Climate risks and opportunities

United recognizes the importance of identifying and understanding risks to inform a comprehensive climate strategy that enhances our resilience, and it’s important that we understand the potential impacts of climate change to establish a response plan to mitigate its effects.

As such, our enterprise-wide risk (ERM) process supports us in identifying, assessing and managing a wide spectrum of risks, including those related to climate change to ensure that we are equipped to address and mitigate challenges effectively. To foster risk awareness among the ERM Committee and Risk Teams, regular ERM Committee meetings are convened where Risk Teams present assessment of enterprise risks as well as risk response capabilities and planning. ERM also manages a quarterly process with all Risk Leads to review, monitor and update all enterprise risk information. Additionally, our Board of Directors and its Committees take an active role in reviewing and managing Climate-related risks through a robust governance process that incorporates regular risk reviews and clear accountability. This ensures direct involvement in decisions related to our risk management processes, with updates provided in regular meetings.

To further United’s understanding of Climate-related risks and opportunities, we have completed several exercises, including a risk and opportunities assessment as well as a scenario analysis. The outcomes of these activities guide our strategy, including our approach to emit less, adopt more sustainable alternatives, improve our operations beyond flights and collaborate with partners.

Climate assessment methodology

In 2023, United conducted a qualitative assessment to identify physical, both acute and chronic, and transition risks, as well as climate-related opportunities, consistent with leading industry practices and in conjunction with United’s existing ERM program and procedures. The assessment was informed by the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

Emissions scenarios and time horizons

Scenario analysis is a process for identifying and assessing a potential range of outcomes of future events under conditions of uncertainty. United selected publicly available and widely accepted climate scenarios developed by the Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA). The time horizons selected align with TCFD recommendations.

Evaluation of physical risks

Risk Type

Low Emissions Scenario

High Emissions Scenario

Physical Risks

IPCC SSP1-2.6 (2⁰C)

IPCC SSP5-8.5 (4.3⁰C)

Transition Risks

IEA Net Zero Emissions by 2050 (NZE)

IEA Stated Policies (STEPS)

Time horizon

Horizon

Definition

Short

0 - 2 years​

Medium

2 - 10 years​

Long

10 - 30 years​

United Risk Areas

To further characterize the potential impact, the following business (or risk) areas are referenced. These areas are defined in United’s existing ERM program.

Risk Area​

Definition​

Strategic​

Risks that disrupt the company’s business strategy and/or are created as a result of adopting/executing a particular business strategy​

Financial​

Risks that affect financial resilience and profitability of the organization​

Operational​

Risks associated with the company's internal activities arising from the people, systems and processes through which the company operates​

Compliance​

Risks related to meeting the regulatory obligations of the organization​

Digital​

Risks around digital technology including system reliability, cybersecurity risks and data management​

Human Capital​

Risks that result from misalignment between organizational values and leader actions, employee behaviors, organizational systems, talent retention and acquisition and labor relations​

Brand​

Risks that threaten the quality / value / reputation of the United brand​

Safety​

Risks associated with the protection of employees/customers from harm and injury, as well as protection of assets from damage​

Extended Enterprise​

Risk of potential disruption caused by a failure to identify, measure and mitigate risks at key third-party organizations​

Physical and Transitional Risks Assessment

Per the TCFD, physical risks are categorized as acute, or those that are event-driven, and chronic, which refer to longer-term shifts in climate patterns. To understand potential physical risks, we evaluated 119 of our operating locations using a third-party modeling platform1 that employs historical data to forecast potential Climate-related risks associated with various physical perils, or hazards, in different geographical areas. After selecting the perils,2 we then modeled these risks against a low-emissions scenario (IPCC SSP1-2.6) and the high-emissions scenario (IPCC SSP5-8.5) in five-year increments through 2050.

United evaluated transition risks in alignment with TCFD-recommended risk categories (Policy & Legal, Technology, Market and Reputational), as referenced in the tables below, and United’s existing ERM process. Risks were analyzed against IEA’s Stated Policies Scenario (STEPS), a scenario indicative of the potential achievements and limitations of recent developments in energy and climate policy and thus a high-emissions scenario, and IEA Net Zero Emissions by 2050 Scenario (NZE), which sets out a pathway for the global energy sector to achieve net zero CO2 emissions by 2050 and is indicative of a low emissions scenario. The scenario analysis yielded Potential Impact Scores based on the potential likelihood and frequency of occurrence.

