American Airlines' Climate Strategy
Originally published in American Airlines 2021 ESG Report
More than 90% of American’s total carbon footprint, including our Scope 3 emissions, comes from our use of jet fuel, so our strategy for reaching net zero emissions by 2050 is focused on running an ever more fuel-efficient operation, with more fuel-efficient aircraft, powered by low-carbon fuel.
To do so, we are working to drive progress across several key levers — some of which we have the ability to influence directly, and some of which will require action and collaboration within our industry, across sectors and by policymakers. (See chart on the following page.)
Integrating climate risk into our strategy and investments
Underpinning our strategy is the in-depth analysis we conducted in 2020 — and updated and expanded in 2022 — to understand the climate-related risks and opportunities facing our company. We studied their potential impacts on our business, operations and the broader environment in which we work under different warming scenarios.
While there is considerable uncertainty about the likelihood and operational and financial consequences of these scenarios, the direction and potential magnitude of climate-related risk is clear. Our strategy is designed to position American to anticipate, mitigate and respond to climate-related risks and to thrive in an uncertain future. It includes making targeted investments to address the demonstrated and high-probability risks associated with climate change that may affect our business, such as the impact of extreme heat on aircraft or of sea level rise at our major hubs. It also includes strategic investments, based on the best available information, to enable American to adapt quickly and be successful if lower-probability or higherconsequence risks manifest. As a result, another core part of our strategy is making ongoing investments in deepening our understanding and analysis of climate-related risks and opportunities to inform our evolving approach. For a detailed discussion of our climate-risk assessment process and findings, see page 22.
As part of our ongoing analysis of transition climate risks and opportunities, we incorporate a price on carbon when estimating American’s potential obligations under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), European Union Emissions Trading System and other possible regulatory programs that may impact our operations. The carbon prices used for these estimates are based on cost projections from respected external sources. We have also begun incorporating a shadow price on carbon in evaluating investments in our fleet and fuel efficiency initiatives, as well as sustainable aviation fuel (SAF) purchases.
