INTERNATIONAL

AIRLINES
GROUP

Consolidated Statement
of Non-Financial
Information 2022
Consolidated Statement of Non-Financial Information
The present statement was prepared to comply with the requirements of Spanish Law 11/2018, of December 28, 2018 on non-financial
information and diversity (amending the Commercial Code, the revised Capital Companies Law approved by Legislative Royal Decree
1/2010, of July 2, 2010 and Audit Law 22/2015, of July 20, 2015), and forms part of the Group’s Management Report. The title of this
statement complies with the UK Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022, SI 2022/31.
International Consolidated Airlines Group (IAG) provides information about environmental, social, employee-related, and human
rights-related issues, which is relevant to the Company and important for the execution of business activities. All information except the
Additional Disclosures section is also in the IAG Annual Report and Accounts. Key changes in the scope of this NFIS versus last year are
restructured climate change disclosures and reporting aligned spend for the EU Taxonomy.
This statement contains the following sections:

Overview
3 Business model
5 Sustainability
8 A. Planet
8 A.1. Planet – climate change
19 A.2. Planet – wider issues
19 A.2.1. Waste
20 A.2.2. Noise and air quality
21 B. People and prosperity
21 B.1. Overview
21 B.2. Key metrics and progress
25 B.3. Diversity
26 B.4. Health, safety and well-being
26 B.5. Human rights and modern slavery
27 B.6. Community giving and charitable support
29 C. Principles of sustainability governance
29 C.1.-C.2. Management approach (strategy and processes)
33 C.3. Workforce governance
34 C.4. Supply chain governance
35 C.5. Ethics and integrity governance
36 C.6. ESG risk management
37 C.7. Reporting and data governance
38 Risk management and principal risk factors
46 ‘Sustainable aviation’ risk
50 ‘People, culture and employee relations’ risk
60 Regulatory environment
62 Additional disclosures
63 A.1.3a.-3b. Planet – climate change
67 A.2.1a.-A.2.4. Planet – wider issues
69 B.2a.-d. People
78 B.8.1.-3. Remuneration and salary gap
81 B.9.1.-5. Prosperity
84 C.8. Governance - Description of EU Taxonomy and 2022 related activities
OUR BUSINESS AT A GLANCE

We deliver for our

stakeholders and society
Who we are
We are an international airline group, with leading airlines in Spain, the UK and Ireland,
and a series of best-in-class non-airline businesses within our central platform that drive
efficiency and create additional sources of revenue for IAG. Our purpose in the world
is to connect people, businesses and countries, and we hold innovation, commitment,
care for people, responsibility, pragmatism, execution, ambition and resilience as key
values that enable us to fulfil our purpose.

We have a portfolio of world-class brands and operations

Airline operating companies Non-airline businesses and central platform

For more information see the operating

companies’ sections

1
Our stakeholders
IAG has the aim to be a force for good purpose, business plans and strategy. In
where we operate and, in doing so, create addition to our employees, customers,
value for all our stakeholders. This starts lenders and shareholders, collaboration
with fostering a culture that makes our with the broader industry, including our
employees feel valued, focusing on suppliers and regulators, is key to ensuring Customers Employees
diversity and inclusion and providing our that we maintain the high standards our
employees with options to develop within customers expect and that policy makers
the Group. Our employees play a critical understand the impact of their decisions
role in delivering the service our customers on our businesses and customers.
expect, which is in turn the main driver of
the Group’s ability to create value for all For more information see the Stakeholder
engagement section
Suppliers Shareholders,
our stakeholders. Our shareholders, lenders lenders and other
and other financial stakeholders, and the financial
broader capital markets are also essential stakeholders
in supporting us in the delivery of our

Governments
and regulators

Where we operate

ASKs (% of IAG 2022 network)

North America Domestic & Europe

31.6 36.6

Africa, Middle
Latin America Asia Pacific
East & South Asia
& Caribbean

19.0 11.6 1.2

Total fleet Total employees

558 66,044

We are committed to sustainable aviation

Our commitment to sustainability underpins a Group, we have clear processes in place sustainability issues including waste
our strategy – it is an important part of how to drive decision-making on the most management, stakeholder engagement and
we do business. We remain committed to important elements driving our employee engagement and welfare.
using 10 per cent SAF by 2030 and to sustainability strategy: use of SAF and fleet
reach the goal of net zero CO2 emissions for modernisation and efficiency. We will also For more information see the
Sustainability section
our Group and its supply chain by 2050. As continue to prioritise other key

2
OUR BUSINESS MODEL

Our purpose is fulfilled

with a unique model
We were formed with a model based around consolidation, synergy capture,
leadership in our core markets and financial performance.

Our operating model

IAG creates value through a unique model people, shareholders and society – The Group has a unique business model
that enables our airlines to perform in the knowing that success in each reinforces within the airline industry, based on a light
long-term interests of our customers, the others. structure at the centre, agile, empowered
and focused airline operating companies
accountable for their results, and a central
platform providing a competitive
Principles advantage to our airlines through scale
Operating companies’ Light structure at the centre Central execution only where and world-class expertise.
execution and accountability for central functions and it provides additional value IAG, as the parent company, actively
intra-Group coordination
engages and works collaboratively with its
portfolio of operating companies, sharing
best practices and talent, overseeing
intra-Group coordination and managing
Corporate parent central functions that drive synergies and
value to the Group. Its independence from
Sets long-term strategy Defines portfolio, M&A Sets targets, coordinates
the operating companies enables IAG to
for the Group and partnerships transformation plans across
IAG and oversees performance
implement a long-term strategy for the
Group that is aligned with our purpose and
Allocates capital and Drives ESG agenda Manages investor values, as well as set performance targets
secures funding for the Group relations for the operating companies, track their
progress and efficiently allocate capital
within the Group. Our model also allows
Facilitates best Defines, drives and monitors
the Group to more effectively take part in
practice sharing response to external shocks
industry consolidation, with IAG ensuring
inorganic options are aligned with our
strategy and providing a central platform
to the benefit of new operating companies
joining the Group.
Airline operating companies The operating companies, with their
Define and execute commercial strategy, Ensure operational different brand identities and customised
network strategy and planning efficiency business models, are in turn empowered
to execute their strategies and are fully
accountable for their financial results.
Define product strategy for target Deep understanding of customer and
The Group’s structure allows our brands
customer segments competitive environment
to focus their efforts on their addressable
markets, customer proposition, cultural
Standalone profit centres Individual brands, cultural identities identities, commercial strategy and their
and independent credit identities and management teams industrial relations, while its scale supports
innovation and investment in new
products and services to enhance our
operating companies' customer
Central platform experience.
Provides common services and allow the Group’s operations to benefit The airline portfolio sits on the Group’s
from scale and world-class expertise central platform, which drives efficiency
and simplicity across the operating
companies whilst creating additional
sources of revenues for IAG. The IAG
For more information see
central platform allows the Group to be at
the operating companies’ pages
the forefront of innovation and
sustainability in the airline industry,
supporting and scaling top emerging
technologies in travel and aviation.

3
Our strategic priorities to
create sustainable value

Our strategic priorities

How we create value

create Unrivalled customer proposition
we va
w • Ensure our operating companies
Ho

lue

collectively deliver an unrivalled

Unrivalled proposition able to fulfil customers’
customer needs across the full spectrum of travel
proposition occasions
• Lead industry consolidation and develop
organic options to differentiate the
Group from its competitors and ensure
1
Strengthening customer demands are met
a portfolio of • Deepen customer-centricity to win a
world-class
brands and
disproportionate share in each customer
operations segment
Value-accretive and sustainable growth
2 3 • Pursue value-accretive organic and
Growing Enhancing
global IAG’s central inorganic growth to reinforce existing or
leadership platform pursue new leadership positions in our
positions priority markets
Value-
accretive and Efficiency • Attract and develop the best people in
sustainable O and innovation the industry
ur s
growth s tr a itie • Set the industry standard for
t e g i c p ri o r environmental and societal stewardship,
whilst always prioritising the safety and
security of our customers and
employees
Efficiency and innovation
Un • Reduce costs and improve efficiency
derp lity
inned by sustainabi by leveraging Group scale and synergy
opportunities
• Engage in Group-wide innovation and
digital mindset to enhance productivity
and best serve our customers
• Promote a culture of high operational
Tracking our performance efficiency throughout our portfolio of
operating companies, and leverage the
We use a combination of financial and non-financial metrics
platform to drive synergies and reduce
to measure the performance and progress of our strategy:
costs

Financial KPIs: see the Key Employees: see the

performance indicators section Sustainability section

Customer NPS: see the Key Environment: see the

performance indicators section Sustainability section

4
INTRODUCTION TO SUSTAINABILITY

Sustainability
supporting our purpose
Contents of this section
A. Planet
TCFD summary, transition
plan, metrics and progress,
emissions reduction
initiatives, scenario analysis,
risks and opportunities,
stakeholder engagement
Waste, noise and air quality

B. People and
Prosperity
Key metrics, health, safety
and well-being, human rights
and modern slavery,
community engagement and
charitable support

The full contents of this sustainability report are included in the

IAG Non-Financial Information Statement (NFIS) which is
third-party independently verified to limited assurance
standards in line with ISAE3000 (Revised) standards.
IAG’s most material environmental metric – Scope 1 emissions
– receives additional verification each year as part of the EU,
Swiss and UK Emissions Trading Schemes (ETS) and
international Carbon Offsetting and Reduction Scheme for
International Aviation (CORSIA), within six months of the
issuance of this report. Any material changes are restated in
future reports.
C. Principles of Compliance with specific frameworks and standards is listed
governance under relevant section headings and summarised in C.8. While
IAG does not align with the Global Reporting Initiative (GRI)
Sustainability strategy, Core or GRI Comprehensive standards, it aligns with selected
governance frameworks, GRI standards based on compliance with Spanish Law 11/2018
workforce governance, and chooses to voluntarily align with other GRI standards on
supply chain governance, material issues.
ethics and integrity, ESG risk
management, reporting and
data governance, alignment
with GRI and SASB
standards

5
SUSTAINABILITY AT A GLANCE

Our vision Our strategy

Is to be the world’s leading Is to pursue nine sustainability

airline group on sustainability. leadership KPIs as listed in section C.1.
Our governance
IAG Management
Board-level oversight Committee oversight Operating company oversight Cross-Group alignment
Safety, Environment and Chief People, Corporate Management committees Group sustainability
Corporate Responsibility Affairs and Sustainability oversee tailored sustainability team updates
Officer (CPCASO) programmes Group sustainability strategy
Audit and Compliance

Our material issues and initiatives

IAG takes a holistic approach to sustainability1.

A. Planet B. People and prosperity C. Principles of governance

Key material issues

• Reducing our climate impact • Engaging with employees • Investing in the future
• Influencing policy • Building a diverse, inclusive and equal • Planning for climate-resilient operations
workplace • Working with suppliers
Key policies

• Environmental Sustainability Policy • Equity, Diversity and Inclusion (EDI) • Code of Conduct
Policy • Supplier Code of Conduct
• Modern slavery and anti-trafficking • Anti-bribery and corruption Policy
statement • Whistleblowing Policy
• Policy on disclosure of corporate
information and engagement with
shareholders
Annual initiatives

• Flightpath Net Zero strategy • Organizational Health Index (OHI) • Accelerator programme and ventures
• Climate-related remuneration surveys • Supply Chain Sustainability Programme
• Policy advocacy for green solutions • EDI and engagement initiatives • Task Force on Climate-related Financial
• Leadership in trade associations • Community giving and fundraising Disclosures (TCFD) scenario analysis
• Developing a social roadmap
Key UN Sustainable Development Goals

Targets • 11% better carbon efficiency, • 10% Sustainable • Net zero Scope 1, 2, and 3
to 80 gCO2/pkm Aviation Fuel (SAF) emissions across our full
• Comprehensive waste targets • 20% drop in net Scope 1 operations and supply
• 10% lower noise per take off emissions, to 22 MT chain.
2019 vs 2020 • 20% drop in net Scope 3 • Removals for any residual
Target Baseline • 40% women in senior emissions, to 6.6 MT emissions
leadership roles

2025 2030 2050

1 The above pillars align with World Economic Forum ‘Measuring Stakeholder Capitalism’ report in 2020. ‘Running a profitable business’ and ‘Pleasing our
customers’ are material issues relevant to Prosperity which are covered in other sections of the NFIS.

6
Towards more sustainable journeys
Our sustainable products and services for customers help them to
reduce their carbon emissions and support wider sustainability goals.
We continue to trial new offers.
Pre-flight services at airports Ground transport at airports On-board impacts

• Renewable electricity in lounges1 • Trialling electric buses for passengers2 • Voluntary offsetting for customers using
• Vegan menus in lounges2,3 • Electric Mototoks to pull aircraft verified6 offsets1
• Pre-ordering meal service to reduce to runways2,3 • Voluntary SAF for customers2,4
food waste3 • Trialling electric trucks5 • Use of IAG-procured SAF2
• Renewable electricity to power aircraft • Vegan food2,3
on the ground1 • Recycling on-board2,3,4

1 All airlines. 2 British Airways. 3 Iberia. 4 Vueling. 5 IAG Cargo. 6 Gold-standard or Verra-accredited projects to ensure real carbon savings.

Planet highlights

250,000 tonnes First

of SAF secured for 2030, which alcohol-to-jet SAF plant in the world, the
is 25 per cent of our target volume LanzaJet Freedom Pines project, in a
signed partnership with IAG

100% 12%
of IAG airline senior executives have annual improvement in carbon efficiency,
A prestigious award for our climate-related remuneration on track for our 2025 target
climate action

People and prosperity highlights Governance highlights

66,044 17% 6 100%

people employed across the increase in our workforce meetings of the Board SECR of suppliers screened for
Group in 79 countries versus 2021 committee sustainability risks

89% 34% 0 74%

of staff covered by collective women in senior instances of modern slavery of suppliers, by spend,
bargaining agreements leadership roles identified in our business or completed ESG scorecards
supply chain

7
Strategic Report

SUSTAINABILITY
A. PLANET

A.1. Planet – climate change

A.1.1. TCFD summary

IAG was an early adopter of the Task Force on Climate-related Financial Disclosures (TCFD) guidance and first carried out TCFD-
aligned scenario analysis in 2018. Descriptions of TCFD recommendations are on the TCFD website.
IAG has applied the TCFD Guidance for All Sectors to the disclosures in this report. Cross-references to relevant sections are below. An
internal review of compliance with the 11 core TCFD recommendations identified no material gaps or material changes from last year.

