Annual Report 2020

Sustainability Statement CLIMATE-RELATED RISK MANAGEMENT AirAsia took our first steps towards a net zero carbon emissions future by committing to CORSIA, developed by the International Civil Aviation Organization (ICAO). Under the scheme, all civil aviation operators registered in participating countries, including Malaysia, Thailand, Indonesia and the Philippines, are required to report verified carbon emissions data on international flights to their respective civil aviation bodies annually from 2019 onwards, ahead of the introduction of a carbon offsetting regime by 2023. Offsetting was earlier scheduled to commence in 2021. However, this has since been postponed due to the heavy toll of the pandemic on the aviation sector. To meet CORSIA requirements, we submitted the Emissions Monitoring Plans (EMPs) and first verified carbon emissions reports for 2019 to the respective civil aviation regulators in Malaysia, Thailand, Indonesia and the Philippines. Manuals were also developed for each AOC to identify accountable personnel, establish processes and procedures for data collection. In early 2020, we developed a comprehensive sustainability dashboard to enable effective tracking and monitoring of relevant data, not only of carbon emissions from flights, but also our utilities consumption, printing usage and recycling activity at all AirAsia offices. To ensure robustness of data, multiple engagements were undertaken with the relevant departments to plug data gaps, implement consistent data collection processes and improve data integrity. Following intensive efforts to transfer manually recorded emissions data into flight systems which feed data into the sustainability dashboard, we appointed an independent third party verification body accredited by ICAO to audit our 2019 emissions data between February and April 2020. All seven AOCs registered in the above mentioned four countries (AirAsia Malaysia, AirAsia Thailand, AirAsia Indonesia, AirAsia Philippines, AirAsia X, AirAsia X Thailand and AirAsia X Indonesia) successfully submitted their respective emissions reports to regulators before the CORSIA-determined deadline of 31 May 2020. AirAsia’s verified emissions data for 2019 is as shown in the table below. At the time of this statement, our emissions data for the financial year 2020 is still being verified. In accordance with updated CORSIA rules issued in response to the pandemic’s impact on the aviation sector, the verified 2019 carbon emissions data shall henceforth be the baseline upon which future emissions offsetting and reduction obligations will be calculated. CO 2 emissions of our AOCs’ international operations in 2019 & 2020 AOC CO 2 emissions (tonnes) 2019 CO 2 emissions (tonnes) 2020 (unaudited) AirAsia Malaysia 1,800,336 329,114 AirAsia Thailand 1,150,073 176,857 AirAsia Indonesia 572,204 128,754 AirAsia Philippines 447,529 80,247 AirAsia X 2,004,053 428,393 AirAsia X Thailand 790,416 181,368 AirAsia X Indonesia 39,276 Ceased operations Total 6,803,887 1,324,733 Moving forward, AirAsia will improve our carbon dashboard to minimise human error and data gaps. Key to this is to reduce the number of steps required to retrieve relevant data and to automate more steps in data extraction so as to stay within the 5% data gaps threshold set by ICAO. Given the two-year postponement of the carbon offsetting regime, our Sustainability Department plans to integrate AirAsia’s carbon offsetting strategy with AirAsia Foundation’s grant support scheme. One avenue being explored is to support the carbon credit certification of its environmental social enterprise partners so that these organisations can benefit from eventual carbon credit purchase by AirAsia Group. Not only will this enable the social enterprises to fund climate change mitigation programmes sustainably, it also opens up an avenue for AirAsia to invest into the environment of cities or countries where we have significant operations. 112 AIRASIA GROUP BERHAD