Scandinavian Airlines CEO Warns of Carbon Taxes Unless Industry Acts on Sustainability

Taking a broad and ambitious approach to reducing its impact on the planet, Scandinavian Airlines (SAS) is doing things like purchasing carbon offsets for its loyalty customers and asking customers to preorder their inflight meals to reduce waste.

Adweek spoke with Gustafson about how the industry is adapting to eco-conscious customers, whether regulation will force airlines to change their policies, and what SAS is doing in pursuit of sustainability.

This interview has been edited for clarity.

Why are we seeing travel brands all of a sudden releasing sustainability reports? Are they actually concerned, or is it a marketing tactic?
Rickard Gustafson: It’s an existential issue. We need to integrate sustainability into our processes, into our short-term and long-term plans. If we don’t do this, I’m absolutely convinced that consumers will find other carriers, and the political environment will feel forced to act. And when they act, they will impose taxes and fees that will stop people from buying.

That’s a scary proposition, not just for individual carriers but also for mankind. Aviation matters. The world is a better place if people can meet and interact. We need to articulate a clear path towards a more sustainable future.

Are you anticipating regulations like carbon taxes?
If the industry is not quick enough and we don’t demonstrate that we are serious about this, and we don’t have a clear path forward, then the answer is yes.

Yes, there will be more regulations for sure. It’s probably better to act before you are forced to. If we can demonstrate that we have this under control, that we are taking the necessary steps voluntarily, I think that would be perceived as a good thing. Maybe that will hinder some of the forces that would push for taxation and regulation.

Whether it’s an airline or a cruise ship, a lot of travel brands have set pretty ambitious goals, like SAS vowing to cut carbon emissions by more than half by 2050. Presumably, you won’t be the CEO by 2050. Are these plans actual road maps or just hopeful ambition?
To have an ambitious long-term goal is not enough. You cannot rest by providing that.

I’m also part of the board of governors of IATA [International Air Transport Association]. We meet twice a year, and when we met in December 2018, I brought this to the board’s attention, and I told them that we as an industry cannot just rest because we have been able to find a fantastic, long-term goal, whether we have zero emissions by 2050 or cutting our emissions by half by 2050. It’s a great goal, but that won’t solve it. No one is going to take us seriously.

All the European carriers agreed that we have to act now. Maybe we are late to the party, but we need to define a trustworthy plan, short-term, mid-term and long-term. Australia, New Zealand, they agreed. Canada joined in. Also, our friends from Japan. Unfortunately, other parts of the globe still aren’t as energized around this topic, but I saw it as a positive thing.

We need the whole industry to join forces here and demonstrate leadership.

Single-use plastics have become a target of brands trying to incorporate sustainable practices. Are such practices enough?
No. You need to have a broader aspect. We welcome the fact that you need to integrate sustainability in all parts of your business model and throughout your whole value chain. So, I support that and I echo that. But just getting rid of plastics is not gonna crack the whole thing. It’s not enough.

It’s an important step, and we want to do it, but the way we look at it at SAS is we need to do everything in our power to be as sustainable as we can, as of now.

What can we do? We can invest in the most modern and fuel-efficient aircraft. We need to constantly try to lose weight onboard, so we’re replacing our interior with more lightweight seats to reduce weight. Less weight means fewer emissions. We train our pilots to operate their crafts as fuel efficiently as possible, like taxiing on one engine.

Consumers don’t see your emissions; they see what you do onboard. They see if you use a lot of plastics, they see how you handle the waste. You need to address those as well to be truly trustworthy.

Every airline says it’s investing in sustainability, particularly in alternative fuels. But could they be doing more?
We need to get large-scale production going. We can all fly on biofuels, but there is a very limited supply. So at SAS, we engage with the different research and academia, we engage with oil producers, we engage with the political environment in our home markets to provide incentives for investors to come and start these new businesses.

Scandinavian has implemented carbon offsets for certain passengers, as have other airlines. Could this become a more widespread practice?
We demonstrated leadership clearly in this aspect. On Feb. 1 of this year, we said, ‘Today, there is no technology available to ensure a zero-emission flight. That doesn’t exist.’ We do everything we can to reduce our emissions, but there’s still going to be some emissions.

So, we said to our customers, ‘We are prepared to step up here. If you join our frequent flyer program, we will CO2 compensate your flight, free of charge.’ We were the first carrier to do this.

Is it feasible to do that for every flyer?
We ask for a small counter-currency. Three clicks online, and there’s no charge and no commitment. It’s up to you, dear customer. You want to get your CO2 compensated—if so, do it.

The practice of “flight shaming” is more common in Europe than here in the States. Dutch Airline KLM literally told its customers to consider not flying. Can shame be a solution?
The solution must be that we all acknowledge the enormous value that aviation brings. Society would collapse without aviation. That’s not the answer.

I want people to travel even more! The world is a better place if people can continue to meet, interact and learn from each other. I want the next generation to be able to do that.

But it can’t happen if we don’t do it in a more sustainable way. The answer is for us as an industry to articulate a tangible, clear trustworthy plan for the future. Not just targeting what we do in 2030, 2050, but what we do here and now.