Governance Strategy Risk management Metrics and targets

Disclose the organisation’s Disclose the actual and Disclose how the Disclose the metrics and
governance around potential impacts of organisation identifies, targets used to assess
climate-related risks climate-related risks and assesses and manages and manage relevant
and opportunities opportunities on the climate-related risks climate-related risks and
organisation’s businesses, opportunities where such
(a, b) (a, b, c)
strategy and financial information is material
planning where such
(a, b, c)
information is material
(a, b, c)
Relevant disclosures in this report
a. See C.2., C.6. a. See A.1.6. a. See A.1.5., A.1.6., C.6., Risk a. See A.1.3., A.1.5., Report of
management and principal Remuneration Committee
b. See A.1.5, C.2., C.6., Risk b. See A.1.6., C.6., Risk
risk factors section
management and principal management and principal b. See A.1.3., A.1.6.
risk factors section risk factors section b. See above
c. See Sustainability at a
c. See A.1.5. c. See above Glance, A.1.2., A.1.6.
Current activities
Board oversight via SECR Delivering against Flightpath Sustainable aviation risks are Clear metrics and targets for
Committee and Audit and Net Zero strategy and nine treated as a principal risk and 2025, 2030 and 2050 (see
Compliance Committee; leadership KPIs; regularly reviewed within ‘At a Glance’); climate-related
multiple layers of robust sustainability-linked loans for Enterprise Risk Management remuneration for senior
governance; 2021 materiality British Airways and Iberia; (ERM) processes; risk executives and managers
assessment still relevant and TCFD-aligned scenario disclosures received an ‘A’
so not updated analysis; one- and three-year rating from CDP
financial and business plans
integrate sustainability
aspects; new sustainability
contract clause for suppliers
Planned future activities
Review assurance, repeating Ramp up of SAF More detailed work on risk Delivery against existing
materiality assessment in procurement, ongoing impacts to 2030 and 2040, targets, review 2030 targets
2024 scenario analysis, reviewing actions to maximise climate in line with latest evidence on
guidance and evidence on resilience, and risk mitigation 1.5°C-aligned transitions
pathways to support 1.5°C KPIs
transition

8
Leading our industry
in SAF projects
What is Sustainable Aviation Fuel? cycle before this carbon is recycled into IAG also ensures its SAF complies with
fuel and then consumed in the flight. strict sustainability certification schemes
Sustainable Aviation Fuels (SAF) are
to ensure the feedstocks come from
chemically almost identical to kerosene. There are eight certified pathways to
sustainable sources, and that the
making SAF based on use of specific
The feedstocks for these fuels – production processes conserve water
technologies. These processes are certified
currently waste materials such as used and energy and have minimal wider
to international standards to ensure the
cooking oil, municipal waste or waste impacts.
fuels are safe to use. SAF can be used in
wood – absorb CO2 in their growth
existing aircraft and airport fuelling
infrastructure.
Key SAF projects – production dates

LanzaJet aemetis LanzaTech Gevo Velocys

Georgia, USA California, USA South Wales, UK Minnesota, USA Immingham, UK
Neste Velocys
Finland; Singapore Mississippi, USA
Phillips 66 LanzaJet/
Humber, UK NovaPangaea
Teesside, UK

2023 2024 2025 2026 2027 2030

Role in IAG transition plan

SAF is a key solution in IAG’s transition plan to net zero (Section A.1.2). It reduces carbon emissions on a greenhouse gas lifecycle
basis and typically by 70 per cent or more compared with the fossil jet fuels it replaces.
IAG is on track to deliver a 100-fold increase in its SAF volumes between 2022 and 2030 and expects to use SAF for 70 per cent of
total fuel in 2050.
In 2021, the Group set a target of using one million tonnes of SAF a year by 2030, dependent on appropriate government policy
support, and this volume will save as much carbon as taking one million cars off the road a year. The Group has now secured
250,000 tonnes of SAF for 2030, committing US$865 million in SAF offtakes and investments.1
The Group has also made direct investments in new and innovative SAF production capacity, catalysing the wider development of
the SAF market. These investments are typically coupled with SAF purchase agreements, which are critical to the financeability of
the new SAF production capacity.

Group airlines will be taking delivery

of 7,500 tonnes annually from the
Lanzajet Freedom Pines facility once
construction is completed towards
the end of 2023.

1 Based on an assumed jet fuel price in 2030 of $900 per metric tonne and contracted margins for SAF production.

9
SUSTAINABILITY
A. PLANET

Planet spotlight: Sustainable Aviation Fuel in 2022

First alchohol-to-jet SAF plant First UK-produced commercial

In October, the LanzaJet scale SAF
Freedom Pines plant in the US Across 2022, in partnership with
(see above) was the first SAF the refining company Phillips 66,
project in the world to receive a British Airways received the first
grant – of $50 million – from the UK-produced SAF on a
Breakthrough Energy Catalyst commercial scale, which is
Fund. IAG invested in this plant manufactured using sustainable
and will receive offtake when it is waste oils.
operational, which is expected to
be the end of 2023.

New SAF offers for customers

From June 2022, Vueling offered
customers the option to fund
SAF use on the day of their flight,
via a partnership with Avikor.
Over 50,000 passengers
contributed, and Vueling
matched their contributions,
supplying over 50 tonnes of SAF
at Barcelona and Madrid airports.

10
A.1.2. Transition plan IAG is also driving internal action by using The version below is a core Group scenario
climate-related annual incentives for over which assumes continued policy support
Overview 7,400 senior executives and managers. for aviation decarbonisation, an overall
IAG is targeting net zero emissions by recovery to 2019 levels of passenger
Key measures to reduce emissions are
2050 across its Scope 1, 2, and 3 emissions. demand by 2024 and annual demand
fleet modernisation, SAF, market-based
‘Net zero’ means any residual emissions growth aligned with the long-term growth
measures including the UK and EU ETS
from IAG operations in 2050, or by the forecasts disclosed in Note 4 and 17 of the
and CORSIA, and carbon removals.
manufacture and transport of goods Financial Statements.
Less than 10 per cent of the emissions
supplied to the Group, will be mitigated by Key changes versus last year’s roadmap
reductions to 2050 are from offsets.
an equivalent amount of CO2 removed are an earlier ramp up of carbon removals,
from the atmosphere via carbon removals. Roadmap to net zero larger net emissions reductions from
IAG is on track to deliver its 2025, 2030 IAG was the first airline group in the world CORSIA, fuel efficiency gains tapering by
and 2050 climate targets (see below) by to commit to net zero emissions and has 2050, and an increased share of SAF in
carrying out emission-reduction initiatives, been publishing its latest roadmap to this 2050 to reflect proposed mandates. This
working in collaboration with key goal every year since 2019. roadmap maintains the assumption on
stakeholders and proactively advocating hydrogen aircraft in the fleet from 2040
for supportive government policy and and 5 per cent saving from airspace
technology development. modernisation by 2050.

2019 Emissions (tonnes CO e) 2 Latest IAG Roadmap to Net Zero

Scope 1 Scope 2 Million tonnes CO2 (MT)
30,744,000 20,000 42%
78.77% 0.05%

Total Scope 3
39,029,000 8,265,000 31
100% 21.18%
27

(SAF is 70% of fuel in 2050)

41%

Percentage CO2 reductions

Scope 1
Scope 2
Scope 3

8
17%

2015 2020 2025 2030 2035 2040 2045 2050

Demand growth Gross emissions Net emissions

New aircraft and operations SAF 2019 baseline emissions
ETS/CORSIA and offsets Carbon removals IAG net zero target

IAG interim targets: 11% improvement in fuel efficiency 2019-2025, 20% drop in net Scope 1 and 3 emissions
2019-30, 10 per cent SAF in 2030, net zero by 2050.

Pillar of carbon roadmap Delivery plans Venture investments/key innovation partners

New aircraft • €13.5 billion investment between 2023-30 ZeroAvia (hydrogen aircraft manufacturer)
and operations for 192 new, efficient aircraft
I6 (fuel management software)
NAVflight services (flight planning services)
Honeywell Forge (fuel efficiency software)
SAF • US$865 million committed to date on SAF LanzaJet (sustainable fuels producer)
offtake and agreements, based on assumed
energy prices
Carbon removals • Refining the IAG carbon removals roadmap Heirloom (carbon capture start-up)
Market-based measures • Support for the global CORSIA scheme to limit CHOOOSE (customer offsetting platform)
and offsets net emissions from aviation
• All airlines offer voluntary offsets for customers
Supply chain • 74% of suppliers by spend have submitted EcoVadis (business sustainability ratings)
scorecards on ESG performance
• New supplier contract clause on sustainability

IAG invests in innovation to meet its targets, drive decarbonisation and accelerate wider change towards a more sustainable industry.
IAG supports climate technology innovation via its Hangar 51 accelerator, venture capital investments, university collaborations, pilot
schemes, supporting applications for grant funding, and research and development consortia. Since 2019, a dedicated sustainability
category has been included in the Group accelerator programme Hangar 51.
IAG supports the 1.5°C ambition of the Paris Agreement and continues to review evidence on aviation pathways which support this.
Where possible, IAG will work with relevant stakeholders, including the Science-Based Targets initiative (SBTi) and Transition Pathway
Initiative (TPI), to build an understanding of aviation industry pathways to net zero, how these contribute to national and global goals,
and how companies and policy makers can drive investment into a green transition.

11
SUSTAINABILITY
A. PLANET

Future emissions intensity What are carbon removals? Role in IAG transition plan
Delivery of current decarbonisation Carbon removals solutions extract CO2 By 2050, IAG will only use carbon
plans, dependent on appropriate policy already in the atmosphere and store it in removals to mitigate any residual
support, is expected to enable the biological or geological ways. emissions from its operations.
following changes versus 2019:
Four key types are relevant for IAG: By 2050 it will only work with suppliers
Gross emissions (MT CO2): who do the same, as part of meeting the
• Nature-Based Solutions (NBS) – include
• 2030 – 15 per cent lower Group Scope 3 commitment. It is already
creating new forests and peatland
• 2050 – 73 per cent lower encouraging suppliers to transition from
• BioEnergy Carbon Capture and Storage
offsets to removals as part of a new
Gross emissions intensity (g CO2/pkm): (BECCS) – capturing biogenic carbon
supplier contract clause which is being
from industrial facilities and storing it
• 2030 – 27 per cent lower rolled out across its supply chain.
in e.g. underground aquifers
• 2035 – 39 per cent lower Based on the latest roadmap detailed
• CCS with SAF production – as above
• 2050 – 83 per cent lower and including the use of byproducts below, the Group expects to use
which can absorb CO2 approximately 100 MT of carbon removals
IAG supports the inclusion of carbon
between 2022 and 2050 to mitigate Scope
removals in industry decarbonisation • Direct Air Capture (DAC) – absorbing
1 emissions and could potentially be
pathways, and in external assessments CO2 directly from the air using a catalyst
removing 2 MT annually in 2030,
of support for the 1.5°C global ambition.
Carbon removals projects differ from conditional on clear and globally agreed
IAG’s short- and long-term targets have carbon avoidance projects, which prevent verification and quality standards for
been independently assessed by TPI as the future release of CO2. IAG sees carbon removals, inclusion of removals in ETS
1.5°C-aligned and it’s mid-term target avoidance projects as a key transitional schemes, and stable policy support.
assessed as well-below-2°C-aligned. solution en route to full use of removals.
IAG expects to use removals to meet an
The TPI assessment compared the When IAG or operating companies choose increasing share of its CORSIA obligations
milestones in the 2021 IAG roadmap to voluntarily invest in carbon avoidance between 2024 and 2035, conditional on
with an industry-wide pathway and removal projects, they work in the above, and supports wider guidance
modelled by the International Energy collaboration with key partners, carry out on how to transition to removals such as
Agency (IEA), taking removals due diligence to select reputable providers the Oxford Offsetting Principles.
commitments into account. and select projects carefully to meet and
It continues to advocate for policies that
align with verified quality standards such
will accelerate global uptake of carbon
as Gold Standard and Verified Carbon
removals, via the Coalition for Negative
Standard (VCS).
Emissions and other trade associations
Within the Group, British Airways started listed in A.1.7., and supports the inclusion of
offering removals projects to customers in removals in the EU, Swiss and UK ETS.
2022: mangrove restoration in Pakistan
and a biochar project in Oregon, USA.

