Change 2018 International Consolidated Airlines Group, S.A .../media/Files/I/IAG/... · (C0.4) Select the currency used for all financial information disclosed throughout your response.

International Consolidated Airlines Group, S.A. - ClimateChange 2018

C0. Introduction

C0.1

(C0.1) Give a general description and introduction to your organization.

International Airlines Group is one of the world's largest airline groups with 546 aircraft flying to 279 destinations and carrying over105 million passengers each year. It is the third largest group in Europe and the sixth largest in the world, based on revenue. IAGcontributes to global economic prosperity by connecting people, places, communities, and cultures. Formed in January 2011, IAG isthe parent company of Iberia, British Airways, Vueling, Aer Lingus and Level. IAG is a Spanish registered company with sharestraded on the London and Spanish Stock Exchanges. In 2017 IAG total revenue was €22.9 billion with €3.0 billion operating profit andRoIC of 16%. The group employed 63,422 people (average manpower equivalent). In 2017 Level operations were accounted for inIberia operations and IAG Cargo operations are accounted for in both Iberia and British Airways disclosures.

Sustainability is a central element of IAG's business strategy and fundamental to our long-term growth. IAG established a Groupsustainability function and set the mission of becoming the world’s leading airline group on sustainability. Our priority is to alignsustainability performance and carbon efficiency across the Group and we have grasped the opportunity to share expertise and bestpractice across our airlines by establishing Group-wide working groups on fuel and carbon efficiency and environmentalmanagement.

We have set ambitious goals on carbon efficiency and noise to be met by 2020 and are also working towards longer term climategoals out to 2050. We are using all the tools at our disposal – modern aircraft, efficient technology, best operational practice andsustainable fuels – to minimise our carbon footprint.

The Group's Sustainability programmes are co-ordinated centrally by IAG and for each operator the programmes are maintainedunder the control of the Boards of each airline. The IAG risk management process provides for both assessment and action on risksincluding those related to sustainability and climate change.

The IAG sustainability programme aims to: Develop and implement Group sustainability policy and strategy Establish Group and operating company targets to improve sustainability performance andDevelop Group and operating company sustainability programmes to deliver our targets. In addition, Aer Lingus, British Airways, Iberia, Vueling and Level maintain their own sustainability programmes with a broader

remit to manage and minimise the environmental impact of their operations and take a leading role in: Tackling climate changeSupporting communities, projects, charities and individuals in the areas they work in and fly to andEngaging with all stakeholders, including customers and suppliers, to make air travel more sustainable.

In 2017 we had another strong year as we continue to develop our sustainability programme.

On the operational front, our flight carbon efficiency improved by 2.6% during 2017 putting us on track for our 2020 target of 87.3grammes of CO2 per passenger kilometre. We began implementing the Honeywell GoDirect Fuel Efficiency software, supportingfurther group-wide reductions in fuel use and carbon emissions. We also acquired 13 new aircraft with typically 20 per cent lowercarbon emissions and 50 per cent lower noise levels than the aircraft they replace.

In September 2017, we welcomed the UK Government’s announcement to include Sustainable Aviation Fuels within the UK incentive

•••••••

CDP Page of 741

policy framework, something we have long advocated. Soon after we announced our partnership with Velocys, a leading globalbiofuels technology company, to construct a waste-to-fuels plant in the UK. We believe there is significant opportunity to producesustainable alternative fuels from waste that would otherwise be destined for landfill.

In December 2017 details of the CORSIA global aviation carbon offsetting and reduction scheme were released enabling our airlinesto begin their implementation plans. IAG continues to actively support the delivery of CORSIA through our collaboration with IATA andICAO and are also helping other airlines in their preparations.

Disclosure is an important driver of any organisation’s climate protection efforts. In 2017, we signed up to the Task Force on ClimateRelated Financial Disclosure, which complements the CDP framework. In 2017 our industry-leading work on climate change wasrecognised when we achieved the CDP ‘A’ List. We were also named by CDP as the UK’s Most Improved Company.

In autumn 2017, we carried out a Materiality Assessment with our key stakeholders to seek their views on what our sustainabilitypriorities should be. This provided valuable insights and direction which we have already applied in our disclosures and actions during2018. In 2018 we have also made further progress on sustainable fuels, fuel efficiency and the implementation of CORSIA.

C0.2

(C0.2) State the start and end date of the year for which you are reporting data.

Start date End date Indicate if you are providing emissions data for pastreporting years

Select the number of past reporting years you will be providingemissions data for

Row1

January 12017

December 312017

No <Not Applicable>

Row2

<NotApplicable>

<NotApplicable>

<Not Applicable> <Not Applicable>

Row3

<NotApplicable>

<NotApplicable>


Row4

<NotApplicable>

<NotApplicable>


C0.3

(C0.3) Select the countries/regions for which you will be supplying data.IrelandSpainUnited Kingdom of Great Britain and Northern IrelandOther, please specify (Rest of world and International Airspace)

C0.4

(C0.4) Select the currency used for all financial information disclosed throughout your response.EUR

C0.5

CDP Page of 742

(C0.5) Select the option that describes the reporting boundary for which climate-related impacts on your business are beingreported. Note that this option should align with your consolidation approach to your Scope 1 and Scope 2 greenhouse gasinventory.Operational control

C-TO0.7/C-TS0.7

(C-TO0.7/C-TS0.7) For which transport modes will you be providing data?Aviation

C1. Governance

C1.1

(C1.1) Is there board-level oversight of climate-related issues within your organization?Yes

C1.1a

(C1.1a) Identify the position(s) of the individual(s) on the board with responsibility for climate-related issues.

Position ofindividual(s)

Please explain

Board/Executiveboard

Positions that are elected or appointed for the board that have specific responsibilities in overseeing the direction of the group: 1. IAG Board: TheIAG Board has collective responsibility and accountability for setting commitments and guiding strategy, ensuring the efficacy and efficiency ofmanagement, for financial stability and regulatory compliance, and reviewing the progress of objectives and policies including those relating to oursustainability and climate change programmes. All members of the board may also raise questions or ask for evidence of action in a particulararea including on our climate change programme.

Director onboard

A Non-Executive Director on the IAG Board is also Chair of the Board’s Audit and Compliance Committee which oversees delivery of the IAGsustainability strategy including climate change along with other responsibilities including enterprise risk management, reviewing the Group’sprincipal risks and agreement of the internal audit programme. This oversight of the connected aspects of sustainability, climate change, risksand opportunities, strategy, financial performance and compliance means the Audit and Compliance committee is well positioned to assessoverall progress of the Group in relation to our goals. On key aspects of strategy (such as whether to support carbon pricing) or major projects(such as investments in sustainable aviation fuel innovation) the Audit and Compliance Committee will be consulted to approve the proposal andin most cases will be shared with the full board.

Chief ExecutiveOfficer (CEO)

Chief Executive Officer of IAG also sits on the board and has responsibility for ensuring the directions of the Board are actioned through IAG'sbusiness strategies, including decisions about our sustainability and climate change strategies. The CEO of IAG also chairs the IAG ManagementCommittee providing the channel to direct decisions made at the Board into action across the Group operating companies. Conversely, theManagement Committee provide a channel for updates, proposals and requests relating to our climate programmes via the CEO back to theBoard.

C1.1b

CDP Page of 743

(C1.1b) Provide further details on the board’s oversight of climate-related issues.

Frequencywithwhichclimate-relatedissues areascheduledagendaitem

Governancemechanismsinto whichclimate-related issuesare integrated

Please explain

Scheduled– somemeetings

Reviewing andguidingstrategyReviewing andguiding majorplans of actionReviewing andguiding riskmanagementpoliciesReviewing andguidingbusiness plansSettingperformanceobjectivesMonitoringimplementationandperformance ofobjectivesOverseeingmajor capitalexpenditures,acquisitionsanddivestituresMonitoring andoverseeingprogressagainst goalsand targets foraddressingclimate-relatedissues

We improved planning for Board activities during the year, giving Board members and the management team the chance to requestand suggest topics for discussion. Climate related issues are now included in a rolling planner and debated by the Board twice a year.The board met 11 times during the year, and the audit committee met 8 times. Climate change and strategy were covered at twoscheduled board meetings and a further discussion was requested by the Audit Committee. Sustainability and climate change werealso addressed in areas and discussions outside this specific area for example through the Board's discussion on future strategy,compliance and audit and risks and opportunities. During 2017, the IAG Group Head of Sustainability reported twice to the Board andonce to the Audit and Compliance Committee. The Audit and Compliance Committee of the Board reviewed progress made with theimplementation of the sustainability strategy and performance against targets in key areas such as carbon footprint and emissionsintensity. This also included a review of progress relating to sustainable alternative fuels, fuel efficiency and improvements in carbondisclosure including work with CDP and TCFD.

C1.2

(C1.2) Below board-level, provide the highest-level management position(s) or committee(s) with responsibility for climate-related issues.

Name of the position(s) and/orcommittee(s)

Responsibility Frequency of reporting to theboard on climate-related issues

Chief Executive Officer (CEO) Both assessing and managing climate-related risks and opportunities Quarterly

Other, please specify (ManagementCommittee)

Both assessing and managing climate-related risks and opportunities Quarterly

Environment/ Sustainability manager Both assessing and managing climate-related risks and opportunities More frequently than quarterly

Other C-Suite Officer, please specify(Chief of Staff)

Both assessing and managing climate-related risks and opportunities More frequently than quarterly

Risk manager Both assessing and managing climate-related risks and opportunities Half-yearly

Other committee, please specify(Audit and compliance committee)

Other, please specify (Non-Executive Director o)Non-Executive Director on the IAG Board is Chair of the IAG Audit and ComplianceCommittee which oversees delivery of the IAG sustainability strategy.

Half-yearly

CDP Page of 744

C1.2a

(C1.2a) Describe where in the organizational structure this/these position(s) and/or committees lie, what their associatedresponsibilities are, and how climate-related issues are monitored.

Ultimate responsibility for climate related issues in IAG sits with the CEO. CEO position accountability demonstrates the highest levelof Management that has the ultimate responsibility and accountability of delivering direction in regards of climate-related issuesthroughout the Group.

The CEO reports to the IAG Board which comprises ten non-executive directors and two executive directors. In relation to climatechange, the Board is responsible for approving the strategy and general policies of IAG and approving the risk management andcontrol policy which also includes climate related risks and opportunities.

As Chair of the IAG Management Committee, the CEO has responsibility for directing decisions made by the Board through IAG'sbusiness strategies and ensuring they are put into action across the Group and its operating companies. Conversely, ManagementCommittee can channel updates, proposals and requests relating to our climate programmes via the CEO back up to the Board.

Below Board level and our CEO, the next highest level of governance for overseeing climate-related strategy sits with the IAGManagement Committee which is Chaired by the IAG CEO and includes Director of Strategy, Group Chief Finance Officer, Chief ofStaff, General Counsel, and CEOs of the operating companies within the Group. The IAG Management Committee support the IAGGroup CEO in the management of climate related aspects by assessing progress against our climate targets and projects such assustainable fuels and fuel efficiency initiatives. They also support the CEO in assessing and managing climate related risks andopportunities within their respective areas of responsibility across the Group.

The IAG Chief of Staff sits on the IAG management Committee and has a direct report, the IAG Group Head of Sustainability,providing the governance structure and channel for our climate change programmes to be managed from director level tomanagement level.

During 2017, the IAG Group Head of Sustainability reported four times to the Management Committee to review progress and agreestrategy. This included providing an update on progress with our action on sustainable alternative fuels, fuel efficiency andimprovements in carbon disclosure including work with CDP and TCFD.

Progress on sustainability and climate change is also presented from each of the Operating Company CEOs and the IAG Group Headof Sustainability through our business planning process to the IAG Management Committee. This ensures highest level managementare made aware of best practice that can be shared group-wide or where collective action is required to ensure progress against ourgoals. It also gives a forum to discuss and agree proposed new policies and strategies before presenting these for approval to theIAG Board.

The IAG Management Committee also oversee the IAG strategy, risk management process and innovation programme providing theopportunity co-ordinate action of these aspects with our climate-related programmes.

Further down the management structure sustainability programmes, including on climate change, are maintained under the control ofeach airline and their respective Boards and management teams.

CDP Page of 745

The IAG sustainability governance structures were published in our annual report 2016 and will be restated if there any futurechanges.

C1.3

(C1.3) Do you provide incentives for the management of climate-related issues, including the attainment of targets?Yes

C1.3a

CDP Page of 746

(C1.3a) Provide further details on the incentives provided for the management of climate-related issues.

Who is entitled to benefit from these incentives?Environment/Sustainability manager

Types of incentivesMonetary reward

Activity incentivizedEfficiency project

CommentIAG offer Environment and Sustainability Managers monetary reward for successful delivery of carbon pricing, fuel efficiency,carbon efficiency and sustainable alternative fuels projects. For example IAG, British Airways and Vueling sustainability andenvironment teams have KPIs for achieving progress towards long-term mitigation goals. Key policy deliverables include successfullobbying for a market-based measure to regulation emissions from international flights and lobbying for policy support to attract low-carbon fuel project developers to build their refineries in the UK and EU. A key climate mitigation project deliverable relates toachieving a sustainable biofuels production facility in the UK. In addition, Delivery of key projects such as the implementation ofnew Group-wide fuel efficiency software is incentivised through individual's performance related pay.

Who is entitled to benefit from these incentives?Energy manager


Activity incentivizedEnergy reduction target

CommentIAG offers monetary reward for successful delivery of energy reduction and efficiency targets. For example the Fuel EfficiencyWorking Group of British Airways is tasked with delivering a series of fuel savings projects in an effort toward meeting annual fuelsavings targets. This is a KPI-based deliverable and strong performance can result in a performance bonus. The Aer Lingus FuelManagement Committee is also assigned an annual fuel efficiency target and has implemented a number of fuel efficiencyinitiatives and projects towards delivering those targets. Delivery of key projects such as the adoption of more fuel efficient lightingin engineering and maintenance buildings is incentivised through individual's performance related pay.

Who is entitled to benefit from these incentives?Facilities manager


Activity incentivizedEnergy reduction target

CommentSome facilities managers within IAG are offered financial reward for successful delivery of energy reduction targets. For exampleBritish Airways facilities management contractor in the UK is given an annual energy savings target as part of the contractualagreement.

C2. Risks and opportunities

C2.1

CDP Page of 747

(C2.1) Describe what your organization considers to be short-, medium- and long-term horizons.

From (years) To (years) Comment

Short-term 0 2 For enterprise risk we assess impact for two years forward looking versus the business plan.

Medium-term 2 5 IAG Strategic business planning cycle is 5 years

Long-term 5 30 For climate risk assessment we look at a range of timescales including from 2030, 2050 and beyond towards 2100.

C2.2

(C2.2) Select the option that best describes how your organization's processes for identifying, assessing, and managingclimate-related issues are integrated into your overall risk management.Integrated into multi-disciplinary company-wide risk identification, assessment, and management processes

C2.2a

(C2.2a) Select the options that best describe your organization's frequency and time horizon for identifying and assessingclimate-related risks.

Frequencyofmonitoring

How far intothe futureare risksconsidered?

Comment

Row1

Six-monthlyor morefrequently

>6 years As a Group of international airlines, our global operations are incorporated into the IAG Enterprise Risk Management (ERM)framework which also considers risks linked to our carriers' hubs in the United Kingdom (London Heathrow and Gatwick), Spain(Madrid, Barcelona) and Ireland (Dublin). We report annually to the IAG Board on sustainability risks, including regarding climatechange. In 2017 we aligned our approach on sustainability and climate change risks to the IAG Enterprise Risk Management(ERM) process. The IAG Group Head of Sustainability reports climate risks to the Chief of Staff and, twice per year, providesreports to the IAG Management Committee and Audit and Compliance Committee, both sub-sets of the Board. The Groupsustainability team also works via IAG Sustainability Network to regularly assess both risks and opportunities from developmentsin international climate policy, EU ETS, associated carbon trading & compliance and future low carbon transition plans.

C2.2b

CDP Page of 748

(C2.2b) Provide further details on your organization’s process(es) for identifying and assessing climate-related risks.

At Group level, the Board has overall responsibility for ensuring that IAG has appropriate risk management and internal controls inplace and that they operate effectively. IAG has an Enterprise Risk Management (ERM) policy which was approved and reviewedagain by the Board in 2017. There is a comprehensive risk management process and methodology ensuring a robust assessment ofthe principal risks facing the Group. This process is led by the Management Committee and supported by the Head of ERM.

For IAG, our asset level is our individual airlines: British Airways, Iberia, Vueling, Aer Lingus and Level. Throughout the Group, atboth company and asset level, risk owners are responsible for identifying risks within their area of responsibility, quantifying,prioritising and managing the risk and preparing appropriate response plans. Risk owners are supported by risk managementprofessionals who maintain risk maps at asset and Group (company) level, and ensure consistency over the risk managementprocess.

Sustainability risks including climate related risks are assessed in line with IAG ERM methodology for likelihood (remote, possible,probable and likely) and impact (manageable, moderate, serious and critical).

Climate related risks are identified and assessed at Group level by the group Sustainability Team in conjunction with the ERM team.

Risk maps are reviewed by each operating company’s management committee, who consider the accuracy and completeness of themap, significant movements in risk and any changes required to the response plans addressing those risks. Each operatingcompany’s management committee confirms to its operating company board as to the identification, quantification and managementof risks within its operating company annually. The management committee of each operating company escalates risks that haveGroup impact or require Group consideration in line with the Group ERM framework.

