Sustainability Report - Air New Zealand
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Sustainability Report 2021
2 — CONTENTS A I R N E W Z E A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 2 1
Contents
03 Letter from the 04 Letter from the Chair 05 About Air New Zealand 06 Our new Sustainability 25 Fundamental metrics
Air New Zealand of Air New Zealand’s Framework table
Chief Executive Officer Sustainability Advisory
Panel
Sections
09 01
Caring for
12
02
Genuine
18
03
Driving towards
21
04
Sustainable
New Zealanders climate action a circular economy tourism
Te manaaki i ngā
He mahinga
Te whai i te
He Tāpoi Mau Roa
tāngata o Aotearoa taiao tūturu ōhanga whai hua
3 — LETTER FROM THE CHIEF EXECUTIVE OFFICER A I R N E W Z E A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 2 1
Letter from the Chief Executive Officer
Despite the pandemic This year has seen a renewed We are actively pursuing It has been fantastic to welcome
grinding our business to focus on the environmental opportunities around electric Katherine Corich, Sam Mostyn
impact of flying, and we are acutely and hydrogen aircraft as an option AO, and Nadine Toe Toe to our
a halt, we believe climate
aware that decarbonising aviation for shorter domestic and regional Sustainability Advisory Panel this
change is the biggest crisis and Air New Zealand will be even flights, with ambitions to have year. Katherine, Sam and Nadine
facing our airline. And if more important when borders electric aircraft in our fleet by add a wealth of sustainability
anything our commitment to open. This will be key to our 2030. This includes a strategic knowledge and experience to our
take action has strengthened. ability to continue to connect partnership with Airbus to explore already very talented Panel and
New Zealanders to the world and the possibility of operating will ensure the Panel continues to
Throughout the impact of play our part in helping Aotearoa hydrogen planes on our domestic provide that robust critique to drive
Covid-19, our people have been future proof its high-value exports network. We are excited by the our sustainability agenda forward
at the frontline, keeping cargo and tourism sectors. opportunities these technologies (see page 8).
moving and bringing more than present that will allow us to better
70,000 New Zealanders home We’ve been working on a range As we reflect on 2021 and set our
serve our customers with low
from overseas in the last year. of opportunities to achieve our eyes to the future, I’d like to say a
carbon travel.
There hasn’t been a single day net zero emissions by 2050 big thank you to our customers
where an Air New Zealand flight target, with particular focus on To help us deliver on our promise who continue to challenge us each
Greg Foran — Air New Zealand hasn’t taken to the skies, moving making sustainable aviation fuel of taking care further than any day to be our best and hold us
Chief Executive Officer essential workers and supplies (SAF) a reality in New Zealand other airline, I’m also delighted to to account on our sustainability
around Aotearoa and the world. and hastening the arrival of zero introduce our new Sustainability journey. My appreciation also
I’m immensely proud of the Air New emissions aircraft. It is becoming Framework, which this year’s goes to the Air New Zealand Board
Zealand whānau who have worked increasingly clear that without Sustainability Report is structured for their continued support and
hard to protect themselves, each readily available access to SAF, around. The Framework will ensure guidance and to our partners who
other and our customers. we will not be able to reach our we can continue to build on our are working alongside us to help
net zero target. strengths to prepare us for what achieve our goals.
In 2021, the climate crisis has lies ahead.
continued to accelerate, with the We are in close discussion with Ngā mihi
latest climate change report from the New Zealand Government
the Intergovernmental Panel on on this and in July we signed a
Climate Change giving the starkest Memorandum of Understanding
warning yet that the window to limit with the Ministry of Business,
global temperature rise to 1.5°C is Innovation and Employment
narrowing rapidly. We recognise to determine the feasibility of
it has never been more important producing SAF in New Zealand.
Greg Foran
for business and government to SAF can be made using a range
Air New Zealand
work together and take bold steps of waste materials and is critical
Chief Executive Officer
to ramp up the pace and scale of to decarbonising the airline, in
genuine climate action. particular our long-haul flights. November 2021
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4 — L E T T E R F R O M T H E C H A I R O F T H E S U S TA I N A B I L I T Y A DV I S O RY PA N E L A I R N E W Z E A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 2 1
Letter from the Chair of the Sustainability Advisory Panel
What an extraordinary year As the new Sustainability There are two factors that As a small country at the end of the
it’s been for Air New Zealand Framework so succinctly differentiate the aviation sector world, New Zealand will always be
demonstrates (see page 7), there’s from all other sectors: first, people a price-taker. By 2030, it will be the
– with continuing disruption
so much more to an airline’s who fly today value the privilege, big players in the industry who will
from Covid-19, significant overall sustainability obligations and most of those who don’t or be determining that price.
commercial pressures, than its response to accelerating can’t fly today would love to be able
The only way of managing
and rising expectations on climate change. But the Climate to; second, the route to net zero
that risk is for New Zealand to
climate change as the year Emergency now looms so large as carbon aviation, technologically,
ensure its own, indigenous SAF
ended with the massive to require the constant attention is harder than for any other sector.
capability – and that means
of the Board, the CEO and the Pre-Covid, that persuaded a lot of
climate conference in whole leadership – as well as the leaders in the sector to sit back and
taking big decisions in a clear and
Glasgow. Running an airline small team of sustainability and refine their greenwash. But those
accountable way over the next
in the golden age of aviation couple of years.
climate specialists charged with days are long gone.
must have been a doddle direct responsibility for driving For most people, it may previously
All airlines’ social licence to operate
by comparison! things forward. have been a rhetorical flourish
will now become increasingly hard
to talk about sustainability as
For all of us involved in Air New In that regard, there have been a to earn and increasingly dependent
mission-critical for airlines. Now
Sir Jonathon Porritt — Chair of Zealand’s Sustainability Advisory number of key developments in on actions not on fine words.
it’s for real – as in which airlines will
Air New Zealand’s Sustainability Panel (see page 8), it’s obviously the course of the year which the And after years of technological
survive and which won’t.
