Finnair preparing for the future - including sustainability in its Articles of Association
Sustainable travel and ecotourism have grown quickly. Increasingly, travellers want to know about the impact that their trip is having on the planet, from their carbon emissions to whether responsible travel is at the heart of the companies they use to help book their trips.
This is something we’re paying close attention to at Finnair. Customers want to know that the airlines and operators that they’re using are doing their absolute best to lower carbon footprints and improve environmental sustainability, making the world a better place for all of us in the process.
Reducing the environmental impact of travel requires a multi-pronged approach, increasing usage of biofuels, lowering the weight of aircraft, making investments in updating older planes, reducing plastic waste as well as using certified offsetting and carbon capture schemes.
To achieve all that, and work for it every single day, such dramatic change requires adjustment at the very heart of the business itself.
Rewriting Our Articles of Association
“I’m sure you’ll have read and heard how companies always say that sustainability is in our DNA. I’ve said it myself several times. But then I started thinking about what it really means,” says Anne Larilahti, Finnair’s Vice President of Sustainability.
“DNA is the code that defines what you are. And if you take that into the corporate environment then that is the articles of association.”
Articles of association is the key document that, among other things, defines a company’s purpose. And Finnair’s board proposed to make a key change to its articles of association to ensure that sustainability, and by extension responsible travel, are written into the very core of our business.
Finnair’s annual general meeting approved of the change in late May 2020. Article 2 now includes the sentence: The company may also engage in, or support, activities that are aimed at ensuring the acceptability, and thereby the long-term profitability, of its business by increasing the positive effects and reducing the negative effects of its business on the environment and society.
What does this mean in practice? As well as consumers using carbon calculators to work out the greenest airline for their route, they’ll be able to see that Finnair is committed to investing in longer term projects that may not have an immediate financial benefit but will help the planet in the future.
Larilahti explains.
“It means that if we decide we are going to engage for example in sustainable aviation research, or development of new solutions for emission reductions, we can go through partnerships and engage in an activity that isn’t necessarily profitable short term but does support us becoming a more sustainable company. It gives an opportunity to reduce our carbon footprint in the future. The updated articles give us that space.”
Focused On The Future
Larilahti says this could mean anything from exploring the future of electric aviation, or pushing further and faster on alternative fuels. Finnair recently announced a new partnership with Neste, the world’s largest supplier of Sustainable Aviation Fuels (SAF), using more biofuels based on used cooking and vegetable oil. The company is also involved in studies on Power to X, CO2 neutral fuels made of carbon and hydrogen.
“It’s really to make room for new innovation in disruptive technologies that can really, drastically reduce carbon emissions of flying,” adds Larilahti.
This approach, placing sustainable travel at the front and centre of Finnair’s business, was inspired by the work of Professor Robert G Eccles, a visiting professor of Management Practice at the Said Business School, part of the University of Oxford.
Eccles’ campaign for a ‘Statement of Significant Audiences and Materiality Campaign' tallies with Finnair’s plans to change its articles of association, working towards a new form of capitalism in the process.
The campaign calls for all listed companies to publish an annual statement showing how they are supporting sustainable development for the longer term. For airlines like Finnair, this means showing that investments in future technologies are helping to boost ethical travel and ecotourism, thereby reducing its carbon footprint and making it a business fit for the environmental challenges of the 21st century.
“If you want to make a real change and have true symmetry between your purpose and your work and your DNA, then the articles of association need to be changed,” says Larilahti.