Annual Report 2020

Climate-Related Disclosure A key development has been the decision to adopt the recommendations of the Financial Stability Board’s Task Force on Climate- related Financial Disclosures (TCFD). Acknowledging the threats posed by climate change, we recognise the need to include climate change related risks in our business strategies and decisions. Accordingly, we engaged Imperial College London, United Kingdom, to conduct our first Climate Risk Scenario Analysis. Completed in November 2020, the exercise modelled two alternative carbon mitigation scenarios. Both point to the need for AirAsia, along with other airlines, to adopt renewable bio-based (BioJet) fuel by 2031. A stakeholder survey carried out as part of the analysis supports this switch with most respondents being in favour of AirAsia using sustainable fuel along with other efforts to enhance our fuel efficiency. In line with our Environmental Policy, we strive to lessen our contribution to climate change and to mitigate any associated risks arising from it. Our climate change adaptation measures include a contract for Volcanic Ash Advisory as well as “Go no Go Decision support” for adverse weather. The services provided inform us of weather patterns in the areas where we operate, allowing us to integrate these into our flight plans. Carbon Monitoring We have continued to monitor our carbon emissions; however, because of greatly reduced flight operations and the omission of data from AirAsia X Indonesia, AirAsia Japan and AirAsia India, there can be no fair comparison of the data for 2020 with that for 2019 or prior years. We monitor our carbon emissions based on the following categories. Scope Category Indicator Measured Emissions Sourced Scope 1 Direct GHG Emissions Fuel Consumption Flight Operations Scope 2 Indirect GHG Emissions Electricity Consumption (Offices/Buildings) Purchased Energy Along with the huge reduction in the number of flights, the Group’s Scope 1 emissions (excluding AirAsia X Indonesia, AirAsia Japan and AirAsia India) dropped by 75.5% % from 10,114,380 tonnes in 2019 to 2,473,335 tonnes. However, our carbon intensity ratio increased, from 65.74 gCO 2 /RPK in 2019, to 315.7 gCO 2 / RPK. This was due to the drop in RPK from the lower number of passengers and shorter flight distances, as there were no international flights. We expect our emissions intensity to normalise once travel restrictions ease and RPK is restored to pre-Covid-19 levels. Scope 2 emissions from electricity consumption at our HQs also reduced significantly, by 44%, as Allstars spent most of the year working from home. 2017 2018 2019 2020 8,541,525 9,517,694 10,114,380 2,473,335 Scope 1 Carbon Emissions, tCO 2e 0 20,00,000 40,00,000 60,00,000 80,00,000 10,000,000 120,00,000 tonnes CO 2e 2017 2018 2019 2020 4,202 6,531 7,381 4,072 Scope 2 Carbon Emissions, tCO 2e tonnes CO 2e 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2017 2018 2019 2020 70.5 80.9 65.7 315.7 Scope 1 Carbon Intensity Ratio 0 50 100 150 200 250 300 350 gCO 2 /RPK 113 ANNUAL REPORT 2020