At the Group level, material risks from each airline, together with Group-wide risks, are maintained in a Group risk map. The IAGManagement Committee reviews the Group risk map twice during the year in advance of reviews by the Audit and ComplianceCommittee of the Board in accordance with the September 2014 UK Corporate Governance Code and the 2015 Spanish GoodGovernance Code of Listed Companies recommendations.

IAG assesses potential risk impact considering Financial and Non-Financial impact against the group business plan and reportsexternally under FRC (Financial Reporting Council) and CMNV (Spanish National Securities Market Commission) guidance.

IAG uses the following definitions of risk terminologies; 1. All risks are assessed for likelihood (remote, possible, probable and likely) and impact (manageable, moderate, serious and critical)against the Group Business Plan and strategy. 2. Risks are grouped into four categories: strategic, business and operational, financial, and compliance and regulatory risks. 3. Risk trends are identified as increasing, stable or decreasing. 4. Key risks that may threaten the Group’s business model, future performance, solvency and liquidity are prioritised. Where there areparticular circumstances that mean the risk is more likely to materialise, the circumstances are described. 5. Timeframes for considering risks range from one year to over 30 years in the case of climate change risks. Consideration of theimpact of future regulatory costs relating to climate change, for example, are considered out to 2050. 6. IAG uses the four risk categories (strategic, business and operational, financial, and compliance and regulatory) with thecombination of the risk criteria (impact, probability, velocity, timeframe) to inform decisions on which risks are categorised asprincipal. 7. Principal risks are explicitly linked back to the group strategy and disclosed in our annual report.

CDP Page of 749

C2.2c

(C2.2c) Which of the following risk types are considered in your organization's climate-related risk assessments?

Relevance&inclusion

Please explain

Currentregulation

Relevant,alwaysincluded

IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: Environment regulation - compliance risk: An inadvertentbreach of compliance requirements with associated reputational damage and fines. (1-6 years) • Adopting group-wide EnvironmentalManagement System, the IATA IEnvA programme. • Internal governance, awareness and assigning ownership for environmentalcompliance obligations. • Engaging with carbon market advisors to understand and mitigate compliance risks and identify futureopportunities.

Emergingregulation


IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: 1. Climate regulation – regional application risk: CORSIA hasbeen agreed internationally however the risk remains of regional regulatory duplication and/or inconsistent application of agreed MRV andeligible offsets which would create inequitable costs and competitive distortion. (3-6 years) Sustainable aviation fuels - regulation risk: EUproposal to mandate proportion of sustainable aviation fuels would drive production but force airlines to purchase SAF at premium pricecompared to conventional fuels creating competitive distortion. (1-3 years) Management response: • Lobbying to prevent mandates bothdirectly and as part of industry organisations at EU and UK levels and supporting policy incentives that help deliver SAF at pricescompetitive with conventional fuels.

Technology Relevant,alwaysincluded

IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: Sustainable aviation fuels - production opportunity: Lack ofpolicies have discouraged investment in innovative, first-of-kind technologies to develop sustainable aviation fuels (SAF). (1-3 years) IAGaction: • Lobbying for sustainable aviation fuel inclusion in renewable fuel policies at the Global, EU, and UK levels. • British Airwaysinvesting with partners in waste-to-fuel projects. • Lobbying to ensure UK policy proposal converted into regulation.

Legal Relevant,alwaysincluded

IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: Environment regulation - compliance risk: potential forinadvertent breach of compliance requirements with associated reputational damage and fines. (1-6 years) IAG action: • Adopting group-wide Environmental Management System, the IATA IEnvA programme. • Internal governance, awareness and assigning ownership forenvironmental compliance obligations. • Engaging with carbon market advisors to understand and mitigate compliance risks and identifyfuture opportunities.

Market Relevant,alwaysincluded

IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: Consumer behaviour risk and opportunity: Trend in ethical andsustainability concerns being a factor in consumer choices. (6 years+) IAG action: • Set mission to be the world’s leading airline group onsustainability with ambitious goals on carbon efficiency. • Using all the tools at our disposal: modern aircraft, efficient technology, bestoperational practice and sustainable fuels, as well as influencing global policy and driving industry-wide action, to minimise our carbonfootprint and mitigate other sustainability risks. • Effective communication of our practices to customers and suppliers.

Reputation Relevant,alwaysincluded

IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: Supply chain CSR - compliance risk: Potential breach ofsustainability, corporate social responsibility or anti-bribery compliance by an IAG supplier or third party resulting in financial, legal,environmental, social and/or reputational risk. (1-3 years) IAG action: • Know Your Counterparty due diligence, Supplier Code ofConduct, supplier compliance audits. • Internal governance including training and workshops to identify risks and mitigation. • Installingnew supplier management IT system, due to complete early 2018.

Acutephysical


IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: Acute events such as fog, snow, flooding, storms and extremeheat events would cause business interruption and damage to operations and supply chain with consequences for input costs,revenues, asset values and insurance claims. IAG action: partnering with airports, ATC and technology developers to develop and adoptaircraft technologies that help minimise disruption from acute weather events such as Boeing Winds tool, and Time Based Separation.

Chronicphysical


IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: IAG follows IAG ERM risk assessment framework in conjunctionwith following TCFD guidance on climate-related risk assessment to identify all relevant climate related risks and opportunities. IAGexample: Chronic physical climate changes could impact our airline network destinations desirability. IAG action: ongoing contingencyplanning teams anticipate and prepare for extreme events and build in operational recovery plans.

Upstream Relevant,alwaysincluded

IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: Consideration of opportunities to mitigate climate impactsthrough engagement with upstream suppliers such as fuel suppliers, aircraft and engine manufacturers, airport operators and ATC. IAGaction: collaboration with aviation fuel suppliers to establish rail supply route to bring fuel by rail rather than road - reducing emissions,cost, and time.

Downstream Relevant,alwaysincluded

IAG follows IAG ERM risk assessment framework in conjunction with following TCFD guidance on climate-related risk assessment toidentify all relevant climate related risks and opportunities. IAG example: Consideration of opportunities to mitigate climate impactsthrough engagement with our customers, suppliers, regulators, investors and NGOs. IAG action: responding to customer requests toadopt independent assessment platform to share performance status on IAG sustainability programmes.

C2.2d

CDP Page of 7410

(C2.2d) Describe your process(es) for managing climate-related risks and opportunities.

IAG has a risk appetite framework which informs the business, either qualitatively or quantitatively on the Board’s appetite for certainrisks. Within the framework, risk appetite statements formalise how performance is monitored either on a Group-wide company basisor within major projects.

The risk maps plot each risk on an impact and probability scale. For each risk, mitigating actions are documented and are activelymanaged. Risk maps are reviewed by each operating company’s management committee, who consider the accuracy andcompleteness of the map, significant movements in risk and any changes required to the response plans addressing those risks.

For IAG, our principal risks are managed at corporate level while other risks are generally managed at the asset level (airlines) by therisk owners.

IAG business plan cycles requires each airline to update status of risks including those relating to climate change at least twice a yearto the IAG management committee.

Decisions on our management response to climate risks and opportunities – whether to avoid, control, transfer or accept – are madeby the risks owners in conjunction with the Group ERM team and communicated to the relevant management team at airline level forapproval and also reported to IAG Management Committee through the business planning and progress reporting process which ispresented twice per year to the IAG Management Committee.

The identified sustainability and climate related risks, also disclosed in our annual report, are currently assessed to be well managedwithin our existing business strategies. The anticipated scale of climate related risks are currently not assessed to be critical for IAG.

Examples of specific climate related risks and opportunities to which this process has been applied are described below:

1. Management of a transition risk – “Global patchwork of climate policy for aviation”

Risk: International climate change regulation for the aviation sector could evolve as a patchwork of uncoordinated national andregional policies including inappropriate tax instruments. Although CORSIA has been agreed, risk remains of regulatory duplicatione.g. EU ETS may continue to apply to international aviation during the early phases of CORSIA.

Potential impact on IAG: Increased costs, competitive distortion including potential carbon leakage (where inappropriate policyleads to inadvertent increase of carbon emissions across state boundaries) and a failure to address the climate impact of aviation’semissions. Based on IATA forecasts, a policy patchwork could represent up to 6 times more cost to IAG than a single marketmechanism like CORSIA.

Management case study: Through review and analysis of our risk management options, the risk manager, IAG Group Head ofSustainability, decided that IAG should control this risk by allocating resource to engage with Governments, IATA and ICAO to helpdeliver a single effective carbon pricing solution for aviation. This proposal was presented to IAG Management Committee and theBoard and regular updates are provided at least annually.

CDP Page of 7411

2. Management of a physical risk – “Operational disruption due to increased extreme weather”

Risk: Operational disruption and increased operating costs for example due to increased frequency of high winds and low visibilityfog events at British Airways’ home base airport Heathrow.

Potential impact for IAG: An increase in extreme weather events (fog, high winds etc) have the potential to increase disruption toour operations closing airports and increasing flight diversions.

Management case study: This risk was managed through an appraisal of options considering how to mitigate delays and improvepunctuality. Performance data tracking was used to observe trends. A costed business case demonstrating the opportunity tocollaborate with partners to find a solution to this risk was presented to British Airways management team and the decision was madeto progress the joint project with partners in NATS and Heathrow Airport to implement innovative technology, the ‘Time BasedSpacing’ system, which enables aircraft landing rates at Heathrow to be maintained in the event of strong winds. This has reduceddelay, reduced fuel burn and emissions and avoided extra costs due to disrupted operations.

C2.3

(C2.3) Have you identified any inherent climate-related risks with the potential to have a substantive financial or strategicimpact on your business?No

C2.3b

(C2.3b) Why do you not consider your organization to be exposed to climate-related risks with the potential to have asubstantive financial or strategic impact on your business?

Primaryreason

Please explain

Row1

Risks exist,but nonewithpotential tohave asubstantivefinancial orstrategicimpact onbusiness

We've identified and assessed climate-related risks for IAG including through the application of scenario analysis for climate-related risks andhave published a list of our key sustainability and climate risks in our annual report. Physical risks arising from climate change such as increasedfog events, atmospheric turbulence or cooling requirements were assessed. Transitional risks such as increased regulation and associated costof compliance or increasing carbon price were also assessed. In line with ERM framework, we assessed the scale and likelihood of each climaterelated impact on the Group’s business model, future performance, solvency and liquidity and concluded at this time that, in comparison to allother business risks identified through our company-wide risk management procedures, climate related risks are not currently assessed topresent substantive financial or strategic impact for IAG. We present the assessment of our climate related risks and opportunities to IAGManagement Committee and Board and continue to review climate risks and management responses on an on-going basis and withManagement Committee at least annually. Example of specific climate related risk to which this process has been applied: 1. Management of atransition risk: emergence of global patchwork of climate policy • Risk: Emergence of a global patchwork of uncoordinated national and regionalpolicies including inappropriate tax instruments. • Potential impact on IAG: Increased costs, competitive distortion including potential carbonleakage (where inappropriate policy leads to inadvertent increase of carbon emissions across state boundaries) and a failure to address theclimate impact of aviation’s emissions. However, in comparison to all other business risks/opportunities identified through our company-wide riskmanagement procedures, this risk is not currently assessed to be a principal risk to IAG. • Action to manage risk: In 2017, three IAGrepresentatives participated in negotiations to develop CORSIA implementation plans and IAG Group Head of Sustainability chairs IATA’sCORSIA working group. IAG is also applying direct political lobbying in the UK and EU as well as through industry groups IATA, A4E andSustainable Aviation to help secure a cost effective and environmentally robust market based mechanism to address aviation carbon emissions.

C2.4

CDP Page of 7412

(C2.4) Have you identified any climate-related opportunities with the potential to have a substantive financial or strategicimpact on your business?No

C2.4b

(C2.4b) Why do you not consider your organization to have climate-related opportunities?

Primaryreason

Please explain

Row1

Opportunitiesexist, butnone withpotential tohave asubstantivefinancial orstrategicimpact onbusiness

We have identified and assessed climate-related opportunities for IAG including through the application of scenario analysis and havepublished a list of our key sustainability and climate risks and opportunities in our annual report. The scale of sustainability and climateopportunities for IAG are currently assessed to be smaller than those relevant to IAG’s strategic opportunities however they are relevant andimportant and are therefore monitored by the IAG Sustainability Team and reviewed by the ERM Team and reported at least annually to IAGManagement Committee. An example of a key climate-related opportunity to which our assessment process has been applied, is the earlyproduction of sustainable aviation fuels which could offer IAG commercial and environmental advantage by helping source cost effective fueland reduce our CO2 emissions thereby reduce our compliance costs in relation to EU ETS and/or CORSIA. In line with our ERM framework,we assessed the scale and likelihood of this climate-related opportunity on the Group’s business model, future performance, solvency andliquidity and concluded at this time that in comparison to all other business risks/opportunities identified through our company-wide riskmanagement procedures, this opportunity is not currently assessed to present substantive financial or strategic impact for IAG. We havenevertheless managed this opportunity effectively for many years and achieved significant success in 2017 when our long-term lobbying wasrewarded with a significant development in UK Government Policy. The UK’s Department for Transport has now established policy incentivesthat will prioritise the production of sustainable aviation fuel beyond 2020. The UK government has also established a new Special InterestGroup to support new research and development programmes for sustainable aviation fuels. These important policy incentives are vital for IAGto be able to invest in sustainable fuel production in the UK. With the progress and success we have made to date, we believe our currentmanagement strategies are appropriate and effective.

C2.5

(C2.5) Describe where and how the identified risks and opportunities have impacted your business.

Impact Description

Productsandservices

Not yetimpacted

Consumer behaviour risk and opportunity Trend in ethical and sustainability concerns being a factor in consumer choices.

Supplychainand/orvaluechain

Impacted forsomesuppliers,facilities, orproduct lines

Supply chain CSR – compliance risk Potential breach of sustainability, corporate social responsibility compliance by an IAG supplier orthird party resulting in financial, legal, environmental, social and/or reputational risk. Encouraged closer collaboration and partnershipwith suppliers such as fuel and waste handling agents to explore opportunities for sustainable aviation fuels, sourcing and carbonperformance agreements in supplier contracts.

Adaptationandmitigationactivities

Impacted Currently planning for the implementation of CORSIA carbon offsetting and reduction scheme for international aviation. Expect carboncosts to increase from 2020 onwards. Continuing our investment in fuel efficient aircraft and operational practices and placingincreasing emphasis on fuel efficiency across our operations to minimise exposure to GHG compliance costs.

Investmentin R&D

Impacted Sustainable aviation fuels – production opportunity Lack of policies have discouraged investment in innovative, first-of-kindtechnologies to develop sustainable aviation fuels (SAF). • Lobbying for sustainable aviation fuel inclusion in renewable fuel policies atthe Global, EU, and UK levels. • British Airways investing with partners in waste-to-fuel projects. • Lobbying to ensure UK policyproposal converted into regulation.

Operations Impacted Continuing our investment in fuel efficient aircraft and operational practices and placing increasing emphasis on fuel efficiency acrossour operations to minimise exposure to GHG compliance costs.

Other,pleasespecify

Not yetimpacted

Sustainable aviation fuels – regulation risk EU proposal to mandate proportion of sustainable aviation fuels would drive production butforce airlines to purchase SAF at premium price compared to conventional fuels creating competitive distortion. • Lobbying to preventmandates both directly and as part of industry organisations at EU and UK levels and supporting policy incentives that help deliverSAF at prices competitive with conventional fuels.

C2.6

CDP Page of 7413

(C2.6) Describe where and how the identified risks and opportunities have factored into your financial planning process.

Relevance Description

Revenues Not yetimpacted

Global carbon pricing and compliance with EU ETS and CORSIA could require revenue adjustment in future. Our treasury teams arewatching and forecasting future carbon prices to plan for, hedge and mitigate the impact of future costs associated with carbon pricingfor aviation.

Operatingcosts

Impacted IAG operating costs are already impacted by fuel price and compliance with EUETS. We anticipate future costs will rise as carbonpricing becomes established at global level in support of Paris Agreement and ICAO CORSIA carbon pricing for aviation from 2021.

Capitalexpenditures/ capitalallocation


Purchase of aircraft informed, among other aspects, by long term assessment of future operating costs including cost of fuel andfuture carbon costs.

Acquisitionsanddivestments


Aircraft purchase and leasing is informed by multiple performance factors including fuel and carbon efficiency. With most aircrafthaving an operating life span of up to 25 years, fuel and carbon efficiency is a key aspect of our decision making and informs ouracquisition and divestment of aircraft into/out of our fleet. Increasingly we are moving more to leasing model rather than to owningaircraft which allows more flexibility in response to potential future costs from fuel and carbon pricing.

Access tocapital

Impacted Investor interest in climate performance is continuing to increase - demonstrated by CDP growth and establishment of TCFD. IAG'sstrong performance in CDP in 2017, ebing the only Airline group to achieve A list status is a significant positive for investors. We havebeen able to promote our excellence in climate related disclosures to investors and are therefore a more attractive proposition on thisaspect of investor ESG ratings.

Assets Impacted Aircraft purchase and leasing is informed by multiple performance factors including fuel and carbon efficiency. With most aircrafthaving an operating life span of up to 25 years, fuel and carbon efficiency is a key aspect of our decision making and informs ouracquisition and divestment of aircraft into/out of our fleet. Increasingly we are moving more to leasing model rather than to owningaircraft which allows more flexibility in response to potential future costs from fuel and carbon pricing.

