Qantas's corporate sustainability strategy and carbon emissions reduction

Carbon Footprint

Qantas Carbon Footprint

Researcher One

Corporate Governance

Qantas corporate governance statement mentions that Qantas has an appropriate corporate governance structure to ensure the creation, protection, and enhancement of shareholder value (Qantas, 2012). Based on this statement alone it seems as if Qantas does not promote a triple bottom line or any other measure of sustainability in the summary of their corporate governance strategy. Other firms in the airline industry make a stronger dedication to social and environmental issues in their corporate governance. Continental for example has significantly more mentions of such causes as well as a plethora of various projects to address these causes (Continental Airlines, 2012). Although Qantas does address such business functions later in their document, their corporate governance strategy seems to be more focused on shareholder value than a more balanced scorecard.

In response to pressures to mounting pressures to address ecological concerns about issues such as climate change and pollution, Qantas worked with strategic partners to design a holistic approach to greenhouse gas emission reduction on a broad organizational scale (Ogilvy Public Relations, 2012). The sustainability program is known as "Be Green" and tackles a wide array of various strategies. These strategies include items such as fuel, but also paper and energy in typical office use. This strategy designates "eco ambassadors" in various departments of the organizations to continuously scan for opportunities to improve sustainability. Qantas now offers a full and transparent sustainability report that covers many social and environmental issues in which the company makes both positive and negative contributions (Qantas, 2008).

Qantas's carbon footprint is nearly entirely composed of the greenhouse gas emissions that are released as a result of burning fuel to power their aircrafts (Qantas, 2012). Not only is reducing carbon emissions through fuel efficiency good for the climate but it is also has monetary implications. Cutting the fuel expense also adds revenue on the balance sheet since it is reasonable to suspect that Qantas still receives comparable ticket sales while spending less per passenger. Therefore Qantas is constantly looking for ways to reduce fuel expenditures. Adding new and more fuel efficient planes to the fleet is one option that Qantas has used. However, there are also many ways to make existing planes more efficient as well.

The weight of the plane is strongly correlated with fuel efficiency and as a result the lighter the plane can be then the less fuel it will use. Therefore Qantas tries to optimize the weight that the planes carry based on the number of passengers. For example, if the plane does not have enough passengers to meet what is considered to be full capacity then Qantas may remove some of the food or beverage items or any other unnecessary items that add weight to the flight. Qantas also charges additional fees to passages for excess baggage (Qantas, 2012). Not only does this apply an incentive for passengers to reduce their luggage weights but it also allows Qantas some degree of service versioning which allows them to change different prices for different consumer requirements.

Researcher Two

Finding New Innovation

To operate sustainably in such economically and environmentally challenging times, Qantas will undoubtedly have to focus on innovation. Reducing weight can only do so much to improve efficiencies in the short-term and eventually they will have to think in more of a long-term perspective. Even though the airline industry in general is achieving higher fuel efficiencies and reducing other pollutants that are emitted in the atmosphere, the total number of flyers is also expanding which increases the overall emission levels. Therefore, Qantas must have a short-term, medium term, and long-term strategy for achieving levels of sustainability in the organization.

While reducing weight and making other efficiencies more salient represents a short-term strategy, in the medium term Qantas is going to have to start replacing older and less efficient planes with more modern and comparably more energy efficient equipment. The newer plane models offer significantly higher energy efficiencies and this technology is also increasing rapidly. Since the technology is evolving so quickly this also presents a timing challenge since the longer that the organization waits the better the efficiency levels will be. In the long-term, Qantas will have to begin to look into alternative fuel sources. Some companies are already experimenting with biofuels and ethanol blends which could significantly reduce greenhouse gas emission associated with aviation dramatically.

Another solution would be to offer more customizable solutions in the ecotourism industry. Qantas could look to expand both horizontally and vertically in this niche to provide innovative new destinations and vacation packages that are associated with environmental and habitat conservation. This would not only boost environmental education but would also allow travelers an option to make their vacations sustainable. The trips could also be bundled with carbon offset packages to address the emissions that the travelers would be responsible for on their vacation. One idea would be to have a travelers club that promotes a new environmentally focused destination periodically. It is reasonable to believe that Qantas could generate customer loyalty for such a program within the environmentally conscious consumer niche. They could then integrate their dedication to these causes and destinations as a foundation of their corporate social responsibility program which into would add value to their customers.

The airline industry in general has an uncertain future at best. On the one hand, competitors want to increase market share and profitability. However, to do so this requires additional customers which in turn adds to additional pollution that contributes to climate change. Aviation is the fastest growing emitter of greenhouse gases due to the fact that the customer base keeps growing exponentially as more and more people can afford to pay ticket prices. So on one hand the increases in potential customers also increases potential revenues however if the industry keeps expanding it is reasonable to suspect that it will face increased regulations and potential a price on carbon emissions that would also raise prices to the consumers and drive down demand. Qantas must make aggressive moves to lower the emissions associated with their fleet quickly and effectively.