Illustrative carbon removals ramp up

MT CO2
8

2020 2025 2030 2035 2040 2045 2050

DAC NBS
BECCS CCS with SAF production
Total

12
A.1.3. Metrics and progress the Intergovernmental Panel on Climate 2022 Emissions2
Change (IPCC) Fourth Assessment Report.
Overview 2022 UK Government conversion factors Scope 1 Scope 2
IAG’s transition plan focuses on reducing are applied across the Group as these are 21,155,000 12,000
79.38% 0.05%
CO2 from jet fuel use, as this represents deemed to be the most robust available.
over 99 per cent of Scope 1 emissions. Other factors like International Energy
The Group measures its full carbon Agency emissions factors are used in Total Scope 3
26,648,000 5,481,000
footprint and tracks multiple metrics each specific cases as described in the NFIS. 100% 20.57%
quarter to ensure progress on tackling
IAG discloses methane (CH4) and nitrous
climate change. Scope 1
oxide (N2O) as Scope 1 non-CO2 Scope 2
2022 saw strong progress against the key greenhouse gases (GHGs), in line with the Scope 3
metric of carbon efficiency. With a 12 per UK conversion factors.
cent improvement to 83.5g CO2/pkm1, the Scope 3 emissions2
Emissions of CH4 were 13,072 tonnes in
Group is on track to deliver the 2025
2022 and N2O were 198,324 tonnes. All other Scope 3 categories
target of 80g CO2/pkm. Franchises 7%
A detailed Scope 3 emissions breakdown 9%
Calculation methodology
is available in the IAG NFIS. Capital goods
Emissions are calculated by multiplying 4%
Fuel and
fuel and energy use by appropriate Total energy-related
conversion factors that are aligned with 5,481,000 activities
100% 80%

Key carbon footprint metric GRI standard Unit vly v2019 2022 2021 2020 2019 2018
Scope 1 CO2e 305-1 MT CO2e 94% (31%) 21.15 10.92 11.02 30.74* 29.99
Net Scope 1 CO2e MT CO2e 82% (29%) 19.13 10.50 10.85 26.95* 27.22
Scope 2 location-based 305-2 kt CO2e 30% (31%) 51.1 39.2 48.2 74.6* 70.4
Scope 2 market-based 305-2 kt CO2e 40% (40%) 11.7 8.4 9.3 19.7* 40.7
Scope 3 305-3 MT CO2e 65% (34%) 5.48 3.32 3.66* 8.27* 8.79

Key emission reduction metric GRI standard Unit vly v2019 2022 2021 2020 2019 2018
Flight-only emissions intensity 305-4 gCO2/pkm (12%) (7%) 83.5 94.6 106.2 89.8 91.5
GHG reduction initiatives 305-5 ktCO2e 38% 6% 82.4 59.7 17.2 77.4 65.9
Net reduction (ETS3) ktCO2e 720% (44%) 1,796 219 0 3,182 2,634
Net reduction (offset projects) ktCO2e 17% n/a 229 196* 168 nr nr
Fleet age years 6% 5% 11.9 11.2 10.6 11.4 11.3

Other metric GRI standard Unit vly v2019 2022 2021 2020 2019 2018
Scope 2 emissions intensity 305-4 gCO2/pkm (41%) (8%) 0.20 0.34 0.47 0.22* 0.22
Revenue per tonne CO2e €/tonne CO2e 41% 32% 1,088 771 705 827 811
Jet fuel 301-1 MT fuel 94% (31%) 6.64 3.42 3.45 9.65 9.41
SAF kT fuel 338% n/a 10.3 2.4 nr nr nr
Electricity 302-1 ‘000 MWh 13% (20%) 213.7 189.0 200.1 267.7 234.9
Energy 302-1 Mn MWh 93% (31%) 81.5 42.1 41.9 119.7 119.4
Renewable electricity4 % (5pts) 9pts 81% 86% 86% 72% 54%
Renewable energy % (0.1pts) 0.2pts 0.4% 0.5% 0.4% 0.2% nr
Descriptions and commentary on other metrics is available in the Additional Disclosures section of the IAG NFIS.
Note: ‘nr’ means ‘not reported’. * means restated using the latest data and assumptions.
1 pkm means ‘passenger-km’. The passenger-km used for this calculation is 213,376 million, which excludes no-show passengers. The cargo-tonne-km
used is 3,712 million, which excludes cargo carried on other airlines or trucks. The jet fuel used excludes fuel for franchises and engine testing.
2 Rounded to the nearest '000 tonnes CO2e.
3 2020 emissions were below the EU ETS sector cap for aviation so no net reductions were delivered.
4 For completeness, Scope 2 emissions cover electricity use at airports and overseas offices, which are partly outside IAG’s operational control.
As part of complying with UK Streamlined Energy and Carbon Reporting regulation, IAG can disclose that 56 per cent of Group energy use was UK
energy use, based on Scope 1 emissions and Group electricity use in UK-based offices.

13
SUSTAINABILITY
A. PLANET

A.1.4. Emissions reduction initiatives

Relevant standards: TR-AL-110a2. GRI 305-5.
Reducing gross and net emissions is a collective effort across the Group. Examples are throughout this report.
By 2030, fleet renewal and SAF programmes will have the biggest impact on reducing gross emissions, and CORSIA will have the
biggest impact on reducing net emissions. In addition, other specific initiatives are run within operating airlines.
Here are savings from key initiatives in 2022, rounded to the nearest 10,000 tonnes:

1,580,000 30,000 80,000 230,000

illustrative tonnes of CO2 tonnes of CO2 saved from tonnes of CO2 saved from tonnes of CO2 avoided due
saved this year from a more SAF purchased this year, five operational efficiency initiatives to use of certified carbon offset
efficient fleet, compared to the times higher than the saving in such as reduced use of landing projects, in locations such as
2019 fleet pre-COVID-19 2021 flaps, single-engine taxi-in Cambodia, Peru, the Congo
and reduced weight on-board Basin, Sudan and Malawi

Examples of initiatives across the Group:

Operating
company 2022 examples
British Airways 9,980 tonnes of SAF delivered from Phillips 66, saving almost 30,000 tonnes of CO2
Rolled out a new fuel efficiency dashboard enabling pilots to better match fuel use to fuel needs
Trials at airports of an electric bus for passengers and use of hydro-treated vegetable oil (HVO) in ground vehicles
Iberia Began operation of a 10,000m2 solar installation to generate 2.7 million renewable kWh annually
Efficiency initiatives across the whole flight phase including take-off, cruise, approach and landing
Aer Lingus Welcomed two A320neos to the fleet, which save up to 20 per cent of fuel compared to the aircraft they replace
More efficient flightpaths out of Dublin airport saved around 1,200 tonnes of CO2
Vueling Demonstrated 72% CO2 saving on a Green Flight between Barcelona and Lyon using SAF and a straighter path
Moved to a new, more sustainable headquarters, certified to international BREEAM1 standards
IAG GBS Rolled out a new supplier contract clause encouraging emissions reductions
IAG Cargo SAF deals with key cargo customers including Kuehne + Nagel, Bolloré Logistics, DB Schenker and DHL
Trials including a lease of 40 tractor units running on HVO biofuel, and an electric tractor
IAG Tech Migration of IT services to Amazon cloud servers, saving energy and CO2
IAG Loyalty British Airways Executive Club Members can use Avios points to contribute to verified carbon offset projects

A diverse portfolio of SAF

IAG continues to work with technology developers to establish a range of SAF supply options, including the projects listed below.
The Group uplifts jet fuel in multiple locations including the US and Europe and therefore is exploring projects in multiple regions.
It is working to support SAF projects which also remove carbon or capture and store it.
IAG has secured 25 per cent of its 2030 target volume of 1 million tonnes.
Key SAF partnerships
Partner Project name if relevant Production location Planned production start
Phillips 66 Humber, UK In production
Neste Finland; Singapore 2023
LanzaJet Freedom Pines Georgia, USA End 2023
aemetis oneworld California, USA 2024
LanzaTech Project Dragon South Wales, UK 2025
Gevo Minnesota, USA 2026
Velocys2 Bayou Fuels Mississippi, USA 2026
LanzaJet/NovaPangaea2 Speedbird Teesside, UK 2026
Velocys2 Altalto Immingham, UK 2027
1. Building Research Establishment Environmental Assessment Method. 2. Includes carbon capture and storage.

14
A.1.5. Scenario analysis EU and UK ETS prices are based on market
prices and the UK Department for
Overview Transport (DfT) Aviation Forecast, and
In 2022, IAG carried out multiple and CORSIA prices are based on internal
aligned forms of scenario analysis: analysis and ICAO industry price forecasts.
• The IAG Sustainability team and the TCFD-aligned scenario analysis
Enterprise Risk Management (ERM)
In 2022, IAG repeated a TCFD-aligned
team reviewed all climate-related risks
scenario analysis exercise, building on the
and opportunities and potential impacts
2018 and 2021 exercises.
to 2024 and 2030. The impacts of
material risks are quantified as part of This was a structured, qualitative
the Company-wide ERM process which discussion of potential climate-related
receives Board oversight impacts and business responses, using the
• Operating airlines modelled compliance- latest evidence and analysis from
related costs, including from the UK and reputable sources like the UN, Eurocontrol
EU ETS and CORSIA, to 2030 and Climate Action Tracker (CAT).
• TCFD-aligned scenario analysis was 1.5°C scenarios1 were chosen for
repeated using a dual timeframe of 2030 transitional risks, in recognition of IAG and
and 2040 global targets. 2°C and 3°C warming
• Ongoing analysis was carried out on the scenarios were chosen for physical risks,
Flightpath Net Zero strategy to 2050 based on the latest UN projections.
This scenario work informs strategy, 2030 was chosen as the key timeframe,
planning, risk management and financial based on IAG targets and key policy
management. timelines e.g. for SAF mandates. 2040 was
also considered due to the possibility of
IAG takes a proactive approach to
the world overshooting 1.5°C in the 2030s
managing climate-related risks and
leading to faster societal changes.
opportunities, and is committed to
managing their regulatory, reputational, The 2021 and 2022 exercises involved
financial, market and technology aspects. representatives from multiple teams
including Strategy, Treasury, Finance,
Applying carbon prices
Government Affairs, Commercial Planning,
IAG concurrently applies carbon prices to
Investor Relations, People, Enterprise Risk
financial planning and to future scenario
Management, IAG Tech, IAG GBS, IAG
analysis.
Loyalty and sustainability representatives
The fleet team uses updated carbon prices from all operating airlines. The Group
and price forecasts for shorthaul and Sustainability team collated inputs, which
longhaul fleet purchasing decisions, based were reviewed by the IAG Sustainability
on market values and reputable external Steering Group.
sources. The Group airlines use carbon
The Group remains resilient to the most
prices in financial planning, and flight
material climate-related impacts –
operations teams and pilots use carbon
industry-wide policy shifts – and these
prices in operational decisions about fuel
have been quantified and mitigation plans
uptake.
embedded into financial and strategic
Potential acquisitions include an planning. Industry-wide changes also
assessment of exposure to climate-related create opportunities for the Group to
issues and policy. move to become more resilient than its
competitors.
For the period 2022-30, UK ETS prices of
£75-£150/tonne, EU ETS prices of €67- To address significant uncertainty around
€130/tonne and CORSIA prices of $11-$21/ future policy, technology and market
tonne were used for modelling compliance trends, IAG is repeating scenario analysis
costs. annually. It will implement action plans in
2023 to further improve resilience to wider
changes.

1 ‘Orderly’ and ‘disorderly’ scenarios were chosen as per TCFD definitions. These scenarios compare smooth, predictable and idealised climate-related
changes with abrupt, variable and disjointed changes across regions.

15
SUSTAINABILITY
A. PLANET

A.1.6. Risks and opportunities

Climate-related risks are assessed and managed within the ERM framework as described in Section C.6. and in the Risk management
and principal risks factors section under Principal Risk ‘Sustainable Aviation’. Opportunities are managed within relevant teams.
Transitional risks primarily affect airline activity between European destinations, which contributed 37 per cent of flying activity in 2022.
Physical risks could affect IAG operations across its global network, reflecting the global nature of climate change.
The carbon-reduction targets in the Flightpath Net Zero strategy are the key measures for assessing the mitigation of these risks, along
with the consideration of these risks in relevant governance processes. The external risk environment, materiality of risks, mitigation
actions and KPIs for these mitigating actions are reviewed regularly.
The table below lists risks assessed through the ERM process. The most material risks are policy risks. Risk timeframes align with
corporate planning timelines.

TCFD Risk Risk Scenario

risk type Risk and/or opportunity combined description time frame trend dependency1
Physical Resilience to acute weather events M Stable Temperature
Resilience of routes and assets to chronic climate changes L Stable Temperature
Market Customer spend due to perceptions of IAG ESG progress S Up Transition
Customer spend due to perceptions of aviation industry ESG progress S Up Transition
Perceived quality of offset and removal projects M Stable Transition
Supply chain readiness L Down Transition
Policy Demand impact of EU and UK climate policy M Stable Transition
Resilience to changes in ETS/CORSIA pricing M Stable Transition
Policy asymmetry across regions M Up Transition
Extra regulation on activity not emissions L Stable Transition
Lack of supporting SAF infrastructure or policy M Down Transition
Regulation on non-CO2 effects L Up Transition
Technology Access to and readiness for lower-emission technologies L Down Transition
Access to SAF M Down Transition

Key: short-term (S) is 1-2 years, medium-term (M) is 3-5 years, long-term (L) is more than 5 years.
IAG continues to analyse risk and transition scenarios to inform mitigation plans to 2030. Key parameters for defining scenarios are
below, based on UN, CAT, UK Climate Change Committee and internal analysis. These are kept under review.

Physical risk parameters Current projection 2°C scenario 3°C scenario

Global scenario to 2100 2.4°C RCP2 2.6 RCP 4.5

Transition risk parameters Current policies/projections Current targets 1.5°C-aligned scenario1

Global emissions vs 2019 0% -7% -41% (-27%)3
UK emissions vs 2019 -28% -42% -42%
EU emissions vs 1990 -55% (via Fit for 55) -55% -62%
US emissions vs 2005 -37% -50% -58%
Aviation (net) emissions vs 2019 -15% (via CORSIA) -15% -15%
1 Whether the cost impacts depend more on the temperature scenario (2°C or 3°C), or type of transition (orderly or disorderly).
2 Representative Concentration Pathway (RCP), a globally recognised scenario for physical changes under different temperature ranges.
3 A 41 per cent drop by 2030 represents an orderly transition. A 27 per cent drop represents a disorderly transition because smaller global emissions
reductions to 2030 require rapid decarbonisation after 2030 to return to 1.5°C by 2100.

