Annual Report 2020

Guided by ESG/EES principles, we strive to play our part in redressing global inequities and environmental issues. Although recognition for our efforts has never been a primary factor, it is always encouraging to receive industry acknowledgement as it indicates that we are on the right track. We were therefore extremely pleased when, in December 2020, AirAsia was listed on the FTSE4Good Bursa Malaysia Index for the first time – validating our ESG/EES practices and principles. ENVIRONMENT: GOING FOR GREEN As an airline, we are keenly aware of our responsibility to ensure optimum fuel efficiency in order to reduce our carbon footprint. While fuel efficiency has always been part of our low-cost business model, in recent years we have adopted a more structured approach – as advocated by the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) initiated by ICAO. Guided by CORSIA, we have set the goals of achieving carbon neutral growth for international flights by 2023 and reducing our net CO2 emissions to 50% of what they were in 2005 by 2050. As first steps towards these targets, in 2020 we set up a carbon monitoring dashboard for all our AOCs and obtained third-party verification of each AOC's emissions in 2019. The latter is to serve as the baseline upon which future emissions offsetting and reduction obligations will be calculated. Underlying our commitment towards climate change adaptation, we appointed a team from Imperial College London, the UK, to conduct a climate risk scenario analysis. Based on its recommendations, we are putting in place various systems and controls to mitigate our climate change risks. Once Covid-19 restrictions lift further, we plan to organise our first climate- related disaster simulation. Some of the airports that we operate in are particularly vulnerable to weather related events such as floods and typhoons so we will be selecting one of these two scenarios. This exercise will enable us to test our evacuation, asset protection and recovery measures while helping to identify any gaps in our preparedness plans. At the same time, we are pleased to share that AirAsia Foundation has been funding the efforts of several post-disaster rehabilitation partners since 2013 to help rebuild communities devastated by natural calamities. This includes designing disaster-resilient structures to coastline mapping, which would be invaluable in future recovery strategies following various crises we have faced in the past, including those related to climate change. SOCIAL: CARING FOR PEOPLE Our social citizenry is further demonstrated by the value we place on our guests, Allstars and local communities. Being always guest obsessed, we do not just do whatever it takes to ensure our guests enjoy an exceptional experience when flying with AirAsia, we also ensure their safety and well-being at all times. This is reflected in all the measures – including the contactless procedures – that have been undertaken to ensure we keep our guests and staff safe from infection; and we remain committed to our efforts to maintain the IATA Operational Safety Audit (IOSA) registration of each AOC through the development and execution of remote assessments as on- site audits were not possible during the year. The IOSA accreditation is the global benchmark for upholding the highest standards of safety at all times. We have always recognised our Allstars as being the true engines of growth for AirAsia and sought to provide them with an exceptional, highly engaging work environment that encourages and rewards performance. This has seen AirAsia provide continuous training for Allstars (in 2020 our training spend exceeded that for 2019 by 7.2%) and even sponsor 13 Allstars to undergo a Master of Business (MBA) Programme at the Asia School of Business in partnership with MIT Sloan. In addition to helping them develop professionally, we also strive to ensure their physical and emotional well-being. The latter was especially pertinent in 2020 due to the stress brought about by the pandemic. In addition to free online counselling, an Allstar Peer Support team was set up to provide emotional support. By year end, about 500 Allstars undergoing mental stress benefitted from this system. 69 ANNUAL REPORT 2020