Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Noise Pollution
• Local Air Quality
• Labor Standards
• Human Rights
• Community Engagement
• Supplier Sustainability

Environmental Achievements

• Reduced global noise energy by 18% over four years despite a 17.6% increase in flights.
• Improved energy efficiency by approximately 10% since 1996/97 despite growth in passenger and cargo traffic.
• Increased industrial waste separation rate to 37% at KLM.
• Recycled 224 tonnes of plastic foil at KLM in 2004.

Social Achievements

• Increased percentage of women in the workforce to 44%.
• Implemented intercultural training seminars to facilitate cooperation between Air France and KLM employees.
• Established a manager exchange program between Air France and KLM.
• No fatal injuries involving KLM employees or contractors in 2004/05.

Governance Achievements

• Adopted a professional ethics code applicable to the entire Group.
• Established a Strategic Management Committee (SMC) to define Group strategy.
• Air France-KLM admitted to the FTSE4Good index.

Climate Goals & Targets

Environmental Challenges

• High fuel prices, rising taxes and charges, security and insurance costs affecting airline profitability.
• Inadequate infrastructure causing delays and extra costs.
• Climate change, for which conclusive offsetting technologies are not yet available.
• Balancing the need for growth with environmental protection.
• Managing noise complaints despite noise reduction efforts.

Mitigation Strategies

• Investing in new, environmentally-efficient aircraft.
• Optimizing flight networks and operations.
• Improving maintenance procedures.
• Participating in studies of policy options to mitigate climate change.
• Implementing noise abatement procedures.
• Contributing to soundproofing programs.
• Improving environmental management at outstations.
• Implementing a strict cost control policy.
• Capitalizing on synergies between Air France and KLM.

Supply Chain Management

Supplier Audits: 2 environmental audits performed on KLM suppliers in 2005

Responsible Procurement

• KLM's environmental criteria for suppliers.
• Air France's Sustainability Charter for suppliers.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001 (KLM, Air France Industries sites), EMAS (KLM)

Awards & Recognition

• Air Transport World's "Airline of the Year 2005"

Environmental Metrics

ESG Focus Areas

• Safety, security, and health
• Achieving sustainable growth
• Contributing to the community
• Working together
• Protecting our environment

Environmental Achievements

• Reduced global noise energy by 21% over the past five years while increasing flights by 18%
• Reduced Air France Industries’ VOC emissions by 50% and projected an additional 30% reduction
• Reduced local emissions of CO and HC by 50% and 90% respectively through fleet renewal
• KLM improved energy efficiency by 50% since 1989 and further reduced consumption by 6% to 20% by 2007

Social Achievements

• Created the European Works Council, a consultative forum for employees across Europe
• Launched numerous initiatives to improve teamwork and cultural understanding between Air France and KLM employees
• Air France spent €25 million on temporary staff and subcontractors in non-core activities
• KLM recruited 1,066 permanent employees in the Netherlands in 2005

Governance Achievements

• Established a common policy on corporate responsibility signed by both chairmen
• Air France-KLM included in the Dow Jones Sustainability Index, FTSE4Good, and ASPI indices
• Implemented a joint Information Security Manual based on ISO 17799

Climate Goals & Targets

Environmental Challenges

• High fuel prices, rising taxes and charges, security and insurance costs affecting airline profitability
• Inefficiencies in European air traffic management
• Climate change and greenhouse gas emissions from air transport
• Noise pollution near airports
• Local air quality issues around airports

Mitigation Strategies

• Investing in new aircraft with enhanced environmental performance
• Implementing operational procedures to reduce noise and fuel consumption
• Developing hub-based operations for efficiency
• Participating in dialogue with local communities to address concerns
• Implementing an Emissions Trading Scheme (ETS) to reduce CO2 emissions

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainable development charter for suppliers
• Ethics clauses in contracts

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: ISO 14001, EMAS, ISO 9001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• 2005 Airline of the Year Award (Air Transport World)
• Commercial Air Transport Laureate (Aviation Week & Space Technology)
• KLM Environment Capacity Award (Amsterdam Schiphol Airport)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environment
• Human Resources
• Safety
• Customer Satisfaction
• Social Responsibility
• Supply Chain

Environmental Achievements

• 10% reduction in emissions per passenger-km in the past five years
• 9% less industrial waste in 2006 than the previous year
• 20% improvement in KLM’s overall energy efficiency since 1998
• 13% reduction in water consumption in the last three years
• 20% reduction in NOx emissions in ground operations in the past year