As United continues to build resilience, integrating climate change mitigation plans into our financial and strategic planning is a key element of our approach, especially as industry-wide changes present opportunities for United to continue conducting regular assessments and enhance planning for the future.

Physical risks

Risk type: Acute

Climate-related risk

United risk area(s)

Potential impact of risk to United

Timeframe/Impact

United’s risk response and management

Potential increased frequency and severity of extreme storms, tropical cyclones and associated storm surge

Operational, Financial

Extreme weather events can cause damage to facilities and infrastructure, and result in corresponding delays, cancellations or extended airport closures. Historical trends in the U.S. indicate more heavy, single-day precipitation events compounded by extended periods of drought. This increases the likelihood of river and urban flooding following heavy rains. Coastal flooding from storm surge also becomes more likely as sea levels rise and acute weather events become more extreme. EWR sits within the 500-year FEMA flood plain and has experienced both coastal flooding during Hurricane Sandy in 2012 and urban flooding from heavy rain from Hurricane Ida in 2021. And while EWR was recently subject to storm surge damage from Hurricane Ida, tropical cyclone frequency and severity is more concentrated on the Gulf coast. IAH experienced urban flooding in 2017 during Hurricane Harvey and in 2019 during Hurricane Imelda. In 2023, flights were grounded at LAX due to heavy rain induced flooding surrounding the airport. Additionally, some airports where United operates have elevated risks for extreme storm damage, such as tornado risk at DEN, windstorm risk at IAD and risk to IAH from both hail and tornados.

United largely leases its airport facilities, but these risks could potentially yield financial impact on United should airport authorities require repair to existing infrastructure and pass costs through to United. In addition, cancellations or airport closures could lead to decreased revenues. We are not able to reasonably predict the extent of such financial impacts.

Low emissions scenario:
Medium timeframe Low potential impact

High emissions scenario:
Medium timeframe Medium potential impact

United recognizes that some of our facilities are more prone to extreme weather events.

As part of the normal course of business, United continually evaluates and responds to weather-related events, staying in communication with local airport authorities regarding airport runway accessibility and operating capabilities.

United’s network operations center works closely with cross-functional teams across the business to manage our operations during weather events. In addition to weather monitoring capabilities, United maintains schedule and network flexibility through processes like out-and-back flying to isolate the impact of weather and Air Traffic Control-related events while mitigating the ripple effect on other stations.

Potential increased frequency and severity of extreme temperatures, storms, wildfires and flooding that may interrupt fuel supply

Operational, Financial

United currently procures over 4 billion gallons of fuel annually to operate. Weather events such as instances of extreme temperatures and storms, can result in fuel supply chain disruptions. Extreme cold temperatures can impact refining and distribution infrastructure in locations where equipment is not typically winterized or engineered to operate in such conditions. Instances of high heat can result in equipment failures and power shortages. Increased storm severity and frequency, particularly tropical cyclones, in several locations but especially in the oil producing and refining regions of the Gulf of Mexico drive increased vulnerability across the fuel supply chain, resulting in potential challenges in the ability to purchase and deliver fuel needed for operations. Increased duration and intensity of wildfires can disrupt usual fuel supply routes and create resource (fuel, trucks) diversion to firefighting. Weather-related fuel supply chain disruptions that impact our ability to fuel our aircraft could lead to flight cancellations and decreased revenue. We are not able to reasonably predict the extent of such financial impacts.

Low emissions scenario:
Medium timeframe Low potential impact

High emissions scenario:
Medium timeframe Medium potential impact

Given the amount of fuel purchased by United each year for our operations, we hold relationships with a robust network of reliable fuel suppliers. Wherever possible, we maintain supplier and supply chain diversity so as to minimize potential disruptions with a given supplier or route. We assess these risks and adjust our sourcing strategy to include more secondary and tertiary supply alternatives as well as hold adequate level of inventory to mitigate these evolving risks. During weather events we work with cross-functional United teams and industry collaboration to lower demand and increase alternative supply to mitigate operational impact to an airport.

United recognizes that supply chain diversity is critical to our fueling operations. As such, in addition to managing a strong network of current suppliers, we continue to invest in various SAF technologies so as to establish a diverse portfolio of SAF producers with whom we can work.

