JetBlue to Offset Carbon Emissions with Carbon Credits

January 7, 2020

Sophia Mendelsohn, JetBlue's head of sustainability & ESG, explains how the airline plans to offset all carbon emissions of domestic flights.

FULL TRANSCRIPT

BRAD SMITH: Welcome back to Cheddar Business everyone.

BRAD SMITH: JetBlue says it will be

BRAD SMITH: the first major US airline to

BRAD SMITH: offset carbon emissions of domestic flights.

BRAD SMITH: Joining us now is Sophia Mendelsohn who is

BRAD SMITH: JetBlue's Head of Sustainability, an ESG.

BRAD SMITH: Great to have you here with us today. How does it work?

SOPHIA MENDELSOHN: What we're doing is offsetting all of

SOPHIA MENDELSOHN: the pollution from greenhouse gases

SOPHIA MENDELSOHN: for our domestic flights.

SOPHIA MENDELSOHN: We've gone to the market and

SOPHIA MENDELSOHN: purchased carbon credits to do that.

KRISTEN SCHOLER: Okay. So explain that process, right.

KRISTEN SCHOLER: Uh, I'm not sure of the average,

KRISTEN SCHOLER: uh, viewer knows what a carbon credit is.

SOPHIA MENDELSOHN: Sure. So we can't eliminate make

SOPHIA MENDELSOHN: the emissions and pollution coming out

SOPHIA MENDELSOHN: of the tailpipes of our airplane,

SOPHIA MENDELSOHN: but we can find solutions on the ground like supporting

SOPHIA MENDELSOHN: solar and wind farms and

SOPHIA MENDELSOHN: capturing methane pollution from landfill.

SOPHIA MENDELSOHN: And when we do that,

SOPHIA MENDELSOHN: we essentially get a credit that offsets your flight.

BRAD SMITH: What type of financial commitment is

BRAD SMITH: that in terms of the cost of the credits,

BRAD SMITH: um, and what JetBlue is

BRAD SMITH: putting out there to acquire those credits?

SOPHIA MENDELSOHN: It's a market based solution instead of a tax.

SOPHIA MENDELSOHN: So we know the money is going

SOPHIA MENDELSOHN: straight to the wind, solar farms,

SOPHIA MENDELSOHN: the forestry projects that prosect- protect the Amazon,

SOPHIA MENDELSOHN: and we see it like our fuel.

SOPHIA MENDELSOHN: It's a competitive hedge against rising CO2 prices.

KRISTEN SCHOLER: So wha- what's behind the decision to do this?

SOPHIA MENDELSOHN: We really hear our customers saying we wanna keep flying,

SOPHIA MENDELSOHN: we need to keep flying.

SOPHIA MENDELSOHN: Our global economy is all based around aviation,

SOPHIA MENDELSOHN: but we don't like

SOPHIA MENDELSOHN: the unintended pollution that comes from our flights.

BRAD SMITH: So right now, when you think

BRAD SMITH: about what's taking place on the ground as well,

BRAD SMITH: I- I mean, it sounds like the credits are

BRAD SMITH: one thing but then there's also

BRAD SMITH: sustainability efforts too.

BRAD SMITH: Uh, some companies, they're replanting

BRAD SMITH: trees in areas as well, um,

BRAD SMITH: to try and make up

BRAD SMITH: for wildfires, the effect that they're having,

BRAD SMITH: global warming as a whole and what

BRAD SMITH: the emissions are ultimately

BRAD SMITH: contributing to in global warming.

BRAD SMITH: Uh, where do you kind of look at some of

BRAD SMITH: those efforts and then see where this can expand-

SOPHIA MENDELSOHN: Right.

BRAD SMITH: -even further from-

SOPHIA MENDELSOHN: Yeah.

BRAD SMITH: -sustainability perspective?

SOPHIA MENDELSOHN: We hear our customers,

SOPHIA MENDELSOHN: our crew members, the communities we s- we serve,

SOPHIA MENDELSOHN: our owners, our shareholders watching

SOPHIA MENDELSOHN: the climate crisis unfold in real time.

SOPHIA MENDELSOHN: Australia, California, flooding in the Midwest.