Social Achievements

• Successful merger of Air France and KLM, with high employee satisfaction scores
• Implementation of new labor agreements
• Air France received the Professional Equality Award for gender equality
• KLM voted “favorite employer” in the Netherlands by students from ethnic minorities
• 26 people with disabilities recruited at Air France in 2006

Governance Achievements

• Establishment of a European Works Council
• Creation of Financial Code of Ethics
• Implementation of whistleblowing mechanisms
• Development of a Competition Law Compliance Manual

Climate Goals & Targets

Environmental Challenges

• Climate change and its impact on the aviation industry
• High oil prices
• Competition from low-cost carriers and high-speed trains
• Congestion at airports
• Distorted competition due to varying regulations and taxes
• Maintaining flight safety and security
• Meeting customer expectations
• Managing the merger of Air France and KLM

Mitigation Strategies

• Climate Action Plan (including support for the Kyoto Protocol, fleet modernization, research into alternative fuels, carbon offsetting, and support for NGOs)
• Hedging against fuel price increases
• Cost-saving plans (e.g., Compétitivité Major 2007 at Air France, 2003 Structural Cost Program at KLM)
• Improved customer service initiatives
• Quarterly internal perception monitoring surveys
• Training and development programs for employees
• Joint procurement initiatives

Supply Chain Management

Responsible Procurement

• Sustainable development charter based on UN Global Compact principles
• Contractual clauses on protection of manpower and working conditions (Air France)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: ISO 9001, ISO 14001, EMAS, OHSAS 18001, ISO 22000 (Air France inflight food safety)

Awards & Recognition

• Dow Jones Sustainability Index World Industry Leader
• Professional Equality Award (Air France)

Environmental Metrics

ESG Focus Areas

• Combating climate change
• Minimizing environmental impacts
• Building a sustainable relationship with customers
• Promoting a responsible human resources policy
• Contributing to local development

Environmental Achievements

• CO2 neutral growth (2007-2011)
• 60% of ramp equipment fleet to be electronically powered by 2020
• 236,250 metric tons of CO2 saved (Fuel plan) 2009-2010
• 3.8 litres/passenger/100km fuel consumption in 2010
• 31% reduction in noise energy compared to 2005
• 6.3% reduction in waste produced by airline operations
• Energy saving initiatives improved energy efficiency by 4.8% in total over 2 years (2009 and 2010)
• Implementation of the Fixed Radius Turn on a specific route for B777s, A330s and Embraers
• KLM is contributing €25m to soundproof 1,100 homes
• 8 m³ of water saved per aircraft wash using EcoShine procedure
• 18% reduction in water consumption at Air France Maintenance’s Toulouse site
• 45% of Air France’s ground equipment fleet was electrically powered
• Reduction of local emissions (CO2, NOx) by supplying electric current and preconditioned air by ground support equipment during ground handling
• Upcycling 90,000 kilos of textiles saved at least 500 million litres of water, 4,600 tons of CO2 and 1 million m3 of natural gas
• Recycling of 80% of onboard catering products

Social Achievements

• Implementation of a Voluntary Departure Plan with individual support for 1,834 employees
• 543 women benefited from wage equalization measures in 2010
• Employment rate of disabled workers increased to 3.92% in 2010 (+0.35%)
• Trade Unions unanimously signed gender equality agreement in October 2010
• Agreement on prevention of psychosocial risks signed in March 2010
• 90% of Air France’s cabin crew management and 63% of cabin crew staff trained in 2010
• Recruitment of 25 disabled staff members in 2010
• Subcontracting to organizations within the sheltered employment sector, resulting in the equivalent of 560 indirect jobs

Governance Achievements

• Adoption of Air France-KLM’s ‘Embark’ company vision
• Adoption of a Compliance Charter and Financial Code of Ethics
• Development of a code of conduct for KLM
• Establishment of a whistle-blowing procedure
• Publication of a Competition Law Compliance Manual
• Online training module on compliance with competition rules rolled out to 8,000 employees
• Self-evaluation of the Board of Directors highlighted positive developments in functioning