Increased potential for winter storms, extreme low temperature and icing conditions to impact flight scheduling and deicing costs

Operational, Financial

Lower winter temperatures may result in increased costs and operational issues such as delays and/or cancelations in instances of freezing rain, sleet and snowstorms like those that impacted Texas in 2021 and 2022. This risk may be further exacerbated in locations at which we operate older, regional aircraft that may not be certified to fly in extreme low temperature conditions.  These operational disruptions could lead to decreased revenues.

Extreme winter temperatures and conditions may also result in longer run times of the aircraft auxiliary power unit (APU), which burns fuel, resulting in increased costs, and in operational challenges with the ground equipment. It also has impact on employee safety, specifically ground crews, as there are cold stress hazards such as frostbite and hypothermia. Continental airports at northern latitudes such as O’Hare (ORD) may be most exposed to this risk. We are not able to reasonably predict the extent of such financial impacts.

 

Low emissions scenario:
Medium timeframe Low potential impact

High emissions scenario:
Medium timeframe Low potential impact

United recognizes the increased frequency of severe weather events across our network, and continuously maintains weather monitoring capabilities to stay apprised of changing patterns and developing events. These capabilities, coupled with strong planning processes in place that allow for sufficient schedule, network and fleet flexibility, allow United to adjust aircraft type or gauge for a particular route, or ferrying aircraft to another station not impacted by such extreme weather. Additionally, through the United Next plan, we will replace older regional aircraft with new planes that are certified to operate in a wider range of temperatures.

Appraisal of cold weather also provides indication for ground teams to plan ahead and ramp up communication to employees. Efforts are increased to prevent cold weather illnesses and injuries such as hypothermia and frostbite by promoting use of protective clothing rated for cold temperatures and encouraging frequent breaks inside warm areas. 

Potential increase of extreme heat on infrastructure and operations

Operational, Financial

Extreme temperatures can negatively affect airport infrastructure, such as buckling or softening of asphalt runways and taxiways; the latter of which prevents the aircraft from single-engine taxiing. Such temperatures may also affect takeoff and landing of aircraft and/or increase maintenance expenses. Extreme heat limits the ability for an aircraft to take off due to lower air density during the hottest hours of the day. In 2017, Phoenix's Sky Harbor Airport cancelled dozens of flights due to extreme heat (over 118 degrees F). Rising temperatures may increase delays or cancellations or change flight patterns to avoid flying during the hottest parts of the day in summer months. These operational disruptions could lead to decreased revenues. We are not able to reasonably predict the extent of such financial impacts.

Low emissions scenario:
Long timeframe Low potential impact

High emissions scenario:
Long timeframe Medium potential impact

United recognizes the increased frequency of severe weather events across our network, and as normal course of business, continuously maintains weather monitoring capabilities to stay apprised of changing patterns and developing events. These capabilities, coupled with strong planning processes in place that allow for sufficient schedule, network and fleet flexibility, afford United the ability to exercise such options as adjustments to aircraft type or gauge for a particular route, or ferrying aircraft to another station not impacted by such extreme temperatures rather than remaining overnight and risking maintenance issues. 

Additionally, through the United Next plan, we will replace older regional aircraft with new planes that are certified to operate in a wider range of temperatures.

Risk type: Chronic

Climate-related risk

United risk area(s)

Potential impact of risk to United

Timeframe/Impact

United’s risk response

Potential increase of enroute turbulence, which may require more frequent changes to altitude and or flight routes

Operational

As climate change drives shifts and changes in weather patterns, there is the potential for increased instances of turbulence over certain geographies, particularly the Mid-Atlantic. This may result in impacts to service to/from airports that are critical to transatlantic travel, such as EWR. It could also pose risk in higher turbulence-related injuries for flight attendants.

 

Low emissions scenario:
Long timeframe Low potential impact

High emissions scenario:
Long timeframe Medium potential impact

As normal course of business, United monitors flight conditions that include potential turbulence to plan accordingly for operational adjustments. We have employed state-of-the art technology that supports knowledge sharing of environmental conditions in real time, providing improved capabilities for route planning that can aid in a smoother, safer flight experience.

United has collected industry leading flight observation data of pilots and flight attendants focused on turbulence and is implementing a mitigation strategy to prevent turbulence related injuries.  