Liabilities Not yetimpacted

This connects to our asset decisions decsribed above regarding aircraft operating restrictions or other further limits.

Other Please select

C3. Business Strategy

C3.1

(C3.1) Are climate-related issues integrated into your business strategy?Yes

C3.1a

(C3.1a) Does your organization use climate-related scenario analysis to inform your business strategy?Yes, qualitative and quantitative

C-AC3.1b/C-CE3.1b/C-CH3.1b/C-CO3.1b/C-EU3.1b/C-FB3.1b/C-MM3.1b/C-OG3.1b/C-PF3.1b/C-ST3.1b/C-TO3.1b/C-TS3.1b)

(C-AC3.1b/C-CE3.1b/C-CH3.1b/C-CO3.1b/C-EU3.1b/C-FB3.1b/C-MM3.1b/C-OG3.1b/C-PF3.1b/C-ST3.1b/C-TO3.1b/C-TS3.1b)Indicate whether your organization has developed a low-carbon transition plan to support the long-term business strategy.Yes

C3.1c

CDP Page of 7414

(C3.1c) Explain how climate-related issues are integrated into your business objectives and strategy.

Sustainability is a central element of IAG's business strategy and fundamental to our long-term growth. Our priority is to alignsustainability performance and carbon efficiency across the Group and we share expertise and best practice across our airlines. Wehave also set ambitious targets on carbon efficiency and are using all the tools at our disposal - modern aircraft, efficient technology,best operational practice and developing sustainable fuels – to minimise our carbon footprint.

In 2017 IAG revised its business strategy and established three strategic priorities:

1. Strengthening a portfolio of world-class brands. This relates to our sustainability and climate change programmes through thecommunication of our practices to customers and suppliers including on our actions to address climate, waste and energy efficiency.

2. Growing global leadership positions. We achieve this through setting the industry standard for environmental stewardship. Thisrelates to our sustainability and climate change programmes through our mission to be the world’s leading airline group onsustainability;

· taking a leadership position advocating carbon pricing for aviation,

· supporting implementation of CORSIA and mentoring other airlines to ensure CORSIA is adopted successfully.

· leadership on sustainable aviation fuels (SAF), lobbying for SAF inclusion in renewable fuel policies at the Global, EU, and UKlevels and investment as a partner in cutting edge waste-to-fuel production projects in the UK, and

· leadership in carbon disclosures.

3. Enhancing the common integrated platform. We achieve this through reducing costs and improving efficiency by leveraging Groupscale and synergy opportunities. This supports our climate change programme through our Fuel Efficiency Network and theintroduction of specialist software to enable group-wide best practice to reduce fuel use and CO2 emissions.

i) IAG’s internal processes to influence business strategy including on climate change:

IAG’s sustainability programmes are co-ordinated at Group level to develop and implement sustainability policy and strategy,establish targets and ensure governance and accountability across all our operating companies. In addition, Aer Lingus, BritishAirways, Iberia and Vueling maintain their own sustainability programmes. Our Group-wide expert working groups on fuel andcarbon efficiency meet quarterly to review performance in relation to climate change, carbon efficiency and fuel efficiency amongother sustainability measures. These groups are co-ordinated by IAG Group Head of Sustainability and output is reported to theManagement Committee and the IAG Board. The IAG Management Committee provides the forum for review, challenge and settingstrategic direction for IAG’s sustainability programmes including on climate change. Further oversight and direction is provided by theIAG Board and its sub-group, the Audit and Compliance Committee. The IAG Head of Sustainability reports once a year, or morefrequently as required, to each of the Management Committee, the Audit and Compliance Committee and the Board.

ii) How IAG’s business strategy has been influenced by climate change:

a. IAG has established a Group sustainability function to manage climate change impacts of our business and set the goal to be theleading airline group on sustainability with a focus on climate change.

b. IAG has set ambitious targets on carbon efficiency and net carbon reduction

c. IAG has run cross functional climate scenario analysis workshops with representatives including strategy, risk, finance, treasury,digital and operational experts to review opportunities and risks for IAG’s short, medium and long-term strategy. This is feeding backin to the business strategy, risk management function, finance and sustainability governance structures to inform future decisions.

CDP Page of 7415

iii) The aspects of climate change that have influenced IAG’s strategy are:

a. Risk of regulatory changes adding cost distortion to our business

b. Opportunities to develop innovative solutions such as sustainable aviation fuels

c. Managing carbon compliance costs for IAG including managing aircraft fuel efficiency

iv) How IAG’s short term/current strategy has been influenced by climate change:

During 2017 one of IAG’s most substantial business decisions that has been influenced by climate change was the decision to sign apartnership agreement with strategic waste and technology partners and to approve significant financial investment in the UKproduction of sustainable aviation fuels. This presents a major milestone in our low-carbon transition plan and directly addresses afundamental challenge for aviation: to identify sources of energy that can enable aviation to continue to grow while the world moves toa low carbon economy in order to achieve global climate goals.

This pioneering partnership with Velocys to develop a series of waste plants in the UK that will convert hundreds of thousands oftonnes of household waste, otherwise destined for landfill or incineration, into sustainable aviation fuels with at least 60% less CO2compared to fossil-based jet fuel.

Other substantial business decisions made by IAG in 2017 that were influenced by climate change include the purchase of 13 newaircraft with c. 20% lower CO2 emissions than the aircraft they replace and investment in a new group-wide fuel efficiency softwaretool to identify and deliver further fuel and emission reductions across our flight operations.

v) How IAG’s long term strategy has been influenced by climate change:

a. IAG established a Group sustainability function to set and deliver climate change strategy

b. IAG set the goal to become the world’s leading airline group on sustainability with a focus on climate change

c. IAG’s has demonstrated leadership in the aviation industry through lobbying (>5 years) to include sustainable aviation fuels inGovernment renewable fuel incentives

d. IAG has demonstrated leadership (>10 years) in our support for carbon pricing and active participation in the development ofCORSIA

e. IAG has aligned its long-term climate goals with industry targets for international aviation. Our 2050 target directly relates to theParis Agreement goal to limit climate change to less than 2 degrees above pre-industrial levels.

vi) Including climate change in our business strategy is gaining IAG strategic advantage over competitors by:

a. Enabling IAG to influence the design of current and future regulatory measures such as the EU ETS and CORSIA to maximisefocus on environmental integrity while managing potential costs

b. IAG’s proactive role in sustainable aviation fuels will create the platform for a cost-competitive low carbon fuel

CDP Page of 7416

c. IAG’s forward-looking scenario analysis relating to climate change allows informed business planning.

C3.1d

(C3.1d) Provide details of your organization’s use of climate-related scenario analysis.

Climate-relatedscenarios

Details

RCP 2.6 IAG followed the TCFD's six step scenarios analysis process: 1. Establish governance 2. Assess materiality of climate related risks 3. Identify anddefine the scenarios and timescales to be assessed for IAG 4. Evaluate business impacts 5. Identify the potential implications and responses 6.Document and disclose Having engaged external stakeholders in determining materiality of climate change during autumn 2017 (step #2 of thescenario analysis process) we then engaged internal stakeholders in the first of a series of a scenario planning workshops. Internal stakeholdersparticipating the workshop: IAG Strategy, Treasury, Enterprise Risk Management, Investor Relations, Digital Innovation, Procurement and Sustainabilityand our operating company sustainability and fuel efficiency managers. By engaging these teams and agreeing to continue to work together on thisiterative process, we are integrating scenario analysis into the existing strategic business planning processes. IAG followed TCFD recommend practiceusing at least one 2⁰C scenario, consistent with meeting the Paris Agreement Goal (RCP2.6 – Representative Concentration Pathways) as well as analternative high emission scenario (RCP8.5) to understand our potential exposure to plausible physical climate change. As our first approach to climatescenario analysis we judged these IPCC (Intergovernmental Panel on Climate Change) references to offer well described and plausible climatescenarios that provide two contrasting scenarios against which to test impacts for IAG. IAG assessed implications of these two climate scenarios onour business in 2030 assuming we have the same business activities as we do today. 2030 was selected as a more tangible nearer term considerationon route to 2050 which is the target year for our 50% CO2 reduction target. 2⁰C scenario in which we made the following assumptions: • In the periodfrom 2018 to 2030 society acts rapidly with strong policy measures to limit greenhouse gas emissions. • There would be only small additional impact onour business from the physical ramifications of climate change by 2030. • A carbon price of $100 per tonne in 2030 Areas of our organisation weconsidered as part of our climate-related scenario analysis include finance, strategy, operations, procurement, innovation and risk. And we assessedthe effects on input costs, operating costs, revenues, supply chain, and business interruption. Scenario analyses outcomes: Conclusions from our firstclimate scenario analysis exercise included and initial qualitative assessment of potential IAG response in terms of changes to business model, portfoliomix, investments in capabilities and technologies and the potential impact on strategic and financial plans. Broadly the 2 degrees scenariodemonstrated IAG would incur additional operating costs, mainly as a result of the increased cost of carbon. Further work is planned to develop morequantitative conclusions. Initial outcomes and actions from the scenario analysis exercise have been the collaboration with our Innovation andSustainability teams, A) to establish new partnerships which can accelerate progress towards our goals on sustainable fuels, B) explore opportunitiesfor electric aircraft innovation and C) identify further fuel efficiency opportunities in line with our Business Strategy priority 2: 'To grow leadershippositions by setting the industry standard for environmental stewardship'. Specifically we have invited companies with sustainable fuel and fuelefficiency ideas to apply to our innovations accelerator programme ‘Hangar51’ as a way to accelerate our action in this area. In addition, by engagingmultiple teams and agreeing to continue to work together on this iterative process, we are integrating scenario analysis into the existing strategicbusiness planning processes.

Other,pleasespecify(RCP 8.5)

IAG followed TCFD recommendations using at least one 2⁰C scenario, consistent with meeting the Paris Agreement Goal (e.g. RCP2.6) as well as analternative high emission scenario (e.g. RCP8.5) to understand our stressed exposure to plausible physical climate change. As our first approach toclimate scenario analysis we judged these IPCC references to offer well described and plausible climate scenarios that provide two contrastingscenarios against which to test impacts for IAG. IAG qualitatively assessed implications of these two climate scenarios on our business in 2030assuming we have the same business activities as we do today. 2030 was selected as a more tangible nearer term consideration on route to 2050which is the target year for our 50% CO2 reduction target. In the 4⁰C (RCP8.5) scenario we assumed: • From 2018 to 2030 climate policy is lessambitious, aligned to business as usual. • However, emissions are high so the physical manifestations of climate change are increasingly apparent by2030. • Carbon price just a little more than today of $20 per tonne in 2030. Areas of our organisation that participated as part of our climate-relatedscenario analysis included finance, strategy, operations, procurement, innovation and risk. And we assessed the effects on input costs, operatingcosts, revenues, supply chain, and business interruption. Scenario analyses outcomes: Conclusions from our first climate scenario analysis exerciseincluded an initial qualitative assessment of potential IAG response in terms of changes to business model, portfolio mix, investments in capabilities andtechnologies and the potential impact on strategic and financial plans. Broadly the 4 degrees scenario demonstrated IAG would incur additionaloperating costs, mainly as a result of the increased cost of operational disruption due to increased frequency of extreme weather events. Further workis planned to develop more quantitative conclusions. Initial outcomes and actions include collaboration with our Innovations team to establish newpartnerships which deliver better operational performance, efficiency and resilience in line with our Business Strategy priority 3: ‘To enhance thecommon integrated platform and engage in a group-wide innovation and digital mindset to enhance productivity and best serve our customers’.Specifically, we have invited companies with ideas to support operational resilience, including to more extreme weather events, to apply to ourinnovations programme ‘Hangar 51’ to accelerating our action in this area. In addition, by engaging multiple teams and agreeing to continue to worktogether on this iterative process, we are integrating scenario analysis into the existing strategic business planning processes.

C-AC3.1e/C-CE3.1e/C-CH3.1e/C-CO3.1e/C-EU3.1e/C-FB3.1e/C-MM3.1e/C-OG3.1e/C-PF3.1e/C-ST3.1e/C-TO3.1e/C-TS3.1e

(C-AC3.1e/C-CE3.1e/C-CH3.1e/C-CO3.1e/C-EU3.1e/C-FB3.1e/C-MM3.1e/C-OG3.1e/C-PF3.1e/C-ST3.1e/C-TO3.1e/C-TS3.1e)Disclose details of your organization’s low-carbon transition plan.

CDP Page of 7417

Climate change is IAG’s most material sustainability issue. With demand for air travel expected to at least double by 2050, we areusing all the tools at our disposal to decouple aviation growth from a growth in greenhouse gas emissions. Improving our carbonintensity is the first step towards reducing our absolute carbon emissions.

IAG was instrumental in developing the aviation industry’s joint declaration on climate change which was signed in Geneva in 2009by our CEO and others from across the aviation industry at the Global Sustainable Aviation Summit. The industry declaration, whichwe have adopted as IAG policy, follows a three-goal, four-pillar strategy to set aviation on the transition pathway to a low carboneconomy.

Three goals are to deliver:

1. Annual fuel efficiency improvement of at least 1.5%

2. Achieve carbon neutral growth for international aviation from 2020

3. Reduce net aviation CO2 emissions by 50% by 2050 versus 2005 baseline (although our goal predates the Paris Agreement it isconsistent with the ambition to limit climate change to less than 2 degrees temperature increase above pre-industrial levels).

The four 'pillars' are the mechanism to deliver these targets:

1. Technology

2. Operations

3. Infrastructure and

4. Market based measure to enable carbon pricing and reduction

In delivering this transition plan, IAG is driving action across all four areas, for example, we are:

• Investing in modern aircraft with typically 20% lower carbon emissions than the aircraft they replace, the Boeing 787 Dreamliner, theA320neo and the new A350 for example and leading innovation for sustainable aviation fuels, deriving jet fuel from waste, with atleast a 60% reduction in CO2 compared to fossil-jet fuel by investing in two partnerships to build Europe’s first waste-to-fuel plants inthe UK.

• Applying the latest fuel efficiency measures and using our strength as a Group to benchmark and ensure we apply best operationalpractice across our airline fleets. In IAG we have consistently delivered between 1.5% and 2.6% annual fuel efficiency improvement

• Engaging with partners including air traffic control, airport operators and aircraft manufacturers to deliver better flight profiles andprocedures to enable more efficient flying.

• Influencing global policy to promote global carbon pricing for aviation and actively participating in IATA and ICAO efforts to developCORSIA, the market based mechanism that will enable delivery of the target of carbon neutral growth from 2020 and net reduction of50% CO2 by 2050. We have made excellent progress in meeting our first CORSIA deadline of completing our Emissions MonitoringPlan by 30th September 2018 and are on track to start monitoring our emissions for CORSIA from 1st January 2019.

We are pleased to report these measures are taking effect and we are already seeing a decoupling of growth from our environmentalimpact. In 2017 while our business grew 2.6% in Available Seat Kilometres (ASKs) versus 2016, our carbon intensity reduced by2.6% in the same period. Our CO2 emissions intensity has consistently reduced year on year since 2013 and we are on track tomeeting our 2020 target of 87.3gCO2 per passenger kilometre.

CDP Page of 7418

IAG is a founding partner in the UK Sustainable Aviation (SA) coalition group driving cleaner, quieter and smarter solutions for a betteraviation industry. Through our role as previous Chair of SA and current chair of the SA Climate group we have contributed to thedevelopment of a UK Sustainable Aviation Carbon Roadmap to 2050. This represents a first step transition plan for the UK industry.We are now working on further inputs to this plan, using climate scenario analyses, to develop pathways to decarbonise aviationbetween 2050 and 2100.

The important ground work that has already been achieved with the establishment of CORSIA and our innovation in sustainable fuelsmeans we already have in place the fundamental tools needed to deliver our low carbon transition plan. We are continuing to focuson realising the goals and influencing the external factors such as global and domestic policy on carbon pricing and sustainable fuelsto ensure our transition plan is delivered.

C4. Targets and performance

C4.1

(C4.1) Did you have an emissions target that was active in the reporting year?Intensity target

C4.1b

(C4.1b) Provide details of your emissions intensity target(s) and progress made against those target(s).

Target reference numberInt 1

ScopeScope 1

% emissions in Scope76.8

% reduction from baseline year10

MetricGrams CO2e per revenue passenger kilometer*

Base year2014

Start year2014

Normalized baseline year emissions covered by target (metric tons CO2e)25219827

Target year2020

Is this a science-based target?No, but we are reporting another target that is science-based

CDP Page of 7419

% achieved (emissions)51

Target statusUnderway

Please explainThe target is to reduce the intensity of our flight operations by 10% by 2020 (87.3 gCO2/pkm) compared to 2014 (97.5 gCO2/pkm).In 2017, we brought 13 new more efficient aircraft into the fleet which, along with fuel efficiency initiatives, delivered a 2.61% fuelefficiency improvement compared to 2016, representing a saving of 655,720 tonnes of CO2 saved. We are now 3 years into our 6year programme, 51% of the way and on track with 2017 fuel efficiency at 92.3 gCO2/pkm. The target to reduce the intensity of ourflight operations by 10% by 2020 compared to 2014 in gCO2 per passenger kilometres. This represents equivalent CO2 reductionof over 3,000,000 tonnes CO2 by 2020 (based on 2014 emissions).

