Task force on Climate-Related Financial Disclosures

This report provides climate-related disclosures in alignment with recommendations of the Task force on Climate-Related Financial Disclosures (TCFD).

We report data related to United’s 2020 calendar year, unless noted otherwise. Information related to governance, sustainability, climate risks and opportunities may include activities that occurred in 2021 and 2022, as noted.

TCFD index

Governance Disclose the organization’s governance around climate-related risks and opportunities.
TCFD recommended disclosure	United disclosure source
a) Describe the board’s oversight of climate-related risks and opportunities.	Strategy - How we manage corporate responsibility and ESG Additional information in “Part I, Item 1. Business—Environmental, Social and Governance Approach and Highlights—Climate Strategy” in the 2021 10-K (p. 7) and in our CDP Climate Change response C1.1
b) Describe management’s role in assessing and managing climate-related risks and opportunities.	Strategy - How we manage corporate responsibility and ESG Additional information in our CDP Climate Change response C1.2a

Strategy Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material.
TCFD recommended disclosure	United disclosure source
a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.	Climate-related risks and opportunities Additional information in “Part I, Item 1A. Risk Factors - Regulatory, Tax, Litigation and Legal Compliance Risks” in our 10-K (p. 27-8) and in our CDP Climate Change response C2.1 and C2.3
b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.	Climate-related risks and opportunities Additional information in “Part I, Item 1A. Risk Factors - Regulatory, Tax, Litigation and Legal Compliance Risks” in our 10-K (p. 27-8) and in our CDP Climate Change response C2.3, C3.3 and C3.4
c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.	Climate-related risks and opportunities Additional information in “Part I, Item 1A. Risk Factors - Regulatory, Tax, Litigation and Legal Compliance Risks” in our 10-K (p. 27-8) and in our CDP Climate Change response C3.2

Risk management Disclose how the organization identifies, assesses, and manages climate-related risks.
TCFD recommended disclosure	United disclosure source
a) Describe the organization’s processes for identifying and assessing climate-related risks.	Climate-related risks and opportunities Additional information in our CDP Climate Change response C2.1 and C2.2
b) Describe the organization’s processes for managing climate-related risks.	Climate-related risks and opportunities Additional information in our CDP Climate Change response C2.2
c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.	Climate-related risks and opportunities Additional information in our CDP Climate Change response C2.2

Metrics and targets Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
TCFD recommended disclosure	United disclosure source
a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.	Environmental sustainability, Environmental data tables Additional information in “Part I, Item 1. Business—Environmental, Social and Governance Approach and Highlights—Climate Strategy” in the 10-K (p. 7, 9) and in our CDP Climate Change response C4.1, C4.2 and C4.3
b) Disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.	Environmental data tables
c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.	Environmental sustainability Additional information in our CDP Climate Change response C4.1 and C4.2

United continues to develop and refine climate risks and opportunities that will impact our business and the aviation industry. Select physical and transitional risks that pose potential impact to our business are outlined below. For physical risks and opportunities such as increases in extreme weather, United constantly evaluates and responds to weather-related events. For transitional risks and opportunities such as emerging regulations, United has been an integral leader in helping implement ICAO’s Carbon Offsetting and Reduction Scheme (CORSIA) market-based international aviation measure and leading advocacy for incentive-based policy mechanisms to grow sustainable aviation fuel (SAF) supply in the US

Identifying and assessing climate-related risks

United defines a substantive or strategic impact on the business as any internal or external event or circumstance that could impact United’s ability to achieve its strategic or business objectives. United’s climate-related risk management process is part of its overall company-wide risk assessment. United has an Enterprise Risk Management (ERM) program and structure, which includes an ERM Committee that iscomprised of officers and executives of the company. ERM Committee members appoint subject matter experts across the organization to one or more Risk Team(s). Risk Teams are responsible for the risk identification, risk measurement, and risk response(s) for their respective area(s) of expertise; Environmental Affairs participates in United’s ERM process(es).

The Risk Teams use several risk identification techniques including but not limited to subject matter expertise, evaluation of prior exposures, perils and hazards, interviews with the business, and outside consultants. Asset-level risks are identified and managed through multiple departments’ processes, including Corporate Insurance, Corporate Real Estate, Corporate Safety, Environmental Affairs, Finance, Internal Audit, Legal, and numerous operations departments.