Advisory Panel been disappointing not being able Panel has warmly welcomed: the procrastination, the route to Net
to meet in person. But our online development of a formal science- Zero for aviation is now fully under
sessions have allowed us not just based target for the reduction way – with highly significant
to stay completely up to speed with of greenhouse gases (still to be competitive issues.
what is still an extremely dynamic accredited by the Science Based
Over the last couple of years, for
agenda, but to continue to provide Targets initiative); a strategic
instance, interest in sustainable
the kind of advice and challenge on partnership with Airbus, alongside
aviation fuels (SAF) has gone from
which the Panel’s value to our Air extensive engagement with a wide
a few niche players providing
New Zealand colleagues depends. range of partners in new technology
vanishingly small volumes, to a Sir Jonathon Porritt
pathways for aviation; and
rapidly-maturing global industry Chair of Air New Zealand’s
continuing support from customers
enthusiastically signed up to a Sustainability Advisory Panel
for FlyNeutral (see pages 12-17).
target of providing 10 percent of
November 2021
the volumes required by 2030.
From a few millions of gallons to
many billions – in just eight years.
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5 — ABOUT AIR NEW ZEALAND A I R N E W Z E A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 2 1
About Air New Zealand
It has been a year of contrasts While the impact of border closures
and lockdowns have challenged our
for Air New Zealand. A robust recovery, the pandemic has only
domestic network, high- reinforced the critical role that aviation
plays in connecting New Zealand’s trade
performing cargo business, and and tourism, and has also reinforced the
the Australian and Cook Islands significant opportunity the airline has
border re-openings have kept the to build back better. Integral to building
back better is the implementation of our
business moving. In 2021 we flew new Sustainability Framework which
more than 8.6 million customers is focused on taking bold and genuine
and operated 7,191 international action as we aspire to lead the aviation
industry globally in sustainability and
cargo flights, carrying 104,572 decarbonisation.
tonnes of cargo, including This framework is not just about Air New
delivering life-saving medicines Zealand. It’s about future proofing our
and essential personal protective key export and tourism industries. It’s
about keeping Kiwis and Kiwi products
equipment to New Zealand and connected to the world and it’s about
37,600 tonnes of New Zealand ensuring that we prosper and remain a
exports to international markets. sustainable airline, now and into the future.
20 8.6m 407 37,600 3.3m 3.6m FTSE4Good
domestic network customers flown charter flights tonnes of New Zealand social media fans, Airpoints™ members, Air New Zealand is
regions serviced across including MIQ and exports flown to up from 3.2m in the up 3.9 percent from the a constituent of the
New Zealand repatriation flights international markets prior year prior year FTSE4Good Index Series¹
1 The FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices.
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6 — O U R N E W S U S TA I N A B I L I T Y F R A M E W O R K A I R N E W Z E A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 2 1
Our new Sustainability Framework
Framework development Sustainability Framework
To develop our new framework, we considered feedback from The insights gained from this materiality assessment enabled us to
our ongoing engagement with our stakeholders, including customers, identify the four pillars of our new Sustainability Framework:
investors, communities and partners, as well as the following forums: • Caring for New Zealanders: Caring for • Driving towards a circular economy:
• Air New Zealand Board of Directors, the We then interviewed key internal subject Air New Zealanders, our customers and Designing and procuring with a circular
Executive and Airline Leadership Team matter experts from across the business, communities, and supporting New Zealand mindset, reducing single-use plastics,
and asked stakeholders to identify in its recovery from the pandemic supporting new recycling infrastructure
• Air New Zealand’s independent and sustainable packaging innovation, and
environmental, social and governance • Genuine climate action: Setting an interim
Sustainability Advisory Panel embedding a waste minimisation culture
opportunities and risks related to Air science-based target, implementing our
• Key industry and sustainability bodies² New Zealand’s operations over the short, decarbonisation roadmap to step us closer • Sustainable tourism: Industry leadership
medium and long-term, as well as rate to our goal of net zero emissions by 2050, and collaboration, including in relation
This provided a foundation for our materiality the extent to which these impacted the taking customers along with us on the to the Tiaki Promise and Qualmark, and
assessment and enabled us to consider the following factors: journey, and supporting biodiversity and supporting regional and Māori tourism
feedback alongside the company’s strategic
• Significance of the issue to stakeholders native forestry offsetting
priorities, key risks and opportunities, and
competitive environment.
• Importance of the issue to
Air New Zealand
• Air New Zealand’s ability to control
and/or influence the issue
The material issues identified through this
consultation process were then shared
with our Sustainability Advisory Panel,
the Executive and the Board for further
consultation as part of Kia Mau, our
company-wide strategy reset in 2020.
2 For more information on our stakeholder engagement, click here.
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Sustainability Framework < B AC K T O C O N T E N T S
Te whakakaha i te manaakitanga o te tangata, o te hapori, o te motu whānui me te ao hoki
Empowering care of our people, communities, country and planet
Our Caring for Genuine Driving towards Sustainable
priorities New Zealanders
Te manaaki i ngā tāngata o Aotearoa
climate action
He mahinga taiao tūturu
a circular economy
Te whai i te ōhanga whai hua
tourism
He Tāpoi Mau Roa
Our focus • Care for Air New Zealanders • Decarbonisation target • Design and procure with • Sustainable tourism thought
areas and nurture a diverse, equitable and roadmap a circular mindset leadership for New Zealand
and inclusive workplace • Customer education and • Reduce single-use plastics • Endorse Qualmark
• Care for our customers engagement on climate action • Support new infrastructure • Embrace Tiaki Promise
and communities • Strong governance and and innovation and conservation in regions
• Support New Zealand’s social climate-related disclosures • Drive waste minimisation • Support regional
and economic revival • Support biodiversity and native culture and awareness and Māori tourism
forestry offsetting • Diversion from landfill
Our Air New Zealand’s employee
engagement score being in Glint’s
Set a science-based carbon
reduction target.
Removal of 50% of forecasted
single-use plastic items on our
Increase annual growth in bookings
for Qualmark-awarded operators
targets Global Top 20% Engagement Index1.
Net zero emissions
international flights by 2023 from
a 2021 baseline3. This amounts to
on Air New Zealand’s website by
100% by 2023 from a 2021 baseline.
Grow access to and use of employee by 2050. the removal of over 28 million
assistance support tools (including forecasted single-use plastic items. 60% of New Zealanders aware of
Employee Assistance Programme, 10% of Air New Zealand’s total fuel Tiaki Promise by calendar year 20235.
Peer Support Network and Bullying uplift is SAF by 2030. 65% of total solid waste diverted
and Harassment Contacts). from landfill by 20234.