Potential rising of mean temperatures, which may reduce aircraft and jet engine performance

Operational, Financial

Higher average temperatures at the airports United serves may cause lower air density, directly impacting lift and jet engine performance. Additional impacts many include need for greater runway length for takeoff, greater fuel usage at each stage of flight and increased landing speeds, impacting brake and fuel performance. These impacts could lead to increased costs. We are not able to reasonably predict the extent of such financial impacts.

Low emissions scenario:
Medium timeframe Low potential impact

High emissions scenario:
Medium timeframe Medium potential impact

United Next plan will enable implementation of aircraft that are not only more efficient, thus minimizing the impacts of potential additional fuel usage, but are also certified to operate in a wider range of temperatures.

Additionally, through United Airlines Ventures, we are also continuing to invest in alternative propulsion technology that will reduce our reliance on conventional jet fuel.

Potential increase of heat stress risk to United employees

Human Capital, Financial

Increasing temperatures may put additional heat stress on airline employees, specifically operational teams at airports. Need for additional break periods and access to shade and water on high temperature days could cause greater downtime, which may result in delays or the need for more staff. These impacts could lead to increased costs. We are not able to reasonably predict the extent of such financial impacts.

Low emissions scenario:
Short timeframe Low potential impact

High emissions scenario:
Short timeframe Medium potential impact

Safety is a core operating principle at United. It’s the foundation of everything we do to protect our people and our customers. United maintains a robust safety program and regularly communicates with employees and operational teams, including during instances of extreme temperatures, providing additional support and resources such as increased access to water and breaks, and education to promote safe work practices.

Additionally, as part of United Next, we are expanding our network of hangar facilities in various locations such that maintenance can be completed indoors and not exposed to the elements.

Mean and extreme temperatures at key tourist destinations could make travel to these destinations less appealing

Strategic, Financial

Higher temperatures may lead to changes in consumer preferences that may impact demand for United’s services for certain leisure destinations, which could lead to decreased revenues.  We are not able to reasonably predict the extent of such financial impacts.

Low emissions scenario:
Long timeframe Medium potential impact

High emissions scenario:
Long timeframe Medium potential impact

United evaluates changes in market demand on an ongoing basis. Many of the company’s markets have grown at different rates over time, and United may shift capacity by allocating different numbers of flights and adjusting aircraft gauge, as appropriate, to meet market demand. United will continue adjusting to meet network demand inclusive of impact to markets from climate change.

Rising sea levels may necessitate adaptation expenditures

Strategic, Financial

Higher sea levels, which could cause runways and taxiways to become inaccessible at key locations such as SFO, EWR and LGA, may require hardening of airport infrastructure by airport authorities, which could pass those costs down to United through lease agreements or rates and charges. We are not able to reasonably predict the extent of such financial impacts.

Low emissions scenario:
Long timeframe Low potential impact

High emissions scenario:
Medium timeframe Low potential impact

Coordination with airport authority partners on efforts such as long-term planning and maintenance of key station infrastructure is normal course of business for United. Relative to operations, United is engaged with local airport authorities on an ongoing basis to ensure airport runway capacity and operating capabilities.

Transitional risks

Risk type: Policy and legal

Climate-related risk

United risk area(s)

Potential impact of risk to United

Timeframe/Impact

United’s risk response

Potential Increase of GHG emissions pricing associated with implementation or amendment of regulations

Operational, Financial

United may be subject to complying with existing and emerging regulation that prices GHG emissions such as a full-scope application of the EU ETS cap-and-trade scheme and the EU's proposed ‘Fit for 55’ legislation.

As a U.S. carrier, United has participated in the CORSIA scheme for international flights since 2021 given U.S. participation in the first two phases of the scheme. Although the specific regulatory mechanism for US-based airline participation in the offsetting requirements of CORSIA has not yet been established, we anticipate compliance costs associated with carbon offsetting requirements in the first phase of CORSIA from 2024-2026, which would be due by January 2028 and may continue throughout the duration of the regulation to 2035. In addition, the availability of CORSIA-eligible offsets is currently severely constrained. CORSIA does allow airlines to reduce their offsetting requirements through the use of CORSIA-eligible fuels, such as SAF.

Low emissions scenario:
Medium timeframe Medium potential impact

High emissions scenario:
Medium timeframe Medium potential impact

Given United’s robust operating network, it is normal course of business for us to monitor and engage in legislative efforts across the global community. Mitigation or adaptation strategies are uniquely applied, dependent on the regulation.