SOPHIA MENDELSOHN: And people are looking to the brands they

SOPHIA MENDELSOHN: love for answers and saying,

SOPHIA MENDELSOHN: "We wanna keep using your products,

SOPHIA MENDELSOHN: but help us deal with the pollution."

KRISTEN SCHOLER: So what's the cost to the company to do this?

SOPHIA MENDELSOHN: The cost is a competitive cost,

SOPHIA MENDELSOHN: is the cost of doing business.

SOPHIA MENDELSOHN: We're not disclosing unit costs because that's

SOPHIA MENDELSOHN: our competitive edge and we see it like our fuel.

KRISTEN SCHOLER: So do you see this as means obviously to, um,

KRISTEN SCHOLER: fulfill the needs of your current clientele,

KRISTEN SCHOLER: but as -as in a way to bring a new clientele as well.

SOPHIA MENDELSOHN: Yeah. We know that

SOPHIA MENDELSOHN: especially younger generations are looking at flying.

SOPHIA MENDELSOHN: They want to keep flying,

SOPHIA MENDELSOHN: but they're increasingly aware of

SOPHIA MENDELSOHN: the pollution that comes

SOPHIA MENDELSOHN: out of the airplane when you do that,

SOPHIA MENDELSOHN: the consequences of do that- doing, of, of of flying.

SOPHIA MENDELSOHN: And we want them to feel good,

SOPHIA MENDELSOHN: to be relaxed when they take a flight,

SOPHIA MENDELSOHN: to know that they can keep

SOPHIA MENDELSOHN: flying and we have a solution for them on the ground.

BRAD SMITH: Uh, shares moved higher by

BRAD SMITH: about 17 percent last year for JetBlue.

BRAD SMITH: What do you attribute that to at the company?

SOPHIA MENDELSOHN: Well, we have a commitment to low everyday fares.

SOPHIA MENDELSOHN: We've always been on top of what the customer

SOPHIA MENDELSOHN: wants from live TV to more legroom.

SOPHIA MENDELSOHN: That's what our brand does.

SOPHIA MENDELSOHN: We stay just ahead of the curve and listen to what

SOPHIA MENDELSOHN: the customer is telling us they need.

SOPHIA MENDELSOHN: And carbon offsets and

SOPHIA MENDELSOHN: sustainable fuel are now part of that.

KRISTEN SCHOLER: What's next for your division in the new year?

SOPHIA MENDELSOHN: We're going to be looking at more sustainable fuel,

SOPHIA MENDELSOHN: staying in touch with our customers,

SOPHIA MENDELSOHN: seeing how they feel about carbon offsets,

SOPHIA MENDELSOHN: and looking at what else we can do to

SOPHIA MENDELSOHN: limit our impact and keep

SOPHIA MENDELSOHN: people feeling good about flying.

KRISTEN SCHOLER: As- as it is mostly done through

KRISTEN SCHOLER: surveys or how do you collect customer feedback?

SOPHIA MENDELSOHN: We survey customers, we listen to them on social media,

SOPHIA MENDELSOHN: we're, you know, in touch with the news.

SOPHIA MENDELSOHN: We see what's happening in the news,

SOPHIA MENDELSOHN: we see people reacting to

SOPHIA MENDELSOHN: the climate crises and we know

SOPHIA MENDELSOHN: we want to help them find solutions for that.

BRAD SMITH: As more technological aircrafts are

BRAD SMITH: being designed, developed, manufactured,

BRAD SMITH: and ultimately seek to get approval,

BRAD SMITH: does a more technological aircraft ultimately

BRAD SMITH: mean a more environmentally friendly aircraft?

SOPHIA MENDELSOHN: Absolutely. Technology is gonna

SOPHIA MENDELSOHN: be a big part of the solution.

SOPHIA MENDELSOHN: JetBlue operates one of

SOPHIA MENDELSOHN: the newest most fuel efficient fleets.

SOPHIA MENDELSOHN: Our first goal is not to

SOPHIA MENDELSOHN: burn and create the emissions where we don't have to.

SOPHIA MENDELSOHN: We're only offsetting what we can't avoid.

KRISTEN SCHOLER: Okay. So when it comes, uh, to sustainability,

KRISTEN SCHOLER: obviously customers want that,

KRISTEN SCHOLER: obviously it's in the news.