Establish a baseline of Air New
Zealand spend with Māori and
Pasifika-owned businesses and social
enterprises by 2022.
Better connecting New Zealand
exporters to the world by increasing
cargo load factors on our widebody
international network to 85%2 by 2025
(from 67% in 2019).
1. Glint’s Global Top 20% Engagement Index is based on employee 3. The 2021 baseline value was adjusted to reflect the updated 5. As measured by Air New Zealand’s Insights Tracker that
survey results across more than 750 companies surveyed forecasts for passenger volumes as of May 2020. surveys 400-500 New Zealand travellers each month.
around the globe and 175 million data points.
4. This target covers Air New Zealand’s domestic ground sites
2. Based on the volumetric utilisation of available belly capacity and airports serviced by our main waste provider.
(including passenger bags) unless a 100% gross weight load
factor is achieved sooner.
United Nations Sustainable
Development Goals
8 — O U R N E W S U S TA I N A B I L I T Y F R A M E W O R K A I R N E W Z E A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 2 1
Implementation of Sustainable Governance of Sustainability
the Framework Development Goals at Air New Zealand
We have identified key targets The Sustainable Development The Air New Zealand Board have
under each pillar to drive Goals provide a blueprint for a the overarching responsibility for
Ambitious Action and hold more sustainable future for all. sustainability and has signed off on
ourselves to account. We have identified 10 sustainable significant sustainability targets.
These pillars and the opportunities that development goals that Air New Zealand The Board meet with our external
sit underneath them are deeply has the greatest ability to positively Sustainability Advisory Panel on an
interconnected. For instance, reducing impact through the four pillars of our annual basis. In addition to regular
waste will decrease the greenhouse Sustainability Framework. reporting from management to the Board,
gas emissions from sending waste to more detailed oversight of elements
landfill, and supporting biodiversity and within the Sustainability Framework is
native forestry offsetting will further exercised through the Board’s People
protect and enhance the environment Remuneration & Diversity Committee,
that is the centrepiece of New Zealand’s Health, Safety & Security Committee,
tourism offering. and Audit and Risk Committee.
Collaboration with Government, industry, The Sustainability team reports to the
iwi and communities will be vital for us to Executive on how we are tracking against
deliver on the initiatives contained in our our sustainability strategy each month,
new Framework. and our progress against key projects
and goals is reviewed through the monthly
Key focus areas and targets will be
Kia Mau executive steering committee.
reviewed and externally reported on
annually to ensure action on Air New Sustainability Advisory Panel
Zealand’s most material issues remains
relevant and has the most significant Our Sustainability Advisory Panel has in between these meetings, including
positive impact.• six external members who were selected on the ongoing implementation of our
based on the range of skills and expertise decarbonisation roadmap. Members
we considered necessary to shape and of Air New Zealand’s executive team
inform our sustainability agenda. The participate in the Sustainability Advisory
panel meets twice a year to independently Panel meetings. To find out more
advise and challenge all aspects of our about the panel, including its three new
sustainability journey. Panel members members that came onboard this year,
also provide guidance to Air New Zealand click here.
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9 — S E C T I O N 0 1 — C A R I N G FO R N E W Z E A L A N D E R S A I R N E W Z E A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 2 1
Caring for
New Zealanders
He tāngata, People are at the heart of everything
we do and everything we stand for.
While we continue to adapt to Covid-19,
our focus is on how we support the
he tāngata, With a promise of manaaki, we are recovery of New Zealand’s economy by
he tāngata. committed to taking care further than
any other airline. This promise extends
connecting Kiwis with each other and
the world. Growing our cargo business
from our employees to our customers is key to this, as well as continuing
and communities. to support our local suppliers and
communities as they too recover.
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10 — S E C T I O N 0 1 — C A R I N G FO R N E W Z E A L A N D E R S A I R N E W Z E A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 2 1
Caring for Air New Zealanders can be themselves and thrive.
Our focus is on building and
(from 16 percent in 2021). We have continued
our Mangōpare leadership development
programme to engage aspiring leaders of
Supporting our people Network, Wellbeing Check Ins and Bullying instilling a culture of manaaki that Māori and Pacific Islands descent through
& Harassment Contacts. The utilisation rate flows through to our customers embracing indigenous values.
Air New Zealanders’ ability to of support tools was 15.6 percent in 20212.
and communities. Unconscious Listening to our people
adapt quickly to change and Vaccination against Covid-19 is important.
Bias workshops, as well as looking
support each other and our In addition to the Government-mandated
at the language we use, the In 2021 we introduced our
frontline worker vaccination rollout,
customers in times of uncertainty we recently broadened our employee behaviours we accept, and the quarterly Employee Survey to
has been particularly apparent vaccination requirements in response to the
workspaces we offer, help to lay the give us a pulse on how people are
over the past 20 months. Our increased risks posed by the Delta variant.
foundations for what we aspire to. feeling and enable us to focus
We have worked closely with our people
people have worked harder and unions to support the vaccination rollout, our efforts based on feedback
Core to an inclusive environment are our
than ever before and we have making sure all the information we provide 10 Employee Networks that are led and run provided by Air New Zealanders.
is clear, and inviting vaccination experts
continued to support them with to answer questions. We also created
by Air New Zealanders passionate about We have an engagement aspiration
providing support and the space for of reaching Glint’s Global Top 20 percent
several wellbeing tools, including opportunities for Air New Zealanders and everyone to be themselves. The Networks Engagement Index3. Air New Zealand’s
our Wellbeing Hub and the Thrive their whānau to get vaccinated to help ensure come together regularly to share ideas engagement index score as at 1 September
our people and their loved ones are safe. and identify opportunities to collaborate,
mental health app. Financial and are instrumental in the renewals of our
2021 was 714 (compared with the Global Top
20 percent benchmark of 79). As we work
assistance has been offered Our focus on diversity, Gender, Rainbow and Accessibility Ticks. towards this target, we have made some
through the Āwhina Trust¹, equity & inclusion Another focus is how we develop, retain and changes to the ways we work, improved
providing hardship grants to Our diversity, equity & inclusion attract diverse talent. We have come a long access to senior leaders, and reintroduced
new remuneration and benefits for
more than 1,585 employees since vision is to create an inclusive
way in our drive to increase the number of
Air New Zealanders to acknowledge their
women in leadership, with more than
its establishment in April 2020. environment where our diverse 50 percent of the Airline Leadership Team exceptional efforts, including a one-off
comprised of women. In addition, we are $1,000 award of shares or cash.