Climate Goals & Targets

Environmental Challenges

• Global financial, geopolitical, meteorological events and epidemics
• Rising oil prices
• Rapidly changing patterns in demand
• Maintaining flight safety
• Reducing CO2 emissions
• Availability of sustainable biofuels
• Intense competition and small margins
• Ever-stricter regulations
• Political uncertainty and unpredictable natural events in some regions
• Economic crisis impacting consumer behavior
• Managing the impact of the EU Emissions Trading Scheme (EU ETS)

Mitigation Strategies

• Ambitious recovery plan
• Adapting products and services
• Cost reduction and organizational changes
• Restructuring of passenger and cargo transport
• Fleet modernization
• Development and use of sustainable biofuels
• Efforts to bring about international regulation
• Investing in sustainability
• Integrating CSR into business and operations
• Weight reduction initiatives
• Fuel saving measures
• Optimization of air routes and traffic
• Noise abatement procedures
• Eco-design principles
• Dialogue with stakeholders
• Voluntary Departure Plan
• Training and development programs
• Compliance policies and training

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainability Charter
• Environmental clauses for tenders
• REACH regulations monitoring
• Eco-design principles

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Sustainable biofuels

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Third-party Assurance: KPMG Audit

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Lighter meal trays
• Recyclable polystyrene meal packs
• Lighter crockery for World Business Class
• Electric vehicles
• Biofuels

Awards & Recognition

• Leader in the aviation sector on the DJSI for 6 years running
• Supersector leader in the ‘Travel and Leisure’ sector
• 5th in the Carbon Disclosure Leadership Index (CDLI)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced specific fuel consumption by 3.8% between 2008 and 2011, reaching 3.7 liters/passenger/100km.
• Reduced noise by 29% compared to 2005.
• Reduced buildings energy consumption by 8% through renewal of facilities management contracts.
• Saved 265,000 tons of fuel since 2008, avoiding 252,000 tons of CO2 emissions in 2011 compared to 2008.
• 45% of ramp fleet electrically powered in 2011.
• Renewal of Air France’s ISO 14001 Environmental Certification for a further 3 years.
• First commercial biofuels flights of Air France and KLM.

Social Achievements

• 10% reduction in the frequency rate of work-related accidents at Air France.
• Decline in the number of serious accidents at KLM (from 11 to 4).
• Third 3-year agreement on gender equality at Air France.
• 8th agreement in favor of the employment of people with disabilities at Air France, with €13 million dedicated to the sheltered sector.
• KLM experimented new ways of working, offering flexibility in terms of working location and working hours.
• Increased customer satisfaction with the “Recovery” assistance service by 30% since the launch of Air France’s and KLM's Connect service.
• 9 new sustainable catering products offered by KLM.

Governance Achievements

• Reunification of the functions of chairman and chief executive officer.
• 3 female members on the Board of Directors (20% of total Board members).
• Implementation of a risk identification and management process.
• Compliance with operational safety and efficiency principles, meeting regulatory requirements.

Climate Goals & Targets

Environmental Challenges

• Deterioration in competitiveness and insufficient profitability.
• Structurally negative trend in unit revenues leading to operating losses in short and medium-haul operations (€700 million in 2011).
• Significant impact of the global financial crisis and soaring oil prices.
• Strong opposition from non-European states to the EU-ETS directive.
• Risks specific to air transport, such as cyclical and seasonal nature of the business, operational risks, terrorist attacks, geopolitical or sanitary risks, regulatory risks, increases in fuel prices, environmental and social risks, and risks to IT systems.

Mitigation Strategies

• Implementation of the Transform 2015 plan to reduce costs, restructure short and medium-haul operations, and reduce debt.
• Immediate measures to reduce costs.
• Complete transformation of short and medium-haul activity: increasing aircraft utilization, improving productivity, redefining the product, and restructuring the network.
• Improving the financial performance of the long-haul fleet.
• Strategic repositioning of the cargo business by focusing on a new belly-dominant business model.
• Consolidating position in the aeronautics maintenance sector by focusing on strengths and continuing investment.