% change anticipated in absolute Scope 1+2 emissions15.9

% change anticipated in absolute Scope 3 emissions39

Target reference numberInt 2

ScopeScope 1

% emissions in Scope77

% reduction from baseline year

MetricPlease select

Base year2016

Start year2016

Normalized baseline year emissions covered by target (metric tons CO2e)28260000

Target year2017

Is this a science-based target?No, but we are reporting another target that is science-based

% achieved (emissions)2.6

Target statusUnderway

Please explainOur target is to achieve 1.5% improvement in fuel efficiency per year. This is delivered through a basket of measures includinginvestment in aircraft fleet renewal and operational efficiency. This is an aviation industry agreed target supported by IATA whichBritish Airways was instrumental in developing and gaining industry support to adopt it. On average since 2012 (the first year IAGreported) we have consistently exceeded this target achieving an average 1.73% efficiency improvement per year, providingcumulative savings of 4.1 million tonnes CO2 in the 3 years to 2017. In 2017, we brought 13 new more efficient aircraft into the fleetwhich delivered a 2.6% fuel efficiency improvement compared to 2016 representing a saving of 655,720 tonnes of CO2, well aheadof our target 1.5% efficiency improvement per year.

% change anticipated in absolute Scope 1+2 emissions1.73

% change anticipated in absolute Scope 3 emissions7.99

CDP Page of 7420

C4.2

(C4.2) Provide details of other key climate-related targets not already reported in question C4.1/a/b.

TargetOther, please specify (net emissions reduction (Abs 1))

KPI – Metric numeratorScope 1 + Scope 2 (location based) tonnes CO2e combined.

KPI – Metric denominator (intensity targets only)Not relevant - not an intensity target

Base year2005

Start year2009

Target year2050

KPI in baseline year

KPI in target year

% achieved in reporting year0

Target StatusUnderway

Please explainIAG considers this to be an absolute reduction target. However due to CDP guidance on offsetting we are reporting this here. Ourtarget is to achieve a 50% net reduction in emissions by 2050 versus 2005 baseline. This is an aviation industry-wide target whichBritish Airways was instrumental in developing & calculating the science based element. The reduction required is based onaviation emissions in 2005 and the requirement as stated by the IPCC that global CO2 emissions would need to reduce by 50% by2050 to remain within the desired maximum of no more than 2 degrees increase in global average temperature by 2050. This targethas been ratified by the industry and remains the focus of our long term climate strategy. Base year emissions are available for BAand Iberia. For Aer Lingus who were acquired by IAG in 2015 and Vueling who did not exist in 2005, we will capture their emissionsand include within scope of our target. Direct emission reductions will be achieved through IAG’s investment in: • more efficientaircraft technology • more efficient operations • adoption of sustainable alternative fuel Together these measures will see usachieve emissions level with 2005 levels by 2050. Our target is to go beyond that and for aviation the only option is to employ amarket based measure to allow the industry to reduce carbon emissions more cost effectively in other sectors. This enables uswork towards our target of 50% net reduction in CO2 by 2050. Given the baseline year is 2005 and we are reporting progress toend of 2017, on course to 2050, we are now 25% of the way towards 2050. In 2016 the progress made by securing agreement toCORSIA, the mechanism to deliver carbon neutral growth from 2020 (see target Abs2 below) was a significant step towardsachieving our Abs1 target (50% by 2050). Since 2012 (the first year IAG reported as a Group) we have achieved cumulativesavings of 4.1 million tonnes CO2 in the 5 years to 2017, versus business as usual, through investment in new more efficientaircraft as well operational fuel efficiency initiatives. Since 2012, IAG has achieved carbon neutral growth through compliance withthe EU ETS as allowances surrendered have exceed IAG's growth. From 2020, the mechanism we use to achieve Carbon Neutralgrowth will be replaced by CORSIA putting us on track to achieve our 2050 target.

Part of emissions target

Is this target part of an overarching initiative?Other, please specify (IATA Industry Targets)

TargetOther, please specify (Net emissions reduction (abs 2))

KPI – Metric numeratorScope 1 emissions tCO2e

KPI – Metric denominator (intensity targets only)

CDP Page of 7421

Not relevant - not an intensity target

Base year2017

Start year2017

Target year2020

KPI in baseline year30000000

KPI in target year30000000

% achieved in reporting year100

Target StatusUnderway

Please explainOur target was established in 2009 with the goal to achieve carbon neutral growth for international aviation from 2020 (CNG 2020).This is also an aviation industry agreed target supported by IATA which British Airways was instrumental in developing. Due todifferent regulations aviation's international and domestic aviation emissions are managed separately - international aviation isregulated by the UN Specialised agency ICAO and domestic emissions are managed by the state through NDCs which contributeto the Paris Climate agreements as well as through the EU where aviation emissions are managed through the EU EmissionsTrading System. The target of CNG 2020 has been ratified by the industry and adopted by IAG and remains the focus of mediumterm action to address climate change emissions. In 2017 we made a significant step towards this target following ICAO achievedagreement of 191 countries to develop CORSIA, the world’s first global market based measure to address aviation carbonemissions. From 2021, airlines will buy emissions units to offset their share of the sector’s growth emissions to fund sustainablecarbon reduction projects around the world. Successfully implementing CORSIA will allow us to develop further plans to deliver onour longer-term target of a 50 per cent reduction in CO2 emissions by 2050 (i.e. Abs1 above). Note that although the target was setin 2009, the base is 2020. However, due to data entry limitations, 2017 has been entered in the table, as the closest base yearavailable to 2020. Base year emissions of 30 million tonnes of CO2 are the current forecast for IAG absolute emissions in 2020.Our target is to achieve carbon neutral growth from 2020. Since 2012 (the first year IAG reported as a Group) we have achievedcumulative savings of 4.1 million tonnes CO2 in the 5 years to 2017 through investment in new more efficient aircraft as welloperational fuel efficiency initiatives. In 2017 we made significant progress towards our target of carbon neutral growth from 2020,by working with ICAO to agree the monitoring, reporting and verification compliance rules for CORSIA. IAG has effectivelyexceeded carbon neutral growth since we joined the EU ETS in 2012 - this is because the EU ETS allowances purchased haveexceed IAG's growth. From mechanism to achieve Carbon Neutral Growth from 2020 will be CORSIA.

Part of emissions target

Is this target part of an overarching initiative?Other, please specify (IATA Industry Targets)

C4.3

(C4.3) Did you have emissions reduction initiatives that were active within the reporting year? Note that this can includethose in the planning and/or implementation phases.Yes

C4.3a

CDP Page of 7422

(C4.3a) Identify the total number of projects at each stage of development, and for those in the implementation stages, theestimated CO2e savings.

Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *)

Under investigation 3 34473

To be implemented* 7 20000

Implementation commenced* 8 75

Implemented* 27 96166

Not to be implemented 0 0

C4.3b

(C4.3b) Provide details on the initiatives implemented in the reporting year in the table below.

Activity typeEnergy efficiency: Processes

Description of activityProcess optimization

Estimated annual CO2e savings (metric tonnes CO2e)12110

ScopeScope 1

Voluntary/MandatoryVoluntary

Annual monetary savings (unit currency – as specified in CC0.4)1928332

Investment required (unit currency – as specified in CC0.4)0

Payback period<1 year

Estimated lifetime of the initiative16-20 years

CommentB787 descent software modification to operate more efficient continuous descent profile




ScopeScope 1




CDP Page of 7423



CommentReduction of additional trip fuel using training and awareness to optimise fuel carried.




ScopeScope 1




Payback period1-3 years


CommentRevised on board catering product including Buy on Board and lighter cutlery and improved loading mechanisms to minimise waste,weight carried and fuel and emissions




ScopeScope 1






CommentReduction of auxilliary power units (APU - the small engine in the tail of an aircraft) usage at outstations , involving multiple training,awareness and equipment improvements to optimize use of auxilliary power units while aircraft are on stand.

CDP Page of 7424




ScopeScope 1






CommentImproving step climb procedures to optimise aircraft fuel burn during climb phase.




ScopeScope 1






CommentImprovement of fixed electrical ground power infrastructure




CDP Page of 7425

ScopeScope 1






CommentLanding lights A320s new policy implemented following collaboration with Airbus to reduce requirement to deploy landing lights tooearly, avoiding drag and saving fuel and emissions.




ScopeScope 1






CommentAircraft Zero Fuel Weight calculation method was improved in the aicraft flight planning software to enable more accurateprediction of fuel requirements pre-flight.




ScopeScope 1



CDP Page of 7426




CommentImprovement of BA A380 departure procedures from Heathrow to improve ground taxiing procedure.




ScopeScope 1






CommentCollaboration with airports and air traffic control at Hong Kong and Dubai to improve altitude profile and straighten air routes.




ScopeScope 1






Comment

CDP Page of 7427

Weight reduction associated with refreshes of Boeing 777 avionics and Boeing 747 cabin.




ScopeScope 1





Estimated lifetime of the initiativeOngoing

CommentReplacement of cargo ULD containers with lighter versions




ScopeScope 1



Investment required (unit currency – as specified in CC0.4)



CommentOptimisation of company routes in flight planning software to improve fuel savings




CDP Page of 7428

ScopeScope 1






CommentReconfiguration of 2 Airbus A320 aircraft from medium haul to short haul flying




ScopeScope 1






CommentReduced engine taxi in and out




ScopeScope 1



Investment required (unit currency – as specified in CC0.4)

CDP Page of 7429

0



CommentFuel efficiency initiatives by Vueling flight crew.

Activity typeLow-carbon energy purchase

Description of activityOther, please specify (Wind)


ScopeScope 2 (market-based)






CommentSwitch of British Airways main facilities management contract for electricity to a green tariff.

Activity typeEnergy efficiency: Building services

Description of activityOther, please specify (combination of factors. See below.)


ScopeScope 2 (market-based)






CommentReduction in scope 2 due to: British Airways: Mothballing of paint bay, new energy saving lighting projects on Heathrow Operations

CDP Page of 7430

base, and substantial closure of Component Engineering facility in Hayes. Iberia: Relocation of jobs to consolidate office space andraising of colleague awareness to regulate air conditioning and heating thermostats.

C4.3c

(C4.3c) What methods do you use to drive investment in emissions reduction activities?

Method Comment

Internal price oncarbon

Business cases are required to identify appropriate carbon costings (e.g. EU ETS compliance cost) for those projects impacting on energyconsumption, fuel efficiency or aircraft weight or aircraft purchasing. Operational decisions such as the need to carry potable water or totanker fuel when fuel supply is uncertain at the outstation are made with a price of carbon included in the business case. Currently we areusing a 14 euros per tonne price of carbon (approximately equal to the EUETS current price) and we review this annually to reflectchanges in the market price of carbon.

Internalincentives/recognitionprograms

Fuel efficiency, energy, and environmental managers are rewarded for achieving fuel/energy efficiency KPIs or climate change policyKPIs.

Employee engagement The Fuel Efficiency teams engage with local station managers and provide instructions on fuel efficiency procedures.For example, BritishAirways Fuel Efficiency Working Group provides station managers with instructions on the procedure for using the Auxiliary Power Unit(APU). Stations receive monthly reports on APU performance.In addition, pilots attend professional standards assessments. Theseassessments include a component of commercial awareness, highlighting the importance and potential impact of fuel saving activities.InVueling annual training sessions are held to brief all pilots on fuel efficiency opportunities and priority initiatives. In Aer Lingus employeesincluding pilots are engaged using the fuel management system to demonstrate data that underpins the need for best operationalpractices.

Dedicated budget forenergy efficiency

At British Airways there is a central finance mechanism to drive investment across departments for aircraft fuel efficiency projects.

Compliance withregulatoryrequirements/standards

Emissions trading costs allocation and accounting across departments within IAG carriers.

Compliance withregulatoryrequirements/standards

EU-ETS compliance has incentives attached for departments in Vueling.

Please select

C4.5

(C4.5) Do you classify any of your existing goods and/or services as low-carbon products or do they enable a third party toavoid GHG emissions?Yes

C4.5a

CDP Page of 7431

(C4.5a) Provide details of your products and/or services that you classify as low-carbon products or that enable a third partyto avoid GHG emissions.

Level of aggregationProduct

Description of product/Group of productsBritish Airways’ carbon fund uses customer donations from flight bookings on ba.com to invest in renewable energy and energyefficiency projects to provide community benefits and mitigate climate change. The Carbon Fund supported three additional energyprojects in 2017, bringing the total to 24, exceeding €2 million in community benefits. We invested in projects for schools andcommunity leisure centres in the UK as well as supporting the Ol Pejeta Conservancy in Kenya with a solar pump to provide areliable water supply for local communities and wildlife. The solar power also provides free Wi-Fi for local schools.

Are these low-carbon product(s) or do they enable avoided emissions?Avoided emissions

Taxonomy, project or methodology used to classify product(s) as low-carbon or to calculate avoided emissionsOther, please specify (Avoided emisisons)

% revenue from low carbon product(s) in the reporting year1

CommentThe success of the BA's original project in Kenya in 2016 has led to the planning of 30 additional similar projects offering valuableclimate, wildlife, social and other sustainability co-benefits as part of the project. Further work is being done to revise the carbonFund pages on BA.com to encourage wider uptake .

C5. Emissions methodology

C5.1

CDP Page of 7432

(C5.1) Provide your base year and base year emissions (Scopes 1 and 2).

Scope 1

Base year startJanuary 1 2011

Base year endDecember 31 2011

Base year emissions (metric tons CO2e)22578170

Comment

Scope 2 (location-based)




Comment

Scope 2 (market-based)




Comment

C5.2

(C5.2) Select the name of the standard, protocol, or methodology you have used to collect activity data and calculate Scope1 and Scope 2 emissions.The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition)

C6. Emissions data

C6.1

CDP Page of 7433

(C6.1) What were your organization’s gross global Scope 1 emissions in metric tons CO2e?

Row 1

Gross global Scope 1 emissions (metric tons CO2e)28764427

End-year of reporting period<Not Applicable>

CommentDirect emissions associated with our flying. • Scope 1 CO2e emissions have increased versus last year by 1.8% but at a lower ratethan activity of the airlines (+2.6% available seat kilometres and +4.1% passenger numbers). • IAG contributed 3 million tonnes ofcarbon reductions through our compliance with the EU ETS, bringing our net CO2 emissions down to around 25.8 million tonnes(provisional figure pending EU ETS verification). In line with industry commitments which we were instrumental in securing in 2009,we have two targets designed to address our direct CO2 emissions over different timescales: To achieve carbon neutral growth forour international aviation from 2020. 50% net reduction in CO2 emissions by 2050 versus 2005 baseline (23.24 million tonnes).

C6.2

(C6.2) Describe your organization’s approach to reporting Scope 2 emissions.

Row 1

Scope 2, location-basedWe are reporting a Scope 2, location-based figure

Scope 2, market-basedWe are reporting a Scope 2, market-based figure

CommentIn 2017 we improved our Scope 2 methodology by applying the most appropriate Spanish Government conversion factors for ourelectricity use in Spain. Fluctuations in trend are influenced by airline acquisitions as well as the trend towards less carbonintensive electricity across Spain, the UK and Ireland. Since publishing our initial data in our 2017 annual report, we have expandedthe scope of our Scope 2 reporting for BA from UK to also include rest of world. In addition we have gathered additional data aboutthe proportion of low carbon sources in the supply for Iberia and Vueling. • 39% of Group electricity use in 2017 was fromrenewable sources, mainly wind. • Renewable electricity use across the Group in 2017: British Airways 47%, Aer Lingus 49% andIberia and Vueling 14% each, ( this data is updated from our 2017 annual report reflecting the new data that was available).

C6.3

(C6.3) What were your organization’s gross global Scope 2 emissions in metric tons CO2e?

Row 1

Scope 2, location-based92638

Scope 2, market-based (if applicable)61916

End-year of reporting period<Not Applicable>

CommentOur Scope 2 location based emissions have reduced by 12.2% versus last year and our market based emissions have reduced by33% in the same period. Scope 2 emissions reported here reflect national (location based) grid mix for UK, Spain and Ireland. Wehave been reporting Scope 2, location based since 2011 while 2016 was our first year reporting Scope 2, market based. • Scope 2emisions in 2017 were 12.1% less than in 2016, continuing our strong downward trend in energy consumption and associatedemissions. • Fluctuations in trend are influenced by airline acquisitions as well as the trend towards less carbon intensive electricityacross Spain, the UK and Ireland. • 39% of Group electricity use in 2017 was from renewable sources, mainly wind. • Renewableelectricity use across the Group in 2017: British Airways 47%, Aer Lingus 49% and Iberia and Vueling 14% each.

CDP Page of 7434

C6.4

(C6.4) Are there any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissionsthat are within your selected reporting boundary which are not included in your disclosure?Yes

C6.4a

CDP Page of 7435

(C6.4a) Provide details of the sources of Scope 1 and Scope 2 emissions that are within your selected reporting boundarywhich are not included in your disclosure.

SourceIberia and Vueling - GHG emissions from natural gas and electricity use at non-Spanish facilities (e.g. from a small office leased ata destination airport).

Relevance of Scope 1 emissions from this sourceEmissions are not relevant

Relevance of location-based Scope 2 emissions from this sourceEmissions are not relevant

Relevance of market-based Scope 2 emissions from this source (if applicable)Emissions are not relevant

Explain why the source is excludedGHG emissions from natural gas and electricity use at non-Spanish facilities (e.g. from a small office leased at a destination airport)are very small (significantly less than 1 % of Scope 1 and 2 emissions) and anticipated at less than 5% of Scope 2 emissions sodetermined as not relevant. As data availability improves over time, we will endeavour to include an estimate for these emissions inupcoming years.

