional reorientation program “myTurn” was launched; management SDG3 • Big amount of initiatives to motivate employees for achieving new career and creation of SDG4 prospects; comfortable SDG9 environment • Consulting offers in medical issues (stress management and recovery capacities); • Tree Medical Centers for Lufthansa, SWISS and Austrian Airlines employees. • “Help Alliance” – a charitable organization that currently supports more than No references 80 000 of employees donate form 40 projects worldwide; their salary. • Company provides fast emergency flights and aid during crises and catastrophes; Group’s spending for aid projects • “iThemba” project in South Africa that helps children to receive a high-quality was 2 million euros and helped Philantropic primary education; SDG4 around 23,000 people around the activities • “Broadening Horizons” program for participants from Brazil that provides SDG10 world. courses for bakers and pastry chefs; • Building of the Happy Child Education Centre in Nairobi with the aim to provide a school education for 100 children; • Employees could donate by means of salary deduction.

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Appendix E: Scandinavian Airlines case study

Policy Key Main implications Related Standart/ Results direction Initiatives SDG legislation Environmental • Set of Long- and short term environmental goals; ISO 14001 In 2019, reduced CO2 emissions for Management The 2030 goals (compared to 2005): reduction of CO2 by 25%, increase in SDG13 2.4% compared to the previous year. System (EMS) biofuel use up to 17%, noise reduction by 50%, use of 100% sustainable EU Emission Trading materials in customer offering. The 2050 goal: 50% CO2 emission reduction. Scheme (EU- In 2019, 27 A320neo was purchased • Continuous fleet renewal to a more fuel-efficient aircrafts; ETS) • The optimal sizing of aircrafts to the routes with high and low demand; with 15–18% lower fuel consumption. Fluel efficiency SDG12 SAS has offset 1.2 million tons of CO2. The signed SAS' Supplier Code of Conduct by long-term partners that programs • During 2019, noise emissions agreed to introduce fuel saving programs; decreased by 10% compared to 2010. • Support of Single European Sky implementation. Biofuel and • Showing the intention to purchase biofuel for produces of fuel; SAS sourced 455 tons of biofuel during emerging 2019 an increase of 355 tons compared • Introduced for customers in online booking the possibility to add biofuel to SDG7 technologies to 2018. their tickets; SDG9 development • Projects aimed at commercializing electrically propelled aircraft after 2025. and support Environmental Sustainable • Cooperation with suppliers and customers to develop more sustainable protection products and products and services throughout the value chain. SDG12 services use • The possibility to carbon offset for all customers; In 2019,1.2 million tons of CO2, or 32% • The company itself carbon offset the tickets all staff tickets and Eurobonds of the passenger-related CO2 members tickets; emissions were offset. • Minimization of glycol, diesel and petrol use programs; • The new program to switch to ground maintenance vehicles with lower The usage of glycol was lowered to Other environmental impact; SDG7 2,807 (3,149) thousand liters in 2019. environmental • Programs to reduce missions from energy consumption in buildings SDG11 initiatives (replacement of hangar lights to LED); SDG12 • Compliance of all regulations in place along flight paths that are close to residential areas; • Waste management programs including onboard meals planning; • Polluter Pays proncipal suppot; • Implementation of CORSIA reporting system. Divercity policy • SAS promotes the equal treatment of all employees; EU-OPS Gender distribution in 2019 was 35% SDG5 IATA women and 65% men. • Encouraging gender equality and diversity through its recruitment policy. Personnel policy Personel traning • Organization of annual training programs; In 2019, it was organized 523,000 and SDG4 hours of training. development

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• Flight crews, technical- and operational ground staff have to approve a number of license and competency requirements. • Zero-tolerance policy toward all forms of harassment that is regulated by Health and Code of Conduct; safety measures • Improving processes for systematic follow-up, educational activities and SDG3 for employees clarification of definition in collaboration with safety representatives;

• Medical center providing healthcare services to employees. • Day-to-day collaboration with labor unions; Cooperation • Employee representatives from the Scandinavian countries sit on the SAS with lobour SDG8 Group Board of Directors; unions SDG10 • Negotiations with labor unions to reduce costs and increase the flexibility of existing union agreements. • The SAS Code of Conduct, Legal Policy and SAS Antibribery Policy are the No references documents that regulates anti-corruption policy; Anti-Corruption • Competition Law Compliance Program; SGD16 policy • Employee anti-bribery training related to the purchase of goods and services and interaction with customers. • SAS Code of Conduct and the SAS Purchasing Policy regulated purchasing Sustainable activities in SAS; Supply Chain • All SAS suppliers have to meet social responsibility requirements, SAS SDG17 Purchasing Policy, and the general terms and conditions of the UN Global Compact. Responsible • NGOs and the media address issues related to the significance of aviation business Dialogue with as an enabler for globalization or aviation's environmental impact; policy stakeholders SDG10 • Educational institutions seek a deepened knowledge on company’s goals

and strategies to reduce CO2 emissions. • Commercial agreement with Swedish government to provide two specially 500 children have been supported equipped Boeing 737s as air ambulances; through the projects during 2019. • Norwegian ‘Christmas flight’ project; • Olympic and Paralympic partner in Denmark, Norway and Sweden; Social initiatives SDG10 • The sport exchange program offered three Scandinavian youth teams for an exchange program; • SAS U-Assist non-profit initiative that is aimed at help children in developing countries.