Health & Safety is our highest priority and workforce of Air New Zealanders,
supporting the wellbeing of our people is supporting Māori and Pasifika into leadership
central to this. We have recruited and trained proudly representative of Aotearoa, roles, with a target of 20 percent by 2025
Peer Support volunteers in operational areas
across the business, supported our leaders Employee networks in operation
to build competency in this space and run a
number of Mental Health, Resilience and QPR 1. Pride 4. Women’s 7. Young 9. WINGs (Women 10. WISE (Women
Institute suicide prevention workshops. Our
professionals Inspiring the in Supply Chain,
aim is to grow access to and use of support 2. Manu 5. Kiwi Asia
tools and resources, including the Employee Next Generation) Engineering &
8. Women in Digital
Assistance Programme, Peer Support 3. Enable 6. Ex-Services – Pilots Maintenance)
1 The Āwhina Trust was set up to provide employees with hardship grants, using funds provided through salary sacrifice and donations from employees. 2 The EAP Association guidelines suggest that a utilisation rate over 6 percent is an indication of EAP being used as
a proactive wellbeing service, whereas less than 6 percent indicates it is more reactive. Air New Zealand aims to maintain a utilisation rate of support services above 10 percent. 3 Glint’s Global Top 20 percent Engagement Index is based on survey results across more than
750 companies surveyed around the globe and 175 million data points. 4 This score is out of 100 and based on the responses to two questions in our Employee Survey which is run quarterly on the Glint platform – “How happy are you working at Air New Zealand” and “I would
recommend Air New Zealand as a great place to work”. Responses are measured on a 5-point scale.
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Caring for our communities Supporting New Zealand’s recovery
Air New Zealand’s wide-reaching As Air New Zealand recovers it Ivalua will help us establish a clearer
picture of our supplier network and will
operations allows us to provide is vital we support New Zealand’s be instrumental in meeting our new
manaaki to every community recovery more widely. target to establish a baseline of Air New
Zealand spend with Māori and Pasifika-
we fly to. Throughout the pandemic, our cargo owned businesses and social enterprises
As a proud partner of Koru Care 4 New operations have played an integral role in by 2022. This will aid our efforts to
Zealand for more than 35 years, we’ve helped ensuring New Zealand exports continue to grow partnerships with this sector and
make dreams come true for thousands reach key international markets, including allow these businesses, as well as the
37,600 gross tonnes of exports in 2021. communities they support, to thrive.
of children with a range of illnesses and
disabilities. In May 2021, our Little Heroes We recognise aviation has an important role To assist us with these endeavours,
flight departed from Christchurch carrying to play in reducing emissions in the freight we became an Aumatua member
50 Koru Care kids on a very special flight supply chain through improving efficiencies, of Amotai in July 2021. Amotai is a
path. Many Air New Zealanders and special so are taking steps to reduce the carbon supplier diversity intermediary that is
guests, The Drax project and All Blacks intensity of our air cargo operations. One connecting us with Māori and Pasifika-
Sam Cane and Joe Moody, ensured it was objective is to increase cargo load factors owned businesses. We are also a
a magical event that left the kids and their to 85 percent1 by 2025. Filling underutilised connect member of Ākina’s Impact
families on a high. belly capacity is one lever available to Buyer Programme, a social procurement
reduce our carbon intensity. programme run by the Ākina Foundation,
Air New Zealand also continued to donate
a range of excess goods, like blankets, Taking suppliers on our sustainability journey an impact development consultancy that
pillows, cookies and unbranded uniforms. is also a priority. In July we launched our new are champions of social enterprise.
In 2021, 720,874 goods were given to a supplier management system, Ivalua, to
range of charities, including Women’s enhance our procurement capabilities.
Refuge, to support people and local The system allows us to capture more
communities that have been particularly accurate data, enabling us to create more
hard hit over the last year. resilient and sustainable supply chains.
1 Our objective to increase cargo load factors to 85 percent is based on the volumetric utilisation of available belly capacity (including passenger bags) unless a 100 percent gross weight load factor is achieved sooner.
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Genuine
climate action
New Zealand is an island nation Whether it’s connecting customers with
their families or keeping our trade and
higher greenhouse gas emissions
than many New Zealand companies
at the bottom of the world, and export industry moving, air travel is key and are committed to taking urgent
air travel keeps us connected to keeping New Zealand connected.
We acknowledge this means we have
and ambitious action to decarbonise.
around the globe.
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Our roadmap to decarbonisation Baseline
(2021)
Fleet
renewal
Zero
emissions
aircraft
Operational
efficiency
Sustainable
aviation
fuel
Target
(2050)
Our decarbonisation roadmap Significant innovation and close
identifies four main levers needed collaboration between the private
to reach net zero by 2050: and public sectors will be vital to
dramatically reduce emissions in
• The use of sustainable aviation
less than 30 years.
fuel (SAF)
Even with the full deployment of
• The operation of zero
available technologies, there is no
emissions aircraft
known technology mix that can
• Continued investment in our modern enable the aviation industry to
fleet replacement programme reach absolute zero emissions
by 2050. This is why offsetting
• Improvements in operational remains in our roadmap to address
efficiencies (such as through residual emissions.
optimised flight planning)
Zero emissions Sustainable Operational Fleet Carbon
aircraft aviation fuel (SAF) efficiency renewal offsetting
Description Future hydrogen or battery or Non-fossil derived jet fuel, Optimising carbon efficiency from Rollover current fleet to new jets 1. Purchasing industry-agnostic
hybrid aircraft technologies carbon reduction potential of flight and ground operations that achieve greater fuel efficiency carbon credits;
more than 80%, compatible 2. Using carbon capture technology
with existing aircraft without that processes and safely stores
modification CO₂ underground (~2040-2050)
2050
Decarbonisation
Potential
20% 50%14 — S E C T I O N 0 2 — G E N U I N E C L I M AT E AC T I O N A I R N E W Z E A L A N D S U S TA I N A B I L I T Y R E P O R T 2 0 2 1
Setting a science-based target Emissions snapshot
Air New Zealand is committed Air New Zealand was a member of the We use a range of carbon metrics in our
Science Based Targets initiative’s technical internal reporting, strategy formation and
to taking genuine climate action. working group developing the target setting decision making. This includes metrics
In addition to our goal of net methodology for aviation and is currently related to assessing the impact of gross
working through target accreditation. carbon emissions, emissions intensity
zero carbon emissions by 2050, The target is aligned to a ‘well below 2°C’ values and the value of New Zealand’s
we are planning to set a science- pathway and requires an absolute reduction carbon compliance obligations. The impact
based carbon reduction target. in carbon emissions, with no provision for of Covid-19 has had a significant impact on
carbon offsets. Air New Zealand’s operations and network
as well as the key metrics that Air New
To guide us to meet these targets, we have
Zealand reports on. As a consequence,
developed the decarbonisation roadmap
it is difficult to meaningfully compare the
that identifies the technologies and actions
key metrics with prior years.
we must adopt to reduce our emissions.
