Corporate social responsibility: The example of Air France-KLM

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Corporate social responsibility: The example of Air France-KLM

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Abstract

This group was created in 2004 through the merger of Air France and KLM and is now the world leader in terms of international passenger traffic. In addition, the financial results have been improved considerably over the last few years. But how is the airline group actually dealing with its different corporate social responsibilities? First of all, we will define the notions of corporate governance, responsibility and business ethics, according to different author's opinions. Secondly, we will give a general presentation of the Air France – KLM Group. Thirdly, we will identify the different stakeholders: the impact and key issues of concern to the company and its stakeholders and the major measures set up. And finally, we will focus on a precise issue: the environmental challenge, by explaining the different concerns and identifying the actions taken. We will also evaluate the effectiveness of these measures and we will formulate some critics as well.

Introduction.
Meaning of corporate governance & business ethics.
1. Definition of corporate governance and responsibility.
2. Definition of business ethics.
Air France klm: Company background.
Corporate social responsibily report analysis.
1. Identification of Air France: KLM stakeholders.
2. Issues of concern in terms of Corporate Social Responsibility and actions recently taken by the group.
Focus on the environmental challenge.
1. General facts.
2. Air France KLM approach.
3. Concrete actions taken by the company.
Concrete actions taken by the company.
Conclusion.
Reference list.

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[...] 12) - The Suppliers: According to the 2006 Corporate Social Responsibility report, Air France KLM strongly contributes to the economy of the regions around airports (notably the main Parisian airports: Roissy CDG and Orly). The economic impact is made at different levels: airport, regional and global scale. Air France KLM also has direct economic footprint through its contractors, suppliers and spin- off jobs generated by airline activities”. In addition, the group has been developing local recruitments and partnerships with local companies over the last ten years (CSR p. [...]

[...] About the critics, we can say that Air France KLM, in their CSR report, is not really precise regarding the measures they are conducting. Indeed, we do not know what their involvements in humanitarian or research programmes are really made of: is it financial help (if so, how much money? What precise percentage of profits is dedicated to research, do we have a participation of the Group's engineers? And so on). Therefore, we can say that most of the information given in the CSR report is not accurate and there is a strong lack of data to explain and measure the effectiveness of their actions. [...]

[...] we can notice that the main priorities are, in terms of local development, to stimulate the social and economic development around the main Air France KLM facilities. The other concern is to strengthen the dialogue with local stakeholders (residents notably), to improve investment in civil society, and to improve the communication with the different stakeholders (better transparency). Actions taken: Since 2006, the company has been developing many local initiatives to stimulate local developments such as dialogue with residents (surveys, meetings), sponsorships with suppliers, local or even humanitarian organisations and development of awareness (for example, a screening of Al Gore Film Inconvenient Truth” was organised for 250 corporate executives and managers). [...]

[...] Air France KLM approach According to the Air France KLM CSR report, we can notice that the Group is aware of the negative impact of CO2, NOx and soot emissions on the environment. Water discharge and waste due to ground operations are also considered. Indeed, the Group actually considers climate change as key challenge for sustainable development for the airline industry” (CSR report, p. and not only in response to the increasing stakeholders' expectations. For information, the Group (with all of its subsidiaries) produces approximately 26 millions tonnes of CO2 per year. [...]

[...] This pyramidal model clearly represents the different social responsibilities of firms into different dimensions. However, it does not address the problem of what should happen when several responsibilities are in conflicts. I. B. Definition of Business Ethics According to A. Crane and D. Matten, “Business Ethics”, p “Business Ethic is the study of business situations, activities, and decisions where issues of right and wrong are addressed”. In addition, “business ethics” is not only about “commercial businesses, but also government organizations, pressure groups, not-for-profit businesses, charities, and other organizations”. [...]

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