Envest Global & CAPA Release Airline Sustainability Ratings

Envest Global and the CAPA Centre for
Aviation have introduced an airline sustainability rating system as part
of the partners’ most recent airline sustainability report. The groups
released the report, which now evaluates 100 airlines, up from 52 last
year, on Nov. 21. 

The Envest Global research team worked
with publicly available emissions and airline operations data to create
its sustainability metrics and compile the report, including in
quarterly earnings reports, bi-annual and annual investor reports or
sustainability reports published by individual carriers. 

The carriers were contacted to confirm the
data in the cases where it was fully disclosed. In other cases, they
were asked to fill in any missing data or asked to provide the
fundamental data if the carrier did not disclose such information. Some
carriers were prepared and willing to provide it when contacted. Many
were not ready, according to Envest Global co-founder Johnny Thorsen,
who is leading the effort to distribute the report to the corporate
travel community. 

“Only 12 airlines out of the 107 we
reached out to actually provide a full disclosure of their
sustainability efforts,” according to Thorsen. 

“That was a big surprise because we
thought more airlines would be sharing what they are doing,” he said.
“Even when we reached out and asked if they wanted to give us the
information that was missing, most of them said no.”

Thorsen speculated that these airlines
likely did not have the data well documented or in a format they felt
was credible to contribute, but one of the challenges he set forth for
corporate buyers whose companies care about travel emissions is to begin
pressing their preferred airlines to provide foundational
sustainability data to help move the corporate travel industry forward
when it comes to driving sustainability-based decision-making. 

Having that data in a more public forum should lay the groundwork for a greener travel industry, according to Thorsen. 

The Metrics 

The researchers evaluated each carrier by
11 key performance indicators to create the ratings and sort the
airlines accordingly. In addition to emissions data disclosure itself,
which weighed heavily in the ratings, the report also covered passenger
CO2 per revenue passenger kilometer, passenger CO2 per available seat
kilometer, total CO2 per revenue tonne kilometer, net passenger CO2 per
RPK, net passenger CO2 per ASK, net CO2 per RTK, along with load factor,
fleet age, the use of sustainable aviation fuel—not investment in SAF,
but actual usage—and purchased carbon offsets. 

Each of the “net” metrics accounts for emissions reductions credited to SAF usage and carbon offsets. 

Not every KPI was weighted equally in the
final ratings formula, however. Data disclosure was key, as it spoke to
the carrier’s credibility and commitment, said Thorsen. “Without the
disclosure, the airline could not make it into the Platinum group,” he
said. But other metrics were more malleable as Envest worked to find the
right formula, and may also change in future reports  as conditions and
opportunities change for carriers. 

“We originally thought load factor would
be a critical one because the higher the load factor, the better this
airline would be at getting people moved for a given amount of fuel,”
said Thorsen. “But the reality of 2021 is that some airlines had limited
control of load factors based on where in the world they were located
and limitations or restrictions placed on their operations [due to
Covid-19]. So load factor was demoted a bit.”

Another interesting factor was SAF usage.
Only 20 airlines reported any SAF usage—and it was infinitesimal
compared to traditional fuel. SAF usage was weighted neither under nor
over average in the ratings calculations. But carbon offsets, which
already pose a challenge due to the impossibility of evaluating the
quality of the offsets, will get more complicated as time passes, said
Thorsen. 

“One airline has announced it will stop
using carbon offsets entirely, after being one of the most aggressive
offsetters,” said Thorsen, noting that offsetting is a strategy largely
considered to kick the can down the road in that the carbon is emitted
now, but the offsetting is delivered often over time—and is unlikely to
catch up to current airlines emissions intensity. For that reason, some
companies are moving away from them. “It doesn’t make sense for them to
drop out of a top category because they are moving away from offsetting,
so we already have some interesting dynamics coming out of this work.” 

One of the big notes coming out of the
report was the future sustainability outlook for airlines with older
fleets and/or a large percentage of long-haul flights that traditionally
fly with reduced load factors—both were major contributors to more
intensive carbon emissions and could portend both metal investment and
route or network strategies. 

Different Strokes for Different Folks 

Ultimately, said Thorsen, the Envest
Global and CAPA team wants to build a procurement tool for travel buyers
that will account for their own KPI priorities, potentially allowing
them to weight the metrics for their own programs. That’s a few steps
down the line—perhaps in a year’s time. 

“We want to create a digital version of
the index, but that obviously will require a very clean presentation of
what is currently a pretty complex Excel file,” said Thorsen. “We’ll
also need to account for the program in which the company flies on two
airlines 50 percent of the time and the rest is spread across 40
airlines. What impact should that have?” 

For now, Envest Global and CAPA are
offering a pre-set ratings system that travel buyers can use as a
starting place for emissions-based decision-making. “I’ve spoken to a
few buyers and they were really positive about saying this was a tool
they really needed,” said Thorsen. 

He admits that most corporate travel
buyers aren’t really at the point of making emissions-based decisions.
“They come to conferences and talk about it, but when they get back to
their offices, they may not be able to spend even five minutes on
sustainability each week,” he said, but pointed out these may be the
buyers who need the report the most. “They need simple tools and
information presented clearly just to get started.”