CARBON EMISSIONS DATA1 2019 2020 2021 CARBON INTENSITY DATA
Scope 1 International Network Emissions (Tonnes of CO₂-e)2 (Jet Fuel) 3,286,502 2,649,922 817,078 Carbon intensity data below provides a measure of emissions generated for each kilogram of payload flown.
Scope 1 Domestic Network Emissions (Tonnes of CO₂-e) (Jet Fuel) 629,876 518,607 508,737 This is the prominent metric for benchmarking airline carbon intensity. Air New Zealand aims to improve
carbon intensity by reducing emissions and maximising total payload carriage (RTK)4.
Scope 1 Other Emissions3 (Tonnes of CO₂-e) 9,273 8,106 7,376
2019 2020 2021
Scope 2 Emissions (Tonnes of CO₂-e) (Electricity) 3,098 2,832 2,720
International Network Grams of CO₂-e per Revenue Tonne Kilometre (RTK) 726 747 972
Domestic Network Grams of CO₂-e per Revenue Tonne Kilometre (RTK) 1,028 1,112 1,168
COMMENTARY ON CARBON EMISSIONS DATA
Total Scope 1 and 2 emissions reduced by International Network Scope 1 Other and Scope 2
58% in 2021. This reduction is due to the COMMENTARY ON CARBON INTENSITY DATA
reduction in Scope 1 emissions from the 61% 0.6%
Air New Zealand’s carbon intensity
international network which reduced by (measured in gCO₂-e/RTK)
69%, compared to a 2% reduction in Scope 1 Emissions
analysis increased 31% compared to 2020.
emissions from the domestic network. This increase was largely due to
New Zealand border restrictions
Domestic Network leading to lower than usual load
38% factors on the international network
and multiple national lockdowns
impacting load factors on the
domestic network.
1 Air New Zealand discloses its emissions within its Greenhouse Gas (GHG) Inventory report, full definitions of emission scopes can be found within that report, extracts from that report are duplicated here within. Deloitte was engaged to provide reasonable assurance over the 2021
GHG Inventory Report. Refer to the reporting and communications page on Air New Zealand’s website for the full GHG Inventory and Assurance Report. 2 Gases included in the carbon dioxide equivalents (CO₂-e) factor are carbon dioxide (CO₂), methane (CH₄) and nitrous oxide (N₂O).
3 Scope 1 other emissions include the combustion of jet fuel from ground operations, LPG, natural gas, diesel, petrol, and wood pellets. 4 Revenue Tonne Kilometre (RTK) is a measure of the weight that has been paid for on the aircraft (freight and passengers) multiplied by the number
of kilometres transported. Freight values are from Air New Zealand records, and passenger weights are estimated at 100kg per passenger (including checked and carry-on baggage) as recommended by IATA for generating a fuel efficiency target. CO₂-e emissions are from
Air New Zealand’s use of aviation fuel over the same time period.
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Sustainable aviation fuel
SAF is critical on our pathway to Currently, there is no SAF supply in In August this year we announced our We continue to actively engage in
New Zealand, and there is a global SAF partnership with the Government to government consultations on climate
net zero and is the only current shortage – less than 1 percent of aviation investigate the feasibility of producing SAF change policy, advocating for additional
option for decarbonising long- fuel supplied in the world is SAF. Where it in New Zealand with the hope it will result in research, policies and investment that are
is available, it is three to five times the local SAF production in five to seven years’ vital to establish a SAF market and reduce
haul flights. Made from waste cost of traditional jet fuel. time. As well as reducing aviation emissions, the cost. This includes advocating for a
materials such as used cooking domestic production has other economic SAF-specific mandate to stimulate SAF
Air New Zealand has been working on
oils, forestry residues or landfill solving the issue of SAF supply in New
and social benefits, including creating demand and encourage investment in
skilled jobs benefiting the regions, enabling SAF production. We are also advocating
waste, SAF has the potential to Zealand, including in collaboration with
more resilient fuel supply chains (rather for the establishment of a public-private
others in the private sector through
reduce carbon emissions by more several SAF consortia.
than relying solely on imported fuels), and aviation decarbonisation advisory body
than 80 percent compared with utilising waste materials as feedstock, for to consider and advise on the right
example from forestry. policy settings to advance SAF (and zero
traditional jet fuel. emissions aircraft) in New Zealand. We
SAF is known as a ‘drop in’ fuel, providing have outlined these and other actions
direct replacement fuel to fossil jet fuel, in our responses to the Climate Change
and not requiring different infrastructure Commission’s draft advice, and the
or engine technology. It is safe and proven Government’s consultations on a pathway
– since 2016, more than 300,000 commercial to get transport to net zero by 2050
flights have used SAF. and a biofuels mandate. In May 2021,
we also shared a SAF White Paper with
the Government that outlined vital and
immediate policy steps to make SAF
a reality in New Zealand.
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Zero emissions aircraft
To truly decarbonise aviation, To expedite the development of these
aircraft, Air New Zealand has established
We are also engaging across the broader
aviation and energy sectors to plan and
we’ll need both SAF and battery- several strategic partnerships with prepare for the new renewable energy
electric, hybrid-design, and/or manufacturers of zero emissions aircraft and infrastructure requirements of zero
to deepen our understanding of these emissions aircraft.
hydrogen-electric aircraft. technologies. This includes a Memorandum
Our ambition is to be operating of Understanding with aircraft manufacturer,
these zero emissions aircraft on Airbus, to analyse the impact hydrogen
aircraft may have on our network, operations
our regional network from 2030, and infrastructure.
or as soon as feasible.
