Doing the right thing

Adopting ESG reporting and management frameworks for a sustainable future is now a top priority for the world’s airports, writes ACI World’s director for sustainability and envionmental protection, Jennifer Desharnais.

Globally, airports have a long history of making commitments and taking direct action to ensure they design, construct, and operate in a way that is economically sustainable, inclusive, and socially and environmentally responsible.

This body of work is most often highlighted in airport annual reports, climate action plans, roadmaps and websites.

As environmental, social, and governance (ESG) disclosure requirements grow, both in public and private markets and begin to cascade through supply chains, airports are working strategically to meet investors’ dynamic needs.

They are adopting comprehensive ESG reporting and management frameworks to address growing requests for information on capital project-specific and organisation-wide performance and risk mitigation.

Rightfully, airports have been rigorously identifying issues material to them and integrating ESG factors into their internal strategies and operational decisions, recognising the links between ESG performance and financial outcomes, as well as communicating with investors about their progress and risks mitigation.

This integration of ESG into core organisational strategies increasingly brings business benefits such as operational efficiency, innovation, employee engagement and supply-chain resilience, among others.

Such practices are not only necessary, but hold the potential to provide opportunities, as well as mitigate threats related to access to capital or sustainable finance.

Indeed, more and more jurisdictions are taking an interest in sustainability and ESG reporting, and with sustainable finance taxonomy, governments are starting to legislate which economic activities are considered sustainable, in the hopes of giving clarity to investors and companies, perhaps making today’s standards tomorrow’s regulations.

Airports should further learn, develop, and adopt ESG commitments around transformative practices, while closely examining and adjusting key financial disclosures to identify and clearly acknowledge systemic risks important to their organisation and investors alike.

In doing so, airports can strengthen their position as truly forward-looking organisations, defining key ESG benchmarks and linking them to their company’s purpose, while anticipating and responding to financial markets, customers, and community demands that dictate that these factors be increasingly reported, forecast, and abated before they materialise.

A pre-emptive ESG focus and embodiment within financial disclosure documents by airports can help standardise factors important to capital projects and operational activities. This can allow airports to set and continuously track, report on, and execute these internally agreed-upon metrics.

It also allows airports to create value by embedding sustainability in their organisation, using ESG engagement to sharpen strategies and build governance structures which connect to the core of what airports do, as opposed to responding to the growing and varied requests from investors, accounting, and/or auditing agencies.

As the global aviation industry faces an increasingly volatile operating environment amid shifting stakeholder demands, building trust around a strengthened approach to ESG factors can offer airports a pathway to long-term operational sustainability, competitiveness, and resilience.

ESG is a journey, and ACI’s ESG Management Best Practice, available for free on the ACI World store, aims to help airports better understand ESG and sustainability reporting, the steps they can take to start or improve reporting, and the reasons why investors are interested.

Reaching for zero

From an environmental perspective, arguably nothing is more challenging for the planet today than climate change as it requires government solutions which can enable initiatives across the globe, promoting a just and inclusive transition to net zero carbon emissions by 2050.

The 2018 Special Report by the Intergovernmental Panel on Climate Change (IPCC) calls for urgent action to avoid the most catastrophic impacts of climate change. Aviation is a hard to abate sector, requiring a harmonised combination of appropriate policies, access to finance, capacity building, and collaboration.

ACI member airports at a global level committed to reach net-zero carbon emissions by 2050 and urged governments to provide the necessary support in this endeavour.

Made in June 2021, it is the first net-zero aviation-sector commitment at the global level and is based on a comprehensive long-term goal feasibility assessment. ACI is also part of the Air Transport Action Group (ATAG) net zero emissions by 2050 commitment made by the aviation industry in 2021.

More than 130 airports have anticipated reaching their target by 2030, or even earlier, while others by 2040. However, support is needed from governments and many other stakeholders for the planning and implementation of their decarbonisation strategies and action plans.

What’s in it for airports, the aviation industry, and beyond?

The greatest source of carbon emissions for airport operators is the energy used to power terminals and equipment. Therefore, the decarbonisation of electricity grids, which in most cases airports have a limited ability to change, will be an essential component in the success of airports in reaching net zero carbon emissions by 2050.

Renewable energy is a strategic issue for States (governments) and the global economy. The grid decarbonisation will happen unevenly across the globe and green energy could remain a scarce resource for many.

States should co-operate and consider the development of policies and mechanisms that could accelerate the deployment of renewables globally, such as power purchase agreements (PPA) and book and claim systems which could be used among stakeholders from different States.

Effective action to achieve net zero by 2050 and sustainable development will depend on the ability of airports and other stakeholders to incorporate sustainability at the core of their corporate governances, strategies, risk managements, and goals. Multi-sector collaboration will play a critical role in ensuring a resilient aviation ecosystem capable of achieving global sustainability goals.

Decarbonisation is a necessity and the right thing to do. There is ever-increasing pressure on airports and other aviation stakeholders to deliver on sustainability and those are attached to requirements to attract and grant finance.

Sharing climate-related risks is becoming a condition for investment. This requires efforts which align mitigation and adaptation initiatives to ensure a sustainable and resilient aviation ecosystem.

Net-zero enablers: Technology, innovation, capacity building, and collaboration

Airports are also embracing technology and innovation, including accommodating new emerging technologies in the aviation market and innovative propulsion methodologies to promote a positive transformation of the aviation ecosystem.

This entails the transition to net-zero and improving the services they provide. The importance of collaboration cannot be overstated and needs to reach higher levels, as the challenge is significant and unprecedented.

The co-operation of aviation stakeholders to ensure the sustainable development of the sector is critical, particularly regarding the decarbonisation of aviation emissions.

Some airports can facilitate the deployment of sustainable alternative sources of energy onsite, especially SAF in the short to mid-term.

No country and no airport should be left behind

The challenge to decarbonise aviation is significant, but airports have committed and are taking action to decarbonise. Support from government and collaboration with stakeholders will be essential for airports to have access to renewable energy, finance, and capacity building to decarbonise globally.

Collaboration will act as a catalyst for impact by providing benefits to several stakeholders. Climate change is a global challenge; No country, and no airport should be left behind.

In line with this philosophy, ACI invited the 41st ICAO Triennial Assembly session to recognise airports’ efforts and the challenges they face to decarbonise; support airports’ work to develop and implement their net-zero roadmaps; and support increased collaboration among relevant stakeholders and actions to facilitate the availability of renewable energy, finance, and capacity building.