What can airlines learn from BP?

Yesterday I wrote a piece on the SimpliFlying website, questioning whether tobacco's past is oil's present and aviation's future. 

To reinforce the point, I looked at some of the protests BP has been facing recently. This has ranged from a 13 foot Trojan Horse being wheeled into the British Museum Courtyard, to protest against BP's Museum sponsorship, to Greenpeace blocking BP's HQ with solar panels on the new CEO's first day.

In fact, as I was writing the post, BP came out with a major announcement saying that it would be aiming to become a net zero company by 2050. And to do so, BP committed to undergoing a thorough cultural and organisational change.

Most climate change groups didn't buy it. But I imagine BP would have factored this in.

However, many commentators did welcome the overall message, albeit with a lot of question marks over the details.

So what can airlines learn from this? A few things:

1 - Take action now, as this issue isn't going to go away anytime soon

What should especially give airlines pause for thought is that the issue of climate change has moved from the street to the boardroom.

As we said in a recent post, it's likely large corporates will start to look at business travel as a way of cutting their carbon footprint. To get that all important corporate contract, you may in future need to prove how you are mitigating the impact of your flights.

Meanwhile, investors are starting to back away from perceived polluters, a fact specifically mentioned by BP boss Bernard Looney yesterday, when he cited Larry Fink's letter about Blackrock making climate change a focus of its investment strategy.

 2 - Sustainability is as much about culture as it is about targets

A key part of the announcement involved 'reinventing BP' through a reorganisation of the company.

According to Bernard Looney, staff are empowered to speak up for climate change - an about turn from when Big Oil used to try to minimise its impact with fake science and astro-turfing.

If sustainability is going to be meaningful, it has to involve more than warm words on a press release. You have to show that it is part of your business DNA, involving all employees and stake-holders.

 3 - Trust needs to be earned and actions speak louder than words

As part of an excellent commentary on the BP announcement, The Guardian's Jonathan Watts has the following to say about the company's planned cultural shift:

This would be a very positive step, but BPs past record on greenwashing and lobbying gives little cause for confidence. This oil company reportedly spends more than any of its rivals on influencing politicians and public opinion.

As Jonathan Watts says, BP's track record here is not good. Among other things, the company contributed money to the inauguration of Donald Trump.

A new CEO does give BP the chance for a reset, but trust needs to be earned. Which brings us onto the next point:

 4 - The Devil is in the detail

Two pro-business newspapers took a similar line towards the announcement - they praised the vision but questioned the detail.

In a Financial Times piece, David Sheppard said that 'BP’s net-zero pledge is welcome, but detail is required.' Meanwhile The Times ran a story headlined, 'Bernard Looney’s big ambitions for change are light on detail.'

As a result, while commending the overall intent and direction, many commentators are taking a wait and see approach, especially as BP has promised to provide more information with regards to the strategy and near term plans at a Capital Markets Day in September.

As an airline, it's important to show what you are doing when. A lot of airlines have signed up to the '50 by 50' pledge (a 50% cut in net CO2 emissions compared by 2050), while a small number have committed to going further.

2050 is a generation away. Thirty years from now, most of the senior management team in airlines will have retired, and so you could argue it becomes someone else's problem.

As a result, what's happening right now? How about next year? And what about in five years time? This is the sort of detail you need to provide, if your plans are going to be taken seriously.

5 - Be honest and don't pretend to be something you are not

BP is in the business of energy and oil. It's also very much a for profit corporation. That won't change and BP was up front about this, committing to a continued 'investor proposition of growing sustainable free cash flow and distributions to shareholders over the long term.'

In fact, Bernard Looney turned this around by using the phrase 'transforming by performing' - e.g. to transform, the company needs the cash to do so.

Similarly as an airline, you are in the business of flying people from A to B. You are not going to stop doing that, much as climate change groups want it to be the case. So don't pretend otherwise.

Instead, show how you are doing everything you can within your existing business model to reduce your environmental impact, become sustainable as an organisation, a good corporate citizen (which involves wider CSR initiatives), and how you intend to decarbonise in the medium to long term by supporting the development of (e.g.) Sustainable Aviation Fuel and electric aircraft.

And finally on that, don't insult the intelligence of the wider public by pretending to be 'green' (something Wizz Air and Ryanair have at various times claimed). If you burn greenhouse gases, you're not green, and neither the media or traveling public are fooled.