New Zealand has a unique
opportunity to be a world
leader in the adoption of zero
emissions aircraft given the
country’s high percentage of
renewable energy. These aircraft
also have the potential to enable
us to operate new, shorter routes,
increasing connectivity for
regional New Zealand.
(c) Airbus 2020 - All Rights Reserved
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Fleet renewal implemented in prior periods remain
ongoing, the impact of Covid-19 restrictions
restoration, regeneration, and production of
New Zealand’s permanent native forests. For Carbon
Air New Zealand has an average fleet age
and operational constraints have limited our
ability to implement new initiatives in 2021
more information, see our FlyNeutral video.
Despite the disruption caused by Covid-19,
compliance
of 6.7 years¹ making it one of the youngest and our ability to accurately report savings by
and most efficient fleets in the world. This initiative. This remains a focus going forward. the number of our retail customers that Air New Zealand remains a participant in the
is due to continued development of our voluntarily offset their flight-related carbon New Zealand Emissions Trading Scheme
fleet modernisation and simplification emissions under FlyNeutral remained and has an obligation to report greenhouse
strategy, including the addition of Airbus
A321neo aircraft to the domestic fleet in
FlyNeutral stable at 7.0 percent in 2021, compared
to 7.1 percent in 2020. In total, customers
gas emissions generated from fuel use
on all domestic flights and then purchase
2022, retirement of our Boeing 777-200ER elected to offset over 40,000 tonnes of and surrender to the Government an equal
This year we made some changes to our
fleet, phasing out our Boeing 777-300ER CO₂-e in 2021. number of New Zealand Units to match
offsetting programme, FlyNeutral. Originally,
fleet by 2027, and preparing for the future those emissions. In the 2020 calendar year,
we sourced half of our FlyNeutral carbon
our Emissions Trading Scheme obligation
Climate-related
delivery of the more fuel efficient Boeing credits from permanent native forestry
787 Dreamliners powered by new GE next- was 412,810 tonnes of CO₂-e, resulting in
projects in New Zealand. Unfortunately, we a compliance cost of $14.5 million.
risks
generation engines from 2023. can no longer find enough of these credits
to meet demand. Now when a customer With the introduction of auctioning in the
Operational chooses to offset their flight related Emissions Trading Scheme, Air New Zealand
emissions, 100 percent of their carbon is Ensuring Air New Zealand has an effective continues to advocate for auction proceeds to
efficiencies offset using carbon credits from international governance structure and strategy in be ring fenced to accelerate the development
projects that comply with international place to manage the risks that climate and deployment of technologies that enable
aviation decarbonisation and provide a suite
and airspace best practice. In addition, a customer’s change presents is a major priority for the
FlyNeutral contribution directly contributes airline. Our 2021 Taskforce for Climate- of co-benefits to New Zealand.
optimisation
to supporting New Zealand’s native Related Financial Disclosures sets out our For emissions generated in international
biodiversity through a donation to the Native climate-related governance, strategy, risk airspace, we continue to participate in the
Forest Restoration Trust (NFRT). Between management, metrics, and targets that Carbon Offset and Reduction Scheme for
Our carbon intensity across the network January and 30 June 2021, over $350,000 of provide the basis by which our airline will International Aviation (CORSIA) requiring
increased by 31 percent compared to 2020 customer funds were donated to the NFRT to adapt to the changing world that climate carbon neutral growth from a 2019 baseline
(from 789 grams CO₂-e per RTK in 2020 to spend on activities that accelerate the change is already affecting. and annual measurement and reporting.
1,039 grams CO₂-e per RTK in 2021). This
increase was largely due to New Zealand
border restrictions leading to lower than usual
load factors on the international network and
multiple national lockdowns impacting load
factors on the domestic network.
Our Carbon Reduction Programme has been
running since July 2017 and has delivered
more than 41,600 tonnes of carbon emission
reductions. While carbon reduction initiatives
1 On a seat-weighted basis.
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Driving towards
a circular economy
Driving towards a circular It requires innovation in sustainable
products and packaging and an
Fundamental to all of this is embedding
a waste minimisation culture so that
economy requires sustainability expansion of recycling infrastructure. every Air New Zealander plays a role in
to be taken into account right Air New Zealand must continue to contributing to this pillar and meeting
our new waste target.
build on the work we have already
from the design phase. undertaken to reduce single-use plastic
and divert waste from landfill.
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Waste target Embedding a waste minimisation culture
With a renewed strategic focus At the end of 2021, Air New Zealand was With over 8,000 employees, impacts of Covid-19, has limited
diverting 41.3 percent of our waste from opportunities to implement effective
and greater understanding of landfill. To identify opportunities to divert embedding a waste minimisation recycling education to further divert inflight
our waste profile, in June 2021 we further waste from landfill, a range of waste culture across the business is waste from landfill. To reignite effective
audits were conducted at our Auckland recycling habits on our domestic jets, we
set a waste target of 65 percent sites (including our Auckland Airport
integral to our ability to improve ran a targeted campaign with our Airbus
diversion from landfill by 2023. domestic waste dock, engineering, cargo, waste diversion. A320 cabin crew to increase the amount
This target covers Air New and corporate offices). Consultation across
In October 2020, Air New Zealand
of recycling and compostable material
the business and with our waste provider collected on flights. This resulted in a
Zealand’s domestic ground sites helped us gain further clarity on the key
participated in Recycling Week, with a call
substantial increase in mixed recycling and
to action to reduce contamination (non-
and airports serviced by our actions available to meet this target.
recyclable waste) in our mixed recycling
compostable collections, from 1.4 tonnes
main waste provider1. The target is ambitious to drive bold bins. We also ran a Plastic Free July
in Q1 of 2021 to 10.3 tonnes in Q4 of 2021.
waste minimisation initiatives while campaign focusing on using reusable coffee Waste audits also identified opportunities
also recognising the complexities that cups and disposing of takeaway coffee to divert more waste from landfill at our
arise from our operations, including the cups correctly. These campaigns prompted Engineering & Maintenance, and Cargo
range of locations where we operate and a great conversation between Air New sites. A waste culture change project is
varying degrees of access to recycling Zealanders about their recycling habits and planned in these business areas to identify
infrastructure. identified future education opportunities to opportunities for more impactful signage
embed a circular way of thinking. and education to further encourage
effective recycling practices. The project
Covid-19 has provided some challenges in
aims to identify longer-term wins, such as
improving our waste diversion. For example,
improved recycling services and working
the changing operational requirements of
with our suppliers to reduce unnecessary
our cabin crew caused by the various
packaging and transition required
packaging to more sustainable alternatives.
