Sustainability Report - Air New Zealand

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Sustainability Report - Air New Zealand
Sustainability Report - Air New Zealand
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


      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


      09   01
       Caring for



                                                                     Driving towards

           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
Sustainability Report - Air New Zealand
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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Sustainability Report - Air New Zealand
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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Sustainability Report - Air New Zealand
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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Sustainability Report - Air New Zealand
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 Report - Air New Zealand
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
                                                                                                                                                                                                                             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
Sustainability Report - Air New Zealand
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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Sustainability Report - Air New Zealand
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.

      < B AC K T O C O N T E N T S
Sustainability Report - Air New Zealand
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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11 —   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 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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       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

       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)

                                                 20%                                      50%
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       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
        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,
       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
       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.
       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.

                                                                   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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       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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23 —   S E C T I O N 0 4 — S U S TA I N A B L E T O U R I S M                                                                                                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

       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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24 —   S E C T I O N 0 4 — S U S TA I N A B L E T O U R I S M                                                                                                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

                                                                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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25 —   F U N DA M E N TA L M E T R I C S TA B L E                                                                                                                                                                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

       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
                                                                                                          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

                                                            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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