Our commitment to net zero GHG emissions by 2050 does not rely on the use of voluntary carbon offsets and will therefore focus efforts on reducing compliance burdens through maximizing fuel efficiency and working with strategic partners to scale, employ and commercialize the use of SAF. United has established a portfolio of investments and certain SAF purchase agreements, tied to technologies that could support sustainable aviation and emissions mitigation efforts, most recently broadening our investment potential through the establishment of the Sustainable Flight Fund.

Financial

Implementation of carbon taxes or other pricing schemes would present a substantial expense to United.

Low emissions scenario:
Medium timeframe High potential impact

High emissions scenario:
Long timeframe Low potential impact

Anticipated increase of U.S. and EU disclosure requirements, and therefore compliance risk, associated with GHG emissions and climate change

Compliance

The U.S. SEC climate disclosure rule requires United to publicly disclose Scope 1 and 2 emissions as part of our annual regulatory reporting, starting with the 2026 fiscal year. CSRD in the EU has similar reporting requirements, although they cover a broader range of ESG topics, which United may be subject to in the future.

Low emissions scenario:
Short timeframe Medium potential impact

High emissions scenario:
Short timeframe Medium potential impact

United has a long-standing history of engaging in voluntary disclosures of the company’s GHG footprint, inclusive of Scope 1, 2 and 3, as well as other sustainability initiatives. In addition, we have reported, on a voluntary basis, Scope 1, 2 and 3 emissions in the 2023 10-K 4 report. United continues to prepare for mandatory climate disclosures and reporting frameworks through its ESG Council.

Potential limitations of government to facilitate scale of SAF supply

Strategic, Financial

A lack of or reduction in federal incentives, such as those associated with the Inflation Reduction Act (IRA), should current incentives expire without being renewed, could increase the cost of acquiring SAF and generally lessen the appetite of potential investors and producers to invest in and develop SAF technology and production facilities, potentially leading to lower available supplies of SAF.

Low emissions scenario:
Medium timeframe Medium potential impact

High emissions scenario:
Medium timeframe Medium potential impact

United actively engages with state, federal and international government leaders to advocate for policies that incentivize the commercialization of SAF. For example, United helped negotiate the tax credits for SAF in the Inflation Reduction Act. Additionally, we were engaged in development of the Illinois state SAF tax credit which was passed in early 2023 and not only lowers the cost of SAF but incentivizes increased production near a key United hub.

United continues to lead the industry and establish innovative ways to finance the transition to sustainable flight through the production and use of SAF, in collaboration with others. The development of a collaborative platform like the Eco-Skies Alliance drives the demand signal and purchase of SAF today, while UAV, and the Sustainable Flight Fund, which includes investments by global corporations in addition to United, are creating an ecosystem for further investments in the technologies necessary to scale SAF production for the future.

Additional regulation regarding non-CO2 emissions

Operational

Uncertainty about non- CO2 emissions impact of aviation may result in law or regulations requiring changes to air travel operations such as flight altitude or aircraft upgrades to mitigate these emissions.

Low emissions scenario:
Medium timeframe Medium potential impact

High emissions scenario:
Long timeframe Medium potential impact

United is proactively collaborating with stakeholders across government, NGOs and industry to advance the understanding of non- CO2 emissions impacts from aviation and the potential opportunities to mitigate such impacts. Additionally, United’s efforts to scale the SAF it uses incidentally mitigates some of these impacts based on current understanding of causes, and we continue to invest in advanced propulsion technologies that provide alternate travel modalities.

Potential litigation associated with ‘greenwashing’ claims

Brand

Climate risk analysis and expectations about transition commitments by investors and regulators are still formative. Litigation related to "greenwashing" may arise, given the future-looking nature of current decarbonization strategy, despite United’s good faith efforts to implement and communicate its climate strategy in an effective and transparent manner.

Low emissions scenario:
Short timeframe Medium potential impact

High emissions scenario:
Medium timeframe Low potential impact

United recognizes the importance of communicating our sustainability strategy and associated initiatives and commitments with clarity and integrity. Sustainability communications are reviewed to ensure transparency and that appropriate context and information regarding United’s climate strategy and initiatives have been provided on United’s website and other climate disclosures. United is also committed to alignment with the latest climate science and proper accounting methodology such that metrics and supporting calculations are underpinned by science-backed protocols. United’s ESG Council and Board provide oversight of climate disclosures.