A substantive or strategic impact is determined by an analysis of likelihood and impact scales which are assessed by the Risk Teams. Financial materiality thresholds are established in coordination with the Treasury and Accounting departments, based on the status and strength of United’s balance sheet and financial situation. Once the financial impact analysis and likelihood ratings have been completed, risks that qualify as enterprise risks are rated by leadership in Communications, Government Affairs, Human Resources, Marketing, and Sales to then be assigned one of five reputational impact risk ratings. The higher of the financial impact and reputational risk rating is the final rating that is presented to leadership and the Board of Directors and used to quantify the risk as one that could cause substantive or strategic impact.

Updating assessments

The ERM Risk Team facilitates a comprehensive enterprise risk assessment during the fourth quarter each year to update assessments of existing risks and to identify and evaluate new, emerging and long-term risks. Risk Teams update risk assessments and identify potential new, emerging and long-term risks on a quarterly basis and determine what should be included in ERM reporting to the ERM Committee and the Board of Directors. This process primarily focuses on risks with a likelihood of occurrence within a three-year time horizon, while the ratings focus on the upcoming 12-months. The process looks ahead to a medium-term and long-term time horizon to determine if any new risks should be included in the ERM reporting process. For example, in direct operations, risks may be tied to the fleet itself, which has a long-term time horizon, due to the useful life expectancy of an aircraft. In recent years, additional Risk Teams have been included in the ERM process(es), to address new and evolving priorities and risks, which include the addition of our environmental, social, and governance (ESG) strategy and governance structure.

United will continue to develop and analyze potential climate risks and opportunities in its CDP Report and 10K.

Timescales

We are defining timescales as follows:

Short-term: 0-2 years
Medium-term: 2-10 years
Long-term: 10- 30 years

Climate-related risks and opportunities

Climate physical risks
Acute or Chronic	Short-term; medium-term	Changes in precipitation patterns and extreme variability in weather patterns on our direct operations Climate change may impact the frequency, severity, and predictability of high intensity weather events; including changes in precipitation patterns (in addition to intensity, the likelihood of rain vs. snow), wind velocities, and/or increased en route turbulence, which can require changes in flight routes or cruise altitude. Extreme storms; including rain, wind, and lightning; have the potential to restrict United’s operations or disrupt flights. Recurring extreme winters may result in having to alter flight schedules. Climate change may result in higher average temperatures at the airports United serves. Aircraft must generate sufficient lift in order to take off, but higher temperatures result in lower air density, negatively impacting both wing lift and engine performance. Higher average temperatures would result in increased fuel consumption during take-off, which may result in an increase in United’s operating costs. Higher temperatures may also lead to changes in consumer preferences that may impact demand for United’s travel services. For example, there may be changes to traditional winter sports vacation destinations if temperature increases impact the desirability of these destinations. Climate change may also result in lower extreme temperatures at the airports United serves. Extreme low temperatures can result in an increased viscosity in jet fuel, resulting in a much lower flow when fueling the aircraft. Additionally, climate change may result in changes in wind patterns at airports, which may result in a reduction in landing capacity. In addition, en route winds may strengthen, which may make it more difficult to ensure an on-time operation.	All of these could increase the number of delays and cancellations and could result in an increase in United’s operating costs and/or a disruption to United’s services, possibly impacting the company’s revenue and/or demand for its services.	United constantly evaluates and responds to weather-related events. In 2016, the company increased the amount of out-and-back flying (flying that begins at a hub, travels to another airport, and returns directly back to the hub). At the beginning of 2016, United increased flying in this pattern from approximately 35% of flights to approximately 70%. In addition to reducing operational complexity, this helps isolate the impact of weather- and Air Traffic Control-related events to that hub, while mitigating the impact on other hubs. United is also constantly focused on improving its aircraft performance, both through its own internal efforts and in conjunction with its suppliers and partners. United is also constantly working with local airport authorities to ensure adequate airport runway capacity and operating capabilities.
Chronic	Long-term	Rising sea levels Climate change may result in higher sea levels, which could adversely impact some of United’s key markets located in coastal areas or island destinations the company serves. For example, United serves the Marshall Islands, which at a maximum elevation of six feet above sea level, could be adversely impacted if sea levels rise.	Climate change may require adaptation costs to ensure future airport runway capacity and operating capabilities, and could also change customer travel patterns, which could impact United’s future revenue.	United is constantly working with local airport authorities to ensure airport runway capacity and operating capabilities. United maintains a seasoned team that works closely with airport and flight operations to manage its operations during severe events. These risks have been considered for all geographic areas in which United operates. As the science continues to evolve, United will continue to evaluate the long-term impact on its business.

