Royal Schiphol Group

Schiphol Group
Quick Facts
Type	Public
sector	Aviation
Headquarters (Benelux Organization)	Haarlemmermeer, Netherlands
Year of Origin	1920
Emissions (All Scopes)	+100 Megatons of CO2 (2020)
NCI assessment	Low
Total Revenue	USD$XXXX billion (2020)
Stock Exhange	bijv. Tokio, Amsterdam
Key People	Dick Benschop (CEO), Robert Carsouw (CFO), Louise Gunnung-Schepers (Chair)
Subsidiaries	Amsterdam Airport Schiphol (majority stake) Rotterdam The Hague Airport (majority stake) Lelystad Airport (majority stake) Eindhoven Airport (majority stake) Brisbane (participation) JFK International Airport NY (participation)

Royal Schiphol Group, stylized as Schiphol Group, is a Dutch airport management company.

It was founded in 1920, when current home carier KLM operated its first civilian flights in Haarlemmermeer. This is now known as Schiphol Airport. Operating Schiphol is one of Royal Schiphol Group's main activities. Schiphol airport covered about 227.304 air transport movements, 1.44 million tonnes of cargo and 20.9 million passengers in 2020, which was significantly lower than pre-corona levels.

In 2016 Schiphol Group received the predicate Royal, as a gift to Schiphol airport for its 100-year anniversary.

Company Structure

Management Board

The Management Board defines the sustainability vision and policy and is for that purpose assisted by the Supervisory Board's Safety, Sustainability & Stakeholders Committee. The sustainability programme manager is part of Schiphol Group's Strategy and Airport Planning department and reports directly to the President and CEO.

The President and CEO of Schiphol Group is tasked with the responsibility of sustainability.

Executive Board

Name	Function	Remuneration (2021)
Dick Benschop	CEO	€443.604,00 EUR
Robert Carsouw	CFO	282.798,00 EUR (as of 1 April 2021)
Hanne Buis	Chief Projects & Assets Officer	377.064,00 EUR
Birgit Otto	Chief Operations Officer	377.064,00 EUR

The maximum variable remuneration amounts to 20% of the total fixed salary. The Supervisory Board determines the level of the variable remuneration which depends on the extent to which the annually defined targets have been achieved. Those targets are both qualitative in nature (maximum of 14%) and related to the financial results achieved (maximum 6%).

Supervisory Board

Schiphol Group's Supervisory Board is tasked with monitoring the management of Schiphol Group and the general state of affairs.

Supervisory Board

Name	Function	Remuneration (2021)
L.J. Gunnung-Schepers	Chair	39.486,00 EUR
S.G. Brummelhuis	Member	25.963,00 EUR
D. Collier	Member	25.963,00 EUR
E. van Galen	Member	25.963,00 EUR
R.J. van de Kraats	Member	25.963,00 EUR
A.B.M. Olsson	Member	25.963,00 EUR
J. Winter	Member	25.963,00 EUR

Accountant

The external accountant of Schiphol Group is KPMG. In the year report of 2021, a part on climate-related risks is added to the auditor report. KPMG says that

'[a]s part of our audit we consider potential effects of climate-related risks on the accounts and disclosures, including estimates and judgements in the current year’s financial statements to determine whether the financial statements are free from material misstatements. This includes discussion of the company’s strategy in relation to climate change with management and those charged with governance and inspecting minutes and external communications for significant climate related commitments, strategies and plans made by the Management Board.”

No key audit matter has come out of this.

Main Activities

Schiphol Group currently manages Amsterdam Airport Schiphol (owner), Rotterdam The Hague Airport (owner), Lelystad Airport (owner), Eindhoven Airport (majority stake of 51%), Groupe AdP (participation of 8%), Brisbane (participation of 19,6%), JFK International Airport NY - Terminal 4 (owner).

Schiphol Group became the world's largest airport company after agreeing to cross shareholding of 8% with Groupe AdP (owner of three Paris airports Charles de Gaulle, Orly and le Bourget) in 2008. Recently Groupe AdP and Schiphol Group decided to end their cooperation agreement. It is not decided yet who will rebuy the 8% shareholdings, which must be done before 30 may 2023.

Schiphol Group has four owners: the State of the Netherlands (69,77%), municipality of Amsterdam (20,03%), municipality of Rotterdam (2,2%) and Groupe AdP (8,0%). Groupe AdP is currently selling its 8,0% shareholding.

The key business partner of Schiphol Group is KLM.

Government

- The minority share (20,03%) in Schiphol Airport of the municipality of Amsterdam allows the municipality to exert some influence on the operation of Lelystad Airport.

- The majority share (69,77%) in Schiphol Airport of the State of the Netherlands allows the municipality to exert a lot of influence on the operation of Lelystad Airport.

- In 2020 en 2021 Schiphol Group received a total of €117 million from the NOW 1, NOW 2, NOW 3, NOW 4, NOW 5 government grants (COVID-19 related).

Paris Agreement until Today

Financial Results since 2015

In this table, an overview of the financial situation of Schiphol is given since 2015.