Risk type: Technology

Climate-related risk

United risk area(s)

Potential impact of risk to United

Timeframe/Impact

United’s risk response

Limitations of SAF technology and availability

Financial

SAF currently costs significantly more to produce than conventional jet fuel and is commensurately expensive. Moreover, it is presently unavailable at scale. Advances in underlying technologies, as well as development of infrastructure, logistical networks and related supply chains are all required to achieve the scale necessary for airlines to fully adopt SAF.

Low emissions scenario:
Medium timeframe Medium potential impact

High emissions scenario:
Medium timeframe Low potential impact

United has defined action plans to achieve its climate targets. The Eco-Skies Alliance is the present-day SAF supply solution that not only creates a collaborative platform for the purchase of SAF but also serves as a demand signal that global corporations beyond the aviation industry are advocating for sustainable flight.

SAF is the long-term solution and UAV is United’s investment mechanism to advance the commercialization of SAF. Given the nascent nature of SAF technologies, UAV’s portfolio of SAF investments is intentionally diverse focusing on many different types of SAF technologies and feedstocks and enabling technology that can scale this market.

Further, United has been using SAF on a regular basis at select locations. For example, at LAX, United began using a SAF blend in 2016 and has since introduced SAF into AMS, SFO and LHR, providing insights and learnings about technical, operational and financial challenges and opportunities.

Potential costs associated with improving fleet fuel efficiency

Operational, Financial

Investments in United’s fleet and fuel efficiency efforts represent cost and operational impacts to our business from fleet purchases and new operational requirements; however, these same investments drive bottom-line value by reducing fuel costs through reduced fuel consumption.

Low emissions scenario:
Medium timeframe Medium potential impact

High emissions scenario:
Medium timeframe Low potential impact

United is addressing emissions through fleet modernization and other operational efficiencies. Further efficiencies may be gleaned through expected Air Traffic Control (ATC) routing optimization upgrades.

As part of United Next, United is introducing new narrowbody and widebody aircraft into its fleet mix, which are expected to lower carbon emissions nearly 20% per seat, compared to the older aircraft it replaces. In addition, United has now electrified 35% of the ground fleet vehicles across its network.

Risk type: Market

Climate-related risk

United risk area(s)

Potential impact of risk to United

Timeframe/Impact

United’s risk response

Potential for decreased revenues due to reduced demand for products and services

Strategic, Financial

Extreme weather may result in operational impacts (delays, cancellations, turbulence, etc.) and potential damage to key tourism assets (both financial and natural capital assets). It is possible that this could decrease passenger perceptions of comfort and convenience to travel to those destinations resulting in lower revenue for select markets.

Low emissions scenario:
Long timeframe Medium potential impact

High emissions scenario:
Long timeframe Low potential impact

United evaluates changes in market demand on an ongoing basis. Many of the company’s markets have grown at different rates over time, and United may shift capacity by allocating different numbers of flights and adjusting aircraft gauge as appropriate to meet market demand. United will continue adjusting to meet network demand inclusive of impact to markets from climate change.

Increased prices and taxes on conventional fuel

Financial

Taxes on fossil fuels may increase to incentivize use of alternative cleaner fuel sources. At the same time, regulation may mandate SAF use causing an increase in overall fuel costs.

Low emissions scenario:
Medium timeframe Medium potential impact

High emissions scenario:
Long timeframe Low potential impact

United is pursuing investments through the UAV Sustainable Flight Fund that could help scale the SAF market. United has also developed market-facing programs for consumers and corporations such as the Eco-Skies Alliance program.

Risk type: Reputational

Climate-related risk

United risk area(s)

Potential impact of risk to United

Timeframe/Impact

United’s risk response

Potential shifts in stakeholder preferences

Strategic, Brand, Financial

An increased environmental awareness across stakeholders may have broad implications on the business. Public perceptions of aviation’s impact on climate change could result in reduced demand for United’s service in favor of lower emissions travel alternatives, leading to decreased revenues, and/or lead to increased shortage of prospective talent in the future.

Low emissions scenario:
Short timeframe Medium potential impact

High emissions scenario:
Medium timeframe Low potential impact

United has been transparent in recognizing its contribution to climate change and the responsibility to address it. United supports transparency on metrics and targets as well as progress against goals. Its climate goals are intended to align with the well below 2.0° temperature limit goals of the Paris agreement. In addition, United supports several employee-led groups focused on sustainability action.