Climate physical risks

Risk category

Time horizon

Details

Potential financial impact

Strategy to realize opportunity

Acute or Chronic

Short-term; medium-term

Changes in precipitation patterns and extreme variability in weather patterns on our direct operations Climate change may impact the frequency, severity, and predictability of high intensity weather events; including changes in precipitation patterns (in addition to intensity, the likelihood of rain vs. snow), wind velocities, and/or increased en route turbulence, which can require changes in flight routes or cruise altitude. Extreme storms; including rain, wind, and lightning; have the potential to restrict United’s operations or disrupt flights. Recurring extreme winters may result in having to alter flight schedules.

Climate change may result in higher average temperatures at the airports United serves. Aircraft must generate sufficient lift in order to take off, but higher temperatures result in lower air density, negatively impacting both wing lift and engine performance. Higher average temperatures would result in increased fuel consumption during take-off, which may result in an increase in United’s operating costs.

Higher temperatures may also lead to changes in consumer preferences that may impact demand for United’s travel services. For example, there may be changes to traditional winter sports vacation destinations if temperature increases impact the desirability of these destinations.

Climate change may also result in lower extreme temperatures at the airports United serves. Extreme low temperatures can result in an increased viscosity in jet fuel, resulting in a much lower flow when fueling the aircraft.

Additionally, climate change may result in changes in wind patterns at airports, which may result in a reduction in landing capacity. In addition, en route winds may strengthen, which may make it more difficult to ensure an on-time operation.

All of these could increase the number of delays and cancellations and could result in an increase in United’s operating costs and/or a disruption to United’s services, possibly impacting the company’s revenue and/or demand for its services.

United constantly evaluates and responds to weather-related events. In 2016, the company increased the amount of out-and-back flying (flying that begins at a hub, travels to another airport, and returns directly back to the hub). At the beginning of 2016, United increased flying in this pattern from approximately 35% of flights to approximately 70%. In addition to reducing operational complexity, this helps isolate the impact of weather- and Air Traffic Control-related events to that hub, while mitigating the impact on other hubs.

United is also constantly focused on improving its aircraft performance, both through its own internal efforts and in conjunction with its suppliers and partners. United is also constantly working with local airport authorities to ensure adequate airport runway capacity and operating capabilities.

Chronic

Long-term

Rising sea levels Climate change may result in higher sea levels, which could adversely impact some of United’s key markets located in coastal areas or island destinations the company serves. For example, United serves the Marshall Islands, which at a maximum elevation of six feet above sea level, could be adversely impacted if sea levels rise.

Climate change may require adaptation costs to ensure future airport runway capacity and operating capabilities, and could also change customer travel patterns, which could impact United’s future revenue.

United is constantly working with local airport authorities to ensure airport runway capacity and operating capabilities. United maintains a seasoned team that works closely with airport and flight operations to manage its operations during severe events.

These risks have been considered for all geographic areas in which United operates. As the science continues to evolve, United will continue to evaluate the long-term impact on its business.