SourceUnintentional leakage of fluorinated gases used for refrigeration, fire suppression, and as engineering solvents (i.e. gases notintentionally emitted) - specifically HFCs, Methylene Chloride, and Halons (though Halon emission from deployment of fireextinguishers is included).


Relevance of location-based Scope 2 emissions from this sourceNo emissions from this source

Relevance of market-based Scope 2 emissions from this source (if applicable)No emissions from this source

Explain why the source is excludedIAG operator British Airways reported these emissions for 2012. From 2013 onward, we have flagged that this emissions data isnot material (less than 10 tonnes C02e in total), that gathering the data related to unit servicing and leakage is very timeconsuming, and that the calculation was a best guess (but not very precise). It was decided to exclude these potential emissionsand we instead focus on capturing the actual emissions of halons from deployment of fire suppression devices, which is included in2016 reporting.

SourceAn element of Aer Lingus energy and water consumption/emissions data at out stations.


Relevance of location-based Scope 2 emissions from this sourceEmissions are not relevant

Relevance of market-based Scope 2 emissions from this source (if applicable)Emissions are not relevant

Explain why the source is excludedEnergy and water consumption/emissions data is for Dublin and Shannon only, we do not have that data for Cork. We have notprovided some outstation data of which the main stations are London Heathrow (two offices, lounge, line maintenance facility of340sq.m. (Cambridge Building), New York (offices at Jericho, lounges) and Belfast. Anticipated at less than 5% of Scope 2emissions so determined as not relevant however as data availability improves over time, we will endeavour to include an estimatefor these emissions in upcoming years.

C6.5

CDP Page of 7436

(C6.5) Account for your organization’s Scope 3 emissions, disclosing and explaining any exclusions.

Purchased goods and services

Evaluation statusRelevant, calculated

Metric tonnes CO2e430

Emissions calculation methodologyData from suppliers and from invoices used to calculate water useage. Conversion factors applied to calculate CO2e according toguidance from UK and Spanish governments.

Percentage of emissions calculated using data obtained from suppliers or value chain partners100

Explanation

Capital goods



Emissions calculation methodologyAircraft manufacture and disposal comprises 18% of our scope 3 emissions, data estimates to calculate these two aspects werederived from suppliers information and Government sourced conversion factors.


ExplanationAircraft manufacture and disposal comprises 18% of our scope 3 emissions, data estimates to calculate this were derived fromsuppliers information and Government sourced conversion factors.

Fuel-and-energy-related activities (not included in Scope 1 or 2)



Emissions calculation methodologyThis aspect includes Fossil fuel production and Fuel prodution for energy generation. The first of these, Fossil fuel production,accounts for 71% of our total Scope 3 CO2 emissions. Data estimates to calculate these were derived from suppliers informationand Government sourced conversion factors.


Explanation

CDP Page of 7437

Upstream transportation and distribution



Emissions calculation methodology"Upstream transportation and distribution includes Fuel burn from subcontractors' ground vehicles, Vehicles used in hub operations,Vehicles for fuel or cargo trucking "


ExplanationBA Calculated, and includes RFS cargo trucking, DHL fuel trucking, aircraft fuel trucking. For other airlines estimated based on BAratio to tonnes fuel.

Waste generated in operations



Emissions calculation methodologyIncludes waste to landfill, waste incinerated and waste recycled. BA Calculated, and includes waste landfill gases, combustion,incineration and recycling. For others estimated based on BA ratio to tonnes fuel.


ExplanationBA Calculated, and includes waste landfill gases, combustion, incineration and recycling. For others estimated based on BA ratio totonnes fuel.

Business travel



Emissions calculation methodologyBA Calculated, and includes business travel mileage claims and flying on non IAG carriers. For other operators values estimatedbased on BA ratio to average manpower equivalent (number of staff)


ExplanationBA Calculated, and includes business travel mileage claims and flying on non IAG carriers (staff travel on IAG carriers is capturedin scope 1). For other operators values estimated based on BA ratio to average manpower equivalent (number of staff)

CDP Page of 7438

Employee commuting



Emissions calculation methodologyBA Calculated, and includes employee commuting on staff buses. For other operators values estimated based on BA ratio toaverage manpower equivalent (number of staff).


ExplanationBA Calculated, and includes employee commuting on staff buses. For other operators values estimated based on BA ratio toaverage manpower equivalent (number of staff) .

Upstream leased assets



Emissions calculation methodologyIncludes seasonal lease of aircraft and fuel upstream emissions.


ExplanationEstimated from supplier data where available and only where IAG operators have relevant activities.

Downstream transportation and distribution



Emissions calculation methodologyIncludes the following Types of emissions: - 3rd party air freight haulage for IAG Cargo - IAG Cargo's Road Feeder Servicetrucking (Global) Cargo trucking from upstream transportation included into here) IAG cargo emissions from (1) subcontracted airfreight, (2) subcontracted ground fleet. We primarily calculated these emissions using actual fuel burn.


ExplanationApplying the DEFRA conversion factors for (1) diesel, (2) aviation turbine fuel - we multiplied actual fuel burn by the relevantDEFRA conversion factor. For a few instances of subcontracted airfreight, we could not access primary fuel burn data. To estimatethe emissions, we multiplied the total CTK (cargo-tonne kilometres) by our GSS freighters' average 'tonnes C02e per CTK' ratio.

CDP Page of 7439

Processing of sold products

Evaluation statusNot relevant, explanation provided

Metric tonnes CO2e0

Emissions calculation methodologyThis category does not apply to IAG. IAG offers air travel and transport services. As our 'product' is a transportation service ratherthan a physical item, the 'processing of sold products' is not relevant.


ExplanationThis category does not apply to IAG. IAG offers air travel and transport services. As our 'product' is a transportation service ratherthan a physical item, the 'processing of sold products' is not relevant.

Use of sold products


Metric tonnes CO2e0

Emissions calculation methodologyThis category does not apply to IAG. IAG offers air travel and transport services. As our 'product' is a transportation service ratherthan a physical item, the 'use of sold products' is not relevant.


ExplanationThis category does not apply to IAG. IAG offers air travel and transport services. As our 'product' is a transportation service ratherthan a physical item, the 'use of sold products' is not relevant.

End of life treatment of sold products


Metric tonnes CO2e0

Emissions calculation methodologyThis category does not apply to IAG. IAG offers air travel and transport services. As our 'product' is a transportation service ratherthan a physical item, there is no relevant 'end of life' waste disposal-related emissions. If interested in our suppliers' productemissions, we estimate the emissions from aircraft manufacturing and disposal in the 'Capital Goods' section above.


ExplanationThis category does not apply to IAG. IAG offers air travel and transport services. As our 'product' is a transportation service ratherthan a physical item, there is no relevant 'end of life' waste disposal-related emissions. If interested in our suppliers' productemissions, we estimate the emissions from aircraft manufacturing and disposal in the 'Capital Goods' section above.

CDP Page of 7440

Downstream leased assets


Metric tonnes CO2e0

Emissions calculation methodologyAs a general rule IAG does not lease it's aircraft to other operators. The short-term lease of an aircraft to a 3rd party does occurfrom time to time. For example, in 2015 Vueling operated an ACMI for Evelop in wet lease modality (Technical Crew + Cabin Crew)from the bases of Tenerife, Barcelona and Palma de Mallorca. However, this is incidental rather than a core business activity. Dueto the infrequent and small scale nature of this, the emissions associated with downstream leased assets are not materiallyrelevant.


ExplanationThis category is not relevant as IAG is not an aircraft leasing company. The short-term lease of an aircraft to a 3rd party does occurfrom time to time. For example, in 2015 Vueling operated an ACMI for Evelop in wet lease modality (Technical Crew + Cabin Crew)from the bases of Tenerife, Barcelona and Palma de Mallorca. However, this is incidental rather than a core business activity.

Franchises



Emissions calculation methodologyEstimate using fuel burn per km travelled for specific aircraft types.


ExplanationThe airlines Sunair and Comair are British Airways franchises but not within British Airways operational control although they arestill relevant emissions sources. 2015 was the first year we have calculated these emissions and they are included again for 2017.Similarly, Air Nostrum is an Iberia franchise not under Iberia operational control and Stobart Air is an Aer Lingus franchise, also notunder Aer Lingus operational control. Air Nostrum and Stobart Air emissions are included for the first time in 2017.

Investments



Emissions calculation methodologyEmissions from natural gas and electricity consumption at properties with the BA Pensions property portfolio. The natural gas andelectricity kilowatt figures are multiplied by the relevant UK Gov conversion factors into CO2e.


ExplanationBA Pensions owns a portfolio of properties across the UK. This figure represents the CO2e emissions resulting from natural gasand electricity consumption at these sites.

CDP Page of 7441

Other (upstream)



Emissions calculation methodologyTo capture sum of total BA total scope 3 emissions consistent with verified


Explanation

Other (downstream)



Emissions calculation methodologyIberia scope 3 'other'


Explanation

C6.7

(C6.7) Are carbon dioxide emissions from biologically sequestered carbon relevant to your organization?No

C6.10

CDP Page of 7442

(C6.10) Describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tons CO2e per unitcurrency total revenue and provide any additional intensity metrics that are appropriate to your business operations.

Intensity figure0.0012562

Metric numerator (Gross global combined Scope 1 and 2 emissions)28857065

Metric denominatorunit total revenue

Metric denominator: Unit total22972000000

Scope 2 figure usedLocation-based

% change from previous year0.06

Direction of changeDecreased

Reason for changeIAG's total revenue increased 1.79% in 2017 versus 2016. Available seat kilometres flown increased 2.6% on 2016, while ourscope 1 emissions grew 1.8%. This reflects improvements in operational fuel efficiency from the introduction of new more efficientaircraft, retirement of older aircraft and delivery of multiple operational fuel efficiency initiatives. Significant reductions in our scope 2emissions (-12.1%) were also achieved through efficiency initiatives, although scope 2 comprises just 0.3%. Scope 1 initiatives aredetailed in question 4.3ab. The main scope 2 initiatives that have impacted this are: British Airways: Mothballing of paint bay, newenergy saving lighting projects on Heathrow Operations base, and substantial closure of Component Engineering facility in Hayes.Iberia: Relocation of jobs to consolidate office space and raising of colleague awareness to regulate air conditioning and heatingthermostats.

C-TS6.15

CDP Page of 7443

(C-TS6.15) What are your primary intensity (activity-based) metrics that are appropriate to your emissions from transportactivities in Scope 1, 2, and 3?

Aviation

Scopes used for calculation of intensitiesReport just Scope 1

Intensity figure92.3

Metric numerator: emissions in metric tons CO2e28416298

Metric denominator: unitp.km

Metric denominator: unit total307856297603

% change from previous year-2.6

Please explain any exclusions in your coverage of transport emissions in selected category, and reasons for change inemissions intensity.Grammes of CO2 per passenger kilometre is a standard industry measure of flight efficiency. In 2017 IAG achieved 2.6%improvement in annual fuel efficiency compared to 2016, continuing to exceed industry target of 1.5%. This improvement is due toa combination of higher load factors, better cargo performance particularly at British Airways and Aer Lingus and an increased mixof longhaul flying at Aer Lingus as well as the delivery of fuel efficiency improvements from new aircraft and operational efficiencyinitiatives. Note that this metric is CO2 and not CO2e in line with industry standard practice. The reduction in flight only emissionsintensity of 2.6% is particularly notable given that equivalent passenger kilometers flown increased by 4.56% in the same period.

ALL

Scopes used for calculation of intensitiesReport Scope 1 + 2

Intensity figure0.3

Metric numerator: emissions in metric tons CO2e92146

Metric denominator: unitp.km

Metric denominator: unit total307856297603

% change from previous year-14.3

Please explain any exclusions in your coverage of transport emissions in selected category, and reasons for change inemissions intensity.Energy efficiency per passenger kilometre (gCO2e/pkm) This is a new metric for IAG in 2017, designed to monitor our energyefficiency (Scope 2) as a function of our business activity (equivalent passenger kilometres). It complements our flight onlyemissions intensity metric described above. The reduction in Scope 2 emissions intensity of 14.29% is particularly notable giventhat equivalent passenger kilometres flown increased by 4.56% in the same period. This was achieved through a number ofinitiatives including: • British Airways Paint Bay was mothballed, new energy saving lighting projects on the Heathrow Operationsbase and substantial closure of British Airways Component Engineering facility in Hayes have made significant contributions toenergy reductions. • Iberia relocated jobs to consolidate office space, and raised awareness among employees to regulate the airconditioning and heating thermostats. • Against the IAG general trend general, Vueling electricity use has increased since 2014due to new 24/7 departments, improved air conditioning and increase of 35% employees and longer opening of the canteenfacilities at the headquarters.

C7. Emissions breakdowns

CDP Page of 7444

C7.1

(C7.1) Does your organization have greenhouse gas emissions other than carbon dioxide?Yes

C7.1a

(C7.1a) Break down your total gross global Scope 1 emissions by greenhouse gas type and provide the source of each usedgreenhouse warming potential (GWP).

Greenhousegas

Scope 1emissions(metrictons ofCO2e)

GWP Reference

CH4 14953 Other, please specify (UK Department for Transport)We have reported CO2 emissions using state approved emissions factors across our operations in the UK, Spain and Ireland. Therelevant emissions factors for CH4 is not provided by the Irish SEAI or the Spanish government. As a result we have used the UKDepartment for Transport's figures. This has resulted in a small disparity between our overall scope 1 as measured in CO2e and the sumof the reported emissions. We are confident that this is simply due to the lack of available conversion factors. We have therefore made asmall adjustment so that the overall scope 1 data reconciles.

N2O 254449 Other, please specify (UK Department for Transport)We have reported CO2 emissions using state approved emissions factors across our operations in the UK, Spain and Ireland. Therelevant emissions factors for CH4 is not provided by the Irish SEAI or the Spanish government. As a result we have used the UKDepartment for Transport's figures. This has resulted in a small disparity between our overall scope 1 as measured in CO2e and the sumof the reported emissions. We are confident that this is simply due to the lack of available conversion factors. We have therefore made asmall adjustment so that the overall scope 1 data reconciles.

CO2 28495025 IPCC Fifth Assessment Report (AR5 – 100 year)

C7.2

(C7.2) Break down your total gross global Scope 1 emissions by country/region.

Country/Region Scope 1 emissions (metric tons CO2e)

United Kingdom of Great Britain and Northern Ireland 18694119

Spain 8060503

Ireland 2009805

C7.3

(C7.3) Indicate which gross global Scope 1 emissions breakdowns you are able to provide.By business division

C7.3a

CDP Page of 7445

(C7.3a) Break down your total gross global Scope 1 emissions by business division.

Business division Scope 1 emissions (metric ton CO2e)

British Airways 18694119

Iberia 5574366

Vueling 2486137

Aer Lingus 2009805

C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4

(C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4) Break down your organization’s total grossglobal Scope 1 emissions by sector production activity in metric tons CO2e.

Gross Scope 1emissions, metrictons CO2e

Net Scope 1emissions , metrictons CO2e

Comment

Cement productionactivities

<Not Applicable> <Not Applicable> <Not Applicable>

Chemicals productionactivities


Coal productionactivities


Electric utilitygeneration activities


Metals and miningproduction activities


Oil and gasproduction activities(upstream)


Oil and gasproduction activities(downstream)


Steel productionactivities


Transport OEMactivities


Transport servicesactivities

28698902 <Not Applicable> This relates to our Scope 1 emissions arising from aircraft fuel burn only. It does not includedemissions from ground vehicles and other equipment which are included in our overall Scope1 figure.

C7.5

(C7.5) Break down your total gross global Scope 2 emissions by country/region.

Country/Region Scope 2, location-based (metric tonsCO2e)

Scope 2, market-based (metric tonsCO2e)

Purchased and consumedelectricity, heat, steam orcooling (MWh)

Purchased and consumed low-carbon electricity, heat,steam or cooling accounted in market-based approach(MWh)

United Kingdom ofGreat Britain andNorthern Ireland

63349 35117 181592.68 117765

Spain 24979 24852 63723.11 26190

Ireland 3818 1947 7907.69 3875

C7.6

CDP Page of 7446

(C7.6) Indicate which gross global Scope 2 emissions breakdowns you are able to provide.By business division

C7.6a

(C7.6a) Break down your total gross global Scope 2 emissions by business division.

Business division Scope 2, location-based emissions (metric tons CO2e) Scope 2, market-based emissions (metric tons CO2e)

British Airways 63841 35117

Iberia 24339 24215

Vueling 640 637

Ireland 3818 1947

C-CE7.7/C-CH7.7/C-CO7.7/C-MM7.7/C-OG7.7/C-ST7.7/C-TO7.7/C-TS7.7

(C-CE7.7/C-CH7.7/C-CO7.7/C-MM7.7/C-OG7.7/C-ST7.7/C-TO7.7/C-TS7.7) Break down your organization’s total gross globalScope 2 emissions by sector production activity in metric tons CO2e.

Scope 2, location-based, metric tonsCO2e

Scope 2, market-based (if applicable), metric tonsCO2e

Comment

Cement production activities <Not Applicable> <Not Applicable> <NotApplicable>

Chemicals production activities <Not Applicable> <Not Applicable> <NotApplicable>

Coal production activities <Not Applicable> <Not Applicable> <NotApplicable>

Metals and mining production activities <Not Applicable> <Not Applicable> <NotApplicable>

Oil and gas production activities (upstream) <Not Applicable> <Not Applicable> <NotApplicable>

Oil and gas production activities(downstream)

<Not Applicable> <Not Applicable> <NotApplicable>

Steel production activities <Not Applicable> <Not Applicable> <NotApplicable>

Transport OEM activities <Not Applicable> <Not Applicable> <NotApplicable>

Transport services activities 92638 61916

C7.9

(C7.9) How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to those of theprevious reporting year?Increased

C7.9a

CDP Page of 7447

(C7.9a) Identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined) and for each of themspecify how your emissions compare to the previous year.

