All of the world’s top 20 airlines risk falling short of the demands of the Paris Climate Agreement, research suggests.
None of the 20 has an emissions target after 2025 despite commitments to limit temperature rises to 2C or below, research by the Transition Pathway Initiative at the London School of Economics found.
The research looked at airlines’ corporate disclosures to assess how carbon emissions are managed.
Easyjet is the only airline with a CO2 emissions intensity that will keep it below the 2C benchmarks after 2020. Delta, United, Lufthansa and ANA Group (Japan) are among the leaders on carbon management. ANA Group, Japan Airlines, Korean Air and Singapore Airlines currently have the highest emissions intensities.
The findings are backed by investors controlling over $13 trillion of client funds, including Legal & General Investment Management, the Environment Agency Pension Fund and BNP Paribas.
Aviation contributes 2 per cent to global greenhouse gas emissions and is growing fast, meaning it is crucial for airlines to limit CO2 if climate change is to be kept under control.
Industry-wide plans rely on targets to offset carbon emissions by, for example, planting additional trees but research by the IEA and others shows that airlines need to significantly reduce their CO2 contribution as well.
Airlines must also confront their contribution to climate change beyond CO2, TPI said. Aircraft flying at altitude create additional warming effects, including the formation of contrails and clouds.
Currently these are not incorporated in company disclosures, or in the models used to benchmark them, even though they are likely to be significant.
Faith Ward, co-chair of TPI on behalf of the Environment Agency Pension Fund, said “Investors have a clear message to the aviation sector: When it comes to carbon performance they must be in it for the long haul. That means setting stretching emissions reduction targets to 2030 and beyond, and ending a reliance on offsetting. It’s clear from TPI’s research that this is not currently the case.”
“Offsetting is no substitute for a clear strategy to reduce emissions, and the IEA’s carbon budget for air transport excludes the use of offsets. The aviation sector is doing the basics when it comes to carbon performance, but investors are urging them to take more significant steps as they judge which airlines are most likely to survive the turbulence of the transition to a low carbon economy. “
Helena Viñes Fiestas, deputy head of sustainability at BNP Paribas Asset Management, said: “The aviation industry clearly has a range of actions it can take to respond to climate change - improved energy efficiency, bio fuels, and offsetting amongst others. As investors, we need clarity about the contribution each of these will make - and, critically, how much they will cost - if the sector is to make its contribution to the goals of the Paris Agreement.“