16
Risk Impacts and Mitigation
Description as per previous page Potential unmitigated financial impacts How IAG is mitigating
Resilience to acute weather Days of lost revenue due to additional flight Existing operational resilience processes can
events disruption and associated mitigation and minimise extra disruption from e.g. more
passenger compensation costs turbulence from US-UK flights
Resilience of routes and Changed revenue from a different route Scale of route network means impacts above
assets to chronic climate network or a different frequency of flights to plan are not material so no immediate action
changes climate-affected destinations, changes in needed. Aircraft are mobile assets which can be
operational maintenance costs moved to different locations to account for e.g.
more hurricanes in Caribbean
Customer spend due to Customers change frequency of flying, duration Delivering emissions reductions, developing
perceptions of IAG ESG of trips, or spend less relative to other carriers emissions dashboards for customers,
progress expanding customer communications
Customer spend due to Customers change frequency of flying, duration Support for global instruments like CORSIA,
perceptions of aviation of trips, or spend less relative to other travel working via trade associations to advance
industry ESG progress modes green solutions
Perceived quality of offset Exposure to sudden variability in prices, cost of Strategy to avoid price spikes, governance to
and removal projects CORSIA credits, scale of growth in revenue by ensure offset quality, a removals roadmap
2050 due to available volume of removals to based on external evidence, advocacy for
deliver net zero policy support and monitoring regimes
Supply chain readiness Sustainability compliance or technology change Supply chain sustainability programme which
causing unplanned changes in cost of goods includes ESG scorecards and supplier risk
and services provided to IAG or associated screening
supplier management costs, margin erosion
Demand impact of EU and UK Pass-through of industry-wide costs affects Impacts of emerging policy assessed as part of
climate policy ticket prices and so demand longer-term financial planning and strategy
Resilience to changes in Exposure to long-term price increases affects Strategy to reduce impact of price spikes; using
CORSIA/ETS pricing compliance costs carbon prices in fleet and financial planning
Policy asymmetry across Changing numbers of customers relative to Advocacy for global solutions such as the ICAO
regions other carriers who are under more favourable Long-Term Aspirational Goal agreed in 2022
or more restrictive policy regimes
Extra regulation on activity Industry-wide taxes or levies increase operating Advocacy in support of emissions-reducing
not emissions costs and have potential demand impacts, measures like SAF and against economically
demand management measures equate to lost inefficient measures like taxes
revenue
Lack of supporting SAF Higher prices of SAF in core markets due to Advocacy for SAF policy, e.g. via UK Jet Zero
infrastructure or policy lack of investment in SAF production or cost of Council, and a strategy to procure SAF in
inputs regions where supportive policy exists
Regulation on non-CO2 Potential multiplier on ETS costs, lost revenue External research suggests just 10% of flights
effects due to route restrictions, or operational costs could be 80% of impacts. Advocacy via trade
due to non-CO2 management associations to support monitoring and
targeted solutions such as route optimisation
and SAF uptake
Access to and readiness for Higher ETS costs if technology access is Hangar 51 Ventures team aligns research and
lower-emission technologies restricted or technology development is slow work with the Flightpath Net Zero strategy
Access to SAF Changing unit prices of SAF in core markets Securing SAF deals and taking equity in
early-stage projects where relevant

17
SUSTAINABILITY
A. PLANET

A.1.7. Stakeholder Key stances on climate change Key principles of climate-related

engagement
engagement IAG supports cost-effective approaches to
Aviation is a global industry and IAG
deliver net zero emissions by 2050,
Relevant standards: GRI 102-13/43/44 advance low-carbon solutions, and support remains committed to global policy
Overview global efforts to align with 1.5°C. approaches.
The aviation industry will decarbonise In 2022, it supported the strengthening of
Actions across ten associations are listed
faster with stakeholder and policy support. the global UN-regulated CORSIA scheme.
below. If the climate-related positions of
The Group and its operating airlines trade associations are deemed to be Changes agreed at the ICAO General
regularly engage with key stakeholders: substantially weaker or inconsistent with Assembly will ensure that net emissions
governments and regulators, shareholders, these internal stances, IAG representatives from international aviation will be 15 per
lenders and other financial stakeholders, take roles on task forces and working cent below 2019 levels in 2030, en route to
trade associations, customers, suppliers, groups and respond to consultations to the ICAO target of net zero emissions by
employees, communities, NGOs and communicate our stances and 2050.
academic institutions to advocate for constructively move to alignment. IAG advocates for carbon pricing as a key
support for emissions reductions and to instrument to determine both the pace of
IAG is proud to have consistent stances on
share progress on Flightpath Net Zero. emissions reductions for the aviation
climate change with all the organisations
As one example, IAG successfully delivered of which it is a member (below). IAG has industry and the balance of in-sector and
its first ESG day for investors in 2022, as positively influenced this outcome by out-of-sector reductions.
described in the CEO letter in the ARA. contributing expertise and time to drive IAG prioritises advocacy on SAF too, as
Internal governance ensures that wider net zero commitments, and create and this is a key emissions reduction driver in
stakeholder engagement on climate support roadmaps to net zero emissions the next decade, and supports policies on
change is consistent with material issues across SA, A4E, oneworld, JZC, and ATAG. operational efficiency, zero-emission
and environmental goals. IAG has also driven and encouraged higher aircraft and carbon offsets and removals.
SAF ambitions across the JZC, oneworld
As per the IAG Code of Conduct, IAG does It advocates for policies that are effective
and WEF.
not use Company funds or resources to and fair across multiple airlines.
support any political party or candidate. IAG and key trade associations are listed
on the EU Transparency Register.

Member of organisation IAG involvement in organisation and actions to ensure and move to consistent stances
UK focus
Sustainable Aviation (SA) One of 13 members of SA Council, which governs activities for 44 members
Drove development of net zero roadmap in 2020, proposed interim industry climate
targets in 2021, active participant in workstreams to advance green solutions
Jet Zero Council (JZC) Chairs SAF Delivery Group, supported creation of UK Jet Zero Strategy in 2022 to
deliver net zero UK aviation by 2050, British Airways CEO a member
Royal Aeronautical Society (RAeS) – Executive Committee of GbD, attended non-CO2 conference in 2022 to understand
Greener by Design group (GbD) how best to mitigate these effects
Spain/Europe focus
Grupo Español para el Crecimiento Verde Iberia is one of over 50 corporate members supporting green growth
Airlines 4 Europe (A4E) Founding member, drove development of net zero roadmap in 2021, supported
RefuelEU consultation responses and other work to advance green solutions
Global focus
Coalition for Negative Emissions Founding member in 2020, Steering Group member, active contributor to consultation
responses to UK Government on how to scale up carbon removals
oneworld (represents 15 airlines) Chairs Environment Strategy Board (ESB), coordinated net zero roadmap and 10 per
cent SAF ambition across 2020-21, hosted two ESB meetings in London in 2022,
continues to provide support for advancing green solutions
Air Transport Action Group (ATAG) Significant airline contributor to global aviation roadmap to net zero in 2020-21, which
helps to inform industry priorities for continual advancement of green solutions
World Economic Forum (WEF) – Cleaner Regular contributor to reports on how to scale up SAF as a low-carbon solution,
Skies for Tomorrow Coalition advocated for 10 per cent SAF ambition by 2030
IATA (represents 300 airlines worldwide) Chaired IATA Sustainability and Environment Advisory Council (SEAC), representatives
on IATA working groups to advance policies for green solutions, supported advocacy
for net zero commitment at ICAO and strengthening of CORSIA baseline

18
A.2. Planet – wider issues

A.2.1. Waste On-board services are the main source of Reducing food waste remains an area of
waste. Key waste outputs include plastic focus. For example, Iberia offers a Buy-
Relevant standards: GRI 306-1/2/3 packaging, leftover food waste, drinks cans Before-You-Fly service on shorthaul flights
(2020). and cabin items such as wrappers. Key and British Airways offers a pre-ordering
inputs included on-board meals and service for products from the on-board
Overview amenity kits supplied to passengers. SpeedBird Cafe, to give passengers the
choice of buying fresh and ambient
IAG has one of the most comprehensive In 2022, IAG operations generated:
products before departure. These services
waste reduction plans in the airline
• 52,106 tonnes overall (27,613 in 2021) remove food waste from unpurchased
industry.
• 51,133 tonnes non-hazardous waste shorthaul economy cabin meals while
The ‘5 by 2025’ plan covers five waste • 973 tonnes hazardous waste. maintaining customer choice. British
streams and five business units, with waste Airways has a target to halve food waste
generation and recycling targets across 13,806 tonnes were recovered or recycled.
volumes between 2019 and 2025.
on-board, office, cargo and maintenance Waste is typically offloaded and processed
The Group is also expanding its efforts to
waste and a zero-based approach to at airports by third-party caterers, with
increase recycling. For example, in 2022
single-use plastic (SUP). IAG is committed some materials recovered on-site and
Aer Lingus trialled the first-ever flights into
to reducing, reusing and recycling waste other materials incinerated or sent to
Ireland to recycle on-board, Iberia
and dealing with any hazardous waste in landfill. The majority of cabin and catering
segregated glass on-board for the first
line with relevant national and international waste is processed at IAG’s hub airports
time, and Vueling rolled out trolleys which
regulations. – London, Madrid and Barcelona –
enabled waste segregation.
although the Group flies to over 200
airports worldwide.

Track record on waste

Iberia joins the EU 160 tonnes of SUP British Airways First Group-wide New initiatives Delivery of ‘5 by
LIFE+ Cabin waste saved across the targets 700 tonnes waste targets to recycle more 2025’ waste targets
project Group SUP saved a year but on-board waste
EU SUP ban comes
had to cancel due to
into force
COVID-19

2016 2019 2020 2021 2022 2025

Below is the Group’s most comprehensive waste disclosure to date. Waste trends remain unusual due to the COVID-19 recovery and
are expected to stabilise in 2023, allowing for more in-depth analysis of progress towards the 2025 goals.

Metric Unit 2019 base 2025 target 2020 2021 2022 vly
On-board waste per passenger Kg/pax 0.33 0.27 (-20%) 0.75 0.47 0.41 (12%)
Office waste per full-time employee Kg/FTE 95.7 47.8 (-50%) 124.5 103.1 77.4 (25%)
Maintenance waste per unit of activity Kg/person-hr 0.63 0.47 (-25%) 0.67 0.56 0.36 (35%)
Cargo waste per unit of cargo carried Kg/tonne cargo 1.55 1.16 (-25%) 1.59 1.43 1.59 11%
On-board waste at hubs recycled/recovered % 24% 40% 31% 26% 24% (2pts)
Office waste recycled/recovered % 35% 60% 16% 13% 26% 13pts
Maintenance waste recycled/recovered % 50% 70% 35% 45% 60% 15pts
Cargo waste recycled/recovered % 63% 80% 55% 61% 59% (2pts)

19
SUSTAINABILITY
A. PLANET

Commentary on key metrics

Key metrics Description Commentary

Overall waste Includes waste from all streams – on-board, office, cargo and Waste volumes increased as flying recovered and
maintenance waste – and an extrapolation of waste processed waste intensity metrics are returning to pre-
at overseas airports, where waste destinations are not always pandemic levels. Trends are expected to stabilise
reported by third parties. in 2023.
Waste Includes re-use, downcycling, upcycling, energy from waste, Overall recycling/recovery rates are 26 per cent,
recycling and composting and anaerobic digestion. Regulations, including up from 21 per cent in 2019. The impact of airline
recovery International Catering Waste (ICW) regulations, limit the recycling initiatives is expected to become clearer
amount which can be recycled. in 2023.
Single-Use Items made wholly or partly of plastic and are typically 160 tonnes of SUP were reduced from initiatives
Plastic (SUP) intended to be used just once or for a short period of time such as using birchwood cutlery and replacing
before they are thrown away. This aligns to the EU definition. packaging on blankets. The IAG GBS Procurement
team is evaluating alternatives to plastic as part of
procurement processes.
Waste/pax at On-board catering waste generated per passenger, including Waste generation ratios per passenger are
hubs volumes later recycled and recovered. gradually decreasing back to pre-pandemic levels.
Passenger numbers are based on those inbound and outbound
passengers who have their waste processed at hub airports
London Heathrow and Gatwick, Madrid, Barcelona and Dublin.

Detailed descriptions of all waste metrics are available in the NFIS.

A.2.2. Noise and air quality

Relevant standards: GRI 305-7.
IAG has delivered a 12 per cent reduction in noise per take-off and landing cycle (LTO) versus 2019, driven by fleet renewal. It remains
committed to reducing the impact of aircraft noise and air pollution on local communities near airports and supports innovation as a
means of delivering this. Noise and air quality performance are monitored using national databases and global aircraft noise standards.
Group airlines continue operational practices to minimise noise impacts, such as the use of continuous descents. They engage with
stakeholders such as community groups, regulators and industry partners to understand their concerns and participate in research and
operational trials to identify and refine solutions. In 2021 and 2022, Iberia participated in the EU AVIATOR project to better understand
air pollution at airports, including the impact of a 30 per cent SAF blend.
As indicated in the 2021 Annual Report, IAG planned to update noise targets in 2022 but has delayed this review until 2023 when flying
demand is expected to stabilise. Detailed descriptions on all noise metrics are available in the IAG NFIS.

Metric Unit1 vly v2019 2022 2021 2020 2019 2018

Noise per cycle QC per LTO (0%) (12%) 0.88 0.88 0.96 1.00 1.07
NOx per cycle kg per LTO (4%) (4%) 8.8 9.222 9.84 9.23 9.71
ICAO Chapter 14 % at standard 3pts 6pts 59% 56% 58% 53% 50%
CAEP Chapter 8 % at standard 2pts 6pts 41% 39%2 40% 35% 29%
1 % at standard is based on the fleet position at the end of 2021, including parked aircraft and excluding leased aircraft. Metrics per LTO are based on
aircraft operational during the year. 80% of the IAG Fleet is CAEP Chapter 6-compliant, up from 74% in 2018.
2 Restated using the latest available data.