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Appendix F: Virgin Atlantic Airlines case study

Policy Key Main implications Related Standart/ Results direction Initiatives SDG legislation Annual report on carbon footprint within tree scopes: direct emissions form flight ISO 16064-3 Scope 1 accounts 71.2% of all Carbon footprint and ground operations; indirect emissions from ground electricity consumption; SDG 13 emissions form company’s direct emissions from sources such as the products and services company are Greenhouse Gas operations. Scope 2 is only 0.1% purchasing. Protocol and Scope 3 - 28.7%. • Fleet renewal -10-year program to replace four engine aircraft to more Each new aircraft is around 30% efficient two-engine aircrafts; more fuel efficient per trip. Aircraft carbon • Implementation of efficient flying program: minimal use of engines while In 2019 it was saved 185 tons of and fuel use moving from a stand to an airfield; access to the updated and customized wind SDG 12 CO2. minimization and temperature information;

• Partnership with ClimateCare on new offsetting initiatives for customers

within the carbon offsetting calculator; • Preparations to comply with CORSIA regulations. • Cooperation with cleantech company LanzaTech aimed at development of Investemnts in SDG7 new types of sustainable aviation fuels; sustainable fuels SDG9 • Participation in the development of a first carbon recycling plant in the UK; • The main goal: a reduction of noise output per aircraft by 6dB between 2012 Environmental and 2020; initiatives Aircraft Noise • Continuous Descent Operations (an aircraft descent technique that reduces SDG11 Management noise, fuel use and emissions) was implemented; Strategy • Continuous cooperation with airports and dialogue with local communities; • The use of quietest aircrafts on night routs; • Monitoring and reduction of onboard products’ weight; Savings of 4,260 tons of CO2 Amenity kits are only per request emissions and more than £650,000 Waste reduction Removed plastic bags from headsets in fuel costs. and optimization Changed to FSC-certified wooden stirrers SDG12 program No straws on flights • Cooperation with consulting company MNH Sustainable Cabin Services that offers optimizes waste utilization procedures. • New VHQ office was built with modern sustainable technologies (extensive Currently the 59% of all cars were Control of building management system, LED lighting, heat pump technology); replaced by hybrid or electric cars. emissions for SDG9 • Replaced old HVAC systems (heating, ventilation and air conditioning) in the ground SDG12 training center; operations • Transition to a fully hybrid and electric car fleet. Responsible • Suppliers are expected to deal with responsible practices; International Labor Supply chain Supplier policy SDG16 Convention management • Annual publication of modern slavery statement;

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• Cooperation with EcoVadis that provides a scorecard that allows to UN Convention on understand performance of suppliers in sustainability areas; Human Rights

• Partnership with the Sustainable Restaurant Association (SRA) UK Modern Slavery 63% of flights worldwide meet • All suppliers required to meet big amount of standards of responsible and Act (MSA) international sustainability and eco Thoughtful food eco food; SDG12 standards • Compliance with «Climate friendly» standard (states that products caterers have to support biodiversity and do not contribute towards deforestation) • Program launched to have 50:50 gender balance in leadership roles; No references • 12% Black Asian and Minority Ethnic (BAME) representation across business; • Implementation of diversity and inclusion strategy ‘Be Yourself’, which SDG3 commits to attracting and developing a more diverse workforce and building a HR policy SDG5 more inclusive environment; SDG8 • Training and extension courses are provided for employees; • Mental health aid training was launched with the aim to support mental health of employees; Social • Social minorities are supported by employee networks; programs • Cooperation with hotels for reduced prices for single travelers; In 2018, it was donated apporx.1,2 • Developed entertainment equipment onboard for passengers with sight loss million pounds. and hard of hearing; • Hidden disability initiative; Customer SDG4 related • Support the main charity fund “WE” with two programs: SDG10 programs WE Schools that is providing free educational resources and support to students aged seven to 18 years, enhancing the curriculum; WE Villages which focuses on delivering long term change to communities in poor, remote and rural areas addressing such problems as lack of access to water, poor education, hunger, healthcare and economic opportunity.

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