KLM Royal Dutch Airlines: Carbon Agenda

We also developed an integrated framework that helped the airline reduce, control and offset its CO2 emission. Our work has sparked the airline to consider building capabilities in areas such as CO2 performance management and biofuels.

As the European parliament prepared legislation to include the aviation industry in the Emission Trading Scheme (ETS), KLM faced a quandary. The legislation would cap allowed industry emissions in Europe and put an economic value on CO2 emissions. Because almost 80 percent of all industry CO2 emissions are caused by intercontinental transportation, there is no clear alternative to flying.

Accenture helped the airline assess the potential financial impact of introducing aviation into ETS, dealing with possible legislative scenarios and uncertainties. We identified the company’s major CO2 drivers and developed a framework that will be used to manage the carbon agenda. This framework covers all CO2 reduction initiatives, as well as performance management and offsetting (both through Voluntary Emissions Rights and emissions trading). Our work encompassed the company’s public affairs team in Brussels to ensure optimal understanding of the legislative process and its progress. We also collaborated with the airline’s fleet development, network planning, flight operations and fuel strategy functions to cover all areas affected by the CO2 agenda.

To ensure that the carbon agenda was integrated into the heart of the organization, we worked with the airline to introduce the value of CO2 into all fuel-related decisions. Finally, we assisted the airline in its procurement of emissions rights to compensate for customer offsetting through the company’s recently launched CO2 offsetting program.

We helped increase the company’s awareness of the impact of ETS and changed the attitude of senior management on the necessity to act. A mid-term (five- to 10-year) framework identifies the major drivers of CO2 reduction and gives the airline a clear vision of how to set up, run and govern the CO2 program. Based on our work, KLM significantly raised its ambition to explore new opportunities to develop aviation biofuels. Finally, we also provided recommendations on immediate steps to take, including feasibility studies on which capabilities to develop, such as carbon trading and gaining access to biofuels and related technologies.