Related risk: Operational noise restriction and charges

Risk and/or opportunity description and potential impact Mitigating actions
Airport operators and regulators apply operational noise • Investing in new quieter aircraft as part of fleet modernisation
restrictions and charging regimes which may introduce additional • Continually improving operational practices including
costs or restrict airlines’ ability to operate, e.g. restrictions on continuous descents, slightly steeper approaches, low-power/
night flights. low-drag approaches and optimised departures
• Internal governance and training and external advocacy in
Ireland, Spain and the UK to manage noise challenges

20
B. People

B.1. Overview B.2. Key metrics

Our people are central to our business and progress
and key in delivering for our customers. Relevant standards: GRI 102-7, 102-8,
The flexibility, commitment and support 401-1, 405-1
our colleagues have demonstrated
Key measures are provided in the next few
have been critical to enable the Group’s
pages together with explanations.
recovery as markets re-opened and
travel restrictions eased.
Each airline had a different recovery path, Headcount Headcount by
reflecting their network and markets
served. All have faced resourcing employment categories
71,134 72,268
challenges as we established the capacity 66,044
to meet increasing demands for travel. This
57,928
resourcing challenge included recruiting 56,658
around 17,400 new colleagues across the 10%
Group, driving a 17 per cent increase in our
34%
workforce year on year. The strength of
the Group’s brands was key to attracting 21%
talent, but we faced industry-wide
shortages in skilled resources especially in
engineering and airport operation roles. At 23% 12%
the end of 2022, around 66,000 people
were employed across the Group in 77 2018 2019 2020 2021 2022
countries. Voluntary turnover at 8 per cent Number of senior women
reflects both more normalised levels and Cabin Crew
increased to
the dynamic talent market in our key hubs. Pilots

The pandemic and inflation have created

pressure for the business and for our
people, and the approach to pay and
conditions in each operating company
34% Airport

Corporate

Maintenance

reflected the different starting points Headcount by Headcount

and business context they face. The
agreements reached by operating
employment contract by employment type
companies have endeavoured to strike the
right balance between benefits to our
employees and the competitiveness
of the business in the long-term. 5%
20%
At the start of 2022 we announced our
ambition for 40 per cent of women in
senior leadership roles by 2025. This new
ambition was underpinned by a new
diversity and inclusion framework and 80%
strategy and we have been making strong 95%
progress in making IAG a more inclusive
place to work.
Permanent Full-time
In 2022, we have seen the percentage
of women in the IAG Management Temporary Part-time
Committee increase 8 percentage points
with the appointment of Sarah Clements
as IAG’s new General Counsel. We end the
year at 34 per cent of women in senior
leadership roles, up from 33 per cent in
2021. We remain confident we are on track
to deliver on our 40 per cent ambition and
have instigated new succession and talent
processes and implemented changes to
ensure our recruitment processes are
inclusive, and we are seeing more talent
mobility across the Group as a result.

21
SUSTAINABILITY
B. PEOPLE

Table of key measures

GRI
Metric standard Unit Sub-category vly 2022 2021 2020 2019 2018
Employment 102-7 Average manpower equivalent1 +18.5% 59,505 50,222 60,612 66,034 64,734
Headcount 102-7 Number of people2 +16.6% 66,044 56,658 57,928 72,268 71,134
Composition 102-8 % headcount by employment Full-time: 2pts 80% 78% 79% 74% 75%
type Part-time: -2pts 20% 22% 21% 26% 25%
Composition 102-8 % headcount by employment Permanent: -1pts 95% 96% 97% 94% 94%
contract Temporary: 1pts 5% 4% 3% 6% 6%
Composition 102-8 % headcount by employee Cabin crew: 2pts 34% 32% 31% 35% 35%
categories Pilots: -1pt 12% 13% 13% 11% 11%
Airport
Operations: 0pts 23% 23% 25% 26% 26%
Corporate
Function: 2pts 21% 19% 20% 17% 18%
Maintenance: -3pt 10% 13% 11% 11% 10%
Employees by % of people UK: 2pts 51% 49% 50% 54% nr
country Spain: -2pts 34% 36% 34% 31% nr
Ireland: 0pts 7% 7% 8% 7% nr
Other: 0pts 8% 8% 8% 8% nr
Note: ‘nr’ means ‘not reported’.
1 The mean of the manpower equivalent captured quarterly to reflect seasonality.
2 Actual number of people employed across the Group at December 31, 2022.

22
Table of key measures continued
Relevant standards: GRI 102-7, 102-8, 401-1, 405-1
GRI
Metric standard Unit Sub-category vly 2022 2021 2020 2019 2018
Gender 405-1 % women at Board level 3pts 45% 42% 42% 33% 33%
diversity % women at senior executive level 1pt 34% 33% 30% 30% 27%
% women at Group level 2pts 44% 42% 43% 44% 45%
Age 405-1 % of managerial staff in each <30 4pts 6% 2% 3% 4% 7%
diversity age band 30-50 1pts 56% 55% 57% 55% 57%
50+ -5pts 38% 43% 40% 41% 36%
% of non-managerial staff <30 5pts 21% 16% 18% 21% 22%
in each age band 30-50 -4pts 49% 53% 54% 50% 50%
50+ -1pt 30% 31% 28% 29% 28%
Workforce 405-1 Attrition rate (%) Voluntary 3pts 8% 5% 16% 7% 8%
turnover Non-voluntary 0pts 1% 1% 5% 2% 3%
Overall % by age group <30 5pts 40% 35% 16% 37% 35%
30-50 -4pts 42% 46% 33% 36% 34%
50+ -1pt 18% 19% 51% 27% 31%
Overall % by gender Women -2pts 47% 49% 52% 47% 51%
Men 2pts 53% 51% 48% 53% 49%

Relevant standards: GRI 102-41, 403-9, 404-1. TR-AL-310a1

GRI
Metric standard Unit vly 2022 2021 2020 2019 2018
Social 102-41 % covered by collective bargaining agreements -2pts 89% 91% 89% 87% 86%
dialogue
and trade
unions
Average 404-1 Average hours per employee per year 80% 53.3 29.6 26.4 48.4 41.1
hours
of training
Lost Time 403-9 LTI per 200,000 hours worked 33% 3.01 2.27 2.41 4.34 4.20
Injury (LTI)
frequency
rate
LTI severity Average days lost per LTI -21% 23.98 30.47 37.80 22.64 21.12
rate
Fatalities 403-9 Number of fatalities 0pts 0 0 0 0 1
Note: ‘nr’ means ‘not reported’.

23
SUSTAINABILITY
B. PEOPLE

Description and commentary for key workforce metrics

Metric Unit Description Commentary
Employment Average Manpower equivalent is the number of The 18.4% increase reflects our business’s growing
manpower employees adjusted to include part-time recovery in 2022 and substantial recruitment and
equivalent workers, overtime and contractors. increases in full-time employment across the business. This
is an average figure and most of the on-boarding of new
The average is the mean of the manpower
recruits has taken place in the second half of 2022.
equivalent captured quarterly to reflect
seasonality. This measure accounts for employees’ contractual
schedule of work.
Headcount Number of Headcount is the actual number of people Overall headcount has increased by 17% in 2022. This
people employed across the Group (employees) reflects recruitment drives across the Group’s key hubs.
at December 31, 2022.
Composition % Composition is a breakdown of headcount Increases in temporary workers to pre-pandemic levels of
headcount as at December 31, 2022. Full-time 5%, driven by short-term capacity requirements and a
by employees are defined as those working return to more normalised seasonal resourcing.
employment full contractual hours as at December 31,
We have also seen an increase in full-time employees to
type, 2022. A temporary employment
80%. There have been significant net increases in full-time
contract and contract has a defined end date.
cabin crew +25% and airport operations employees +25%.
employee
The employee category breakdown
categories Cabin crew composition levels have recovered this year to
portrays the distribution of the major
34% of the Group workforce.
groups within IAG’s workforce ’in the
air‘ – pilots and cabin crew – and ’on the
ground’ – airport, corporate and
maintenance and logistics.
Employees Number of This metric depicts the distribution of the The increase in the proportion of Group employees based
by country people Group’s employees according to the in the UK reflects the recruitment drive currently underway
country in which they are based. in British Airways. This has seen nearly 9,000 UK-based
employees join the Group.
At the end of 2022 IAG had employees based in 77
countries.
Gender % women at The share of women as a proportion of all There were 221 senior executives as at December 31, 2022.
diversity Board, staff at specific levels of seniority across
Gender diversity increased to 45% at Board level. IAG’s
senior the Group.
proportion of women in senior executive roles is currently
executive,
34%.
and Group
level An increase in the proportion of women across the Group
is associated with the recruitment drives in roles with a
traditionally more balanced gender mix e.g. cabin crew.
Age % of staff in The ‘on the ground’ managerial population Employee turnover for <30 year old was 31% (2,951); 10%
diversity each age includes all airport, corporate and for 30-50 year old (3,022); and 7% for >50 year old (1,427).
band maintenance roles equivalent to a
Overall, the Group has seen a decrease in the proportion
manager across the Group.
of employees aged between 30-50 years old. This is linked
The ‘in the air’ managerial population to significant growth in the <30 years age joining the
includes all pilot and cabin crew roles group (+19%).
equivalent to captains and cabin
service managers.
Workforce % voluntary Measured as the number of leavers as a The overall annual turnover in 2022 was 9% – a total of
turnover and percentage of the average number of 5,930 employees, of which 916 were non-voluntary leavers.
non- Group employees in the year. The number This compares to 6% in 2021, a total of 5,054 of which 685
voluntary of leavers excludes temporary contracts were non-voluntary leavers.
turnover and death in service. Voluntary turnover
This increased turnover reflects more normalised turnover
occurs when employees choose to leave
levels and the dynamic talent market in key hubs.
(e.g. resignation, retirement, voluntary
redundancy) and non-voluntary turnover
occurs when employees leave for reasons
other than a personal decision (e.g.
compulsory redundancy, dismissal).

24
B.3. Equity, Diversity Achievements in 2022 • IAG GBS have launched the first
• IAG has increased the number of women Equity, Diversity, and Inclusion policy
and Inclusion in senior executive roles to for the company.
Diversity is one of IAG’s core strengths, 34 per cent, a 1-percentage point • IAG Loyalty placed EDI at the centre
with colleagues joining us from across increase on last year. of its new values this year, stating ‘We
the world, and working in around 80 • IAG’s new Equity, Diversity and Inclusion take belonging seriously’. Bringing this
countries. IAG continues to champion policy was approved by the IAG Board to life included forming a colleague
and make positive progress relating of Directors in July 2022. ‘squad’ focused on
to equity, diversity, and inclusion (EDI) • Launch of the ‘Peppy’ menopause the topic, the launch of a women’s
initiatives and practices. A robust support App across IAG head office, development programme in
integrated framework for EDI guides British Airways and IAG Loyalty, partnership with Amazing If and an
our journey towards a diverse and recognising the impact of the organisation-wide EDI survey.
inclusive culture and workforce. menopause at work and offering • Iberia have incorporated EDI into
In 2022, we reset our ambition of 40 24/7 advice, support, and information to their values, transforming the previous
per cent women in senior leadership those impacted both directly and value of ‘We are one’ into ‘We are one
roles by 2025 and we have made indirectly. and diverse’. In 2022, the company
strong progress in our first year with • Having achieved the Bronze Investors in also created and launched a network
a 1 percentage point increase to 34 Diversity Award from the Irish Centre for of diversity ambassadors who will be
percent. Our Group-wide plans go Diversity, Aer Lingus now targets the supported as champions and role
beyond gender. We are reviewing how Silver Award, with significant models.
we manage declarations in our core improvements to parental leave policies • In Iberia Express the management
countries of operation, reflecting the implemented in 2022 and a continuation committee reached 50 per cent
cultural and regulatory environment, in support for Dublin’s Pride Parade. female representation for the first time
with an aim to use data and insights to • British Airways achieved 40% women in and there was a substantial
set progressive targets and action plans. senior leadership roles for the first time. improvement in female representation
The airline also successfully undertook a in First Officer pilot roles, moving from
The IAG Diversity Panel, created in
9-month pilot for reverse mentoring with 9 to 11 per cent
2021, sees representatives across all
operating companies sharing best colleagues from racially and ethnically • Vueling finalised its D&I strategy
practice and leading on the co-design diverse backgrounds and members of and action plan. The company also
and implementation of new EDI the British Airways Management celebrated achieving a 50% female
initiatives. In 2022, the panel welcomed Committee. In 2023, this programme will management committee and a
internal and external guest speakers on be rolled out to all senior managers positive 44% of female colleagues
specialist subjects such as gender across British Airways. working in team leader positions.
diversity in aviation and reverse • IAG Cargo invested in mental health first
mentoring. Members of the panel have aid training for 59 colleagues across the
joined Women in Hospitality and Leisure
(WiHTL) Committees, including
company, supporting a culture of
support and inclusion. In recognition of “Diversity
specialist areas such as Race & Ethnicity
and Disability.
the global nature of the Cargo business,
Rosetta Stone Language Learning is one of
To support and underpin actions
and initiatives across the group, work
launched and was made available to all
colleagues. IAG’s core
has taken place to review IAG’s key
employment policies, ensuring they
strengths”
are inclusive and fair for all.