1 The target does not include international inflight dry waste. Due to the significant reduction in international flights in 2021, there was not a sufficient baseline to develop a target. This will be reviewed when feasible.
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Sustainable design Project Green delivers again
The majority of a product’s Measurable sustainability objectives, Project Green, an initiative that Since Project Green’s inception in 2017,
including reducing single-use plastic and we have diverted 1,103 tonnes of reinjected
environmental impact is weight reduction targets were set at the reinjects a range of sealed and product and recycled glass from landfill,
determined during product project’s inception to focus the team’s efforts untouched products back onto the equivalent to the weight of over 26
on developing more sustainable serviceware. Airbus A320 aircraft. In 2021, Project Green
design. This was front of mind A range of sustainability factors were then
flights and recycles a substantial volumes were impacted by our reduced
when Air New Zealand launched considered during product evaluation. amount of glass, continues to international network, however, 2,515,420
units (57 tonnes) of products like cookies
a programme of work to redesign This included the impact of the raw materials be a key tool to divert waste and boxes of tea were still diverted from
used to create the serviceware and the life
its international serviceware cycle carbon emissions produced, including from landfill. landfill, and 22 tonnes of glass was recycled.
offering as part of the wider added weight on our aircraft. As a result, Plans to return Project Green to our major
Future Aircraft Cabin Experience we are on track to exceed our sustainability domestic ports and expand it further in
objectives, including removing 28 million America were paused in 2021 due to the
(FACE) programme to reimagine single-use plastic items annually. While continuing impact of Covid-19. We look
our international inflight offering. some of the changes being trialled will be forward to expanding Project Green further
obvious, such as our bagasse (a renewable when feasible.
plant-based agriculture by-product)
economy casserole dish and cutlery made
from renewable sources, other changes will
be more discrete, such as lighter weight
ceramics in our premium cabins. We look
forward to launching these products on
our flights next year. To find out more about
the serviceware trials, click here.
The key learnings gained from the
serviceware redesign will be a valuable
resource as we continue to partner with
sustainable and innovative suppliers to meet
our circular economy objectives.
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Sustainable
tourism
While supporting the economic Through our partnerships with Tourism
New Zealand, Qualmark, Queenstown
and build back sustainably when
international borders reopen is
wellbeing of tourism has Resort College, the Department of a priority for Air New Zealand.
been a priority this year, our Conservation, our collaboration with
New Zealand Māori Tourism, and
The continuing uncertainty caused by
Covid-19 has tested the New Zealand
commitment to sustainable our support for Tiaki – Care for New tourism industry like never before.
Zealand, positioning tourism to thrive
tourism remains firm.
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The closure of New Zealand’s border for international In partnership with Tourism New Zealand and
visitors until the trans-Tasman bubble opened in April regional tourism operators, we invested in
2021, only to close again in June, meant a sudden and marketing campaigns to encourage Kiwis to explore
significant loss of revenue for tourism businesses the incredible destinations and unique attractions
across the country. across Aotearoa, New Zealand.
Air New Zealand moved quickly to rebuild domestic
capacity providing a critical pipeline for domestic
tourism to support both businesses and communities
reliant on tourism.
Sharing the Tiaki Promise
As one of the founding organisations The Tiaki Promise promotes Air New Zealand has promoted To advance our endeavours and
responsible and safe travel the Tiaki Promise on a range of further promote the Tiaki Promise,
of Tiaki – Care for New Zealand, behaviour and actively encourages channels in 2021, including on our we’ve set a target of having 60
Air New Zealand participates in the (international and domestic) domestic inflight entertainment, percent of New Zealanders aware
visitors to experience New Zealand billboards, Kia Ora magazine, and of the Tiaki Promise by calendar
Tiaki Governance Group, which over in a way that keeps everyone safe, social media channels. year 2023 (from a baseline of
the last year developed a new strategy protects our environment, respects 26 percent in June 2021)1.
with an increased focus on educating our culture and protects the
country for future generations.
New Zealanders on the Tiaki Promise.
1 As measured by Air New Zealand’s Insights Tracker that surveys 400-500 New Zealand travellers each month.
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Championing sustainable Developing
tourism businesses tourism talent
To celebrate the businesses contributing to Aotearoa Our partnership with Queenstown Resort College (QRC),
becoming a world-class sustainable visitor destination, established in 2019, has continued to strengthen this
Tourism New Zealand and Air New Zealand support year and focuses on encouraging New Zealanders into
the Qualmark 100 percent Pure New Zealand Experience a career in tourism.
Awards, launched in 2019.
This year’s winners were selected Destination Marlborough, We have shared learnings and When New Zealand reopens its
by a judging panel that included Destination Queenstown, resources with QRC, including borders to international tourists,
Air New Zealand Sustainability Nelson Airport, Northland Inc., our Mental Health and Wellbeing it’s critical the tourism industry is
Advisory Panel member Dr Trust Tairāwhiti, Wellington Strategy, promoted QRC in features prepared. Central to this is having
Susanne Becken, and Air New Regional Destination Agency in our Kia Ora magazine, and a sufficient talent base as the
Zealand’s Head of Sustainability, and Venture Taranaki. continued to support QRC staff and industry rebuilds. To assist with
Meagan Schloeffel. The 12 diverse students to stay connected through building this talent pipeline, Air
To further champion sustainable
winners were chosen for offering our travel fund. Air New Zealand New Zealand’s partnership with
businesses, Air New Zealand’s
world-class experiences which Chief Executive Officer Greg Foran QRC will continue to promote the
website now features more than
apply sustainability best practices also presented the Air New Zealand tourism industry as an exciting
360 Qualmark-awarded sustainable
through looking after the people & QRC Pūmanawa Award (including and sustainable sector offering
activities and attractions. Our aim
and the land. a $1,000 Air New Zealand travel a variety of career options.