Opportunities assessment

This section characterizes the opportunities that United is uniquely positioned to seize given the bold action we’ve taken thus far to drive the market-level progress we need to realize our net zero ambitions and climate transition plans.

As with the transition risks, opportunities were categorized by type, according to the TCFD recommendations: Resource Efficiency, Energy Source, Products and Services, Markets and Resilience. Using the same ERM processes, the potential for an opportunity was determined based on the potential likelihood and frequency within the respective timeframe and assigned an applicable score. Notably, the opportunities do not include characterization by low- and high-emission scenarios. The characterizations provided are reflective of a low-emissions scenario, which accounts for market-level economic, political, economic, energy and societal factors.

Opportunity type: Resource efficiency

Climate-related opportunity

Opportunity area(s)

United Airlines opportunity response

Timeframe

Potential opportunity score

Increasing operational efficiency through the purchase and use of more energy-efficient aircraft

Operational

The United Next strategy serves as a market leading action to recognize the importance of fleet modernization in the transition to a low carbon economy by replacing older aircraft with new, more fuel-efficient models. As part of this initiative, United has placed orders for more than 800 narrowbody and widebody aircraft, with options to increase that number to nearly 1,000 narrowbody and widebody aircraft, with an expected 20% improved fuel efficiency per seat, compared to older planes. United took delivery of 85 new planes in 2023 and plan to take delivery of 66 new planes in 2024. These new, more efficient aircraft, combined with fuel efficiency measures on seat density, result in 20% of our forecasted emissions reductions by 2050.

Medium

Medium

Operational efficiencies associated with updates to Air Traffic Control (ATC) and corresponding Air Traffic Management (ATM)

Operational

United works closely with its industry trade organizations such as Airlines for America, International Air Transport Association, and Air Transport Action Group, to advocate for the development and implementation of new technologies; to increase fuel and operational efficiencies; for improvement of ATC systems and infrastructure; and for supportive government policies and investment. This work includes support of fully implementing the NextGen ATC, which would transform the U.S. air traffic control system from a radar-based system with radio communication to a satellite-based system supporting safer and more efficient flight operations. United and its trade organizations also continue to advocate for modernization of the ATC system in the EU and other international regions, due to the environmental benefits and associated cost savings.

Medium

Medium

Opportunity type: Energy source

Climate-related opportunity

Opportunity area(s)

United Airlines opportunity response

Timeframe

Potential opportunity score

Accelerating the transition to sustainable flight through SAF development and other low emissions energy sources

Strategic

United has long championed the development, deployment and commercialization of SAF. We have correspondingly led the industry in both direct SAF purchases and related capital investments. United has extended its industry leadership in decarbonization by broadening its investment scope from SAF to include additional decarbonization technologies, such as advanced propulsion like electric and hydrogen, and carbon capture and utilization. To create structure around this portfolio of climate-related investments, United launched UAV in 2021, a corporate venture capital arm. One of UAV’s three focus areas is decarbonization technology ventures. In February 2023, the Sustainable Flight Fund was launched by UAV; a first-of-its-kind investment vehicle designed to support startups focused on decarbonizing air travel by accelerating the research, production and technologies associated with SAF. The Fund has doubled its capital commitments since the launch and quadrupled the number of corporate partners.

Medium

Medium

Policy incentives associated with SAF blending and carbon capture & sequestration

Financial

The Inflation Reduction Act, signed in 2022, creates a relevant policy incentive (by way of tax credit) for SAF blending and clean hydrogen production while expanding the existing credit for carbon sequestration and utilization. In addition, in February 2023 the Invest in Illinois Act was signed into law. This law includes a SAF purchase tax credit for SAF sold to or used by an air carrier in Illinois. Such incentives send important price signals in the market but specifically allow United to invest in a more cost-effective manner and drive value appreciation associated with venture equity investments in respective supply chains. United intends to take advantage of such meaningful (and material) tax incentives.

Medium

Medium

Opportunity type: Products and services

Climate-related opportunity

Opportunity area(s)

United Airlines opportunity response

Timeframe

Potential opportunity score

Prime mover advantage associated with SAF purchases and UAV investments

Operational

United has been a leader not only in SAF investments, but also in other aviation technologies such as hydrogen, electric aircraft and carbon capture investment. Such investments are intended not only to enable accomplishing United’s net zero ambition by 2050, but also to drive long-term competitive advantages and returns commensurate with the risks associated with such investments.