Financial situation

Year	Revenue	Profit (loss)	Dividend
2015	1.4 Billion EUR	378 Million EUR	138 Million EUR
2016	1.4 Billion EUR	311 Million EUR	187 Million EUR
2017	1.4 Billion EUR	285 Million EUR	148 Million EUR
2018	1.5 Billion EUR	285 Million EUR	150 Million EUR
2019	1.6 Billion EUR	362 Million EUR	117 Million EUR
2020	0.6 Billion EUR	(424) Million EUR	0 Million EUR
2021	0.8 Billion EUR	104 Million EUR	0 Million EUR

Current Emissions

According to Royal Schiphol Group's own annual report, it is directly responsible for around 0,116 Mton (scope 1 & 2) CO2 emissions in 2018 from operations on Amsterdam Airport (heating of airport buildings and use of electricity).

The figure (CO2 emissions 2018) below show that Royal Schiphol Group does not have a correct understanding of the range of its responsibilities. It has a value chain responsibility as its providing the infrastructure that makes aviation possible. This means that the responsibility extends to everywhere where value is created; both for arriving as well as departing flights. The total climate impact consists of three parts: the climate effect of producing kerosene, the CO2 effect of burning kerosene and the non-CO2 climate effect.

In 2019 research organisation CE Delft published a report in the emissions of Royal Schiphol Group on the emissions in 2018. It identifies that in the Netherlands in 2018, 4.800 million liter of kerosene was used. As 99% of air passengers travel via the airports of the Schiphol Group, it concludes that 4.780 million liter was tanked on these airports. This does not reflect the entire climate emissions of Schiphol Group as it only takes into account kerosene calculations from departing flights. Assuming that arriving flights cause the similar amount of CO2 emissions, it would increase the emissions with a factor 2, adding up to 9.560 million liter. To produce and deliver it to the user, it takes 0,5 kg CO2 per kg of jet fuel, or 0,4 kg/liter. This amounts for Schiphol to 3824 million kg, or 3,8 million ton; 3.8 Mton.

Per liter kerosene burned, the CO2 emission is 2,509 kg. The total CO2 emissions that are caused by the combustion of kerosene during flight in the value chain of Schiphol Group's emissions are 23.986 million kg, or 24 Mton.

However, aviation also causes non CO2-effects. These non CO2-effects, such as persistent contrails, aviation induced cirrus and NOx derivatives contribute significantly more to global heating than aviation CO2 emissions. Studies conclude that the non CO2 effects cause three times more global warming than direct CO2 effects. The total climate effect of the emissions during flight is equal to 72 Mton CO2e.

Taking the production emissions into account, the total climate effect of Royal Schpihol Group is around 75.8 Mton CO2e.

Total CO2 emissions of Amsterdam Airport as reported by Schiphol Group (2018)

Scope 1	Scope 2	Scope 3
0.020 Megatonnes of CO2 (2018)	0.096 Megatonnes of CO2 (2018)	1.28 Megatonnes of CO2 (2018)

Total CO2 emissions of Amsterdam Airport as reported by Schiphol Group (2020)

Scope 1	Scope 2	Scope 3
0.012 Megatonnes of CO2 (2020)	0.074 Megatonnes of CO2 (2020)	0.686 Megatonnes of CO2 (2020)

NB: The aviation sector was heavily impacted by worldwide corona lockdown measures in 2019 and 2020. The reported emission numbers from Schiphol Group are significantly lower than pre-corona emissions and therefore do not reflect the usual climate impact of Schiphol Group.

Climate Policy and Plans

Current Policy

Top Performance Indicators

Royal Schiphol Group has eight Top Performance Indicators (TPI); one of these TPIs is focussed on reducing Schiphol Group’s CO2 emissions. Although Schiphol Group reports extensively on its scope 1, scope 2 and scope 3 CO2 emissions in its annual report, it uses a very narrow scope 3 in its own Top Performance Indicators (TPI). It does not include emissions from electricity used by third parties, all road traffic to and from the airports and fuels related to aircraft handling and landing and take-off cycle. CO2 emissions from the kerosene tanked in the Netherlands were also not included. However, fuels related to aircraft handling and kerosene supply cause the majority of Schiphol's CO2 emissions.

Moreover, Schiphol Group also doesn't report on CO2 emissions from international airports in which it has either a major shareholding or a management contract. These emissions are also not included in its sustainability Top Performance Indicators (TPI).

By using such a narrow scope 3 in its TPI, Schiphol Group is only committing itself to CO2 reduction in a very small part of their supply chain.

Nitrogen Action Programme

On 14 February 2020 Schiphol launched its Nitrogen Action Programme, following the recommendations of the Remkes Committee. This programma is mainly focussed on nitrogen reduction of transport to and from the airport (sustainable transportation), at the airport (100% wind powered airports and electric fleet) and in the air (differentiated airport charges, finance the development of sustainable fuels and sustainable taxiing).

Climate resilience

Royal Schiphol Group acknowledges that the current pace of climate change has the potential to substantially disrupt their operations, therefore adopting several climate adaptation initiatives. Schiphol is therefore taking steps to limit the possible risk of rainwater flooding, such as rainwater drainage, below and above-groud water buffers and flood-risk management.