Supply Chain Management

Supplier Audits: CSR pilot audits started in 2011

Responsible Procurement

• CSR questionnaire for potential suppliers
• Sustainability charter
• Environmental criteria for products
• Supplier audits

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes (EU-ETS)
• Market shifts

Opportunities

• Development of energy-efficient products
• Sustainable alternative fuels

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Third-party Assurance: KPMG Audit

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• New lighter aircraft seats
• Reusable headphones
• Sustainable catering products

Awards & Recognition

• Supersector leader DJSI 2011
• First prize in customer service (Air France)
• Best Use of Mobile Technology Award (Air France-KLM)
• Award for the best e-reputation (Air France)
• Best Digital Marketing Company of 2011 (KLM)

Environmental Metrics

ESG Focus Areas

• Environment
• Customer experience
• Social policy
• Local development
• Governance

Environmental Achievements

• Achieved a 3.69 liters/passenger/100km fuel consumption, meeting the objective; 25,000 tons of fuel saved compared to 2011 thanks to the New Fuel Plan; 3% improvement in energy efficiency in 2012 compared to 2011; ~3% reduction in CO2 emissions per ton/kilometer compared to 2009; 600 tons reduction in the amount of catering waste incinerated; 3% reduction in the energy consumption of buildings; 2.4% energy saving in buildings (896m3 of natural gas and 2,146 MWh of electricity saved); 41% hazardous waste recycled; 31% reduction in noise energy compared to 2005; First transatlantic biofuel flight to Rio de Janeiro; Launch of KLM BioFuel program

Social Achievements

• New collective labor agreements signed at Air France and KLM; Air France’s “Services signatures” training for 11,000 cabin crew and 1,300 ground staff; 3% decrease in the number of workplace accidents; KLM’s “Economy Comfort” introduced in Europe; Opening of Air France's largest passenger lounge (3,150 m2); 18 sustainable products added to KLM’s onboard menu; €12 million contributed to environmental and social projects; KLM Takes Care online platform launched; Doubling the number of apprenticeship placements at Air France to 1,000; 2,000 employees trained in CSR e-learning

Governance Achievements

• Independent firm conducted an evaluation of Board functioning; Four female members on the Board of Directors (26.7%); New corruption prevention manual drawn up; Whistle-blowing procedure established; Compliance with competition law through manual and hotline; Air France-KLM ranked amongst the 19 most responsible companies in the world by the Dow Jones Sustainability Index

Climate Goals & Targets

Environmental Challenges

• Slowdown in global economic growth and significant market volatility, particularly in Europe; Tough competition from low-cost carriers, Gulf State airlines, and emerging countries; Uncertain economic environment and tough competition; Limited amount of sustainably grown biomass for biofuel production; Noise hindrance for residents near airports; Air quality concerns near airports

Mitigation Strategies

• Transform 2015 plan implemented to restore competitiveness, restructure operations, and reduce debt; Cost-saving measures; New collective labor agreements; Fleet modernization; Implementation of noise abatement procedures; Dialogue with residents; Increased use of electric ground handling equipment; Development of sustainable biofuel supply chain strategy; Investment in sustainable aviation fuel and research; Eco-design criteria integrated into product specifications; CSR audits of suppliers

Supply Chain Management

Supplier Audits: 13 audits in 2012 (40% increase)

Responsible Procurement

• Supplier questionnaire addressing CSR issues; Sustainable Procurement Charter; Ethical and environmental clause in supplier contracts; Eco-design criteria in specifications; CSR criteria in supplier selection

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products; Sustainable alternative fuels

Reporting Standards

Frameworks Used: GRI3

Certifications: ISO 14001

Third-party Assurance: KPMG Audit

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• New lightweight seats; Reusable headphones; Eco-designed crockery; Sustainable catering products; Herculight cargo pallet

Awards & Recognition

• Dow Jones Sustainability Index Supersector leader; TTG China Travel Awards; National Marketing Prize; SkyTrax World Airline Award

Environmental Metrics

ESG Focus Areas

• Environment
• Customer experience
• Responsible human resources
• Local development

Environmental Achievements

• Improved CO2 efficiency by 1.9% compared to 2012
• Reduced fuel consumption by 44 million liters (110,000 tons of CO2 emissions saved)
• Increased proportion of recycled waste to 38%
• Improved energy efficiency of buildings by 8.7% (exceeding the target)
• 33.3% reduction in noise energy compared to 2005
• 16 new products added to sustainable inflight catering offer

Social Achievements

• 90% of ground staff and 100% of flight deck and cabin crew completed training (28 training hours per employee)
• Employment rate of disabled employees increased to 4.95% (from 4.42% in 2012)
• Collective agreements signed for cabin crew and ground staff
• Launched mobility kiosks and internal job exchange, supporting 1700 employees in job changes
• Increased number of apprentices by 40% relative to 2012

