🌍 Last week, the 75th UN General Assembly kicked off with "virtual meetings, vital promises, vapid results." On climate, battle lines were drawn between China and the US.
🐲 President Xi made a commitment to reduce emissions in the world’s top-polluting nation and reach carbon neutrality by 2060. The NYT outlines what you need to know.
🗃️ The Big Four accounting firms unveiled a reporting framework for ESG standards. Spearheaded by IBS, the initiative encourages adoption among 130 companies by 2021.
🚢 The world’s first shipment of blue ammonia—used for zero-carbon power generation—is on its way to Japan from Saudi Arabia, paving the way for hydrogen energy systems.
✈️ Airbus revealed three concepts for the world's first zero-emission aircraft, which "could enter service by 2035." All three rely on hydrogen as a primary power source.
🍔 The plant-based food industry should be a no-brainer for ESG investors. But as the FT finds, the true impact of eco-friendly, meat-alternative businesses is hard to measure.
🎂 The SDGs turned five on Friday. Reviewing how far we've come and how far there is to go, Responsible Investor has marked the occasion with an 18-day content series.
Talk about a rock and a hard place.
Squeezed on one side by pandemic-related border restrictions and on the other by growing pressure on businesses to "go green," the aviation industry is not having an easy time. And that's before we even factor in flygskam.
Last week, French aircraft manufacturer Airbus made headlines for two, very different, reasons. The juxtaposition served as a reminder of how difficult it is to evaluate a company as a sum of its non-financial parts.
On the environmental front, the company shows signs of taking off. In a press release, Airbus revealed three concepts for the world's first zero-emission aircraft, which "could enter service by 2035." The announcement marks a big step for the aviation industry—if it can be achieved.
That's a big if.
Existentially, Airbus is stalling. After having announced plans to cut 15,000 jobs, the company is now also proposing a two-year reduction in working time to save the remainder. As reported by Bloomberg, Airbus's HR head for France wrote to workers that “Airbus faces an unprecedented crisis, [and] the prospects for resuming our activities are deeply uncertain.”
The problems facing Airbus point to a broader, critical problem for the aviation industry. Companies need—and want—to innovate. But they're working against the clock.
In his letter, the HR head added that he expects the government to provide research contributions for several projects, including its zero-emissions aircraft. But government contributions can't save Airbus from the looming threat of collapse between now and 2035.
"Airlines are racing to find an answer for how to decarbonise and reduce their climate impact," wrote the FT last year, "But the challenge is that there are no easy ways to reduce emissions meaningfully — at least not in the near term."
Recognising this uniquely precarious position, Airbus CEO Guillaume Faury has called for an “urgent reframing” of the debate over the aviation industry’s impact on climate change, arguing the sector’s “role in society” is at risk.
In a press release issued on Friday, Faury argued “the 2020s hold the promise of far-reaching progress towards zero-carbon aviation and governments are providing new impetus as they commit research funding to sustainable aviation... [which is] why the debate in Europe and across the globe needs urgent reframing.
Citing Airbus's ambition to build “the world’s first emissions-free airliner by 2035," Faury added that the industry is “entering a period of innovation to match anything since the dawn of air travel." This—not to mention the “more than 80 million [commercial aviation industry] jobs worldwide” and uniting of “people, cultures and businesses,"—should, he argues, lead the debate.
Our analytics show that Faury is entirely correct. Environmentally destructive it may be (SDGs 13, 14, 15), but Airbus does a great deal of good for work and economic growth (SDG 8). The question facing investors, businesses and consumers alike is: what should matter more? Against what timeframe?
As we hit the fifth anniversary of the SDGs, Airbus is a useful example of a company—and industry—that defies easy categorisation. While the environmental SDGs might have proved more popular than their social counterparts in the years since the framework's inception, 2020 has been a stark reminder that we cannot neglect the latter.