25
SUSTAINABILITY
B. PEOPLE

B.4. Health, safety and To support and prioritise employees’ The IAG Group Slavery and Human
health and safety, our operating Trafficking Statement outlines these
well-being companies continue to provide employees actions and is available on the IAG website.
Overview with access to occupational health services This statement is made under section 54,
and rehabilitation services. For example, part 5 of the 2015 UK Modern Slavery Act
IAG is committed to safeguarding the
British Airways has relaunched its Early (MSA). In terms of policies associated with
health and safety of our employees,
Active Rehabilitation programme to assist human rights, IAG asks suppliers to comply
customers and all others related to our
employees back to work to help keep with the Supplier Code of Conduct, which
activities. This means operating in a
LTI severity rates low whilst providing expressly prohibits the use of child labour
healthy, safe and secure way in compliance
employees the necessary support to get and any form of slave, bonded, forced,
with all applicable laws, regulations,
back to work. British Airways will also be involuntary prison labour, human
Company policies and industry standards.
commencing a project in 2023 to replace trafficking or exploitation. Modern slavery
Health and safety are fundamental to
its current Occupational Health software to clauses feature in all new supplier
our business, whether in the air or on
provide employees and managers with a contracts as well as contract renewals.
the ground.
better platform for colleague referral. IAG
IAG remains committed to taking swift and
IAG has robust governance processes in Cargo has trained 59 accredited Mental
robust action if any evidence relating to
place led by the safety committees in each Health First Aiders as part of a new vision,
slavery or human trafficking in our
operating company. mission and values launch across the
business supply chain is identified.
The IAG SECR Committee has oversight of business.
IAG is taking steps to prevent human
all matters related to the operational safety Most of our operating companies have
trafficking. Human trafficking is of
and corporate responsibility of IAG’s supplemented government and
particular concern to IAG and to the wider
airlines as well as to the systems and healthcare-provided influenza vaccinations
aviation industry, as the Group transports
resources dedicated to safety activities with their own programmes. Given the low
millions of passengers every year and has
across the Group. levels of influenza since COVID-19 this
tens of thousands of suppliers across the
IAG’s customers travel on aircraft and initiative is seen as key to keeping our
world. Operating airlines work closely
through buildings and environments employees healthy and protected and
with governments and the airports in
that are subject to regulations applicable maintaining productivity in the Group. For
which they operate to ensure that any
to health and safety in each country. example, Iberia has continued its ‘Elige
suspected trafficking on our flights is
Procedures, systems and technology used Cuidarte’ (‘Choose to take care of
identified, reported and dealt with
in our operations are designed to protect yourself’) programme with an objective to
appropriately. IAG also supports the 2018
employees and customers alike. vaccinate all employees against the flu and
IATA resolution denouncing human
providing workers with suggestions of
Focus areas trafficking and reaffirming a commitment
health lifestyle habits.
to tackle this issue.
As IAG continues to recover and grow
in 2022, health and safety has remained Operating airlines also train staff to
a priority area for the Group. While Lost
B.5. Human rights and recognise and respond to the signs of
Time Injury (LTI) frequency rates have modern slavery potential human trafficking situations and
increased this year to 3.0 incidences per provide procedures for reporting where
IAG had no known cases of human rights any cases are suspected. This training is
200,000 hours worked, this is still violations across the Group during 2022,
relatively low compared to pre-2019 levels, managed at airline level. In 2022, over
the same as in 2021. 24,000 employees have completed
and reflects the increase in hours worked
by front-line operational teams compared IAG is taking steps to prevent incidences training covering human rights topics,
to 2021. of modern slavery within the Group and compared to 27,000 employees in 2021.
across its supply chains.

Related risk: Human rights

Risk description and potential impact Mitigating actions
Not preventing potential incidences of human trafficking via IAG • Updated Group Slavery and Human Trafficking Statement
routes, damaging efforts to improve human rights and associated • Training for staff to recognise signs of potential human
legal and reputational impacts. Potential human rights or modern trafficking and guidance and processes in place to report this
slavery violations in the supply chain leading to fines, compliance • See C.4. Supply chain governance
issues, business interruption or reputational damage.

In 2022, IAG planned to review its assessment of human rights risks within the business. This review has been shifted to 2023.

26
B.6. Community engagement and charitable support
Relevant standards: GRI 102-13, 201-1.
In 2022, IAG raised over €6.5 million for charitable causes across the Group, including campaigns related to the floods in Pakistan and
the war in Ukraine.
Of this, 43 per cent came from customer contributions, 35 per cent from Company donations, 16 per cent from employee contributions,
and 6 per cent from in-kind donations. The Group also carried over 19 million COVID-19 vaccines between 2020 and 2022.

Metric GRI Standard Unit vly 2022 2021 2020 2019 2018
Total raised € million 141% 6.5 2.7 4.6 5.7 nr

Group operating companies have partnerships with a range of organisations including:

Disasters Emergency Committee (UK) Flying Start (UK)

Save the Children (Spain) Lovaas Foundation (Spain)

Dublin Pride (Ireland) Special Olympics (Ireland)

Business vs Smog (Poland) Noble Gift (Poland)

UNICEF (global)

27
SUSTAINABILITY
B. PEOPLE

Aer Lingus and

Paralympics Ireland
In October 2022, Aer Lingus was
announced as the Official Airline of
Paralympics Ireland and will support
Team Ireland as it prepares for and
competes in the Paris 2024 Paralympic
Games. Following the support of the
team for its Tokyo 2020 campaign,
Aer Lingus will continue to support Irish
para-athletes to World Games in the
lead up to qualification for Paris 2024.

28
C. Principles of
sustainability governance
C.1. Sustainability strategy Material issues The results inform ongoing disclosures and
IAG orientates its sustainability strategy strategy.
IAG’s vision is to be the world’s leading
around material issues: those which are Tackling climate change was identified as
airline group on sustainability.
most important to key stakeholders and the most material issue in the long-term. In
That means using its scale, influence and which have the biggest external impacts. the short-term, as the business recovers
track record to not only transform the from the COVID-19 pandemic, profitability
To identify these issues over a three-year
business but drive the system-wide and customer and employee engagement
timeframe and to 2030, IAG repeated a
changes required to create a truly and well-being remain high priorities. IAG
materiality assessment in 2021 which was
sustainable aviation industry. IAG is will consider use of a double materiality
facilitated by an independent third party.
committed to delivering best practices in assessment when it next repeats this
External stakeholders included investors,
sustainability programmes, processes and analysis, which is expected to be 2024.
corporate customers, policy makers, trade
impacts, while executing Group strategy.
associations, fuel suppliers, airports, and IAG does not have specific risk provisions,
IAG aligns its environmental strategy with NGOs. Internal stakeholders included IAG targets or guarantees related to non-
the three overall strategic priorities of the Board members, all IAG Management material issues such as water consumption,
business described in the Strategy section. Committee members, and operating biodiversity, raw materials consumption or
company sustainability representatives. light pollution. More information on water
and biodiversity is available in the
Additional Disclosures section of the NFIS.

Leading net zero by 2050 roadmaps and commitments

IAG IAG roadmap Sustainable oneworld A4E roadmap oneworld IATA ICAO
commitment launched at Aviation commitment and roadmap commitment commitment
(first airline Capital Markets roadmap and commitment
group Day commitment
worldwide)

Oct 10, 2019 Nov 8, 2019 Feb 4, 2020 Sept 11, 2020 Feb 11, 2021 Aug 31, 2021 Oct 4, 2021 Oct 3, 2022

Leading 10% SAF by 2030 commitments

IAG (first European airline World Economic Forum oneworld alliance UK Government
group to commit)
(Cleaner Skies for Tomorrow
Coalition)

Apr 22, 2021 Sept 22, 2021 Oct 4, 2021 Oct 9, 2021

Leading innovation

CDP A-List company Sustainability Founding member Secures first aviation Invests in hydrogen Offers carbon
category added to of Coalition for sustainability-linked aircraft (ZeroAvia) removals
Group accelerator Negative Emissions, loan linked to ESG to customers
programme. supporting carbon targets, via British (British Airways)
removals. Airways

Dec 2017 Sept 2019 Oct 2020 Jan 2021 2021 Nov 2022

Drove/leading role
Supported
IAG-specific

29
SUSTAINABILITY
C. PRINCIPLES OF SUSTAINABILITY GOVERNANCE

Sustainability leadership KPIs

9 1
8 2
Our
9
7 KPIs 3

6 4
5

IAG drives progress based on nine Accelerating progress in Leadership in carbon disclosures
strategic KPIs agreed by the Board 5 low-carbon technologies IAG leads the aviation industry in external
in 2021. including aircraft technology, ratings of climate action.
SAF, carbon offsets and For four of the past six years, IAG has been
carbon removals awarded Leadership grades by The
Clear and ambitious targets
1 relating to IAG’s most
2022 action Carbon Disclosure Project (CDP), which
material issues Sustainability remains a focus assesses almost 15,000 companies globally
area within the IAG accelerator on climate action. CDP awarded IAG a
2022 action
programme Hangar 51. prestigious A-List award in 2022, placing
2025, 2030 and 2050 carbon
the Group in the top 3 per cent of
targets and published transition
Accelerating innovation respondents worldwide.
plan. British Airways and Iberia
have sustainability-linked loans 6 in low-carbon technology For the past two years, IAG has also
related to 2025 carbon efficiency. as above been the highest ranked airline in the
2022 action global Transition Pathway Initiative (TPI)
Low-carbon transition pathway LanzaJet Freedom Pines SAF ratings, which assess 600 companies
2 embedded in business strategy plant was the first project across 47 countries on their readiness for
the low-carbon transition.
worldwide to receive a catalyst
2022 action
grant from the Breakthrough IAG is in the top 10 per cent of airlines
Sustainability aspects included in
Energy Catalyst Grant. assessed by Sustainalytics, which
one-year, three-year and 2030
business planning for operating gives ESG risk ratings to around
Industry leadership in the 15,000 companies worldwide based
companies.
7 innovation and deployment of on public disclosures.
SAF including power-to-liquids IAG continues to engage with other
Management incentives aligned
3 to delivering a low-carbon
2022 action relevant ESG rating agencies to enable
transition plan 250,000 tonnes of SAF secured more accurate calculations of IAG’s
for 2030, 25 per cent of target. scores and to identify actions to improve
2022 action
these scores.
Over 7,400 senior executives and
Stepping up our social
managers have 10 per cent of
their annual incentive linked to 8 commitments including
annual carbon intensity targets. on diversity, employee
engagement and sustainability
as a core value
Leadership in
4 carbon disclosures
2022 action
34% women in senior executive
2022 action
roles, a 1 percentage point
A-List company in CDP climate
increase on 2021.
ratings in 2022 (Top 3 per cent).
Highest-ranked airline in TPI
Industry leadership in
climate ratings (Score: 17/18).
9 stakeholder engagement and
advocacy
2022 action
Leadership roles across multiple
trade associations. See A.1.7.

30
Governance spotlight: Jet Zero Council

Overview IAG support

In 2021, the UK Government IAG staff chaired two
created a new initiative subgroups – a COP26 Group
called the Jet Zero Council and the SAF Delivery Group
(JZC), to provide advice on – and the British Airways
the Government’s ambitions CEO is a member.
to deliver net zero aviation Jet Zero In 2022 the work of the JZC
and zero-emission flights.
Consultation supported the launch of an Jet Zero
ambitious ‘Jet Zero Strategy’
A consultation on for UK aviation.
Strategy
our strategy for Delivering net zero
net zero aviation aviation by 2050

Scope Next steps

July 2022

The JZC is a partnership The Government also

between industry and committed to reviewing the
Government to bring strategy every five years, and
together ministers and adapting its approach based
CEO-level stakeholders, with on the progress made.
regular meetings and The JZC model has been so
subgroups to drive the successful that it is being
ambitious delivery of new replicated in other countries.
technologies and innovation
to cut aviation emissions.

31
SUSTAINABILITY
C. PRINCIPLES OF SUSTAINABILITY GOVERNANCE

C.2. Governance frameworks

Relevant standards: GRI 102-46/-48
Overview
IAG has robust governance in place to ensure joined-up and progressive decisions on sustainability.
This also helps to ensure that wider stakeholder engagement is consistent with material issues and environmental priorities and goals.
An annual meeting planner for the Board ensures sustainability governance processes fit within the reporting and disclosure framework
of the Group.
The Group’s unique structure means that each individual operating company has a distinct sustainability programme. These are
regularly reviewed to ensure alignment with the Group sustainability strategy and principles, which covers material issues, KPIs and
engagement plans.
Relevant forums and levels of responsibility are indicated below. Information flows between groups is covered in Sections C.6., on the
second page of the Risk Management and Principal Risk factors section, and in the Corporate Governance section.

Board/management committee Frequency of meetings Responsibility in relation to sustainability

Board At least quarterly Approval for strategy, major investments, risk management
and controls and review of progress against environment and
people plans including climate-related goals and targets
Board Safety, Environment and At least quarterly Dedicated oversight of Group sustainability programme and
Corporate Responsibility (SECR) alignment with strategic priorities, review of progress against
Committee environment and people plans. Provides a link between operating
company management committees and the IAG Board
IAG Audit and Compliance At least quarterly Ensures compliance with relevant regulation and reviews Annual
Committee Report and Accounts and Non-Financial Information Statement
IAG Management Committee At least quarterly Reviews and challenges Group programmes, the alignment of
operating company-specific programmes with Group priorities
and strategy, and progress against plans
Operating company management At least quarterly Reviews and challenges operating company-specific
committee environment and people programmes

Forum Frequency of meetings Responsibility in relation to sustainability

IAG Sustainability Steering Group At least quarterly Comprised of senior representatives from across the Group who
(SSG) provide oversight of environmental and social initiatives and
reporting
IAG SAF Steering Group At least quarterly A cross-Group meeting focusing on SAF projects and progress
IAG Sustainability network Monthly Sharing sustainability updates and ideas across all business units
and over 30 sustainability representatives. In 2022, three Group
workshops were also hosted: in Spain, Ireland and Poland
Hangar 51 Governance Committee At least bi-annually Reviews new potential investments to consider emerging climate
technologies and partnerships with sustainability start-ups
Members include the Chief Strategy Officer, Chief Financial
Officer, Chief Information Officer and General Counsel

Individual Frequency of reporting Responsibility in relation to sustainability

IAG CEO At least quarterly Chairs the IAG Management Committee, updates the Board,
and ensures Board-level decisions are directed into action
across the Group
IAG Chief People, Corporate Affairs At least quarterly Reports into the IAG CEO. A member of IAG Management
and Sustainability Officer (CPCASO) Committee. Chairs the SSG and provides approval and direction
of Group programmes
IAG Group Head of Sustainability Regularly as relevant Reports into IAG CPCASO. Chairs the Sustainability network
IAG Group Head of People Regularly as relevant Reports into IAG CPCASO

Wider governance
Wider governance processes integrate sustainability aspects. As part of the Group-wide ERM process, sustainable aviation and people,
culture and employee relations risks are presented bi-annually to the Audit and Compliance Committee and annually to the Board.
One-year financial plans and three-year business plans are coordinated by Group Finance and include sustainability aspects.
In 2022, Group Sustainability representatives also attended the away days of other teams to support the embedding of sustainability.

