Lufthansa Group (Lufthansa) is a publicly listed company headquartered in Germany. In 2021 its revenue was USD 19.16 billion. Lufthansa is an aviation company with operations worldwide, providing scheduled air transportation for passengers and freight. It plays a leading role in the European market with 105,290 employees.
The company has implemented board-level oversight of low-carbon transition. The incentive programme of Lufthansa’s executives and board members is linked to climate change, with 15% of the 2021-2024 long-term incentive plan linked to reducing the fleet’s CO2 emissions per passenger-kilometre flown compared to 2019. The company transparently reports how incentives are managed and allocated for the year in its annual report.
Lufthansa remains a member of some associations, such as the International Air Travel Association (IATA) and Airlines for Europe (A4E), that are reported to have opposed climate policies. IATA has actively opposed numerous measures to decarbonise aviation, while A4A opposes more robust climate policies in the US and EU. Also, Lufthansa has joined the Aviation Alliance Fit for 55, opposing and calling for revisions to the Fit for 55 package of the EU Green Deal. This alliance argues that measures are negative in competition terms and lead to rapid increases in costs for European airlines. Lufthansa can increase its credibility by setting a clear position on climate policy and by implementing processes to withdraw from trade associations that oppose climate policies.
The company is considering future business models that align with current regulations and a low-carbon economy. The company will invest USD 250 million in sustainable aviation fuel (SAF) procurement within the next three years. This represents around 12% of their total fuel costs for 2021 but 4% annual average. Since SAF is one of Lufthansa’s main transition actions, the investment is not ambitious enough. Additionally, the company has not set an energy mix target for SAF. There is a lack of detail on profitability, current size, growth potential and deployment schedule to substantiate the development of the business model.
Without a reduction in emissions intensity, Lufthansa’s cumulative emissions are projected to greatly exceed its carbon budget for the period 2022-2036. Lufthansa’s recent business decisions could threaten the company’s alignment with its carbon budget and the required reduction of emissions intensity. Eurowings has launched a new holiday airline, ’Eurowings Discovery’, with ten new aircraft and objectives to expand its route portfolio. Continuing to expand demand without solutions to the additional emissions is inconsistent with Lufthansa’s climate ambitions.
Lufthansa receives a trend score of -. If the company were reassessed in the near future, its score would likely decrease. Lufthansa has set a 2050 net-zero target. However, the company is not on track to achieve the reduction in emissions intensity required by its 1.5°C pathway. Lufthansa is projected to greatly exceed its carbon budget for 2022-2036. Lufthansa is committed to replacing current aircraft with fuel-efficient aircraft for around 35% of its fleet over the next 8 years. However, the company does not have a robust decarbonisation strategy beyond 2030.
Lufthansa has set a target to achieve net-zero scope 1 emissions by 2050 and an interim target to reduce its well-to-wake GHG emissions related to jet fuel from owned operations 30.6% per revenue tonne-kilometre by 2030 from a 2019 base year. The Science Based Targets initiative (SBTi) has validated that the 2030 target is consistent with a well below 2°C pathway.
The company plans to significantly accelerate its fleet modernisation, improve flight operation efficiency and invest in R&D into SAFs. However, it is relying on carbon offsets both through projects and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) scheme to meet its net-zero target.
Through its accelerated fleet modernisation, Lufthansa will replace 35% of its fleet with fuel-efficient aircraft over the next 8 years. Lufthansa will spend 250 million USD on SAF over the next three years (around 12% of their total fuel costs for 2021) but relies on carbon offsetting to achieve its targets.
The company’s reported scope 1 emissions intensity decreased by approximately 0.3% per year from 2017-2019. This was not aligned with the company’s 1.5°C pathway, which requires an annual change of -1.3%.
Lufthansa’s net-zero target is supported by its fleet modernisation strategy and investment in R&D into fuel-efficient technologies. However, the company’s SAF procurement ambition is low, and it relies on offsets to achieve its ambitions rather than undertaking sufficient direct action which is preferable.
No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.
No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue or engagement with stakeholders in its just transition planning.
No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks.
The company discloses the actions it takes to provide training opportunities for workers and affected stakeholders. For instance, it has a platform to create individualised training to administrative and operational employees alike. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to reskill or upskill.
No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.
No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.
The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. However, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does however have a grievance mechanism available to its workers, but it does not clearly extend to other stakeholders.
No evidence of the company’s policies related to key decent work issues were found in the public domain. These issues include the provision of secure, safe and healthy workplaces, where workers are fairly remunerated and have a meaningful say in decision-making. The company does however set time-bound targets regarding the representation of women at different levels of management, and the company does disclose some fundamental information on its workforce diversity.
The company commits to protecting the personal data of both customers, employees, shareholders and suppliers. Furthermore, the company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. However, the company does not have a public policies or commitments relating to responsible tax, responsible lobbying and political engagement fundamentals, neither in their own operations nor in its relationships with business partners.