From Fortune · Johannes Teyssen · · 2m
Lufthansa chief: climate needs pragmatism, not purity
After the hottest August on record, a major airline executive argues businesses must integrate sustainability into core operations rather than pursue separate, unachievable goals.
In brief
After the hottest August on record, a major airline executive argues businesses must integrate sustainability into core operations rather than pursue separate, unachievable goals. Lufthansa's chair says companies pursuing lofty net zero commitments without integrating sustainability into daily operations will fail…
Hottest August on record
The world has just lived through the hottest August in recorded history, with heatwaves, floods, and wildfires affecting communities across the globe.
Net zero promises faltering
Many lofty net zero commitments have recently come back down to Earth with a bump. Companies have missed deadlines for science-based targets and some are moving away from goals entirely.
Climate impacts on energy systems
Lower water levels in lakes and rivers are significantly curbing hydroelectric generation at sites such as the Hoover Dam in the western United States. In southern France, cooling water shortages have affected gas and nuclear plants.
Cascading economic disruptions
Wildfires are damaging infrastructure from Indonesia to Canada, raising premiums and making some areas entirely uninsurable. Drought is shrinking agricultural productivity and cutting production at industrial facilities.
Standalone sustainability fails
Standalone sustainability functions have often looked to the long term without sufficient recognition of day-to-day commercial demands. Overly exuberant executives have sometimes set successors up for failure by pursuing audacious but ultimately unachievable goals.
Integration across core functions
Companies that find a way to genuinely integrate sustainability into decision-making across core functions, particularly finance, operations, logistics, and procurement, will be best placed to succeed.
Five key recommendations
Reposition sustainability as a cross-functional capability embedded in strategy and operations. Reframe it in financial terms. Prioritize resilience-critical investments. Reassign accountability across core functions. Build capability with data and tools.
Sustainability as competitive advantage
Accelerating the transition can help transform sustainability from a compliance cost into a genuine performance catalyst, managing risk, improving efficiency, and capturing new sources of value for companies.
“transform sustainability from a compliance cost into a genuine performance catalyst”
The big picture
Lufthansa's chair says companies pursuing lofty net zero commitments without integrating sustainability into daily operations will fail; the answer is embedding it across finance, operations, and procurement.
