Delta Airlines Sustainability

This year, people around the world are experiencing record-high temperatures, an unusually high level of hurricanes, and the destruction of countless homes from wildfires. As natural disasters grow more intense every year, experts in the scientific community are raising concerns about the human impact on the planet’s climate. While billions of federal dollars are being allocated to conservation programs, many are pushing for a response from the business community. Throughout the past decade, many businesses have accepted responsibility for their impacts on the environment and are now investing in new methods to mitigate their carbon footprint. However, because many organizations are still struggling to adapt their business models to focus around sustainability, it is up to some industry leaders to set the example. Delta Airlines is one such organization that has had a clear focus on reducing its carbon footprint ever since 2012.

Delta is an aviation company that provides travel services to 300 destinations located in 50 countries. Everyday, there are over 15,000 Delta departures that help bring nearly 200 million people to their destinations. With over 90,000 employees, Delta brings in annual revenues totaling around 45 billion dollars. However, due to recent COVID-related travel restrictions, Delta’s annual revenues are expected to drop in 2020. Currently, Delta is trading at $32.68 per share, which is a significant decline from the all-time high of $63.16 per share in July of 2019. Despite the dip in stock price, investors are confident that Delta will rebound ever since the stock price grew by 74 percent from the low of $18.80 per share in May 2020.

Delta’s initiative to voluntarily cap greenhouse gas emissions in 2012 marked the beginning of the company's continuing commitment to further reduce its carbon footprint. Although the airline industry makes up only two percent of total global carbon emissions, leaders in Delta’s sustainability program are setting the precedent for companies to pursue more environmentally-friendly alternatives. The biggest component of Delta’s carbon emissions comes from inefficient aircraft design and fuel consumption. 98 percent of Delta’s carbon footprint comes from burning jet fuel. That is why in 2019, Delta replaced 80 old plane models with new aircraft that are 25 percent more fuel efficient. In response to COVID-19, Delta also retired three more inefficient models ahead of schedule. Delta is also working on reducing its carbon footprint by implementing carbon offsets and investing in alternative fuels. Carbon offsets are certificates that are created when a company lowers its carbon emissions by one metric ton. People can then purchase these carbon offsets to provide funding for additional sustainability projects. Delta has successfully purchased over 14 million carbon offsets since 2012 as the company continues towards its goal to cut emissions in half by 2050. Delta is also making efforts to cut waste and recycle materials. Since 2007, Delta has recycled over 3 million pounds of aluminum cans using the rebates to fund the construction of 12 homes with Habitat for Humanity. Delta will continue to partner with charitable organizations in order to recycle old materials and prevent waste from going to a landfill.

Delta’s vision of sustainability is focused on mitigating carbon emissions throughout their global business in order to eventually become carbon neutral. The term carbon neutral means making no net release of carbon dioxide into the atmosphere. Delta’s sustainability strategy involves three main elements: carbon reduction, carbon removal, and stakeholder engagement. Carbon reduction is focused on projects that lower the amount of CO₂ entering the atmosphere. According to the sustainability section on Delta’s website, one way that the company intends to reduce its carbon emissions is by developing new airplane models that are “25 percent more efficient than the aircraft they are replacing.” Delta can track their progress by measuring the amount of CO₂ being emitted from the new engines and comparing them to older models. While carbon reduction is an important first step to going fully carbon neutral, sustainability leaders at Delta must also think about a long term strategy for eliminating positive net carbon emissions. Delta’s Chief Sustainability Officer Gareth Joyce provided some details about Delta’s recent projects that are aimed at recycling carbon. He explained how Delta is investing in ways to recapture the carbon from CO₂ emissions which can be combined with clean hydrogen to create carbon-neutral fuel. Although carbon reduction and carbon removal are effective methods for reducing the Delta’s carbon footprint, none of these projects could occur without effective stakeholder management. Gareth Joyce mentioned that leaders at Delta use priority and decision matrices in order to determine which stakeholders will have the biggest impact on the overall sustainability strategy. From these matrices, Delta executives can determine which stakeholders require the most attention. When engaging with stakeholders, sustainability leaders must create confidence in the cause by developing a sense of purpose, mission, and responsibility. The amount of funding flowing in from external parties would be the best measure for the effectiveness of Delta’s stakeholder management. Overall, Delta is moving in the right direction, but a lot more work needs to be done in order to go fully carbon neutral.

Although the sustainability section on the company website lists several goals and activities aimed at going carbon neutral, it may also be helpful to explain how these initiatives are economically sustainable. Before the economic crisis in 2020, Delta’s stock price reached an all-time high in 2019. Much of this can be attributed to Delta’s sustainability initiatives, but there was little mention about the cost savings that resulted from these programs. While the website states that funds and excess supplies from waste reduction programs are being donated to charitable organizations, there is no mention of how many dollars are saved because of these activities. Additionally, there is no mention about how much money is projected to be saved through the development of fuel-efficient aircraft. These are significant monetary figures, and they should be included on the company website in order to better communicate the financial impacts of new initiatives to investors.