Environmental performance
Communication in Business
Name: A Student
Name of TA:
Tutorial Day and Time:
Company: QANTAS
Semester and Campus: Semester 1 2018 – Bentley
Title: A Review of Qantas’ Social Performance regarding the Environment
Word Count: 1615
A Review of Qantas’ Social Performance regarding the Environment
Qantas Airways Limited, Qantas, is Australia’s largest, both domestic and international, airline and is part of the OneWorld alliance; alongside twelve other airlines (Qantas 2014). As the world’s second oldest airline, Qantas is committed to its environmental plans in achieving sustainable social responsibility (Qantas 2016). As part of the Fly Carbon Neutral scheme, Qantas intends to minimise their environmental impact of their operations and create plans to guide their performance (Customer Charter). The airline industry has a significant role in the transportation and tourism industries, where corporate social responsibility, CSR, is a source of competitive advantage (Chang et al. 2015). It is Qantas’ corporate governance to ensure stakeholder interests are protected and enhanced through policies and procedures; including maximising performance, generating appropriate value and return, and maintaining the success of the company (Qantas 2017). This report will apply CSR to assess Qantas’ social performance by considering stakeholders, both externally and internally. Stakeholders include the competitors, society, customers, and employees. In understanding their commitment to fulfilling societal expectations, the environmental social performance of Qantas will be assessed both positively and negatively.
Human activity has increasingly impacted the environment over the last few decades, where consumers expect companies to uphold their CSR ideals by adjusting their practices (Cowper-Smith & Grosbois 2011); such as their environmental sustainability. Evidence suggests that the airline industry is actively reporting their sustainability performances regarding CSR through public disclosures (Cowper-Smith & Grosbois 2011). In attempt to achieve a positive influence upon stakeholder expectations, Qantas announced a commitment to CSR on both their website and through media releases. Qantas are most renowned for communicating their commitment to CSR; specifically concerning environmentally sustainability issues and their communication with stakeholders. Influencing factors to contribute to environmental sustainability are that of, emissions, waste, energy, water, biodiversity, noise, and other influences (Cowper-Smith and Grosbois 2011).
In 2013, Qantas was awarded for its environmental actions as a leading airline in the Air Transport World (ATW) Eco-Aviation Awards (Qantas 2013). In 2015, Qantas offset its carbon emissions on domestic flights for World Environment Day; providing customers with the opportunity to pay a small amount to contribute to offsetting emissions, replacing operational lights with energy efficient LED lights, providing onboard recycling, and lightweight containers to reduce fuel consumption (Qantas 2015). By fulfilling an aspect of social performance regarding environmental issues, such as carbon emissions, provides the opportunity for CSR to have a positive impact on stakeholders; customer loyalty (Chang et al. 2015). Stakeholders place environmental expectations upon corporations to recognise their responsibilities to improve such sustainability through the adjustment of business practices (Cowper-Smith and Grosbois 2011). By Qantas demonstrating a commitment to their social performance regarding environmental sustainability, employees and shareholders, will be positively impacted as the airline develops its policies. A corporate responsible image was evoked by the company communicating their acceptance of an award for environmental sustainability. Such reputation differentiates a corporation from its competitors by improving customer loyalty and satisfaction, why also enhancing the corporation’s attractiveness (Lin-Hi and Muller 2013). Another factor to further this impact is that of fuel efficiency.
Airlines, such as Qantas, have introduced more fuel-efficient aircrafts as a contribution to increasing social performance regarding environmental issues. A recent example is the introduction of a new Perth to London direct flight, operating on a Dreamliner aircraft; requiring twenty percent less fuel than a traditional aircraft of the same size (Qantas 2018). There is a lower level of carbon dioxide emissions and the engines reduce the nitrogen oxide emissions by twenty percent (Qantas B787-9 Dreamliner). As the desire to protect the environment becomes increasingly significant in social performance, corporations positively impact on their own business and fulfil the expectations of stakeholders, specifically consumers and shareholders, and allow for new opportunities to arise in terms of new markets, and new customers (Lin-Hi and Muller 2013).
By having a positive influence towards environmental sustainability through CSR, an organisation furthers its competitive advantage within the industry (Casado-Diaz et al. 2014). For example, when Qantas used one of its most fuel-efficient aircraft, the Boeing Dreamliner 787-9, to fly from Los Angeles to Melbourne using biofuel, this increased Qantas’ competitive advantage by being the first biofuel flight between Australia and the US (Zhou 2018). Biofuels are popular as an alternative to fossil fuels in contributing to environmental sustainability by reducing carbon dioxide emissions that contribute to environmental problems such as climate change (Solomon 2010). To further their positive impact upon stakeholder interests, Qantas intend to operate all Los Angeles flights on renewable fuel by 2020 (Zhou 2018). Qantas is one of several airlines to invest in projects and biofuel alliances, for example, the European Advanced Biofuel Flight Path 2020 initiative, which intends to protect required resources, meanwhile, attempting to reduce the price of a renewable source of fuel (Chang et al. 2015). As described by Chang et al. (2015), biofuel and forms of alternative energy are significant factors in a corporation’s social performance when engaging with stakeholders; such as government bodies and shareholders.
