5 business reasons why applying sustainable solutions can help your business
I remember talking with my friend about climate change issues and business aviation. He said nothing will change until the customers push for changes. I argued that this can be a very dangerous attitude and that we should look at this from a holistic perspective.
I would like to share with you five major points why I believe applying sustainable solutions in the aviation business can help your business sustainability and growth.
Efficiency and rising prices of CO2
Enhance your talent pool
Improve your customer loyalty
Lower operational risks
Create your own peace of mind
1. Efficiency and rising prices of CO2
According to the European Green Deal, the aviation industry will receive fewer free certificates as part of emissions trading in the near future. If nothing changes and you emit more than allotted 10.000 tons of CO2, you will have to comply with CORSIA requirements as well. That could put the efficiency of your operations and your existing strategies through a critical test. Noting the rising costs of CO2, would it still make sense to buy (carry and burn) more fuel bought at a lower price elsewhere? Are you aware of the rising prices of APU relative to GPU (at some airports)? Do you know how SAJF could benefit your company and lower offsetting costs? Have you prepared fuel efficiency plans to close any of the existing gaps? While we await further details on the European Green Deal, we already know that it will impact the aviation industry. The time to get ready is now.
2. Enhance your talent pool Millennials are now the largest demographic in the workforce and their concerns about global warming are at an all-time high. Plenty of research studies, such as the ones conducted by Lumesse, Gallup or CONE, are explicit in this regard: corporate sustainability is a priority for Millenials and they take it into account when deciding their new employer. According to the research, 64% of respondents won’t take a job if a company doesn’t have strong corporate social responsibility (CSR) values; and 88% of respondents say their job is more fulfilling when employers provide opportunities to make a positive impact. So if your competitor performs better on CSR than you, they are more likely to attract better talent than you. For example, in the survey, nearly 40% of respondents stated that they had chosen a job in the past because the company performed better on sustainability than the alternative.
3. Lower operational risks Aviation is not the only industry that has been challenged to act on sustainability issues. Public pressure on banks can cause potential financial difficulties stemming from financing non-compliance with environmental and climate change (ECC) rules. As we read in “Towards a green finance framework” report by the European Banking Federation, “European banks are fully committed to take on their responsibilities and fulfill their role in contributing to a sustainable economy and the transition towards a more sustainable financial system.“ A number of banks have already started issuing green revolving credit facilities where the interest rate is linked to the sustainability performance of the borrower. The best example is JetBlue, which recently signed on to a new credit facility that is priced according to its performance on environmental and social matters (JetBlue announced it's desire to become carbon neutral and offset all of its emissions). According to the Financial Times, “Issuance of 'sustainability-linked loans' increased by nearly 250 percent in 2019 and similar growth is expected this year”.
4. Improve your customer loyalty Let’s be honest! When it comes to the material good, business aviation clients have or could have everything we can offer them...or invoice them. But is it always about money? Research shows that purchasing green products or services make people feel pride. It is a very interesting finding especially in comparison to the opposite feeling - eco-guilt (eco guilt is the feeling that you could have done something for the environment, but consciously made the decision not to). Will people stop flying business planes any time soon? Probably not, but their awareness of global warming will not weaken either. If you had a look at the linked study, you know that people who made a sustainable purchase and experience the good feeling of pride, are more likely to repeat those choices in the future. In other words, showing your commitment to environmental issues can improve your customer loyalty and produce solid margins. Can you think about anyone who doesn’t care about the environment?
5. Create your own peace of mind I dare to write that the climate change problem will not disappear from our lives any time soon. There will be fires, floods, hurricanes, droughts or even ski resorts with little to no snowfall. Your business will finally have to change. The sooner you start, the better for your business and, eventually, your reputation as a leader in a changing world. I bet you don’t want to be the one who avoids tackling difficult problems?