Change inemissions(metrictonsCO2e)

Directionof change

Emissionsvalue(percentage)

Please explain calculation

Change inrenewableenergyconsumption

19724 Decreased 0.07 39% of Group electricity use in 2017 was from renewable sources, mainly wind. This com-pares to 11% in2016. o Renewable electricity use across the Group in 2017: British Airways 47%, Aer Lin-gus 49% andIberia and Vueling 14% each. o British Airways electricity tariff was changed to renewables in September2017. Last year 19724 tCO2e were reduced by this change in our renewable energy consumption. Thisconstitutes a 33% decrease in our scope 2 market based emissions. As a percentage of combined scope 1and 2 emissions we arrive at a figure of 0.07%, i.e. (19724/28857065)*100 for our use of renewable energy.

Otheremissionsreductionactivities

76442 Decreased 0.26 Initiatives to reduce emissions delivered the following savings: Scope 1: 65,224 tCO2e Scope 2 (marketbased): 11,218 tCO2e Our total S1 and S2 emissions in the previous year was 28,857,065 tCO2e Last year76,442 tCO2e were reduced by these initiatives. As a percentage of combined scope 1 and 2 emissions wearrive at a reduction of 0.26%, i.e. (76,442/28,857,065)*100

Divestment <NotApplicable>

Acquisitions <NotApplicable>

Mergers <NotApplicable>

Change inoutput

588091 Increased 2 An increase of global scope 1 and scope 2 emissions of 2% is due to an increase in output of our businessoperations which can be measured by our available seat kilometres (up 2.6% versus 2016), as well as Cargotonne kilometres which were up 5.6% on the previous year. However, due to efficiency savings outlined inthe other rows of this question along with C4.3b, our global scope 1 and scope 2 emissions increased in2017 by 1.73% overall com-pared to 2016. The relatively small increase in emissions of just 1.73% is due toimprovements including higher load factors, better cargo performance particularly at British Airways and AerLingus and an increased mix of longhaul flying at Aer Lingus as well as a 16% reduction in scope 2emissions due to energy efficiencies. Calculations: Change in emissions due to increase ofoutput/scope1+2emissions for 2016: =588091/28857065 = 2.04% Change in overall emissions includingefficiency projects/scope1+2 emissions for 2016: (588091-19724-76442)/28857065 = 1.73%

Change inmethodology

<NotApplicable>

Change inboundary

<NotApplicable>

Change inphysicaloperatingconditions

<NotApplicable>

Unidentified <NotApplicable>

Other <NotApplicable>

C7.9b

(C7.9b) Are your emissions performance calculations in C7.9 and C7.9a based on a location-based Scope 2 emissions figureor a market-based Scope 2 emissions figure?Market-based

C8. Energy

C8.1

(C8.1) What percentage of your total operational spend in the reporting year was on energy?More than 30% but less than or equal to 35%

CDP Page of 7448

C8.2

(C8.2) Select which energy-related activities your organization has undertaken.

Indicate whether your organization undertakes this energy-related activity

Consumption of fuel (excluding feedstocks) Yes

Consumption of purchased or acquired electricity Yes

Consumption of purchased or acquired heat No

Consumption of purchased or acquired steam No

Consumption of purchased or acquired cooling No

Generation of electricity, heat, steam, or cooling No

C8.2a

(C8.2a) Report your organization’s energy consumption totals (excluding feedstocks) in MWh.

Heating value MWh from renewablesources

MWh from non-renewablesources

Total MWh

Consumption of fuel (excluding feedstock) LHV (lower heatingvalue)

0 114180728 114180728

Consumption of purchased or acquired electricity <Not Applicable> 98034 155189 253223

Consumption of purchased or acquired heat <Not Applicable> <Not Applicable> <Not Applicable> <NotApplicable>

Consumption of purchased or acquired steam <Not Applicable> <Not Applicable> <Not Applicable> <NotApplicable>

Consumption of purchased or acquired cooling <Not Applicable> <Not Applicable> <Not Applicable> <NotApplicable>

Consumption of self-generated non-fuel renewableenergy

<Not Applicable> <Not Applicable> <Not Applicable> <NotApplicable>

Total energy consumption <Not Applicable> 98034 114335917 114433951

C8.2b

(C8.2b) Select the applications of your organization’s consumption of fuel.

Indicate whether your organization undertakes this fuel application

Consumption of fuel for the generation of electricity No

Consumption of fuel for the generation of steam No

Consumption of fuel for the generation of cooling No

Consumption of fuel for co-generation or tri-generation No

C8.2c

(C8.2c) State how much fuel in MWh your organization has consumed (excluding feedstocks) by fuel type.

Fuels (excluding feedstocks)Jet Kerosene

Heating valueLHV (lower heating value)

CDP Page of 7449

Total fuel MWh consumed by the organization110102795

MWh fuel consumed for the self-generation of electricity<Not Applicable>

MWh fuel consumed for self-generation of heat<Not Applicable>

MWh fuel consumed for self-generation of steam<Not Applicable>

MWh fuel consumed for self-generation of cooling<Not Applicable>

MWh fuel consumed for self- cogeneration or self-trigeneration<Not Applicable>

Fuels (excluding feedstocks)Natural Gas

Heating valueHHV (higher heating value)







Fuels (excluding feedstocks)Gas Oil








Fuels (excluding feedstocks)Gas Oil

CDP Page of 7450








Fuels (excluding feedstocks)Diesel








Fuels (excluding feedstocks)Petrol

Heating valueHHV (higher heating value)







CDP Page of 7451

C8.2d

CDP Page of 7452

(C8.2d) List the average emission factors of the fuels reported in C8.2c.

Diesel

Emission factor2.60016

Unitkg CO2e per liter

Emission factor sourceUK Department for Transport

Comment

Gas Oil


Unitkg CO2e per MWh

Emission factor sourceUK DfT, Spanish Government, Irish SEAI

CommentThere are slight differences between the emissions factors used by the three states where IAG conducts business. The emissionfactor stated above is an average value that takes the proportion of consumption by state in to account.

Jet Kerosene


Unitmetric tons CO2e per metric ton


CommentIreland and Spain do not report an emissions factor for CO2e so the UK factor is assumed for all areas.

Natural Gas


Unitmetric tons CO2e per MWh

Emission factor sourceUK DfT, Spanish Government, Irish SEAI

CommentThere are slight differences between the emissions factors used by the three states where IAG conducts business. The emissionfactor stated above is an average value that takes the proportion of consumption by state in to account.

Petrol


Unitkg CO2e per liter


Comment

CDP Page of 7453

C8.2f

(C8.2f) Provide details on the electricity, heat, steam and/or cooling amounts that were accounted for at a low-carbonemission factor in the market-based Scope 2 figure reported in C6.3.

Basis for applying a low-carbon emission factorContract with suppliers or utilities ( e.g. green tariff), supported by energy attribute certificates

Low-carbon technology typeWind

MWh consumed associated with low-carbon electricity, heat, steam or cooling14134

Emission factor (in units of metric tons CO2e per MWh)0.09163

CommentBritish Airways electricity consumption for Fixed Electrical Ground Power and Preconditioned Air at London Heathrow. Power isprovided by E.On and a renewable energy certificate is provided certifying that the power source is wind.

Basis for applying a low-carbon emission factorContract with suppliers or utilities (e.g. green tariff), not supported by energy attribute certificates

Low-carbon technology typeNuclearOther low-carbon technology, please specify (Unknown renewables)


Emission factor (in units of metric tons CO2e per MWh)0.1051

CommentBritish Airways main facilities management electricity contract is a green tariff with Haven Energy. They do not provide a fullbreakdown of their energy sources but state that 77.8% is from renewable sources and 3.6% from nuclear. Source:https://www.havenpower.com/help/regulatory-fuel-mix/


Low-carbon technology typeSolar PVWindHydropowerNuclear


Emission factor (in units of metric tons CO2e per MWh)0

CommentVueling and Iberia's electricity contract is with Endesa. The official Endesa energy mix according to the Spanish Government is13.6% renewables and 27.5% nuclear. The renewables are from solar, wind and hydro.


Low-carbon technology typeWind


CDP Page of 7454

Emission factor (in units of metric tons CO2e per MWh)0

CommentAer Lingus has a supply agreement for the provision of 100% renewable energy from Energia’s certified renewable portfolio. Thesource of this energy is wind. The following buildings benefit from this renewable energy Dublin Airport, Air Cargo Building ShannonAirport, Iolar House Dublin Airport and Lismacleane, Shannon Industrial Estate This constitutes 49% of Aer Lingus total electricityusage.

C-TS8.4

(C-TS8.4) Provide any efficiency metrics that are appropriate for your organization’s transport products and/or services.

ActivityAviation

Metric figure92.3

Metric numeratorOther, please specify (gCO2 per passenger kilometre)

Metric denominatorp.km

Metric numerator: Unit total28416398

Metric denominator: Unit total307856297603

% change from last year4.65

Please explainThe metric is the focus of our activity targeting a reduction in the intensity of our flight operations by 10% by 2020 (to 87.3gCO2/pkm) compared to 2014 (97.5 gCO2/pkm). The numerator is flight only CO2 emissions which increased 1.83% from27,906,810 tCO2 in 2016 to 28,416,398 tCO2 in 2017. The denominator is equivalent passenger kilometres which increased 4.56%from 294,443,106,533 in 2016 to was 307,856,297,603 in 2017. In 2017, we brought 13 new more efficient aircraft into the fleetwhich, along with fuel efficiency initiatives, delivered a 2.61% fuel efficiency improvement compared to 2016, representing a savingof 655,720 tonnes of CO2 saved. We are now 3 years into our 6 year programme, 51% of the way and on track with 2017 fuelefficiency at 92.31 gCO2/pkm. The target to reduce the intensity of our flight operations by 10% by 2020 compared to 2014 ingCO2 per passenger kilometres. This represents equivalent CO2 reduction of over 3,000,000 tonnes CO2 by 2020 (based on 2014emissions).

C9. Additional metrics

C9.1

(C9.1) Provide any additional climate-related metrics relevant to your business.

C-TO9.3/C-TS9.3

CDP Page of 7455

(C-TO9.3/C-TS9.3) Provide tracking metrics for the implementation of low-carbon transport technology over the reportingyear.

ActivityAviation

MetricOther, please specify (Percentage Sustainable Aviation Fuel)

TechnologyOther, please specify (Aircraft using Sustainable Aviation Fuel)

Metric figure0.01

Metric unitPlease select

ExplanationWe are tracking the percentage of Sustainable Aviation Fuel used in our aircraft across the group. Sustainable Aviation Fuels canresult in up to 80% less carbon emissions than standard fossil kerosene and represents a significant pathway for absolutereduction of IAG's scope 1 emissions. Currently there is low availability of commercial volumes of Sustainable Aviation Fuels.Recent changes to policy, particularly in the UK but also at the ICAO level have provided incentives by which production may beincreased. However, without further development, investment and policy support, securing commercial volumes of SustainableAviation Fuels will be very difficult. Currently IAG Group aircraft uplift Sustainable Aviation Fuel when they operate at airports thatcurrently have these fuels dropped in to their infrastructure. Examples include LAX, OSL and GVA that use approximately a 1%blend of Sustainable Aviation Fuel. IAG is demonstrating leadership in this area through projects such as the British Airways andVelocys Waste to Jet joint venture to develop commercial scale production of Sustainable Aviation Fuel. For more detail see casestudy at C11.3a.

C-TO9.6/C-TS9.6

CDP Page of 7456

(C-TO9.6/C-TS9.6) What is your investment in research and development (R&D), equipment, products and services andwhich part of it would you consider a direct investment in the low-carbon transition?

ActivityAviation

Investment start dateJanuary 1 2017

Investment end dateDecember 31 2021

Investment areaR&D

Technology areaAlternative fuels

Investment maturitySmall scale commercial deployment

Investment figure2000000

Low-carbon investment percentage0-20%

Please explainSustainable Aviation Fuels - turning waste into fuel IAG is part of a pioneering project with UK renewable fuels specialist Velocys toproduce jet fuel from household waste which will then be supplied to British Airways. Launched in September 2017, the first stageinvolves the engineering design of the plant and selecting the UK location for the facility alongside stringent environmental andlifecycle carbon analysis of the technology. Once preparations are completed, building should begin in early 2019, with productionstarting in 2022, making it one of the first plants in the world dedicated to producing bio jet fuel on a commercial scale. Ultimately,IAG hopes biofuels could provide up to 25 per cent of its fuel by 2050. The fuel emits 60 per cent less greenhouse gases and 90per cent fewer particulates than fossil fuels, and the planned plant will produce around 30,000 tonnes a year – delivering CO2savings of some 60,000 tonnes annually. Recent changes to the UK Renewable Transport Fuel Obligation, which sets targets forsustainable fuel use in transport, means the new fuel will qualify for government incentives to help develop the technology –something for which Sustainable Aviation has lobbied for nearly a decade. The incentives will bring down the fuel’s cost, making itmore price competitive with traditional fuels, helping make the business case for its adoption. The government has shown furthersupport for the project by awarding Velocys a grant on the grounds of sustainable fuel’s potential to help meet the UK’s low-carbonvision. This is the start of something big for the industry and for IAG. It will be game-changing in terms of making waste-based fuelscommercially viable and helping the industry reduce the impact it has on the environment.

C10. Verification

C10.1

(C10.1) Indicate the verification/assurance status that applies to your reported emissions.

Verification/assurance status

Scope 1 Third-party verification or assurance process in place

Scope 2 (location-based or market-based) Third-party verification or assurance process in place

Scope 3 Third-party verification or assurance process in place

C10.1a

(C10.1a) Provide further details of the verification/assurance undertaken for your Scope 1 and/or Scope 2 emissions and

CDP Page of 7457

attach the relevant statements.

ScopeScope 1

Verification or assurance cycle in placeAnnual process

Status in the current reporting yearComplete

Type of verification or assuranceReasonable assurance

Attach the statementSGS BA 2017 Verification Statement - T postTR .pdf

Page/ section referencePage 4 - scope 1

Relevant standardISO14064-3

Proportion of reported emissions verified (%)65

ScopeScope 1




Attach the statementVerified AEM Report 2017 Aer Lingus.pdf

Page/ section referencePage 14

Relevant standardEuropean Union Emissions Trading System (EU ETS)


ScopeScope 1




Attach the statementInforme de emisiones Iberia zonas industriales_2017 v2_signed_firmado.pdfIBERIA_EXPRESS_2017_R0_20180227_firmado.pdf1476 - IBERIA LAE Operadora_ Annual Emissions Report for Aircraft Operators.pdf

Page/ section referenceInforme de emisiones Iberia - page 16 Iberia Express 2017 - page 1 1476 - IBERIA LAE - page 1

CDP Page of 7458

Relevant standardEuropean Union Emissions Trading System (EU ETS)


ScopeScope 1




Attach the statementIV_VUELING_02_958_243263_firmado.pdf

Page/ section referencePage 1

Relevant standardSGS Sustainability Report Assurance


ScopeScope 2 location-based





Page/ section referencePage 4 - scope 2 location based



C10.1b

CDP Page of 7459

(C10.1b) Provide further details of the verification/assurance undertaken for your Scope 3 emissions and attach the relevantstatements.

ScopeScope 3- all relevant categories




Page/section referencePage 4 - scope 3


This verification statement covers 100% of British Airways scope 3 emissions. This constitutes an estimated 64% of our groupscope 3 emissions.

C10.2

(C10.2) Do you verify any climate-related information reported in your CDP disclosure other than the emissions figuresreported in C6.1, C6.3, and C6.5?No, we do not verify any other climate-related information reported in our CDP disclosure

C11. Carbon pricing

C11.1

(C11.1) Are any of your operations or activities regulated by a carbon pricing system (i.e. ETS, Cap & Trade or Carbon Tax)?Yes

C11.1a

(C11.1a) Select the carbon pricing regulation(s) which impacts your operations.EU ETS

C11.1b

CDP Page of 7460

(C11.1b) Complete the following table for each of the emissions trading systems in which you participate.

EU ETS

% of Scope 1 emissions covered by the ETS24

Period start dateJanuary 1 2017

Period end dateDecember 31 2017

Allowances allocated3555060

Allowances purchased3047505

Verified emissions in metric tons CO2e6934389

Details of ownershipFacilities we own and operate

CommentAviation has been part of the EU ETS since 2012. We have been actively lobbying for aviation inclusion in global carbon pricingscheme since 2008. In 2016 we achieved a significant milestone with global agreement at ICAO to implement CORSIA. From 2021we will participate in the CORSIA scheme which should replace aviation's inclusion in the EUETS however we await confirmationon this point from the EU. CORSIA is an important stepping stone for IAG and aviation as a whole to meet its sectoral climatetargets of carbon neutral growth from 2020 and a net reduction of 50% by 2050, based on 2005 levels.

C11.1d

CDP Page of 7461

(C11.1d) What is your strategy for complying with the systems in which you participate or anticipate participating?

lAG's strategy is to fully comply with the requirements of the EU ETS and any subsequent emissions trading schemes or market-based measures installed by countries in which the Group's airlines operate.