Although there are positives of Qantas’ commitment to develop its social performance regarding environmental sustainability, there are, however, some arguments against such improvements due to lack of proactive approaches and negative results. One of the major contributions to environmental impact, of the airline industry, is that of climate change and air pollution (Wang, Wu and Sun 2015). The stakeholder group that is largely affected by social performance towards environmental sustainability is that of the general public; they are more concerned about the company’s impact on the environment than those of shareholders, employees, customers, and government (Wang, Wu and Sun 2015). Therefore, when a corporation, such as Qantas, does not fulfil societal expectations regarding environmental sustainability, they are negatively impacting on the general public and also their organisational development and profit maximisation (Wang, Wu and Sun 2015). Despite strong attempts to promote environmental efficiency through Qantas media releases, the airline industry strongly impacts negatively on the environment through emissions (Yan, Cui and Gil 2016).
Qantas has recently been ranked as one of the worst major airlines for its fuel efficiency and carbon emissions when flying internationally across the Pacific; burning approximately sixty-four percent more fuel per passenger-kilometre than other major airlines, including Hainan (Branley 2018). Competitors, such as Virgin Australia, move thirty-three people, one kilometre for every litre of fuel consumed, whereas Qantas moves twenty-two people (Branley 2018). When demonstrating a negative approach towards CSR and social performance, stakeholders, specifically shareholders, are greatly invested in the airline’s environmental efficiency when thinking about future investment opportunities (Arjomandi and Seufert 2014). Qantas occupies the Sydney International Airport to LAX route, on a Boeing 747 or Boeing 777 aircraft, with an estimated 453 seats; where passenger numbers on each flight and carbon dioxide emissions are in correlation (Yin, Dargusch and Halog 2015). Although, when flying domestically, Qantas excelled in its commitment to environmental sustainability regarding emissions (Qantas 2015) when comparing to airlines such as Emirates in 2012, Qantas was one of the largest emitters when flying long haul routes (Yin, Dargusch and Halog 2015).
Despite introducing a flight from Los Angeles to Melbourne, that was powered by biofuel and has positive impacts on the overall environment, there is also negative implications on the environment. Biofuels are produced from plant or animal materials rather than fossil fuels, and can have negative implications on the environment, despite cutting out such greenhouse gas emissions which contribute to climate change (Yan, Cui and Gil 2016). One of the major implications of the production of biofuel is that of land degradation (Ravindranath et al. 2010). The degradation of land and loss of habitats are major threats to biodiversity; specifically, evidential in palm oil plantations (Zaman et al. 2016). With the implications on the environment, stakeholders such as the general public, are inclined to view a corporation negatively. Although Qantas does not directly produce their biofuel, they are the consumers of such product. Another influencing factor towards a negative view towards CSR regarding biofuel is the environmental concerns regarding food versus fuel, deforestation, water pollution, water scarcity, and others (Solomon 2010); specifically focussing on soil erosion, nutrient losses, decreased quality in the ground and surface water, difference in air quality, higher demand for water, and loss of biodiversity (Solomon 2010). This will have a minimal effect on shareholders, employees and customers. Meanwhile, the general public in the areas affected by such productions will negatively view Qantas’ social performance influenced by their major concerns with a corporation’s commitment to environmental sustainability.
In conclusion, Qantas’ social performance regarding the environment prevails to consist of both positives and negatives. In demonstrating a strong commitment to improve its performance, there is evidence of strategies implemented to fulfil societal expectations of increasing fuel efficiency and reducing carbon dioxide emissions. In experiencing pressures from stakeholder groups such as governmental bodies, shareholders, and the general public, Qantas has increased its environmental sustainability actions by providing a platform to communicate such elements. Although there are positives towards its environmental commitment, Qantas does display evidence of indirect negative approaches such as the production of biofuel. Although the production of such fuel has negative implications on the environmental directly, the overall benefits of reducing emissions and reducing contributions to climate change overshadow negative impacts. Qantas has demonstrated numerous attempts to counter the criticisms of its lack of CSR towards the environment, by improving their social performance and engaging stakeholders, such as customers, to get involved in their commitments. It can be demonstrated that the development of Qantas’ social performance is slowly developing to respond to the criticisms of its environmental sustainability in contributing to maximise its corporate reputation and fulfilling societal interests to make decisions based on stakeholder interests.
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