Climate transitional risks
Risk category	Time horizon	Details	Potential financial impact	Strategy to realize opportunity
Current and emerging regulations	Short-term; medium-term	Current and emerging regulations Currently, United is subject to ICAO’s (the UN agency for aviation) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) for international flight emissions as well as the EU ETS (European Union Emissions Trading Scheme) for intra-EU fights. While the EU ETS, with its current intra-EU scope, has limited impact on United, it could have a much larger cost impact should the scope ever be adjusted to incorporate extra-EU flights. CORSIA has been adopted to address any annual increase in total GHG emissions from airlines’ international flying above baseline levels. Starting 2021, United’s CORSIA reporting will be subject to offsetting obligations per ICAO standards. Over 30% of United’s pre-COVID-19 (representing typical operations) capacity was flown between country-pairs that have volunteered for the first phase of CORSIA (2021-23). If additional countries join in subsequent years, this number is expected to increase.	These regulatory obligations are expected to increase United’s operating costs due to the need to offset emissions.	These risks are identified and assessed by Environmental Affairs and Regulatory Affairs as existing and new regulations continue to evolve. These departments then proactively evaluate the financial impact of these regulations to determine the most appropriate risk response, and report these results to the ERM Committee. United is constantly focused on reducing emissions by improving its fuel efficiency and aircraft performance, both through its own internal efforts and in conjunction with its suppliers and partners; each new generation of aircraft has a 15%-20% improvement in fuel efficiency. In addition to addressing this risk, these efforts also serve to reduce United’s overall GHG emissions and operational costs.
Reputation	Medium-term	Shifts in consumer preferences United monitors public opinion and investor interest in climate change, and the perceptions of its stakeholders regarding airlines’ impact on the climate. United understands that climate change is increasingly attracting public, investor, and political attention worldwide. As a result, United recognizes the importance of addressing these concerns and communicating with the company’s stakeholders—customers, investors, employees, shareholders, and communities—to raise awareness and provide updates on the company’s environmental efforts.	If stakeholder perceptions negatively influence consumer choice and loyalty, this could reduce demand for United’s services and possibly impact the company’s revenue.	United focuses on enhancing and improving its climate programs to reduce the company’s impact on the environment. United is committed to pursuing reductions in fuel consumption including, but not limited to, improvements in aircraft fuel efficiency. In the short term, United is pursuing a number of fuel efficiency measures. In the long term, United has taken a leading role in developing the market for SAF. United also mitigates its impact on climate change through investments in its aircraft fleet and innovative technologies. United shares information with its customers, employees, shareholders, and communities to inform them of the activities that the company is undertaking to reduce its impact on the environment. These risks are identified and assessed by Environmental Affairs, Corporate Communications, and Investor Relations. These departments monitor public opinion and investor interest in climate change, and the perceptions of its stakeholders regarding airlines’ impact on climate change.
Market	Medium-term	Changing customer behavior and shifts in consumer preferences Climate change may result in population relocation away from coastal areas, where some of United’s markets are located, like United’s hubs in Houston, Los Angeles, New York/Newark, and San Francisco. In addition, climate change may result in changes in economic prosperity at the local, national, or global level. Both of these may result in shifts in demand across markets, which would have an uncertain impact on customer travel patterns and may impact the company’s revenue.	Decreased revenues due to reduced demand for products and services	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 size as appropriate to meet market demand. For example, United concentrates its aircraft heavy maintenance, aircraft modification, and recurrent training for flight crews in the winter, when demand is lower, in order to have aircraft and flight crews fully available in summer, when demand is higher. Similarly, United reallocates its larger international aircraft between European and South American markets based on season; European demand peaks in the Northern Hemisphere summer, while South American demand peaks in the Northern Hemisphere winter. United has also developed market-facing programs such as the Eco-Skies Alliance program, which give corporate customers the opportunity to pay the additional cost for SAF to allow increased purchase. These risks have been considered for all geographic areas in which United operates. As the science continues to evolve, United will continue to evaluate the long-term impact on its business. Network planning has long been embedded into United’s business strategy, so it is considered a fundamental cost of doing business. The cost of management presented here represents the approximate cost of 100% of one employee’s time to monitor this risk.
Technology	Long-term	Emerging technologies aimed at supporting the global low-carbon transition SAF costs significantly more to produce than conventional jet fuel. The current SAF market today remains relatively small and expensive and will take further financial incentives to make SAF production affordable. Additional low-carbon technologies and infrastructure are not available at scale and will take years for technology to be matured and receive regulatory approvals such that they may be used in operations. The current cost of transitioning to low-carbon technologies, such as electric aircraft and direct air capture is also still extremely high.	Transitioning to low-carbon aviation technologies will require a substantial investment from United.	United's corporate venture capital fund, United Airlines Ventures, allows the airline to continue investing in emerging companies that have the potential to influence the future of travel. The fund will concentrate on sustainability concepts that will complement United's goal of net zero emissions by 2050 -- without relying on traditional carbon offsets -- as well as revolutionary aerospace developments and innovative technologies that are expected to create value for customers and United's operation.