Overall strategy for compliance with EU ETS and CORSIA is co-ordinated at Group level and IAG also has dedicated peopleresponsible for EU ETS compliance in each airline managing the detailed monitoring, reporting and verification aspects. In addition,we engage third party verifiers to check and review our compliance reporting prior to annual submission to our regulators.

IAG manages costs of compliance with EU ETS through our carbon management strategy applying the IATA four pillar strategy tominimise our emissions and exposure to compliance costs. This includes our investment in modern, fuel efficient aircraft, delivery ofoperational fuel efficiency, optimised airspace routing and investing in the production of sustainable aviation fuels to minimise ouremissions and compliance costs.

In addition, we employ a hedging strategy for the EU allowances we purchase to protect against price volatility. lAG operators forecastanticipated fuel consumption within scope of EU ETS and subsequently purchase allowances with the aim of ensuring full compliancewhile minimising compliance cost.

An example of how our strategy for compliance has been applied relates to our preparation for compliance with CORSIA, for whichthe baseline monitoring begins on 1st January 2019. We have established an internal CORSIA working group comprisingrepresentatives from IAG Sustainability team and each airline’s EU ETS compliance manager, to share understanding of our newcompliance requirement of CORSIA, co-ordinate action and share expertise between our airline operating companies. We have alsoheld information sharing sessions and attended IATA CORSIA workshops to ensure we fully understand the compliancerequirements of the scheme. As a result, all our airlines are on track with preparing their CORSIA Emissions Monitoring Plans readyto be submitted to the relevant national regulators by 30th September 2018.

C11.2

(C11.2) Has your organization originated or purchased any project-based carbon credits within the reporting period?No

C11.3

(C11.3) Does your organization use an internal price on carbon?Yes

C11.3a

CDP Page of 7462

(C11.3a) Provide details of how your organization uses an internal price on carbon.

Objective for implementing an internal carbon priceNavigate GHG regulationsChange internal behaviorDrive low-carbon investmentStress test investmentsIdentify and seize low-carbon opportunities

GHG ScopeScope 1

ApplicationIAG employs an internal price of carbon in several areas of our business. For example; • Group Treasury departments applycarbon price for forward planning and risk management of our EU ETS and other emissions compliance obligations. • Commercialdecisions around aircraft fleet investments, engine investments and fleet retirement and renewal decisions incorporate a carbonprice to enable consideration of lifetime operating costs. • Flight operations apply carbon price to inform decision making forexample in tankering fuel when fuel supply is sub-optimal at outstations. • Sustainability teams apply carbon pricing including futureforecasts, to inform scenario analysis of climate related risks and opportunities for IAG. • Innovation and investment decisions areinformed by future fuel costs as well as future forecast carbon prices.

Actual price(s) used (Currency /metric ton)14

Variance of price(s) usedOur forward planning team preparing for EU ETS compliance currently use an indicative carbon price for financial planning which is14 EUR in 2018. Flight planning teams also use carbon price to inform operational decisions to calculate overall operating cost.This is currently 10 EUR per ton in 2018. Future carbon prices applied for scenario planning follow low, medium and highscenarios. The low estimate for example was $20 per tonne in 2030 and the high estimate was $100 in 2030. We drew on multiplesources to inform these future assumptions including UK Government's Airports Commission, UK Committee on Climate Changeand IPCC.

Type of internal carbon priceShadow priceImplicit priceOffsets

Impact & implicationConsidering carbon price helps with forward planning for costs and investments as well as with operational decision making in IAG.Examples of the impact of carbon pricing in IAG include: • Hedging ETS allowance purchases • Selection of the most fuel efficientaircraft to minimise operating costs associated with fuel and future carbon price obligations • Operational tankering of fuel •Business planning and strategy review • Investment in fuel efficiency initiatives to save fuel and minimise exposure to carbon costs• Investment in Sustainable Aviation Fuel (see detail below) Case Study on IAG investment in Sustainable Aviation Fuels (SAF):IAG applied carbon pricing to assess future fuel and compliance costs. The exercise identified that cost-competitive low-carbonaviation fuel could significantly reduce IAG's emissions compliance costs. Under the current rules of the EU ETS, sustainable fuelsare zero-rated. SAF will also be eligi-ble to reduce compliance obligations within CORSIA. In a future situation of high carbonprices, the availability of sustainable fuel could offer a lower-cost route to compliance with carbon emissions schemes (ETS,CORSIA, carbon taxes etc). Application of carbon pricing in this context has underpinned our business strategy and informed ourpolicy position on SAF as well as shifting investments towards low carbon initiatives. It has en-abled IAG to invest in a sustainablefuels team who have lobbied for policy incentives to support the production of sustainable aviation fuel and to make financialinvestments into innovative first-of-a-kind technologies for sustainable fuel production. In 2017 IAG announced its partnership in apioneering project with UK renewable fuels specialist Velocys to produce jet fuel from household waste which will then be suppliedto British Airways. Production will begin from 2022, making it one of the first plants in the world to produce sustainable aviation fuelon a commercial scale. The fuel emits at least 60 % less GHG than fossil fuels, and the initial planned plant will save 60,000 T CO2per year. IAG believes SAF could form 25% of its total fuel requirements by 2050. This is the start of something significant for theindustry and for IAG. It will be game-changing in terms of making waste-based fuels commercially viable and helping the industryand IAG minimise our carbon emissions.

C12. Engagement

CDP Page of 7463

C12.1

(C12.1) Do you engage with your value chain on climate-related issues?Yes, our suppliersYes, our customers

C12.1a

(C12.1a) Provide details of your climate-related supplier engagement strategy.

Type of engagementInnovation & collaboration (changing markets)

Details of engagementOther, please specify (Collaboration and innovation on projects)

% of suppliers by number10

% total procurement spend (direct and indirect)85

% Scope 3 emissions as reported in C6.588

Rationale for the coverage of your engagementOur strategic approach to engagement with suppliers is to engage with the proportion of suppliers that have the most significantcontribution to scope 3 emissions as this will drive the most impact in reducing our scope 3 emissions. This collectively covers 85%of our procurement spend. This is calculated based on our engagement in the following areas and the relative pro-portion of ourprocurement spend: • Fuel, oil and emissions costs comprise 35% of our supplier costs (EUR million 4610). • Handling agents andcatering costs comprise 21% of our supplier costs (EUR mil-lion 2700). • Landing fees and enroute charges comprise 16% of oursupplier costs (EUR million 2151). • Engineering and other aircraft costs comprise 13% of our supplier costs (EUR mil-lion 1773).We estimate this direct engagement covers approximately 10% of suppliers by number. This is because we have many thousandsof suppliers but relatively few who have signifi-cant contribution to our Scope 3 emissions. We calculate 88% of our Scope 3emissions are covered by our engagement and collabora-tion with suppliers - 70% of this relates to fossil fuel production which iswhy a key part of our supplier engagement relates to innovation on future fuel technologies to develop sus-tainable aviation fuelswith up to 80% less life cycle CO2 emissions.

Impact of engagement, including measures of successIAG is engaging with multiple suppliers to deliver our climate change strategies and re-duce our CO2 emissions. For example, IAGis collaborating with fuel suppliers and waste companies to develop technology and production facilities for sustainable aviationfuels derived from waste products. In 2017 we signed agreements with waste and fuel partners on a future fuels programme. A keymeasure of success here is the % sustainable aviation fuel we use in our operations. Currently this is just 0.01% but we believeIAG’s aircraft could be operat-ing on up to 25% sustainable aviation fuels by 2050. By 2030 we anticipate at least 1.6% of IAG’saircraft fuel will be sourced from sustainable alternative fuels, saving up to 146,084 TCO2e per year. We also measure success bythe progress achieved with influencing Government policies to support sustainable aviation fuels. A significant success achievedduring 2017 was the changes to the UK Renewable Transport Fuel Obligation, which sets targets for sustainable fuel use intransport. This means the new IAG fuel will qualify for government incentives to help develop the technology – something for whichIAG and our fuel and waste partners have jointly lobbied for a decade. We have also lead the development of an innovative projectcollaborating with our fuel suppliers to deliver some of our aircraft fuel by rail rather than road. Our key measure of success here isthe proportion of South East UK aviation fuel demand being delivered by rail – in 2018 this is 35% - which is reducing our fueltransportation CO2 by up to 90%. Further examples of our innovation and collaboration with suppliers includes work with Air TrafficControl authorities and Airport operators. The measure of success here is the CO2 savings achieved and in 2017 for example wecollaborated with NATS in the UK to de-liver multiple improvements to airspace enabling over 16,829 TCO2e savings. Weencourage our ground handlers to help connect our aircraft to the more efficient ground-based electricity and air conditioningsupplies. In 2017 our initiatives to reduce auxiliary power unit use saved 3111 TCO2e. We also collaborate and innovate with ouraircraft and engine suppliers. For example, in 2017 we worked with an aircraft manufacturer to modify the descent profile saving12,110 TCO2e.

Comment

CDP Page of 7464

C12.1b

(C12.1b) Give details of your climate-related engagement strategy with your customers.

Type of engagementCollaboration & innovation

Details of engagementPlease select

Size of engagement70

% Scope 3 emissions as reported in C6.52

Please explain the rationale for selecting this group of customers and scope of engagementThe type of engagement we undertake with our customers includes both collaboration and innovation as well as education andinformation sharing. We have estimated the coverage of customers engaged relating to reducing our Scope 3 (indirect) emissionsrepresents about 2% of our overall emissions since the vast majority of our emissions are captured under our Scope 1 (direct)emissions. Customers are however a very important channel for our sustainability and climate en-gagement as purchasing andtravel decisions are increasingly made on the basis of the ex-pectation that airlines take full responsibility for managing andminimising sustainability impacts including climate change. Key groups of customers we engage with are: • Corporate Customerscontracting with British Airways and Iberia on large business travel accounts, and • Individual customers (passengers) at all ourairlines We prioritise engagement with corporate customers based on the volume of flights and the customers interest insustainability. For example, corporate customers who engage via CDP Supply Chain are demonstrating interest in their GHGemissions as well as IAG’s climate performance. We also prioritise based on opportunities for collaboration to achieve cost andemission reductions for our business and their own. Engagement with individual customers (via point of sale, focus groups etc) isbased on those customers who have indicated an interest, for example those who have previously voluntarily participated in the BAClimate Fund or engaged via our airlines charity fund raising activities.

Impact of engagement, including measures of successOur engagement with Corporate Customers includes inviting our top 5 corporate custom-ers to participate in our materiality study togain feedback on our sustainability and climate change programmes. We also engage our corporate customers by responding totheir surveys on our CSR and climate strategy. We also responded to Corporate Customer requests for disclosure in CDP supplychain and have also signed up to the Ecovadis platform to share independent as-sessment of our CSR performance with corporatecustomers. For corporate customers, we measure the success of our engagement through participa-tion in a customer-specificsustainability meeting such as our materiality workshops as well as through feedback and satisfaction with our information and datadisclosures. In 2017 we successfully engaged large corporate customers by responding to CSR surveys, and engaged 5 corporatecustomers in face to face workshops. The insights gained are in-forming our communications relating to climate change and hasbeen instrumental in our decision to upgrade our website sustainability information and to join the Ecovadis plat-form. Ourengagement with individual customers includes raising awareness of our climate ac-tion through our websites, in-flight magazines,social media, IAG annual report and through actively engaging our passengers in climate impact mitigation e.g. with British Air-ways Carbon Fund. We also issue press releases about significant events that are reported in mainstream press e.g. theagreement of CORSIA and our progress on sustainable fuels. The BA Carbon Fund offers customers the opportunity to voluntarilyoffset the CO2 emis-sions from their flights at the point of ticket sale on BA.com. For individual customers, we measure the successof our engagement by the level of par-ticipation in our focus groups, voluntary offset or carbon reduction schemes and feedbackreceived via social media. BA held customer focus groups to increase participation in the Carbon Fund. Monitoring revealed that>30% of customers agree carbon offsetting is good, but only 1-3% actually chose to offset their flight CO2. In 2017 BA establisheda regular column in their in-flight magazine to inform customers about activities on fuel efficiency and Iberia published asustainability report to engage customers in their climate forest action.

C12.3

(C12.3) Do you engage in activities that could either directly or indirectly influence public policy on climate-related issuesthrough any of the following?Direct engagement with policy makersTrade associations

CDP Page of 7465

C12.3a

(C12.3a) On what issues have you been engaging directly with policy makers?

Focus oflegislation

Corporateposition

Details of engagement Proposed legislative solution

Cap andtrade

Support Policy makers engaged: •Civil servants in the UK,the European Union, andthe International CivilAviation Organisation(ICAO) Policies of interest:• EU policies: EUEmissions Trading System(EU ETS) • Global policies:ICAO's development of aGlobal MBM Method ofengagement • Member ofGlobal MBM Task Force ofICAO CAEP •Founder/member of UKEmissions TradingGroup(which is the primaryinterface between UKindustry and governmenton emissions trading) •Direct meetings withpolicy-makers

IAG continues to support the inclusion of aviation emissions in the EU ETS and has participated in thescheme since 2012. The full scope of the EU ETS has been temporarily suspended in order to allow the UN’saviation body ICAO to establish and demonstrate the success of its Global Market Based Measure, CORSIA.IAG has actively supported negotiations to secure ‘CORSIA’: the Carbon Offsetting & Reduction Scheme forInternational Aviation. IAG was instrumental in securing the original 2009 industry targets (carbon neutralgrowth from 2020 and net reduction of 50% CO2 by 2050) which CORSIA is designed to address. Since thenIAG has been active in the process to formalise the targets under ICAO, and in 2016 we saw significantsuccess from this activity when ICAO secured political agreement to the scheme from 191 countries inOctober 2016.IAG helped successfully lobby with IATA to secure the following elements in CORSIA: (1) clarityon the geographic scope a state could apply measures within, (2) agreement that all airlines flying a routewould face equal treatment, (3) confirmation that the carbon offset concept is the most cost-effectiveapproach, (4) standardised requirements on monitoring and reporting & verification. CORSIA is the firstglobal sectoral deal to tackle climate change. It is a landmark achievement, not just for aviation, but also forthe global carbon market and we are proud of the significant role that IAG has played in securing it. Ourmethod of managing the opportunity to develop a single market mechanism for aviation emissions during2017 included our Group Head of Sustainability using his platform at the Gloval sustainable Aviation Summitin Geneva to encourage global political support for CORSIA. IAG also sent a delegation to participate in thenegotiations in ICAO as part of our industry trade association IATA’s delegation. IAG remains activelyinvolved with three representatives developing the implementation plans and IAG Head of Sustainabilitychairing IATA’s CORSIA working group - to help ensure the success of CORSIA. We are also activelylobbying UK and EU Governments on the issue that CORSIA should replace aviation’s inclusion in the EUETS and there should not be regulatory duplication.

Other,pleasespecify(Investmentlow carbonsustainablefuels)

Support Policy makers engaged: •Civil servants in the UK(DfT, BEIS) and theEU.Policies of interest: •UK Renewable TransportFuel Obligation • EURenewable EnergyDirective (EU RED), • EUFuel Quality Directive (EUFQD) Method ofengagement :• Directmeetings with policy-makers• Consultationresponses - submission ofwritten responses toconsultation documentsand participationinstakeholder consultationevents • Engagement asan individual entity, or as amember of industry groupslike 'Leaders forSustainable Biofuels' andSAFUG ( SustainableAviation Fuel usersGroup).

IAG and operator British Airways have been actively advocating: 1. The prioritisation of advanced fuelsmanufactured from wastes and residues, which avoid the land use change impacts that are associated withcrop-based fuels. 2. The work of the Roundtable on Sustainable Biomaterials (RSB) who have developed themost robust project-based sustainability standard for biofuels. 3. The introduction of standards to mitigateIndirect Land Use impacts such as the Low Indirect Impact Biofuels (LIIB) module offered by the RSB. 4.Greater harmonisation of standards with respect to sustainability and life cycle assessment of low-carbonfuels to ensure that these take account of the full life cycle impacts of fuel production. 5. Ensuring that a levelplaying field is provided by governments, so that aviation fuels are treated equally in relevant policyframeworks and incentives – with significant success recently since the UK Government agreed policy changeto include advabnced aviation fuels as eligibly for subsidy under the RTFO incentives. 6. A role in the globalmarket based mechanism for sustainable fuels that meet stringent sustainability criteria and deliver robustgreenhouse gas savings.

C12.3b

(C12.3b) Are you on the board of any trade associations or do you provide funding beyond membership?Yes

C12.3c

(C12.3c) Enter the details of those trade associations that are likely to take a position on climate change legislation.

CDP Page of 7466

Trade associationIATA International Air Transport Assiciation

Is your position on climate change consistent with theirs?Consistent

Please explain the trade association’s positionThe International Air Transport Association (IATA) 69th Annual General Meeting (AGM) agreed a resolution on "Implementation ofthe Aviation Carbon-Neutral Growth (CNG2020) Strategy". The resolution proposes a set of principles for a global climateagreement on aviation emissions, specifically covering: • Establishment of procedures for a single global market-based measure(GMBM) • Integration of a single GMBM as part of an overall package of measures to achieve CNG2020 • Policy support andincentives to enable the development of sustainable aviation fuels to commercial scale

How have you, or are you attempting to, influence the position?We actively advocate an approach for the Global Market-Based Measure which is equitable, achievable, and that can beimplemented by 2020. We take a leading role in relevant IATA environment committees and its climate change task force forexample, during 2017 IAG Group Head of Sustainability was chair of the IATA Environment Committee and CORSIA WorkingGroup.

