Japan Airlines to assess CO2 cuts in deciding execs’ pay

TOKYO >> Japan Airlines Co. will start factoring in the company’s carbon dioxide emission cuts when calculating executives’ pay.

JAL will introduce the system in 2025, which will be based on the amount of cuts achieved during the three-year period from 2022.

Current performance-­based compensation primarily focuses on company profits.

Decarbonization has high priority in the airline industry. Airlines are concerned that without reforms, passengers — particularly from Europe, where environmental awareness is high — could shy away from using their services.

JAL has set a goal of reducing CO2 emissions to net zero by 2050. It is working on accessing next-generation fuel and replacing its fleet with more environmentally friendly aircraft.

ANA Holdings Inc. introduced a similar compensation system that goes back to 2020.