As we look forward to 2050, United anticipates most of its fleet will require jet fuel for propulsion; however, for shorter-haul distances, there are opportunities to adopt zero-carbon aircraft technologies like battery electric or hydrogen propulsion. United has invested in such technologies through agreements with Heart Aerospace and ZeroAvia.

Short

Medium

Attraction and retention of eco-conscious consumers through industry-leading decarbonization initiatives

Strategic

United’s sustainability leadership may help attract and retain both business travel and leisure customers with a preference for low-carbon travel, a potential competitive advantage over peers with less ambitious sustainability commitments. This could correspondingly result in reduced customer acquisition costs or enhanced pricing power.

United has demonstrated various opportunities for strategic collaboration to drive engagement with those customers that are eco-conscious. We launched the Eco-Skies Alliance program in 2021 to provide corporate customers the opportunity to reduce their travel-related emissions on United by funding the 'green premium' associated with SAF. Using a book and claim model, this financing mechanism creates a demand signal for SAF. United was also the first of any U.S. airline to provide individual consumers the ability to contribute funds towards United’s investment in SAF production technologies.

Short

Medium

Opportunity type: Markets

Climate-related opportunity

Opportunity area(s)

United Airlines opportunity response

Timeframe

Potential opportunity score

Reaching new stakeholders

Brand

As reflected in our Good Leads the Way campaign, United has emerged as a force for good by taking actions that inspire pride among our employees and customers. We have committed to our net zero target by 2050 without relying on the use of voluntary carbon offsets, thus recognizing the critical importance of in-sector solutions that result in meaningful, long-term change. In addition to UAV’s investment activity focused on scaling low-carbon solutions, United recognizes the importance of engaging our customers and providing transparent information about the impact of air travel. In February 2023, United became the first U.S. airline to provide consumers with an estimate of their flight’s carbon footprint on a per economy seat passenger basis. Additionally, in coordination with the launch of the Sustainable Flight Fund, United created the opportunity for customers to take action and contribute to supplement United’s investment in the Sustainable Flight Fund before checkout. To date, the Fund has received over $500,000 in customer contributions.

Short

Medium

Investment opportunities in emissions reduction and removal technologies

Strategic

Through UAV, United is an investor in alternative fuels, advanced propulsion technologies, and carbon capture and utilization technologies, among other areas. Significant net return on investment associated with these investments is plausible in the future if success of these companies is realized. United plans to grow such investments, as indicated through the 2023 launch of the Sustainable Flight Fund, which as of February 2024 raised over $200 million in capital commitments from 22 corporate partners.

Long

Medium

New sources of capital

Financial

Certain investors may have already reweighted portfolios away from fossil fuel-intensive industries or otherwise practice exclusionary investment strategies. Successful implementation of United's net zero ambition may open new sources of capital and lead to cost of capital reductions.

Long

Low

Opportunity type: Resilience

Climate-related opportunity

Opportunity area(s)

United Airlines opportunity response

Timeframe

Potential opportunity score

Diversifying and stabilizing United's energy supply chain with alternative fuels (SAF) and propulsion

Strategic

Given the vulnerability of traditional energy markets to international supply shocks, as SAF becomes commercially scaled, there is potential to benefit from diversification of energy sources other than traditional kerosene-based propulsion. UAV has invested in a variety of technologies and companies that not only represent low-carbon solutions across the value chain, but correspondingly temper exposure to increases in traditional kerosene prices and reliance.

Long

Medium

Footnotes

  1. United notes that the modelling output referenced and used in our climate analysis is not a prediction of future events or conditions, but a methodology that employs the most complete and latest publicly available climate-related observational datasets. We have relied on models and data from a variety of third-party sources to assist with estimating the current risk scores, including, but not limited to, government-provided data, scientific measurements, observational data, and non-profit sources. With any models, their future data estimates and predictions, conditions can change, models can be incompletely specified, and input data can be inaccurate, incomplete, or imprecise. As a result, the models may exclude or may only approximate these data. As technological capabilities evolve, so too will the reliability of forecasting capabilities for such model platforms.
  2. United selected ten perils to evaluate and assess the risk at each location. These perils were tropical cyclone, drought, hail, flood, wind gust, wildfire, heat stress, tornado, wind storm and storm surge.