Trade associationA4E - Airlines For Europe


Please explain the trade association’s positionAirlines for Europe (A4E) support a global approach to regulating CO2 emissions from the aviation sector which avoids competitivedistortion and carbon leakage.

How have you, or are you attempting to, influence the position?IAG partnered with other major airlines to establish Airlines For Europe (A4E) in 2016. IAG has taken an active role in A4Eenvironment committees and has provided guidance to shape communications and policy positions in relation to the EU ETS,CORSIA and sustainable aviation fuels.

Trade associationLSB - Leaders for Sustainable Biofuels


Please explain the trade association’s positionLSB supports enhanced policy support for advanced fuel pathways (including aviation fuel). Types of policy support would includean EU-level sub-target for advanced biofuel.

How have you, or are you attempting to, influence the position?British Airways is a founding member and regular participant in group meetings and lobbying activities. We advocate forpreferential policy support for sustainable fuels produced from waste materials (e.g. municipal solid waste) that offer robust lifecyclegreenhouse gas reductions.

Trade associationSustainable Aviation


Please explain the trade association’s positionSustainable Aviation (SA) is a coalition of UK aviation sector companies including airlines, airports, ATC and aircraft manufacturers.Sustainable aviation supports industry efforts to influence UK climate policy on carbon trading as well as sustainable aviation fuels.

How have you, or are you attempting to, influence the position?IAG is a founding member of SA and is a member of the SA Council as well as sponsor of the Climate group, chair of SustainableFuels working group and active participant in the Noise and Communications working groups. We influence SA position by sharingour expertise and insight on the CORSIA and have successfully influenced SA partners to support the IAG and IATA positions. SAalso supports IAG position on sustainable fuels and has actively lobbied UK Government to create a level playing field for aviationand road transport fuels. IAG has been a lead partner in the SA programme to establish, with other members of SA and UKGovernment, a sustainable fuels UK knowledge transfer network.

CDP Page of 7467

C12.3f

(C12.3f) What processes do you have in place to ensure that all of your direct and indirect activities that influence policy areconsistent with your overall climate change strategy?

The IAG sustainability team’s role is to drive change towards a more sustainable company and to achieve sector leadership to meetour goal of being the world’s leading airline group on sustainability. Our Group-wide Sustainability Network comprises colleagues fromacross the Group who ensure Group strategy is applied to and is consistent with operating company strategy. The IAG SustainabilityNetwork meets regularly to develop work programmes and share learning and best practice across the Group and includes updateson direct and indirect engagement activities in relation to our climate change goals.

Climate change policy in IAG is governed at Board level and also through a sub-set of the Board: the Audit and ComplianceCommittee. This is where the Group’s strategic direction on sustainability and climate change policy are established, monitored andreviewed. The IAG Group Head of Sustainability (Jonathon Counsell) is responsible for reporting on climate change aspects to theChief of Staff (Julia Simpson) and to the IAG Audit and Compliance Committee and IAG Management Committee which oversees theIAG risk management process including the assessment of and action on climate change-related risks.

IAG publishes its position on climate change policy including its involvement in ICAO's work on CORSIA for addressing aviationclimate emissions in its Annual Report and Accounts integrated sustainability report.

IAG and British Airways have proactively worked with other airlines to build a consensus approach to climate change policy. Thisapproach includes the position that a climate change regulation must achieve its intended environmental outcome in a cost effectiveway without causing competitive distortion between airlines.

IAG works with our Trade Associations to align consistent positions in relation to climate change wherever possible.

For expmple during 2017 and 2018 we have been working withGRI and the International Air Transport Association (IATA), to identifymaterial issues across the industry and develop a GRI Sectorial Guidance Handbook for airlines which will improve consistency andopportunities to benchmark our performance with other airlines.

C12.4

CDP Page of 7468

(C12.4) Have you published information about your organization’s response to climate change and GHG emissionsperformance for this reporting year in places other than in your CDP response? If so, please attach the publication(s).

PublicationIn mainstream reports in accordance with TCFD recommendations

StatusComplete

Attach the documentAnnual_report_and_accounts2017.pdf

Content elementsGovernanceStrategyRisks & opportunitiesEmissions figuresEmission targetsOther metricsOther, please specify (Case studies )

C14. Signoff

C-FI

(C-FI) Use this field to provide any additional information or context that you feel is relevant to your organization's response.Please note that this field is optional and is not scored.

C14.1

(C14.1) Provide details for the person that has signed off (approved) your CDP climate change response.

Job title Corresponding job category

Row 1 Willie Walsh, IAG Chief Executive Officer. Chief Executive Officer (CEO)

SC. Supply chain module

SC0.0

(SC0.0) If you would like to do so, please provide a separate introduction to this module.

Please refer to our response to question C0.

SC0.1

CDP Page of 7469

(SC0.1) What is your company’s annual revenue for the stated reporting period?

Annual Revenue

Row 1 22972000000

SC0.2

(SC0.2) Do you have an ISIN for your company that you would be willing to share with CDP?No

SC1.1

(SC1.1) Allocate your emissions to your customers listed below according to the goods or services you have sold them inthis reporting period.

Requesting memberVodafone Group

Scope of emissionsScope 3

Emissions in metric tonnes of CO2e4622

Uncertainty (±%)10

Major sources of emissionsEmissions from staff business travel with British Airways and Iberia . 21181 flights were taken with British Airways group, of which:2287 were long haul premium, 573 were long haul non premium 577 were short haul premium 17744 were short haul non premium.12138 flights were taken with Iberia group, of which: 201 were long haul premium, 8 were long haul non premium 352 were shorthaul premium 11577 were short haul non premium. Geographic distribution was: UK and Ireland: 15185 BA flights , 979 Iberiaflights North America: 238 BA and 2 Iberia flights Africa, Middle East & South America: 496 BA and 22 Iberia flights Asia Pacific;131 BA, 1 Iberia Europe: 5131 BA and 11,131 Iberia Revenue passenger kilometres: BA = 36,489,393 RPK Iberia = 11,082,359RPK Overall Total = 47,571,752 RPK

VerifiedNo

Allocation methodAllocation based on the volume of products purchased

Please explain how you have identified the GHG source, including major limitations to this process and assumptionsmadeWe have applied our average 2017 IAG fuel efficiency of 92.3 grammes CO2 per passenger kilometre (gCO2/pkm) to the flightsundertaken by Vodafone Group. This was calculated estimating the distance of each flight (km) multiplied by our Group fuelefficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total.This is supported by the figures below showing major emissions sources. If one or other travel class was favoured, the efficiencymetric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.

Requesting memberEndesa



Uncertainty (±%)10

CDP Page of 7470

Major sources of emissionsEmissions from staff business travel with British Airways and Iberia . 1,245 flights were taken with British Airways group, of which:455 were long haul premium, 13 were long haul non premium , 460 were short haul premium, 317 were short haul non premium.17,294 flights were taken with Iberia group, of which: 457 were long haul premium, 149 were long haul non premium, 505 wereshort haul premium, 16,183 were short haul non premium. Geographic distribution was: UK and Ireland: 0 BA flights , 0 Iberiaflights North America: 0 BA and 1Iberia flights Latin America & Carribean: 6 BA and 542 Iberia flights Africa, Middle East & SouthAmerica: 0 BA and 0 Iberia flights Asia Pacific; 0 BA, 0 Iberia flights Europe: 1239 BA and 16,751 Iberia flights Spain: 138 BA and16,129 Iberia flights Revenue passenger kilometres: BA = 4,397,111 RPK Iberia = 17,296,747 RPK Overall Total = 21,693,858RPK

VerifiedNo


Please explain how you have identified the GHG source, including major limitations to this process and assumptionsmadeWe have applied our average 2017 IAG fuel efficiency of 92.3 grammes CO2 per passenger kilometre (gCO2/pkm) to the flightsundertaken by Endesa. This was calculated estimating the distance of each flight (km) multiplied by our Group fuel efficiencymetric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This issupported by the figures below showing major emissions sources. If one or other travel class was favoured, the efficiency metricmay become less accurate as, for example, business class is less efficient than economy due to lower seat density.

Requesting memberBank of America



Uncertainty (±%)10

Major sources of emissionsEmissions from staff business travel with British Airways and Iberia . 21,986 flights were taken with British Airways group, of which:7,841 were long haul premium, 1,067 were long haul non premium , 8,762 were short haul premium, 4,316 were short haul nonpremium. 1,031 flights were taken with Iberia group, of which: 128 were long haul premium, 26 were long haul non premium, 581were short haul premium 296 were short haul non premium. Geographic distribution was: UK and Ireland: 15,872 BA flights and503 Iberia flights North America: 4651 BA and 277 Iberia flights Latin America & Carribbean: 80 BA and 5 Iberia flights Africa,Middle East & South America: 252 BA and 0 Iberia flights Asia Pacific; 287 BA, 5 Iberia flights Europe: 844 BA and 241 Iberiaflights Spain: 35 BA and 241 Iberia flights Revenue passenger kilometres: BA = 69,577,836 RPK Iberia = 1,727,448 RPK OverallTotal = 71,305,284 RPK

VerifiedNo

Allocation methodPlease select

Please explain how you have identified the GHG source, including major limitations to this process and assumptionsmadeWe have applied our average 2017 IAG fuel efficiency of 92.3 grammes CO2 per passenger kilometre (gCO2/pkm) to the flightsundertaken by Bank of America Merrill Lynch. This was calculated estimating the distance of each flight (km) multiplied by ourGroup fuel efficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG'sfleet total. This is supported by the figures below showing major emissions sources. If one or other travel class was favoured, theefficiency metric may become less accurate as, for example, business class is less efficient than economy due to lower seatdensity.

Requesting memberAccenture


CDP Page of 7471


Uncertainty (±%)10

Major sources of emissionsEmissions from staff business travel with British Airways and Iberia . 54,100 flights were taken with British Airways group, of which:7,365 were long haul premium, 7,750were long haul non premium , 2,846 were short haul premium, 36,139 were short haul nonpremium. 31,186 flights were taken with Iberia group, of which: 604 were long haul premium, 839 were long haul non premium,1,012 were short haul premium 28,731 were short haul non premium. Geographic distribution was: UK and Ireland: 34,499 BAflights , 1050 Iberia flights North America: 4,115 BA and 322 Iberia flights Latin America and Carribbea: 467 BA and 321 Iberiaflights Africa, Middle East & South America: 3665 BA and 52 Iberia flights Asia Pacific; 481 BA, 12 Iberia flights Europe: 10,837 BAand 29,429 Iberia flights Spain: 2,055 BA and 28,180 Iberia flights Revenue passenger kilometres: BA = 140,873,550 RPK Iberia =32,968,618 RPK Overall Total = 173,842,168 RPK

VerifiedNo


Please explain how you have identified the GHG source, including major limitations to this process and assumptionsmadeWe have applied our average 2017 IAG fuel efficiency of 92.3 grammes CO2 per passenger kilometre (gCO2/pkm) to the flightsundertaken by Accenture. This was calculated estimating the distance of each flight (km) multiplied by our Group fuel efficiencymetric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This issupported by the figures below showing major emissions sources. If one or other travel class was favoured, the efficiency metricmay become less accurate as, for example, business class is less efficient than economy due to lower seat density.

Requesting memberKPMG UK



Uncertainty (±%)10

Major sources of emissionsEmissions from staff business travel with British Airways and Iberia . 33,395 flights were taken with British Airways group, of which:6,383 were long haul premium, 1,589 were long haul non premium , 2,192 were short haul premium, 23,231 were short haul nonpremium. 9,095 flights were taken with Iberia group, of which: 264 were long haul premium, 145 were long haul non premium, 301were short haul premium 8,376 were short haul non premium. Geographic distribution was: UK and Ireland: 25,939 BA flights , 277Iberia flights North America: 3,009 BA and 94 Iberia flights Latin America and Carribbea: 106 BA and 33 Iberia flights Africa, MiddleEast & South America: 556 BA and 6 Iberia flights Asia Pacific; 817 BA, 19 Iberia flights Europe: 2,968 BA and 8,666 Iberia flightsSpain: 252 BA and 8,523 Iberia flights Revenue passenger kilometres: BA = 77,455,636 RPK Iberia = 8,754,314 RPK Overall Total= 86,209,950 RPK

VerifiedNo

Allocation methodAllocation based on the energy content of products purchased

Please explain how you have identified the GHG source, including major limitations to this process and assumptionsmadeWe have applied our average 2017 IAG fuel efficiency of 92.3 grammes CO2 per passenger kilometre (gCO2/pkm) to the flightsundertaken by KPMG. This was calculated estimating the distance of each flight (km) multiplied by our Group fuel efficiency metric.The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total. This is supportedby the figures below showing major emissions sources. If one or other travel class was favoured, the efficiency metric may becomeless accurate as, for example, business class is less efficient than economy due to lower seat density.

Requesting member

CDP Page of 7472

Wells Fargo & Company



Uncertainty (±%)10

Major sources of emissionsEmissions from staff business travel with British Airways and Iberia . 726 flights were taken with British Airways group and 15flights were taken with Iberia group. Geographic distribution was: UK and Ireland: 118 BA flights , 1 Iberia flights North America:609 BA and 14 Iberia flights Revenue passenger kilometres: BA = 4381931 RPK Iberia = 35384 RPK Overall Total = 4,417,315RPK

VerifiedPlease select

Allocation methodAllocation based on the chemical content of products purchased

Please explain how you have identified the GHG source, including major limitations to this process and assumptionsmadeWe have applied our average 2017 IAG fuel efficiency of 92.3 grammes CO2 per passenger kilometre (gCO2/pkm) to the flightsundertaken by Wells Fargo & Co. This was calculated estimating the distance of each flight (km) multiplied by our Group fuelefficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total.This is supported by the figures below showing major emissions sources. If one or other travel class was favoured, the efficiencymetric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.

Requesting memberAvianca Holdings S.A.



Uncertainty (±%)10

Major sources of emissionsWe did not identify any Avianca business travel use of BA or Iberia flights. If identified we report emissions in tonnes CO2e,Volume of flights taken with each airline by cabin class, Global geographic split of emissions based on volume of flights in eachregion. Revenue passenger kilometres travelled by airline and overall.

VerifiedNo


Please explain how you have identified the GHG source, including major limitations to this process and assumptionsmadeWe have applied our average 2017 IAG fuel efficiency of 92.3 grammes CO2 per passenger kilometre (gCO2/pkm) to the flightsundertaken by Avianca Holdings. This was calculated estimating the distance of each flight (km) multiplied by our Group fuelefficiency metric. The methodology assumes a mix of business and economy class travel broadly consistent with IAG's fleet total.This is supported by the figures below showing major emissions sources. If one or other travel class was favoured, the efficiencymetric may become less accurate as, for example, business class is less efficient than economy due to lower seat density.

SC1.2

CDP Page of 7473

(SC1.2) Where published information has been used in completing SC1.1, please provide a reference(s).

The principle metric used for calculating the CO2e emissions above are IAG's fight only CO2 efficiency for 2017 of 92.3 grammes ofCO2 per passenger kilometre (gCO2/pkm). Our performance and trends on this measure over five years is reported in the IAGAnnual Report and Accounts 2017, reference is page 50.

SC1.3

(SC1.3) What are the challenges in allocating emissions to different customers, and what would help you to overcome thesechallenges?

Allocationchallenges

Please explain what would help you overcome these challenges

Other, pleasespecify(Factorsaffecting flightefficiency)

It would be extremely complex and time-consuming to determine an exact measurement of emissions for an individual passenger on any givenflight and route. Each flight can vary by its aircraft seating configuration and travel class, aircraft types, weather conditions, holding patterns, loadfactors, and haulage of bellyhold cargo. The challenge is to provide data which is representative of a given passenger's emissions, and ourpreferred method of emissions allocation is using an aggregate efficiency figure based upon externally verified data.

SC1.4

(SC1.4) Do you plan to develop your capabilities to allocate emissions to your customers in the future?Yes

SC1.4a

(SC1.4a) Describe how you plan to develop your capabilities.

We continue to work on standardising the greenhouse gas emissions and efficiency calculations across the Group. This ensures thatthe allocated emissions we report to customers continue to be consistent and accurate.

SC2.1

(SC2.1) Please propose any mutually beneficial climate-related projects you could collaborate on with specific CDP SupplyChain members.

SC2.2

(SC2.2) Have requests or initiatives by CDP Supply Chain members prompted your organization to take organizational-levelemissions reduction initiatives?No

SC3.1

CDP Page of 7474

(SC3.1) Do you want to enroll in the 2018-2019 CDP Action Exchange initiative?No

SC3.2

(SC3.2) Is your company a participating supplier in CDP’s 2017-2018 Action Exchange initiative?No

SC4.1

(SC4.1) Are you providing product level data for your organization’s goods or services, if so, what functionality will you beusing?No, I am not providing data

SC4.2d

(SC4.2d) Have any of the initiatives described in SC4.2c been driven by requesting CDP Supply Chain members?No

Submit your response

In which language are you submitting your response?English

Please confirm how your response should be handled by CDP

Public or Non-Public Submission I am submitting to Are you ready to submit the additional Supply Chain Questions?

I am submitting my response Public InvestorsCustomers

Yes, submit Supply Chain Questions now

Please confirm belowI have read and accept the applicable Terms

Change 2018 International Consolidated Airlines Group, S.A .../media/Files/I/IAG/... · (C0.4) Select the currency used for all financial information disclosed throughout your response.

Documents