Outgoing Qantas CEO Alan Joyce says superannuation investors can take some credit for holding the national airline to account on its ESG commitments, as he urged business not to shy away from backing landmark social reforms such as marriage equality and the Indigenous Voice to Parliament.
In one of his first interviews since announcing his retirement after 15 years in the role, Joyce said the changing nature of institutional shareholder activity, notably growing direct engagement from superannuation funds, saw the company appoint a chief sustainability officer during the pandemic to lead a new department overseeing sustainable aviation fuel, carbon offsets, and other technologies to reach net-zero carbon emissions by 2050.
He described Qantas’ engagement with domestic and international institutional investors as “uplifting and interesting”, crediting them with playing a role in motivating progress on environmental, social and governance outcomes.
“We’re seeing a lot of super funds engaging directly. We also have seen that [engagement] change over time because now sustainability has become a big part of the future, obviously, and there’s a lot more questions on it,” Joyce told the Investment Magazine Fiduciary Investors Symposium in Sydney’s Blue Mountains region last month, by video link from Istanbul, Turkey.
Qantas’ newly purchased aircraft, which are now arriving at a rate of one-every-three-weeks, have 25 per cent less emissions than the aircraft they are replacing, Joyce said. While battery or hydrogen aircraft are “a long way away,” the best shorter-term solution is biofuel made from sugar cane waste and other agricultural products, which will reduce carbon emissions by 80 per cent compared to current jet kerosene.
The airline also has the “largest carbon offset program in the world of any airline,” Joyce said, with 10 per cent of its online customers offsetting their carbon emissions, and a desire from the company to produce 25 per cent less carbon than just before the pandemic by 2030. Achieving net-zero by 2050 is “absolutely achievable,” Joyce said.
Beyond the environment, Joyce said it is important the private sector “get involved in all aspects of society” including voicing support for landmark social reforms like marriage equality and the campaign for an Indigenous Voice to Parliament, said 15-year Qantas CEO Alan Joyce.
A strong supporter of the ‘yes’ campaign for marriage equality with a $1 million personal donation, Joyce said the support he received from company shareholders was “phenomenal,” despite high-profile opposition to the CEO’s stance from the likes of then-government minister (and now opposition leader) Peter Dutton and tennis legend Margaret Court.
“We had great support from shareholders all around the community thinking this was what good companies should be doing, they should be involved in social issues,”
During the fireside chat with Joyce, Colin Tate AM, founder of Investment Magazine‘s publisher, Conexus Financial, said support for marriage equality soon “became almost trendy,” noting “you [Joyce] and Qantas were the first who really did put a business and a shareholder group and an individual CEO behind such a mammoth social issue.”
Tate then likened the fight for marriage equality to the Voice campaign currently unfolding in Australia and asked Joyce for his position.
Qantas has a “long history of supporting Indigenous rights,” Joyce said, noting that in the 1920s the Indigenous community had helped the early Qantas founders when looking for runways and places to land their aircraft. The company in the 1960s had supported indigenous artwork “when it wasn’t trendy or popular to support Indigenous art,” he said.
Having supported the Recognise campaign that advocated for constitutional recognition of Aboriginal and Torres Strait Islander people, along with the Uluru Statement from the Heart, Joyce said Qantas “as a consequence of that, support[s] the Voice.”
“I think it’s up to all companies to support that diversity, and help promote diversity, and help promote social causes,” Joyce said.
Set to retire at the end of this year after extending his term during the onset of the pandemic, Joyce discussed some of the challenges brought by Covid-19, which involved layoffs and outsourcing of various parts of the business.
In the middle of 2020 with closed borders, no vaccine in sight, and a high-cost business with almost no revenue, “we had 11 weeks left to survive, and you have to make tough decisions with all that in mind,” Joyce said.
“There’s a great [Theodore] Roosevelt quote I keep on using and he says: at the point of decision, the best thing you could do is the right thing, the next best thing you can do is the wrong thing, the worst thing you can do is nothing,” Joyce said.
While some decisions may not have been perfect, they were made with information available at the time, he said.
“We thought this was going to be a tough recovery, worse than the GFC, worse than September 11, it was going to take years for demand to come back, it was going to take years for all the borders to open up,” Joyce said. “Suddenly, everything opened up really fast, demand got back to even better than before Covid.”
Ultimately the company was able to purchase new aircraft in the middle of Covid-19, “when nobody was buying aircraft,” and was able to secure aircraft slots that aren’t available now due to higher demand, he said.