Case Study

Sustainability transformation at SITA

13 pages
December 2023
Reference: IMD-7-2452

Aiming to blaze the trail that would lead the air travel industry out of the pandemic, SITA decided to reshuffle and renew its credit facilities. In the process, it established that sustainability – particularly ESG factors – would play an increasingly critical role in the financing of the struggling aviation sector. Negotiating a sustainability-linked revolving credit facility (RCF) that connected specific ESG targets to potential pricing benefits proved to be an opportunity for SITA’s executives to (1) draw on and gauge the impact of SITA’s established credentials and experience in areas that included carbon-neutral certification and accessing alternative sources of funding such as Schuldschein; (2) alleviate financial risk for airlines (as SITA members); and (3) kickstart a broader, organization-wide change process led by Finance and Treasury, of ESG learning, data collection (encompassing scope 2 and 3) and building a culture of sustainability. Although the purely economic gains of ESG compliance for SITA might be modest overall, several positive links emerged. They include those between meeting ESG targets and obtaining priority access to funding, better compliance with regulatory requirements, increased customer loyalty and employee productivity, and improved firm value and financial performance.

Learning Objective
  • Examine the relationship between an organization’s financial strategy and sustainability strategy.
  • Discuss the role of the Finance function in leading the sustainability agenda in a company and fostering the adoption of the necessary metrics, knowledge-sharing mechanisms and KPIs.
  • Explore, in the context of finance, avenues to making an organization’s ESG targets sufficiently ambitious and transformative.
Keywords
Learning, Climate Action, Goal Partnerships
Settings
World/global, Switzerland
SITA, Information Technology, Services, Telecommunications, Travel and Leisure, Airlines and Aviation
2020-2023
Type
Field Research
Copyright
© 2023
Available Languages
English
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