Zero-emissions zone

Schiphol Group aims to create a zero-emissions zone at Schiphol airport in collaboration with a nearby municipality. Moreover it also cooperates in studies for the Regional Energy Strategy such as a new solar field in the Schiphol region. However, this is a fairly small solar field and it’s questionable whether this wil significantly contribute to zero-emission ambitions.

Bio-kerosene plant

In 2020, Schiphol Group continued to provide financial support to an ongoing project to develop a new bio-kerosene plant in the province of Groningen in collaboration with SkyNRG. The plant has the potential to deliver about 2% of the aircraft fuel consumed (100,000 metric tonnes per year) in the Netherlands from 2023 onwards. The use of bio-kerosone is however controversial, as its production often results in deforestation and exploitation of scarce agricultural land. This causes major environmental damage.

Climate Plans

Schiphol Group states in its own reporting that it aims to operate zero-emissions and zero-waste airports by 2030. The long-term goal is to be energy-positive by 2050. In its recent annual report it warned that, although COVID-19 had not altered their ambitions, Schiphol Group may needed to reassess the approach and timeframe outlined in Schiphol's Sustainability Roadmap. It also states that it aims to create sustainable aviation by using 14% sustainable aviation fuels by 2030 and reduce 49% CO2 emissions on landside activities. By 2050 the aviation sector needs to be CO2 free.

Due Diligence

Due Diligence

Edit: Keep the broader context in mind. Is the company integer when it comes to deforestation, palm oil, biodiversity, human rights etc etc? Be critical in the sources used here.

Scandals and controversies

Lelystad Airport

– An environmental impact report performed in 2017 contained calculation errors on environmental impacts and noise pollution of Lelystad airport.

– After the decision of the Dutch Ministry of Infrastructure and Water Management to open Lelystad Airport for commercial aviation in 2018, there have been many incidents of unclear decission making processes and budget reporting.

– In 2018 and 2019 two alderman of Amsterdam (Dijksma and Kock) were secretly lobbying at the European Commission for expansion of Lelystad Airport without informing the municipal council and the municipal executive of Amsterdam.

Nature Permits

- Schiphol Airport is in violation of current nature conservation laws. It should have had valid nature permits for every flightmovement above 250.000 flightmovements. According to Mobilisation for the Environment (MOB) Schiphol airport is in violation of these regulations since 1996. Other airports of Schiphol Group (Rotterdam, Eindhoven, Maastricht) also operate without a valid nature permit.

(Bio) Fuel supply

– In December 2020 Schiphol welcomed the news that Neste bought a minority stake in Aircraft Fuel Supply (AFS). AFS is the owner and operator of the fuel storage company serving Schiphol Airport. Neste's biofuel production is linked to deforestation, forest fires, landgrabbing and human rights violations.

– Half of Schiphol's fuels is supplied by the Ministry of Defence and the other half by Amsterdam Schiphol Pipeline (ASP). ASP is owned by KLM, Shell, Total, BP, Statoil, Q8 petroleum and Navires Fuels (Morgan Stanley). The emissions that are caused by these 'bunkerfuels' are not attributed to The State of the Netherlands and belong to 'nobody'. If we would attribute these emissions to the State of the Netherlands, it's emmissions would rise with almost 7% (in 2017 with 9 megaton).

Financial support & working conditions

– The airport charges of Schiphol are artificially low and airport operations must therefore be financed by other business units, such a airport catering, office space rentals, parking fees and flight taxes. However, these are costs primarily paid by Dutch citizens as Dutch airport passengers. Passengers of transfer flights barely pay for any of these costs. Moreover, Schiphol is strongly investing in transfer flights (in the interest of business partner KLM). This is causing even more environmental damage as a transfer passenger has to take-off and land twice. The take-off cycle causes the highest kerosene use, it produces more noise and causes emissions of fine particles, nitrogen and greenhouse gases. In addition, a transfer flight does not fly the shortest possible distance between two airports, but makes a detour. This also increases fuel consumption. As a consequence of these low airport charges terms and conditions of employement are poor at key business partners on the airport.

– Aviation companies receive 80% of there emission rights for free (decided by the European Commission), the part that they have to pay for is very cheap.

- In december 2020 research showed that Schiphol Group and KLM had ignored warnings from health and safety services concerning health risks for platform personnel for many years. Anonymous employees report remarkable many cases of early-onset lung cancer and increased risk of heart failure amongst platform employees.

Conclusion

Royal Schiphol Group is not on it’s way to become Paris Proof. It is mainly focussed on reducing it’s scope 1 and 2 (and some scope 3) emissions by 49%, but neglects it’s responsibility in the supply chain. Schiphol Group’s reporting rules out most supply chain emissions (scope 3) and it’s performance indicators does not include any scope 3 emission in the supply chain. Any claims of a ‘CO2 free aviation sector’ by 2050 are therefore false promises and don’t match with Schiphol Group’s current operations.