Wednesday, February 21, 2024
Capital A has achieved top rankings in global sustainability assessments following a strategic overhaul of its sustainability framework, emphasizing comprehensive measures to tackle climate risks and enhance stakeholder engagement.The group’s recent accolade includes AirAsia’s GOLD Environmental Sustainability rating, as recognized by the Centre for Aviation in its 2023 CAPA-Envest Global Airline Sustainability Benchmarking Report. Among 19 airlines awarded, AirAsia stood out for its significant progress in efficiency and environmental performance amidst post-pandemic network reconstruction. Notably, AirAsia ranked 11th lowest in CO2 emissions per passenger and 12th lowest in emissions per seat among nearly 80 surveyed airlines worldwide.
Additionally, Capital A secured the 15th position out of 124 airlines in the London Stock Exchange Group’s ESG scoring, evaluating companies’ ESG performance, commitment, and effectiveness across ten key areas. With a score of 71%, AirAsia not only leads among ASEAN-based carriers but also stands as one of the top performers globally in the low-cost carrier segment.
These accolades supplement the positive outcomes from ESG evaluations conducted by the company’s listed boards, reflecting improvements in sustainability disclosures. In Malaysia, Capital A’s ESG score increased from 2.9 to 3.2 between 2020 and 2022, surpassing the threshold for inclusion in the FTSE4Good Bursa Malaysia Index consistently. Similarly, Capital A’s Thai affiliate, Asia Aviation, witnessed a notable rise in ratings from 67% to 81% between 2021 and 2022, positioning it among the top-rated companies in the Stock Exchange of Thailand’s ESG Ratings.
On the international front, Capital A benchmarks its performance against two prominent global indices for publicly listed companies with market capitalization exceeding US$1 billion. The latest S&P Global Corporate Sustainability Assessment (CSA) awarded Capital A a score of 40%, up from 32% in 2020, demonstrating continuous improvement. S&P CSA scores play a crucial role in selecting companies for inclusion in the Dow Jones Sustainability Indices (DJSI), recognizing those that exhibit ESG leadership.
In the past year, Capital A continued its commitment to transparency by submitting its 2021 social performance disclosures for evaluation under the Bloomberg Gender Equality Index* (GEI). Once again, it exceeded the inclusion threshold, reflecting its ongoing dedication to gender equality. Notably, Capital A has made significant strides in increasing female representation across its workforce. In 2022, key highlights include women comprising 53.8% of all employees and 32% of senior management positions. Additionally, AirAsia maintained its position as the leading airline in Southeast Asia for employing women pilots, with a rate of 6.6%, surpassing the global average of 5.8%.
“In 2020, we began reorienting Capital A’s sustainability focus for a better balance between our external and internal sustainability practice. While we were very active in external social activities prior to 2020, the global pandemic necessitated a recalibration. This coincided with a period when climate change regulations on aviation were also beginning to take shape,” said Capital A Chief Sustainability Officer, Yap Mun Ching.
“There are two main prongs to our strategy. The first was to apply our cross-cutting cost and efficiency discipline to managing our ESG risks. One area where we can see the results of this approach is in the strengthening of our environmental strategy. In 2021, we published our first net zero roadmap to identify key pathways to decarbonisation. Every year since, we have added depth to our understanding and with the aid of data modelling, we have been able to better integrate ESG considerations into our overarching business strategy,” she added.
Yap said the second was to communicate more effectively. “Aviation sustainability is a complex topic which is not easily accessible to our stakeholders. We expended a lot of resources to build better understanding among policy-makers, regulators, investors, business partners and very importantly, our staff – Allstars. We revamped the way we report on our sustainability achievements to highlight data-based results and deliverables. Internally, we also enhanced governance by establishing Board sustainability committees, including appointing sustainability advisors to our Aviation Board Sustainability Committee, given the importance of this issue to our core airline business.”
The company’s stakeholders have responded positively to this initiative. In December 2023, Maybank IB Research issued a report reaffirming a BUY recommendation for Capital A shares, citing the company’s admirable long-term ESG objectives and the refreshing nature of its report.
In the latest reporting cycle for 2023 performance, both Capital A and Asia Aviation (the sole shareholder of Thai AirAsia) will release individual sustainability reports. This move aims to underscore their commitment to sustainability and enhance the communication of their ESG priorities and strategies.
Between 2020 and 2023, Capital A remained eligible for ESG benchmarking assessments by global indices, albeit not included due to a decline in market capitalization induced by the pandemic. With AirAsia anticipated to resume full fleet operations in 2024, Capital A expects to see an improvement in its market capitalization.
Sunday, April 28, 2024
Sunday, April 28, 2024
Sunday, April 28, 2024