Governance Achievements

• Ranked number 1 in the Dow Jones Sustainability Index
• Received the Climate Performance Leader prize awarded by the Carbon Disclosure Project
• Awarded “Best Investor Relations by a CEO” for clarity of communication and transparency

Climate Goals & Targets

Environmental Challenges

• Persistently challenging environment for the airline industry
• Increased number of workplace accidents (+8%)
• Maintaining competitiveness with other carriers
• Addressing noise pollution concerns from residents near airports

Mitigation Strategies

• Implementation of new working conditions and industrial plans
• Various preventative health and lifestyle programs
• Structural measures based on mobility and staff reduction (voluntary basis)
• Dialogue with residents and implementation of noise abatement procedures
• Investment in cleaner vehicles and equipment, and optimized operational procedures

Supply Chain Management

Supplier Audits: 150 suppliers assessed by EcoVadis, 75% signed Sustainable Development Charter

Responsible Procurement

• Sustainable Development Charter
• EcoVadis assessment platform
• Integration of environmental and social criteria into specifications and contracts

Climate-Related Risks & Opportunities

Physical Risks

• Climate change impacts on operations

Transition Risks

• Regulatory changes, market shifts towards sustainable aviation fuel

Opportunities

• Development of sustainable aviation biofuels

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: ISO 14001

Third-party Assurance: KPMG

Sustainable Products & Innovation

• Eco-designed meal trays
• Lightweight cargo nets
• Sustainable inflight catering products

Awards & Recognition

• Dow Jones Sustainability Index leader (9 consecutive years)
• Climate Performance Leader prize (CDP)
• Best Investor Relations by a CEO

Environmental Metrics

ESG Focus Areas

• Governance
• Environment
• Customer Experience
• Responsible Human Resources
• Local Development

Environmental Achievements

• 6.7% reduction in CO2 emissions compared to 2011 (86 g CO2/passenger/km)
• 50 million liters of fuel saved (Air France), resulting in 126,000 tons of CO2 emissions saved
• 8.8 million liters of fuel saved (KLM), resulting in 22,000 tons of CO2 emissions saved
• 11% reduction in APU fuel consumption (Air France)
• Almost 50% of ground support equipment are electric (Air France)
• 40% of KLM GSE at Schiphol Airport are electric
• 90% of non-hazardous waste recycled (KLM)
• 43% of hazardous waste recycled (KLM)
• 26% of non-hazardous waste recycled (Air France)
• 75% of hazardous waste recycled (Air France)
• Volumes of biofuel tripled in 2014 (compared to 2013)
• One weekly Toulouse-Paris flight since September 2014 powered by 10% biofuel

Social Achievements

• Launched MyHR for all KLM staff
• Total training cost: €3,229 per FTE (KLM)
• 28 training hours per employee (Air France)
• Partnership with Schiphol Aviation College continued (KLM)
• Diversity Manager appointed (KLM)
• Signed the 2013-2015 “Generation Contract” (Air France)
• Increased percentage of female staff among senior management and executive level (Air France and KLM)
• Increased employment rate of disabled employees (Air France and KLM)
• Air France is the largest private-sector employer in the Paris region
• KLM Group is the third largest private sector employer in the Netherlands

Governance Achievements

• Air France-KLM ranked as the Group leader of the “Airlines” category in the Dow Jones Sustainability Index for the tenth consecutive year
• Air France-KLM named leader of the broader “Transport” category for the sixth year
• Silver Award for “Best investor relations” at the Investor Relations and Financial Communication Forum

Climate Goals & Targets

Environmental Challenges

• Competition from low-cost carriers and expanding Middle Eastern airlines
• High infrastructure costs in Europe
• Climate change and its impact on flight operations
• Need for a global carbon emissions trading system
• Incomplete implementation of the Single European Sky
• Varying passenger rights around the world
• Geopolitical instability and sanitary events

Mitigation Strategies

• Transform 2015 and Perform 2020 strategic plans to improve competitiveness and profitability
• Fleet modernization and investment in fuel-efficient technologies
• Development of sustainable biofuels
• Carbon offsetting service for customers
• Support for a global carbon emissions trading system
• Active cooperation in the SESAR program
• Risk analyses to improve existing policies and optimize flight schedules
• Special programs to train employees in managing emergency situations