Climate opportunities
Risk category	Time horizon	Details	Potential financial impact	Strategy to realize opportunity
Energy source	Medium-term	United has extended its industry leadership in decarbonization by broadening its investment scope from SAF to include additional decarbonization technologies, such as carbon capture and sequestration and aircraft innovation. To create structure around this portfolio of climate-related investments, United launched United Airlines Ventures, a corporate venture capital fund that will concentrate its portfolio on decarbonization technology ventures.	United has long championed the development, deployment and commercialization of SAF and has invested in more SAF than any other airline. United has greater resiliency to regulatory changes and reduced indirect (operating) costs through the increased adoption of SAF.	As a leader in advancing the SAF market, United is actively working with strategic partners to generate SAF capable of reducing the company’s GHG emissions and providing energy diversification. United is vertically integrating into the biofuel supply chain and production because it believes SAF represents an important pathway for the airline industry to reduce its dependence on traditional fossil fuels, lower its emissions, enhance national security, and support economic growth.
Products and services	Medium-term	In 2021, United launched the first-of-its-kind Eco-Skies Alliance program to give corporate customers the opportunity to pay the additional cost for SAF. In addition to the Eco-Skies Alliance program, United is giving customers the ability to contribute funds for additional SAF purchase or for use on initiatives United believes will help decarbonize aviation—the first of any US airline to do so.	Partnering with corporate customers will significantly scale up SAF and reduce price premiums. United’s sustainability leadership will also attract customers with a preference for low-carbon travel.	Recognizing that one of the major roadblocks, particularly after the financial impact of the COVID-19 pandemic, to procuring larger volumes of SAF is the incremental cost over traditional fuel, United launched its Eco-Skies Alliance program in 2021. The program offers United’s corporate customers the opportunity to reduce the environmental impact associated with their travel emissions by paying the additional cost for SAF. This contribution goes beyond traditional carbon offsets and create a demand signal for low emissions fuels.
Resilience	Medium-term	United believes air traffic control (ATC) reform is necessary to expedite and ensure the efficient modernization of the US ATC system and ATC systems globally. The airline industry’s proposals to separate the US ATC function from the federal government and move it to a newly created not-for-profit organization as well as modernize global ATC systems may also help advance the timeline for the airline industry to meet its GHG emissions goals.	In 2015 the Federal Aviation Administration (FAA) estimated that its Next Generation Air Transportation System (NextGen ATC) would provide airlines with $51.4 billion in cost savings from 2013 to 2030 collectively.	United is working closely with its industry trade organizations, Airlines for America, the International Air Transport Association, and the Air Transport Action Group, to develop and implement new technologies (including SAF) to increase fuel and operational efficiencies, to improve ATC systems and infrastructure, and to advocate for supportive government policies and investment. This work includes fully implementing the NextGen ATC, which would transform the US air traffic control system from a radar-based system with radio communication to a satellite-based system. GPS technology would be used to shorten routes, save time and fuel, reduce air traffic delays, and permit controllers to monitor and manage aircraft with greater safety margins. 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.
Resource efficiency	Long-term	As the climate changes, some regions may experience an increase in average temperatures. Those regions that previously required high levels of fuel or electricity for heating may see reductions in the energy associated with keeping buildings and aircraft warm in the winter. United is required to deice its aircraft when there is precipitation in sub-freezing weather, which is costly in terms of acquiring deicing fluid, maintaining the specialized equipment, and reducing the efficiency of the company’s operation.	As a result of temperature increases, costs for heating, deicing aircraft, and costs associated with the resulting operational impact may be reduced.	United is constantly working with local airport authorities to ensure airport runway capacity and operating capabilities. United maintains a seasoned team that works closely with airport and flight operations to manage its operations during severe events. These risks and opportunities have been considered for all geographic areas in which United operates. As the science continues to evolve, United will continue to evaluate the long-term impact on its business.