Evaluating a company's impact (the case of Boeing)

Today’s newsletter is brought to you by Economist Impact - empowering businesses, governments, and foundations to catalyse change and enable progress.

This week’s read time: 3 minutes

You are reading Green Digest Impact, a weekly newsletter that provides in-depth analyses of companies’ environmental and social impact.

OUR APPROACH

Central to our narrative is the principle of double-materiality, which recognizes that a company's impact is twofold: it affects both the environment and society at large, and in turn, these external factors influence the company's financial and operational performance.

While traditional ESG assessments focus on the latter, we aim to examine companies' direct impacts on these factors. In pursuit of this, we introduce a unique scoring system that quantifies a company's impact.

The insights and analyses presented in Green Digest Impact are brought to you by a partnership between Green Digest and Impaakt, a Swiss-based impact data provider. Contact Impaakt here to explore how they can assist you.

SPONSORED BY ECONOMIST IMPACT

Economist Impact’s 4th annual Sustainability Week: Countdown to COP29 will lead a global debate on net-zero goals. With more than 100 speakers, 500 in-person attendees in Amsterdam, and an online audience of over 2,500 attendees, the event will present original insights and practical solutions focusing on the manufacturing, supply chain, shipping, and agriculture sectors across Europe. Meet the most influential speakers in business, policymaking, and finance, by registering for the event today at this link. Exclusive for Green Digest readers: Enjoy a 15% discount with the code GD-COP/MP15.

THIS WEEK’S COMPANY

Boeing

This week we dive deep into Boeing’s environmental and social impact.

Boeing is one of the largest aerospace companies in the world, specializing in the development, manufacturing, and servicing of commercial airplanes, defense products, and space systems.

Some interesting facts:

• Boeing’s first airplane, the B&W Seaplane, took its maiden flight on June 15, 1916. It was made almost entirely of wood and linen.

• Recently, Boeing has been embroiled in several significant issues, including safety scandals and whistleblower allegations. The company has faced multiple claims from whistleblowers about unresolved safety concerns, particularly regarding the 737 MAX and other aircraft models.

COMPANY’S IMPACT

Boeing’s overall impact score

Boeing has a general impact score of -0.32 (on a scale from -5 to +5). Its impact is spread across 10 UN Sustainable Development Goals (SDGs) and 10 topics, split between positive and negative analyses.

In the socio-economic sphere,

Boeing operates in more than 150 countries, transporting billions of people each year. The company has been the premier manufacturer of commercial jetliners for decades. More than 10,000 Boeing-built commercial jetliners are in service worldwide, which is almost half the world's fleet. Additionally, the company offers the most complete family of freighters, and about 90% of the world’s cargo is carried onboard Boeing planes. Through its Defense, Space & Security segment, it also provides commercial derivatives, military rotorcraft, satellites, and human space exploration and autonomous systems. Boeing employs 170,000 people, fostering economic growth and social stability, while offering salaries above the country average but below the industry average. The company hasn’t achieved gender parity in its workforce or at any other level.

Conversely, Boeing is the world’s third-largest manufacturer of weapons and has supplied arms used in conflicts like the Yemeni civil war and the Israel-Palestine conflict—which have displaced millions and claimed thousands of lives. Boeing has also agreed to pay over $2.5 billion to resolve a criminal charge related to the tragic deaths of 346 passengers in the 2018 and 2019 737 MAX crashes in Indonesia and Ethiopia. Regulators stated that Boeing knowingly deceived about its flawed software, which contributed to both crashes.

Environmentally,

Boeing emits over 448 million tonnes of CO₂ equivalent annually, equal to the emissions of 115 coal-fired power plants for a year. The company also uses more than 4.5 million m³ of water annually, 10% in high or extremely high water-stressed areas. Additionally, it generates approximately 80,000 tonnes of waste, while it recycles only 66% of it.

_{*The impact score is current as of August 2024 and may be subject to changes as it is continuously updated.
**You can find details about the scoring methodology here and the information sources here.}

ESG VS IMPACT SCORE

What is Boeing’s ESG rating?

For comparison, Boeing has a BBB rating in MSCI's ESG evaluation.

However, ESG Ratings from MSCI ESG Research are designed to measure a company’s resilience to financially material ESG risks and they provide a window into one facet of risk to financial performance. They measure how effectively companies manage ESG risks, not their impact on these factors.

SCORES BY SDG

Boeing’s impact scores by SDG

Now, back to Boeing’s impact score:

Positively (and by weight), the company scores the highest in Sustainable Cities and Communities SDG (+1.51), followed by Decent Work and Economic Growth (+0.21), and Partnership for the Goals (+2.54).

Negatively, the company scores the worst in Peace, Justice, and Strong Institutions SDG (-0.78), followed by Climate Action (-3.03), and Responsible Consumption and Production (-2.84).

*the analysis takes into account the weight of the SDGs

Boeing influences three SDGs both positively and negatively: SDG 8 (Decent Work and Economic Growth), SDG 11 (Sustainable Cities and Communities), and SDG 16 (Peace, Justice, and Strong Institutions). For instance, it impacts SDG 16 by contributing to security and stability through its weapons, but these same weapons have also caused thousands of deaths in high-conflict areas.

CONCLUSION

Final words

So, Boeing’s key social and environmental impact lies in …

its role as a global leader in aerospace and defense, providing transportation for billions of people and supporting global trade through its vast fleet of commercial jetliners and freighters. The company operates in over 150 countries, employing 170,000 people and contributing to economic stability on a global scale.

However, Boeing also carries a heavy burden of responsibility for its significant social and environmental drawbacks. As the world’s third-largest manufacturer of weapons, the company has contributed to conflicts that have displaced millions and resulted in numerous casualties. The tragic 737 MAX crashes, which claimed the lives of 346 passengers, further highlight Boeing’s ethical lapses, where profit motives overrode safety concerns, leading to devastating consequences. Environmentally, Boeing’s operations also contribute substantially to global carbon emissions, water usage, and waste generation.

Its negative -0.32 score is a balance of all of these factors and topics, underscoring the dual impact of Boeing’s extensive reach and its substantial ethical and environmental challenges.

If you’d like to delve deeper into Boeing’s impact, you can explore it here.

Next week, we will analyze the impact of the world's biggest music streaming platform, Spotify. 🎵

If you'd like to learn more about the scoring methodology, you can do so here.

Do you have a specific company you'd like us to cover? Send your suggestions to [email protected]