Supply Chain Management

Supplier Audits: 179 suppliers assessed on their CSR performance

Responsible Procurement

• Air France-KLM Sustainable Development Charter
• EcoVadis online platform for assessing supplier CSR performance
• Integration of environmental, social, and ethical criteria in product/service specifications and contracts

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and sustainable biofuels

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: ISO 14001, OHSAS 18001 (Air France), IOSA

Third-party Assurance: KPMG Audit

Sustainable Products & Innovation

• Eco-designed meal trays
• Reusable headphones
• Lighter seats
• Sustainable biofuels

Awards & Recognition

• Dow Jones Sustainability Index leader in Airlines category
• Leader in broader Transportation category
• Silver Award for “Best investor relations”

Environmental Metrics

ESG Focus Areas

• Sustainability
• Human Resources
• Environmental Impact
• Customer Trust
• Ethics and Compliance
• Societal Value

Environmental Achievements

• Ranked first on the Dow Jones Sustainability Index in 2019
• 25% less fuel consumed compared to previous-generation aircraft (A350-900)
• 40% reduction in noise footprint (A350-900)
• 14% reduction in CO2 emissions per passenger per kilometer (Transavia France, relative to 2010 level)

Social Achievements

• Three employee agreements signed at Air France in January 2019 (Cabin Crew, Ground Staff, Pilots)
• 40 hours of training per employee in 2019
• We Care for Our Customers program deployed in 2019 across 15 call centers and 180 international outstations
• Gift For Care project: 30,000 gifts offered to customers
• Empowerment initiatives extended to all 14,000 cabin crew staff in 2019
• Agreement on Quality of life in the Workplace signed with all unions at Transavia France

Governance Achievements

• Simplification and improvement of managerial governance at Air France-KLM in February 2019
• Establishment of a CEO Committee
• Increased collaboration across the Group to better capture synergies and efficiencies

Climate Goals & Targets

Environmental Challenges

• Intense competition in the European airline market
• High regulatory costs and airport taxes in France and the Netherlands
• Capacity constraints at Amsterdam-Schiphol airport
• Pressure on cargo unit revenue and higher fuel bill in 2019
• Slowdown in worldwide passenger traffic growth and contraction in cargo traffic in 2019
• Geo-political uncertainties impacting global air freight demand

Mitigation Strategies

• Fleet renewal and modernization
• Optimization of operating model and internal processes
• Focus on growth in most profitable passenger segments
• Development of non-passenger businesses (customer data, Flying Blue, E&M, Cargo)
• Pragmatic evaluation of consolidation opportunities
• Cost reduction measures (estimated at €500 million in 2020)
• Negotiation with governments and financial institutions for additional financing

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• First place in Dow Jones Sustainability Index
• Awards from Facebook F8 event (Air France)
• Awards from Spin, Emerce, and Lovies (KLM)
• Awards from Capital magazine (Transavia France)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Sustainable Aviation Fuel
• Fleet Renewal
• Operational Efficiency
• Carbon Offsetting
• Diversity & Inclusion
• Employee Well-being
• Responsible Supply Chain

Environmental Achievements

• 30% reduction in CO2 emissions intensity between 2005 and 2019
• SBTi validation of 2030 CO2 emission reduction targets aligned with the Paris Agreement
• Signed multi-year SAF purchase agreements for 1.6 million tons of SAF between 2023 and 2036
• 270,000 tons of CO2 avoided since 2012 through operational measures
• 39% reduction in noise footprint per flight between 2000 and 2019

Social Achievements

• 31.3 hours of training per employee in 2021
• Launched internal assessment to understand Diversity & Inclusion (D&I) and improve inclusive culture
• Commitment to gender diversity with targets of 33% women in Group Executive Committee by 2030 and 40% of top 10% management positions by 2030
• Air France and KLM are signatories of the Buckingham Palace Declaration to combat illegal trading in protected species

Governance Achievements

• Establishment of a Sustainable Development and Compliance Committee within the Board of Directors
• CEO's compensation includes criteria related to non-financial issues and sustainability
• Proactive request for independent ESG rating from S&P Global Ratings, receiving a score of 64/100

Climate Goals & Targets

Environmental Challenges

• Meeting the growing global demand for sustainable fuel
• Geopolitical and macroeconomic contexts impacting activities and decarbonization trajectory
• Potential impact of new pandemics or geopolitical instability on passenger traffic