32
C.3. Workforce governance Training and development Diversity
Within the Group, individual operating At IAG, we believe diversity is key to
Relevant standards: GRI 403-4, 408-1,
companies have responsibility for the innovation and to the future growth and
409-1.
policies and procedures relating to their success of our business. IAG is proud of
IAG aims to create an environment in employees to ensure they can continue to the diversity of its workforce, with
which employees feel motivated, safe and attract and retain the best talent for every colleagues having joined from across the
able to thrive as this is central to the role. world, working in 77 countries, speaking
continued success of the Group. dozens of languages and representing
Measures to support employee satisfaction
Working policies and rights at work every element of the communities we live
and talent management are primarily
Core principles in the IAG Code of and operate in. It is this richness of
managed within operating companies and
Conduct include fair and equal treatment, backgrounds, of experiences, of cultures
each operating company has its own
non-discrimination, fairness and respect for and ideas that makes our business tick.
established methods of measuring
human rights. This Code applies to all employee satisfaction. In addition, IAG has We want our workforce to reflect the full
directors, managers and employees of the introduced an organisational health survey, diversity of the communities we live and
Group and e-learning training to support it initially focused on management work in. We want everyone to see role
is mandatory and applicable to all populations across all operating companies models they can identify with and to have
employees and directors. In addition to the to benchmark management practices the same chance of progression and
Code of Conduct, individual operating against a globally recognised metric. This development, and we want everyone who
companies have responsibility for policies survey was run initially in November 2020 works for IAG to feel that their unique
and procedures relating to their and repeated every six months since. difference is recognised and valued. This
employees, including appropriate reward Insights from the survey are used to shape means a focus on equity, diversity and
frameworks to ensure they can continue to and prioritise cultural development plans. inclusion. This allows us to be a place
attract and retain the best talent for every where everyone’s talents are recognised,
Individual operating companies are
role. where skills and capabilities grow, and
responsible for learning, development and
IAG has employees based in European where future leaders are nurtured and
talent within their business, to enable them
countries which comply with the developed.
to ensure they have the right skills and
conventions of the International Labour capabilities required to support their IAG has recently published a revised
Organization (ILO), covering subjects that strategy. In May, IAG completed a detailed Group-wide Diversity, Equity and Inclusion
are considered as fundamental principles review of succession planning and talent Policy to address and eliminate
and rights at work: freedom of association for all critical and senior roles which has discrimination and promote equality of
and the effective recognition of the right been used to shape the Group’s talent and opportunity regardless of age, gender,
to collective bargaining; the elimination of leadership development priorities and disability, ethnicity, religion or sexual
all forms of forced or compulsory labour; plans. Due to the diverse nature of Group orientation.
the effective abolition of child labour; and businesses, both in terms of jurisdictions
At Group level, IAG also has a Directors’
the elimination of discrimination in respect and operations, all training policies
Selection and Diversity Policy that sets out
of employment and occupation. Outside and programmes are implemented at
the principles that govern the selection
the EU, IAG recognises trade unions in operating company level. Each is
process and the approach to diversity on
many jurisdictions, has collective responsible for determining the specific
the Board of Directors and the IAG
agreements and meets/exceeds all courses offered within their organisation,
Management Committee. These policies
relevant labour standards. the frequency with which training courses
have been approved by the Board of
Collective bargaining arrangements are in must be completed, and the employees
Directors.
place for 89 per cent of our workforce. In required to attend. However, across the
Group, all operating companies are See Section B.3. for more diversity
addition, IAG has a European Works
required to run the following mandatory initiatives.
Council (EWC) which brings together
representatives from the different corporate training courses for their
European Economic Area (EEA) countries employees:
in which the Group operates. EWC • Code of Conduct
representatives are informed about and, • Compliance with Competition Laws
where appropriate, consulted on
• Anti-bribery and Corruption Compliance
transnational matters which may impact
• Data Privacy, Security and Protection
employees in two or more EEA countries.
IAG completed the election and
appointment process for the new Select
Committee and Chair in early 2022, and
the transition was completed in May this
year.

33
SUSTAINABILITY
C. PRINCIPLES OF SUSTAINABILITY GOVERNANCE

C.4. Supply chain IAG GBS is also partnering with EcoVadis, In 2022, IAG GBS embedded sustainability
a market-leading provider of business aspects into the day-to-day operation of
governance sustainability ratings, to assess suppliers the organisation and included sustainability
Relevant standards: GRI 308-2, GRI 414-2. using a holistic environmental, social and targets in the performance objectives of all
Overview governance (ESG) scorecard. IAG GBS employees.

IAG Global Business Services (IAG GBS) This gives IAG and its suppliers a baseline IAG GBS has verified the existing, active
continues to engage with, support and for improvements across ESG issues, and supplier base and IAG’s airlines’ interline
monitor suppliers to ensure all products suppliers can share them with customers relationships in Russia and Belarus in order
and services provided to IAG are on a path and other stakeholders, which benefits to determine the potential implications of,
to net zero by 2050. wider industry sustainability. and actions to be taken, due to the trade
sanctions issued as a response to the war
The IAG GBS Group Procurement team As a minimum, IAG requires its suppliers to
in Ukraine. Follow-up and support have
leads the Supply Chain Sustainability provide a safe and healthy environment for
been provided to IAG’s operating
Programme by delivering in four key areas: their workforce. Supplier selection
companies with regard to mitigation
considers potential industry and
• The Supplier Code of Conduct (SCoC) actions taken in response to the findings
geographical risk and, where necessary,
• Independent risk screening and (e.g. payment stop/blockage) in
on-site audits are carried out. These audits
sustainability assessments coordination with the relevant Compliance
are performed by independent inspectors
• Corporate Social Responsibility (CSR) Teams.
with CSR expertise using the SEDEX
Audits Members Ethical Trade Audit (SMETA) Building a sustainable future in 2023
• Embedding sustainability as standard in methodology. In 2022, 32 of these audits
IAG GBS plans to assess the sustainability
the procurement process were completed.
performance of suppliers representing at
From insight to action in 2022 All suppliers also undergo annual screening least 80 per cent of IAG’s total spend, and
The SCoC has been issued to the existing for any legal, social, environmental and include sustainability aspects in the
supply chain and integrated into the new financial risks. The Group Procurement and category planning process and additional
supplier onboarding process. New Compliance teams assess any suppliers measures into the selection and contract
suppliers are requested to acknowledge identified as having potentially higher award process.
their commitment to achieving net zero levels of risk and implement mitigation
emissions by 2050, and the need for a plans where necessary. Any issues are
roadmap, supported by deliverable plans, flagged to the risk owners within the
to achieve this target. Group to jointly take appropriate action.

Issued Supplier Code of All suppliers screened for Net Zero Scope 3 EcoVadis partnership Embedding sustainability
Conduct sustainability risks commitment and supplier sustainability into category planning
clause

2019 2020 2021 2022 2023 (planned)

Tracking metrics and progress

GRI Standard vly 2022 2021 2020 2019 2018
Total number of suppliers 6% 14,045 13,272 22,947 27,033 nr
Suppliers screened 6% 14,045 13,272 22,947 18,369 nr
308-2,
Suppliers with additional compliance assessments (63%) 557 1,510 1,818 2,912 nr
414-2
Critical suppliers under regular risk monitoring (6%) 32 34 35 n/a nr
Independent CRS audits 7% 32 30 25 28 nr

Related risk: Supply chain sustainability compliance

Risk and/or opportunity description
and potential financial impact Mitigating actions
Potential breach of compliance on • IAG GBS procedures above as well as integrity, sanctions and IAG Know Your
sustainability, human rights or anti- Counterparty due diligence for higher-risk third parties
bribery by an IAG supplier resulting in • Internal governance on supplier management to identify challenges and mitigation
financial penalties, legal, environmental, • Supplier screening using external business intelligence databases which actively monitor
social and/or reputational impacts. supplier status and flag risks including sustainability

34
C.5. Ethics and integrity Whistleblowing reports received for each conduct an annual review of bribery risks
Operating Company are triaged by the at operating company and Group level.
governance Compliance teams to direct to the most
The main risks identified for 2022 were
Relevant standards: GRI 102-16/-17, appropriate area for investigation,
unchanged from the previous year and
205-1/-2/-3 maintaining independence in this
relate to the use of third parties,
Overview investigation process.
operational and commercial decisions
All directors and employees are expected The IAG Audit and Compliance Committee involving government agencies, and the
to act with integrity and in accordance reviews the effectiveness of the inappropriate use of gifts and hospitality.
with the laws of the countries in which whistleblowing channel on an annual basis. No material compliance breaches were
they operate. This annual review considers the volume of identified in 2022, as in 2021.
IAG’s Group Code of Conduct (CoC), last reports by category; timeliness of follow-
Anti-bribery and corruption training is
revised in 2019 and approved by the up; process and responsibility for follow-
mandatory for all relevant personnel in IAG
Board, sets out the general guidelines that up; emerging themes and lessons; and any
operating companies, Group functions and
govern the conduct of all directors and issues raised of significance to the financial
the Board. Individual training requirements
employees of the Group when performing statements or reputation of the Group or
are set by each operating company and
their duties in their business and other areas of compliance.
function and are determined by factors
professional relationships. Mandatory CoC In 2022, whistleblowing reports concerned such as the level and responsibilities of an
training and communications activities are issues relating to employment matters (64 employee.
carried out for directors, employees and per cent), dishonest behaviour/reputation
Revised Group-wide anti-bribery e-learning
third parties on a regular basis to maintain (29 per cent), health and safety (6 per
was rolled out in 2019 and is required to be
awareness and understanding of the cent) and regulatory matters (1 per cent).
completed every three years.
principles that govern the conduct of the All reports were followed up and
Group. This policy is available on the IAG investigated where appropriate, and no To identify, manage and mitigate potential
website. material concerns were identified. bribery and corruption risks, IAG uses
risk-based third-party due diligence which
In 2022, a new Group-wide Whistleblowing Anti-corruption and anti-money
includes screenings, external reports,
Policy was issued and all the Group laundering
interviews and site visits depending on the
channels consolidated to one IAG and its operating companies do not level of risk that a third party presents. Any
whistleblowing channel provided by an tolerate any form of bribery or corruption. risks identified during the due diligence
independent third-party provider, This is made clear in the Group CoC and process are analysed and a mitigation plan
EthicsPoint, where concerns can be raised supporting policies which are available to put in place as necessary. Certain risks
on an anonymous and confidential basis. all directors and employees. An anti- could result in termination of the proposed
This channel is available to members of bribery policy statement is also set out in or existing relationship with the
staff as well as suppliers, with information the SCoC. counterparty. The IAG Audit and
on how to access it published in the CoC In 2022, a Group-wide anti-bribery and Compliance Committee receives an annual
and SCoC. If any employee has a concern corruption policy was issued. This sets out update on the anti-bribery compliance
about unethical behaviour or the minimum standards that are expected programme.
organisational integrity, they are by the Group, its directors and employees, There were no legal cases regarding
encouraged to first speak with their including definitions and guidance for corruption brought against the Group and
manager or a member of the Legal, bribery, gifts and hospitality guidance, its operating companies in 2022, as in 2021,
Compliance or Human Resource teams. political and charitable donations, public and management is not aware of any
Similarly, suppliers are encouraged to officials, facilitation payments amongst impending cases or underlying issues.
contact their primary contact within the others.
business. IAG has processes and procedures in place
Each Group operating company has a across the Group, such as supplier vetting
IAG will not tolerate any retaliation against Compliance Department responsible for and management, Know Your
individuals using the whistleblowing managing the anti-bribery programme in Counterparty procedures and financial
channel or contributing to investigations their business. The compliance teams from policies and controls, which help to
arising from reports to the whistleblowing across the Group meet regularly through combat money laundering in the business.
channel. Working Groups and Steering Groups,
under the IAG General Counsel. They

vly 2022 2021 2020 2019 2018

Employees completing anti-bribery e-learning 248% 4,880 1,404 1,984 7,933 nr
Speak Up (whistleblower) reports 54% 252 164 193 nr nr

35
SUSTAINABILITY
C. PRINCIPLES OF SUSTAINABILITY GOVERNANCE

C.6. ESG risk management Impact on operations and strategy As such, IAG adopts precautionary
Sustainability risk assessments have measures to mitigate these hazards, an
Relevant standards: GRI 102-11/-15. approach known as the precautionary
informed specific decisions related to
business operations and strategy, and IAG principle. For example, the precautionary
Overview allocates significant resources to principle is applied to the planning of
Sustainable aviation risks and People, environmental risk management. Examples operations and the development and
culture and employee relations risks are include: launch of new services, by integrating
reported as principal risks to IAG. climate considerations into three-year
• In 2018, TCFD-aligned scenario analysis
business plans and one-year financial
These risks are considered and assessed identified a need for more ambitious
forecasts and aligning activities with the
under the Group ERM framework which is action on climate change, which
Flightpath Net Zero strategy.
presented bi-annually to the Audit and contributed to the 2019 decision to
Compliance Committee and annually to design and adopt the industry-leading IAG also manages risks via the use of
the SECR Committee and Board. More Flightpath Net Zero strategy to deliver ISO-14001-aligned environmental
details on this framework, risk identification net zero emissions by 2050. management systems and is planning for
and assessment, and risk management can • In 2021, IAG set a new net zero target by all material environmental impacts across
be found in the Risk management and 2050 for Scope 3 emissions and IAG 100 per cent of flight operations and
principal risks factors section. GBS appointed EcoVadis to help to corporate activities to be covered by the
track supplier sustainability performance IATA Environmental Management System
All principal risks are linked to the Group
and mitigate supply chain-related (IEnvA) by the end of 2023.
strategic priorities which includes
environmental sustainability. sustainability risks. IEnvA is the airline industry version of ISO
• In 2022, IAG expanded its commitment 14001, the international standard for
Sustainability risks and opportunities,
to invest in SAF development, environmental management systems.
including climate-related risks and
production and supply, from IEnvA is tailored specifically for airlines and
opportunities, are also identified and
US$400 million to the equivalent of is fully compatible with the International
assessed by the Group Sustainability team,
US$865 million based on assumed Organization for Standardization (ISO).
in conjunction with the Group ERM team,
energy prices, to manage climate policy
and presented to the IAG CPCASO, IAG Vueling achieved full IEnvA certification in
risks and take advantage of energy-
MC and SECR Committee. Plans to 2022 and British Airways and Aer Lingus
related opportunities.
mitigate risks are developed by relevant have achieved partial (Stage 1)
risk owners in specific areas of the IAG is committed to mitigating the impacts accreditation.
business, with agreed initiatives included in of hazards which, if they occur, have
In terms of the amount of provisions and
relevant operating company business uncertain but potentially negative
warranties for environmental risks, IAG
plans. outcomes on the environment or people.
does not take out any specific insurance to
People, culture and employee relations cover environmental risks.
risks are managed by the Group’s
operating companies with guidance from
the Group as appropriate.

