Emirates invests 7% of profits into sustainability research and development - others should too
Emirates invests 7% of profits into sustainability research and development - others should too
The Dubai-based airline has created a $200 million sustainability fund for R&D
Emirates announced a $2.9 billion profit (not revenues!) for the year. The same day, the airline announced giving employees a six-month salary bonus. Finally, the Dubai-based carrier announced the creation of a US$ 200 million aviation sustainability fund.
Not only is this the biggest single commitment by an airline towards R&D, I do not know of any other airline investing over 5% of its profits into research for sustainable aviation.
While one may argue that the likes of United Airlines have put in large amounts purchasing sustainable aviation fuel (SAF), this is a bit different. Emirates’ $200 million fund is earmarked for R&D, not for operating costs like the purchase of SAF or carbon offsets to tick regulatory boxes.
“We are ring-fencing $200 million to invest in advanced fuel and energy solutions for aviation, which is where airlines currently face the biggest impediment in reducing our environmental impact,” said Sir Tim Clark, President of Emirates
Why is this fund needed?
What Sir Tim highlights above is indeed critical. While many airlines are investing in newer aircraft and optimising operations, the reality is that overall carbon emissions are going up even though per passenger footprint may be down. This is due to growth in aviation, especially since the pandemic.
Radical technology solutions like electric aircraft and hydrogen are still years, if not decades away. In that scenario, the only realistic option for fast-growing airlines like Emirates to reduce their environmental impact is to invest in lower carbon-emitting fuel options, drive efficiencies from air traffic control improvements and try new methods like contrail reduction. Most research efforts in these fields are currently being funded by governments, private companies, and universities. A good example is the Whittle Lab in Cambridge.
With Emirates committing $200 million over the next three years to research, this sets an encouraging precedent for other airlines to follow. Not only is it a significant commitment set to benefit the larger ecosystem, but it is also commendable for an airline to set aside more than five percent of its profits to research, rather than fuel uptakes.
Timing is everything
When I spoke at the ATM in Dubai last week, there were over 40 conference sessions on the theme of sustainability. It might seem like an overkill in an oil-producing region, there is context here we should be aware of.
The Emirates initiative has been announced during the UAE’s ‘Year of Sustainability,’ during which the nation hosts events this year that include the Dubai Airshow, the third ICAO Conference on Aviation and Alternative Fuels, and the UN’s COP28 climate change summit.
With so much attention on the country, its airlines need to step up. Etihad Airways has already been leading the charge among Gulf carriers, as I learned in my podcast interview with its former CEO Tony Douglas. Now, with Emirates throwing its hat in the ring in a big way, both of UAE’s major airlines are pushing forward the sustainability frontier.
Leaving a legacy
When I met Sir Tim, the CEO of Emirates, last week in Dubai, he shared that he clearly wanted to leave the airline healthy when he retires.
The airline has announced a record profit, record profit sharing and a record investment in sustainable aviation.
It looks like he is well on the way to accomplishing his goals before retirement. Perhaps we will also see an announcement in the next year on succession?
Emirates has done well to announce the creation of a sizeable sustainability research fund immediately after the airline announced record profits.
Now, which airline will raise its hands and divert 10% or more of profits towards a greener future? I have a feeling we won’t have to wait for long.