Piling on the pressure

Industry body TIACA’s annual sustainability survey found the issue is increasing in importance in the air cargo sector

Sustainability is rising up the corporate agenda for air cargo companies but the sector is lagging significantly behind other areas of business in shouting about its greed credentials.

The latest insights from industry body TIACA’s annual Air Cargo Industry Sustainability Survey found pressure from regulators and investors is increasing on companies.

The survey found that the vocabulary of ESG (Environmental, Social, and Governance) is becoming adopted in the air cargo sector, with large businesses in particular investing in a sustainability
strategy (80 per cent).

In contrast, just 60 per cent of small to medium companies reported having a sustainability policy and only 52 per cent of companies have at least one dedicated person employed to deliver that policy.

TIACA’s survey found 57 per cent of firms have a dedicated sustainability team and just under half (45 per cent) have a budget for sustainability.

Air cargo performed poorly making its sustainability efforts public, with just 50 per cent of firms sharing their performance in public compared to a global industry average of 80 per cent.

The TIACA report cites Forbes data to show how ESG investing has grown in the past decade, now accounting for over $35 trillion in asset value worldwide and expected to reach $50 trillion by
2025. However, the report notes there is “no ESG reporting mechanism designed specifically for air cargo industry”.

The pressure on corporates to act sustainably was more acute in the Americas and Europe compared to Africa and the Middle East and in Asia.

And the pressure was higher for ground handers (77 per cent), airports (70 per cent) and airlines (64 per cent), but significantly lower for freight forwarders (42 per cent).

Leadership buy-in was found to be widespread in the sector with 92 per cent saying that sustainability is supported by their chief executive. Among the industry’s leadership, 81 per cent place sustainability as a strategic priority although 12 per cent say they do not see any “concrete action”.

TIACA has urged more to be done on sustainable sourcing and procurement with just 66 per cent of firms with sustainability teams saying they have policies in place in this area.

Glyn Hughes, director general of TIACA, said: “Pressures to be sustainable continue to increase from all stakeholders. However, there is still work needed to raise awareness in our industry of how sustainability can positively contribute to a company’s bottom line.

“I am pleased to see continuous commitment from air cargo companies’ leadership, who are placing sustainability as a strategic priority. But while resources are increasing, sustainability is a large undertaking.

“Transparency is key to building trust and longstanding relationships. It is great to see the majority of companies coming forward by tracking the progress of their sustainability objectives, and over half of them sharing results with the world.”

This feature was first published in Airline Cargo Management – May 2023. To read the magazine in full, click here.

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