KRISTEN SCHOLER: Does it give you an edge over your competitors?

SOPHIA MENDELSOHN: We think so. We think we're

SOPHIA MENDELSOHN: in touch with what customers want.

SOPHIA MENDELSOHN: We've had really positive reactions to this.

SOPHIA MENDELSOHN: Of course, these are huge problems.

SOPHIA MENDELSOHN: The climate crisis isn't going to be solved

SOPHIA MENDELSOHN: brand by brand, announcement by announcement.

SOPHIA MENDELSOHN: The industry has already come together.

SOPHIA MENDELSOHN: The aviation was the first industry to have

SOPHIA MENDELSOHN: a voluntary global goal to reduce emissions.

BRAD SMITH: Yeah. Well, just in terms of the fleet as well,

BRAD SMITH: does this- is this an area where you kind of go

BRAD SMITH: to your heads of

BRAD SMITH: operations people that are in charge of engineering,

BRAD SMITH: people that are within JetBlue making

BRAD SMITH: decisions about what is in the fleet for JetBlue.

SOPHIA MENDELSOHN: Yeah.

BRAD SMITH: Where you're saying to them,

BRAD SMITH: "Hey, from a sustainability perspective,

BRAD SMITH: we should be looking at this type

BRAD SMITH: of aircraft versus another one?"

SOPHIA MENDELSOHN: Absolutely. When we went ahead and

SOPHIA MENDELSOHN: purchased our Airbus A321s,

SOPHIA MENDELSOHN: they had new engine options,

SOPHIA MENDELSOHN: some of the most fuel efficient aircrafts out there.

SOPHIA MENDELSOHN: And that is where the sustainability in

SOPHIA MENDELSOHN: the business decisions intertwine and become one.

KRISTEN SCHOLER: As he mentioned, obviously these,

KRISTEN SCHOLER: these carbon tax credits,

KRISTEN SCHOLER: right, and trying to offset what we

KRISTEN SCHOLER: see happening in the rain forest,

KRISTEN SCHOLER: in the Amazon, uh,

KRISTEN SCHOLER: certainly the wildfires in Australia,

KRISTEN SCHOLER: is there anything that JetBlue is doing right now

KRISTEN SCHOLER: to try to lessen

KRISTEN SCHOLER: the effect of what is going on in Australia?

SOPHIA MENDELSOHN: Absolutely. We've been carbon

SOPHIA MENDELSOHN: offsetting and working on afforestation,

SOPHIA MENDELSOHN: reforestation, and forest protection since 2008.

SOPHIA MENDELSOHN: This isn't new to us,

SOPHIA MENDELSOHN: we've been protecting swaths of the Amazon with no- the

SOPHIA MENDELSOHN: non-profit Carbonfund.org since 2008.

BRAD SMITH: Um, one huge thing that we've been

BRAD SMITH: watching over the past decade play out,

BRAD SMITH: regulation around cap and trade particularly.

BRAD SMITH: Um, when I used to wor- work on

BRAD SMITH: the software side of the industry,

BRAD SMITH: it was all about how companies were

BRAD SMITH: transferring their certain credits,

BRAD SMITH: transferring, um, that ability to give

BRAD SMITH: emissions or give some type

BRAD SMITH: of energy credits to another company,

BRAD SMITH: transfer that for a price.

SOPHIA MENDELSOHN: Right.

BRAD SMITH: If we see more regulation around that,

BRAD SMITH: where does JetBlue kind of advocate for or against that?

SOPHIA MENDELSOHN: What we're showing here is that

SOPHIA MENDELSOHN: we've taken matters into our own hands.

SOPHIA MENDELSOHN: We've gone ahead and we've become

SOPHIA MENDELSOHN: the first major US airline to go

SOPHIA MENDELSOHN: carbon neutral for our domestic flights

SOPHIA MENDELSOHN: and we're doing it through reliable,

SOPHIA MENDELSOHN: audible, traceable carbon credits

SOPHIA MENDELSOHN: without a cap and trade system.

BRAD SMITH: All right. Sophia Mendelsohn who's

BRAD SMITH: JetBlue's Head of Sustainability

BRAD SMITH: in ESG. Thanks so much for coming.

SOPHIA MENDELSOHN: Thank you. Thanks guys.