Engagement
Engagement is of great importance for EAM‘s sustainable investment approach. It
combines own initiatives with collaboration on a national and international level. The
structured engagement process is based on the „EAM Engagement Guideline“ which
determines engagement issues, approach and procedures.
Airlines
Condensation trails litter the sky: since 54% of all journeys worldwide are taken by aeroplane, Erste Asset
Management wanted to fi nd out what progress climate protection has made in the sky. Within the framework
of its engagement activities, EAM approached the airlines Air Berlin, Air China, Delta Air Lines, KLM, Lufthansa
Group, and Singapore Airlines and asked them about sustainability in their corporate strategy. KLM and Lufthansa
were the most accessible airlines in this respect.
Society regards aeroplanes as gas-guzzlers. The European average amounts to 5.2 litres of kerosene per passenger
per 100km, with KLM (3.5 l) and Lufthansa (4l) coming in below average. Kerosene is one of the main cost items for
airlines. All companies try to increase their effi ciency with measures such as lighter trolleys or new aircraft. In order
to step up efficiency, all airlines cooperate with airports in order to cut the distances aircrafts cover on ground.
According to Lufthansa, a reduction of 100kg of weight in each of the company’s aircrafts could decrease fuel
costs by an annual EUR 2.6mn, which would also cause CO2 emissions to decline by several tonnes.
Airlines check the entire supplychain on sustainability
EAM asked the airlines approached in the engagement process about their CO2 offset programme. While customers
currently make very little use of said programmes, Lufthansa has recorded a rise in acceptance: a total of 14,000
tonnes of CO2 were offset in 2013 (+18%), which equals 320 flights between Frankfurt and New York. The money
donated is invested in projects of myclimate.org. Also, companies receive comprehensive business travel reports
from Lufthansa. These reports include information about the companies’ CO2 footprint – data that can be included in annual reports.
As far as sustainability is concerned, airlines go beyond their immediate organisation and invest a lot into their
supply chain. KLM and Lufthansa put ethical and ecological clauses into their contracts with suppliers (e.g.
compliance with international working laws, ratification of the UN Global Compact). The suppliers’ compliance
is ensured through checks by the airlines.
(Richard Boulanger)
Status:
Our engagement with airlines has clearly shown that many
companies are already working intensively on their sustainability.
The talks we had will have no impact on the SRI investment universe
of Erste Asset Management: KLM was among the best of its industry
even before our dialogue – and therefore part of the investment
universe. While Lufthansa turned out an active engagement partner,
it is not investable at the moment due to bribery cases in the past.
Singapore Airlines, where we are currently not invested with our
sustainable funds, were very brief in their responses and thus failed
to effect a change to their status.
