Airline Sustainability Reports Need Improvement, PwC Says

Southwest Airlines, UPS, Delta, Air France KLM, Iberia, LAN Airlines and Lufthansa produced the best sustainability reports by airlines last year, according to a PricewaterhouseCoopers analysis.

Building Trust in the Air (pdf) rated all seven reports as “good,” meaning they scored 61 to 80 percent of possible points. No reports were “excellent,” which PwC defined as any score above 80 percent.

The average score was 38 percent. Out of 46 airlines sampled, 30 produced sustainability reports, a 15 percent increase over 2009, when 26 filed reports. PwC also found that 62 of the top 100 airlines worldwide did not produce sustainability reports.

PwC said the highest performers did a particularly good job of profiling their company, providing clear data, using a consistent CSR policy and engaging with stakeholders. It said these companies need to improve their ability to make sure data is relevant, and to put the report in its appropriate context.

PwC found that of the reports sampled, 70 percent reported CO2 emissions and 67 percent included measures of fuel efficiency, but only 40 percent reported on waste production and water consumption.

PwC said that with airlines due to be brought into the EU’s emissions trading program, many airlines will be under greater pressure to disclose such information.

Under EU proposals, airlines will have to start participating in the European cap and trade program on January 1, by meeting a limit on carbon emissions or buying permits to make up the shortfall. The rules will apply to flights within, to and from the EU.

Last week Chinese airlines said they will take the EU to court over the plans. Earlier this month, the U.N.’s International Civil Aviation Organization adopted a working paper by 26 of its 36 member countries, urging Brussels not to require compliance from non-EU carriers.

In its report, PwC also found a lack of consistent reporting standard across the industry. For example, not only do airlines use different units for fuel efficiency – with some reporting in miles and some in kilometers – but they also use different underlying assumptions about how to define a passenger mile or passenger kilometer.

Jeroen Kruijd, one of the report’s authors, said he expects the airline industry to begin harmonizing standards.