is to increase annual growth in
voucher) at the QRC graduation
Air New Zealand’s domestic bookings for Qualmark-awarded
in December 2020. The award
marketing campaigns have operators on our website by 100
recognises hard work, resilience,
stimulated leisure demand by percent in 2023 from a 2021
integrity and being yourself.
encouraging Kiwis to explore the baseline. Integral to meeting this
country. Our retail campaigns target is our ambition to only list
have promoted fares to regional operators on the website that have
destinations, and we have achieved Qualmark endorsement
undertaken partnership activity by 31 March 2022.
with Auckland Unlimited, Dunedin
Airport, Destination Rotorua,
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Conserving nature through Sustainable safety showcasing
our partnership with DOC domestic tourism
Air New Zealand’s longstanding partnership with the To inspire and support domestic tourism, Air New
Department of Conservation (DOC) has continued to Zealand collaborated with Tourism New Zealand to
soar this year. release Aotearoa, the 8th Wonder of the World safety
In 2021, the airline relocated Great Walks. This includes an video in December 2020.
more than 600 threatened additional 41 new predator control A Department of Conservation staff In addition, A Journey to Safety
species, and 73 conservation traps installed on the Routeburn member (and former Threatened came back on board earlier this year,
dogs were flown, representing a Track, increasing Air New Zealand Species Ambassador) featured in highlighting the need to protect our
record number of transfers since funded predator control to 10,347 the video to promote Tāne Mahuta native taonga. Combined, these
the partnership’s inception. The hectares (up from 8,300 hectares and to acknowledge DOC’s role videos received more than 15.4
translocation of 15 takahē to in 2020). within New Zealand destinations. million views globally in 2021.
their new home on the Heaphy
The Greenteam, our internal team of
Track was a particular highlight.
conservationists, has also supported
Air New Zealand’s partnership the Department of Conservation
support has enabled 45,294 with seabird counting at Kāpiti Island
hectares of sustained pest control and tree planting in the Te Waihora
alongside six of New Zealand’s wetlands in Canterbury.
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Fundamental metrics table
Our new Sustainability Framework outlined in this report has key
headline targets that we will be reporting on. In addition to those targets,
the following fundamental metrics, which detail Air New Zealand’s
impact, are also tracked.
Priority Metric 2019 2020 2021
Representation of Māori and Pasifika 15.4% 17.0% 16.0%
in people leadership positions¹
throughout the organisation
Employee engagement 71 (2018)² N/A³ Engagement index score of 71
(September 2021)⁴
Caring for
New Zealanders Women in Airline Leadership Team
(ALT)
44.0%⁵ 51.0%⁶ 51.0%⁷
Te manaaki i ngā tāngata
People Safety Risk Control N/A⁹ N/A⁹ 84.0%¹⁰
o Aotearoa Effectiveness (RCE) rating of
substantially or fully effective⁸
Environmental non-compliances One environmental non-compliance Zero environmental non-compliances Zero environmental non-compliances
Underground fuel tanks (at Auckland Engineering as at end 2020 as at end 2021
& Maintenance) failed to meet HSWA (Hazardous
Substances Regulation). A compliant above ground
tank was operational by the end of July 2019
IEnvA stage 2 certification via IATA IEnvA stage 2 certification achieved IEnvA stage 2 certification achieved. In 2020, the IEnvA stage 2 certification achieved. In 2021, the scope
scope of the certification was extended beyond Flight of the certification was extended to include all New
Operations and Corporate to include national Cargo; Zealand airports along with Flight Operations and
Maintenance Repair Organisations; Ground Services; national Corporate, Maintenance Repair Organisations
and Auckland Airport and Cargo operations
Suppliers providing positive Suppliers representing 93.2% of our spend provided Suppliers representing 94.2% of our spend provided Suppliers representing 92.7%¹² of our spend provided
assurance of our Supplier Code of positive assurance positive assurance positive assurance
Conduct¹¹
Annual volume of New Zealand 38,600 tonnes 35,045¹³ tonnes 37,600 tonnes
exports on Air New Zealand
Full compliance with ICAO noise No notified noise breaches in 2019. Achieved full No notified noise breaches in 2020. Achieved full No notified noise breaches in 2021. Achieved full
standards for aircraft fleet compliance with ICAO noise standards compliance with ICAO noise standards compliance with ICAO noise standards
1 A people leadership position includes any position in the airline which has employees reporting into it. Data is based on ethnicity data collected via our people management system Workday. This is an optional data field and coverage is currently 56.0%. We continue to
encourage employees to complete this data to inform our strategies and programmes. 2 Based on Your Voice employee engagement survey conducted on a bi-annual basis using Aon Global engagement methodology. 3 Your Voice employee engagement survey cycle paused
due to Covid-19. 4 A new quarterly employee survey was introduced in 2021. As at 1 September 2021, the Glint Global Top 20% engagement threshold was an engagement index score of 79. 5 This percentage relates to the Senior Leadership Team (SLT) which was replaced
by the Airline Leadership Team (ALT) in calendar year 2020. 6 Across all employees, 57.6% identify as a man, 42.4% identify as a woman, and 0.1% identify as gender diverse. 7 Across all employees, 60.5% identify as a man, 39.2% identify as a woman, and 0.1% identify as gender
diverse, with 0.2% unspecified. 8 Risk Control Effectiveness (RCE) review and verification is part of the company risk management process and is a framework being implemented to give depth to the risk declarations. The RCE scale ratings are totally ineffective, largely ineffective,
partially effective, substantially effective, and fully effective. 9 In 2019 and 2020 we were developing this new rating tool and the key metrics that underlie it. 10 The remaining 16.0% of People Safety Risk Controls are rated partially effective (the minimum for compliance). 11 Based on
percentage of spend. This excludes fuel, airport fees, aircraft, taxes, and labour. Where supply agreements are not in place, Air New Zealand’s purchase order terms and conditions are used to apply the Supplier Code of Conduct where the supplier spend is below $150,000.
12 A decrease of 1.5% from 2020 result, mainly due to Covid-19’s impact on Air New Zealand’s spend profile with its strategic suppliers. 13 The cancellation of Air New Zealand’s Shanghai service early in calendar year 2020 due to Covid-19 in China, significantly impacted on
volumes and the ability to move key perishable products to market in China, such as lobsters.
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