Mitigation Strategies

• Working to make SAF more accessible in terms of quantity and price
• Continuous monitoring of risks and implementation of remedial measures
• Ambitious fleet renewal plan and operational efficiency measures

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Strict sourcing policy for SAF, requiring minimum 75% GHG emission reduction and certifications (RSB or ISCC+)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Challenges in accessing sufficient quantities of SAF at competitive prices
• Geopolitical and macroeconomic factors impacting operations

Opportunities

• Development and use of SAF
• Fleet renewal with more fuel-efficient aircraft
• Operational efficiency improvements

Reporting Standards

Frameworks Used: SBTi, GHG Protocol Standard, Sustainability-Linked Bond Principles (SLBP), Sustainability-Linked Loan Principles (SLLP), TCFD

Certifications: Gold Standard, FSC, RSB, ISCC+

Third-party Assurance: Moody's Investor Services (SPO), Statutory Auditors (limited assurance)

UN Sustainable Development Goals

• SDG 7 (Affordable and clean energy)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 13 (Climate action)

Initiatives contribute to these goals through fleet renewal, SAF use, operational efficiency improvements, and carbon offsetting.

Sustainable Products & Innovation

• Sustainable Aviation Fuel (SAF)

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Decarbonization
• Sustainable Aviation Fuel (SAF)
• Fleet Renewal
• Employee Well-being
• Diversity & Inclusion
• Responsible Procurement
• Ethical and Compliance

Environmental Achievements

• Reduced CO2 emissions per passenger kilometer by an unspecified amount through fleet renewal and operational measures.
• Incorporated around 80,000 metric tons of SAF in 2023, nearly double the amount in 2022, making the Group the world’s largest SAF user.
• Successfully issued €1 billion in sustainability-linked bonds.
• Airbus A350F full freighter aircraft delivers significantly improved environmental performance with an over 40% reduction in CO2 emissions compared to the Boeing 747F.

Social Achievements

• Launched a global employee shareholding plan, with approximately 22% of the workforce subscribing.
• Improved customer experience through various initiatives (new cabins, lounges, digital services).
• Continued efforts to promote Diversity and Inclusion.

Governance Achievements

• Separation of the functions of Chair of the Board of Directors and Chief Executive Officer.
• Implemented ESG KPI-Linked Revolving Credit Facilities.
• Achieved inaugural Investment Grade credit ratings.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions.
• Staff shortages.
• Geopolitical tensions impacting air traffic.
• Poor reliability of some latest generation aircraft engines.
• Lack of spare parts.
• Extended delivery periods by aircraft manufacturers.

Mitigation Strategies

• Strategic partnerships with OEMs and suppliers.
• Flexible and agile approach to meet changing needs.
• Use of digital technologies to optimize processes.
• Continuous improvement initiatives.
• Fleet renewal.
• Increased use of SAF.
• Operational measures (eco-piloting).

Supply Chain Management

Responsible Procurement

• Sustainable sourcing of SAF.

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and services.

Reporting Standards

Frameworks Used: SBTi

Awards & Recognition

• Skytrax World Airline Awards
• APEX World Class Award
• World Travel Awards

Environmental Metrics

ESG Focus Areas

• Sustainability
• Decarbonization

Environmental Achievements

• Increased use of Sustainable Aviation Fuel (SAF)
• Purchased CO2 emission quotas

Social Achievements

• Study shows Air France-KLM contributes over €70 billion to French and Dutch economies, supporting more than 820,000 jobs.
• Recruited 4,000 and 5,000 permanent staff in 2022 and 2023 respectively

Climate Goals & Targets

Environmental Challenges

• Staff shortages in the aviation industry
• Supply chain issues and engine reliability constraints
• Lack of spare parts
• Delayed aircraft deliveries
• ATC strikes in Europe
• Olympic Games in Paris impacting summer bookings

Mitigation Strategies

• Accelerated transformation initiatives to increase cost savings
• Hiring freeze of support staff
• New fleet delivery to support unit cost development
• Marketing cost cutting
• 20% reduction of discretionary costs
• Renegotiation of credit facilities
• Joint venture with Airbus for A350 component maintenance

Supply Chain Management

Responsible Procurement

• Joint venture with Airbus for A350 component maintenance

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: KPMG SA and PricewatherhouseCoopers (for sustainability information)