Related risk: Environmental regulation compliance

Risk description and
potential financial impacts Mitigating actions
An inadvertent breach of compliance • Strengthening sustainability governance including reviews of annual disclosures via the
requirements related to ESG reporting, Audit and Compliance Committee
emissions or waste management, or • Internal governance, training and assigning ownership for environmental compliance
other environmental issues, leading to obligations
fines and potential reputational • Working towards IEnvA accreditation to improve internal compliance processes
damage.

36
C.7.1. Reporting and data IAG does not align with GRI Core or GRI The scope of environment performance
Comprehensive options but instead aligns data in this report includes all IAG airlines,
governance with selected GRI standards based on subsidiaries and cargo operations over
The full contents of this sustainability compliance with Spanish Law 11/2018. In which IAG has operational control. This is
report are included in the IAG Non- cases where GRI alignment was not also the scope of the net zero targets.
Financial and Sustainability Information possible, other standards aligned to airline Some exceptions for non-material business
Statement (NFIS), which is third-party industry guidance or internal frameworks units have been applied for specific
independently verified to limited assurance were used and described. metrics, and these are clearly stated with
standards in line with ISAE3000 (Revised)1 rationale provided.
Emissions data from intra-European flights
standards. Compliance with specific is also independently verified within six The scope of workforce and ethics and
frameworks and standards is listed under months of the year end, for compliance integrity data includes all IAG operating
relevant section headings. with the UK and EU ETS, and for all flights companies and support functions. Some
IAG complies with current and emerging for the UN CORSIA scheme. Any material exceptions have been applied and these
standards on sustainability reporting. changes to key metrics are highlighted in are clearly stated with rationale provided.
future Annual Reports.
These include obligations under EU The scope of human rights and modern
Directive 2014/95/EU on non-financial IAG also goes beyond compliance slavery reporting is as above and includes
reporting and its transposition in the UK requirements and voluntarily aligns data from all suppliers in the IAG supply
and Spain, the 2018 UK Streamlined sustainability reporting with the chain.
Energy and Carbon Reporting regulation, Sustainability Accounting Standards Board
For any specific cases where full-year data
the Task Force on Climate-related (SASB), the IATA Airlines Reporting
was not available for selected metrics,
Financial Disclosures (TCFD), and the EU Handbook, GRI Standards for material
estimates have been applied based on
Taxonomy Regulation (2020/852). issues, and relevant criteria from external
business forecasts and data from prior
ESG rating agencies. IAG supported IATA
months. Internal governance is in place to
and the GRI to develop the IATA
ensure that any estimations made are
handbook.
robust. Any prior-year restatements are
indicated next to relevant metrics with
reasons provided.
C.7.2. Alignment with GRI and SASB standards
Key: Green is GRI CORE

Sustainability section Sustainability subsection GRI SASB

A.1. Planet – A.1.3. Metrics and progress 305-1/2/3/4/5, 301-1, 302-1 TR-AL-110a.1.
climate change A.1.4. Emissions reduction initiatives 305-5 TR-AL-110a.2.
A.1.7. Stakeholder engagement 102-13/-43/-44
A.2. Planet – A.2.1. Waste 306-1/-2/-3 (2020)
wider issues A.2.2. Noise and air quality 305-7
B. People and B.2. Workforce metrics 102-7/8, 401-1, 405-1, 102-41, 404-1, 403-9 TR-AL-310a.1.
prosperity B.6. Community engagement and charitable support 102-13, 201-1
C. Principles of C.2. Governance frameworks 102-46/-48
sustainability C.3. Workforce governance 403-4, 408-1, 409-1
governance
C.4. Supply chain governance 308-2, 414-2
C.5. Ethics and integrity 102-16, 102-17, 205-1/-2/-3
C.6. ESG risk management 102-11, 102-15

1 ISAE3000 is the assurance standard for compliance, sustainability and outsourcing audits, issued by the International Federation of Accountants (IFAC).

37
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS

Managing risk to protect the

business and support delivery
of sustainable change
Agility in Enterprise Risk Management ERM policy and framework The ERM function also works with other
(ERM) The Group Enterprise Risk Framework is compliance and Group functions, such as
The Group’s ERM framework continues to set out in the ERM policy, which has been Government Affairs, Investor Relations,
adapt and evolve to the needs of the approved by the Board. The Legal and Sustainability, leveraging their
business and our stakeholders. This allows comprehensive risk management process frameworks and assessments where
the Group and its businesses to both and methodology ensures a robust appropriate.
respond to changes in the external risk identification and assessment of the risks At the Group level, key risks from the
environment and support the pace and facing the Group, including emerging risks. operating companies, together with
scale of business transformation to achieve The risk management framework is Group-wide risks, are maintained in a
sustainable change. embedded across all of the Group’s Group risk heat map.
businesses. Enterprise risks are defined as
In the year, the Group has reviewed the Risk appetite
any risk that could impact the three-year
macroeconomic and geopolitical
Strategic Business Plan (“the plan”). They IAG has a risk appetite framework which
landscape to identify emerging risks and
are assessed and if the impact is above a includes statements informing the
implications for existing principal risks as
threshold, plotted on an enterprise risk business, either qualitatively or
well as competition and market risk
heat map, based on probability and quantitatively, of the Board’s appetite for
changes, particularly those that could
impact. Consideration is given to changes certain risks. Each risk appetite statement
impact operational resilience. By
in the speed of potential impact. Risks are applies either on a Group-wide basis or for
continuing to develop the Group’s
also considered in combining events where specific programmes, initiatives or activity
assessment of the interdependencies of
a number of risks could occur together. within the Group. The framework has
risks; scenario planning to quantify risk
This process is led by the Management continued to operate throughout the year,
impact under different combinations and
Committee supported by the ERM with the Board assessing its appetite
assumptions; and considering the risks
function. across all of the framework statements at
within the Group’s risk environment that
the half year and year end against the
have increased either as a result of the The Group considers risks to the plan over
Group’s performance and its anticipated
external factors or as a result of decisions the short-term up to two years, also
delivery of the Board-approved strategic
made by the Group, its Board and medium-term from three to five years and
business plan priorities and initiatives. The
management are better informed and can in the longer-term beyond five years.
Board is satisfied that the Group continued
react more quickly. Where further action
Risk outcomes are quantified as the to perform and deliver initiatives
has been required the Board has
potential cash impact to the plan over two throughout 2022 as planned to mitigate
considered potential mitigations and,
years. Non-financial considerations include risk as set out in its framework statements
where appropriate or feasible, the Group
the Group’s sustainability commitments, or necessary additional mitigations to risks
has implemented or confirmed plans that
potential for increased regulatory scrutiny, have been addressed as they occurred.
would address those risks or retain them
as well as damage to customer and
within the Board’s determined Group risk The appetite framework has been subject
employee trust impacting the Group’s
appetite. to review and a new framework will be
brand and share price.
implemented in 2023. This will allow the
New guidance from regulators and
Key controls and mitigations are setting of tolerances more dynamically
investors is reviewed on an ongoing basis
documented, including appropriate across the business plan period. The
and best practice sought from other risk
response plans. Where risk treatments framework will also allow consideration of
management sources.
require time to implement, short-term trade offs to allow appropriate
Emerging risks and longer-term threats mitigations are assessed and the timeline prioritisation of initiatives to seek
Consideration is given to emerging risks to risk mitigation and consequent risk opportunities and manage risk within the
and longer-term threats that the Group or acceptance discussed and agreed. Every defined appetite tolerances. The new
the industry could face. Where emerging principal risk has clear Management framework is aligned to the Group strategy
risks are identified, they are within the Committee oversight. approved by the Board in 2022 which sets
overall risk framework as “on watch” until the level of ambition and investment
Risk heat maps for each operating
they are re-assessed to be no longer a across the business plan period.
company and central functions are also
potential threat to the business or where reviewed by their operating company’s Viability assessment
an assessment of the risk impact over the management committee or function The Board’s assessment of the viability of
next two or three years can be made, and leadership team. the Group is directly informed by the
appropriate mitigations can be put in place
Where the Group’s operating companies outputs of the ERM framework. Full details
or the risk becomes a principal risk. Other
have a reliance on other parts of the Group of our approach, scenarios modelled and
high-impact, low-likelihood risks are also
for services delivery, risks are reflected the viability assessment are shown at the
considered and discussed.
appropriately across risk heat maps to end of this report.
ensure accountability is clear.

38
Risk management roles and responsibilities

Risk owners Operating companies’ IAG Management IAG Board and

and management management Committee Audit and
committees Compliance
Committee

Across the Group, risk Operating companies review The IAG Management The IAG Board has overall
owners are responsible for risk during the year including Committee reviews risk responsibility for ensuring
identifying potential risks risk heat map reviews during the year, including the that the Group has an
and appropriately managing semi-annually, in advance of Group risk heat map semi- appropriate, robust and
decisions within their area the Group risk heat map annually in advance of effective risk management
of responsibility that could reviews. reviews by the Audit and framework, including the
impact business operations They escalate risks that have Compliance Committee, in determination of the nature
and delivery of the plan. a Group impact or require accordance with the 2018 UK and extent of risk it is
Group consideration in line Corporate Governance Code willing to take to achieve
As the Group undertakes
with the Group ERM and the Spanish Good its strategic objectives.
transformation activities
framework. Governance Code for Listed
within its operating The IAG Audit and
Companies.
companies, the pace and They confirm to their Compliance Committee
agility of the changes operating company board The IAG Management discusses risk and considers
required creates risks and and audit committees, where Committee reviews the the risk environment regularly
opportunities. For they have them, as to the performance of the Group at throughout the year, as does
transformational risks, identification, quantification half year and full year against the IAG Board as part of
business owners are and management of the risk appetite framework wider Board discussions, in
assigned, and the business risks within their operating and reports any near addition to the IAG Audit and
will agree appropriate company at least annually. tolerance or out of tolerance Compliance Committee’s
mitigations and timelines assessments to the Audit and bi-annual risk heat map
for implementation, Local risk heat maps are in Compliance Committee. review, including a review of
following discussions with place for subsidiary the assessment of the Group’s
businesses, together with The Management Committee
all relevant stakeholders. performance against its
Group support platforms recommends scenarios for
risk appetite, scenarios for
Emerging risks are assessed including Group Business stressing the strategic
assessment of viability and
and risk owners consider Services and IAG Tech. business plan as part of the
the outputs from the viability
and identify any potential annual Group viability
modelling. The Audit and
impact to plans. Longer- assessment.
Compliance Committee has
term ‘on watch’ risks are
early sight of management
subject to review as part
consideration of scenarios
of the framework.
to enable it to challenge
Management is responsible subjectivities and confirm
for the effective operation rationale. It then reviews the
of the internal controls and outputs at year end and
execution of the agreed risk makes recommendations on
mitigation plans. the viability assessment and
statement to the Board.
The IAG Board reviews the
Group’s risk heatmap annually
and it has completed a robust
assessment of the Group’s
emerging and principal risks
in the year.

Enterprise Risk Management function

The Enterprise Risk Management function provides support across the Group to ensure risk
management processes are appropriately embedded and applied consistently, as well as working
with management to identify risk, challenge assessments and strengthen the risk culture across the
Group. The function provides enterprise risk management guidance and shares best practice across
the Group and its operating companies, keeping them informed of any risk-related regulatory
developments. The function is responsible for ensuring that the Enterprise Risk Management
framework remains agile and responsive to meet the needs of the business and its stakeholders.

39
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Year in review
The highly regulated and commercially The Group has also considered operational Business responses implemented by
competitive environment, together with resilience, competition and market risk management and that effectively mitigate
the businesses’ operational complexity, changes, the status of the financial markets or reduce the risk are reflected in the
expose the Group to a number of risks. and access to finance, people and culture Group’s latest business plan and related
across the Group and customer risk scenarios.
The Group’s exposure to the external risk
satisfaction and trust. Macroeconomic
environment and the weaknesses in the No new principal risks were identified
uncertainty and impacts on inflation,
resilience of the aviation sector’s supply through the risk discussions in the year.
interest and exchange rates have been
chain and inflation impacts, combined with One risk has been reconsidered as part of
reflected in the principal risk assessments.
an ambitious transformation and change the reviews and has been reframed as
Management remains focused on
agenda has required assessment of how ‘Operational resilience’ from ‘Event causing
mitigating these risks at all levels in the
risks are evolving and responding to significant network disruption’ to recognise
business and investing to increase
mitigating actions. that the risk to the operational resilience of
resilience whilst recognising that such risk
the business may be challenged by
With the return of operations as markets events may not be so easily planned for
multiple combining events with significant
have re-opened, the Group has reviewed and that mitigations are more responsive
network and customer impact and these
macroeconomic and geopolitical events to in nature.
may be more significant to the Group
identify emerging risks and implications for
where they persist over a longer timeframe
existing principal risks.
compared to one-off events.
Principal risks influence Principal risk radar
The relative level of influence each principal risk has on the other The assessed likelihood of risk materialisation for each
principal risks principal risk

Strategic Business and

16 1 operational
15 2
Compliance
14 and regulatory 5
risks 3 7
Strategic
risks
6
4
8
2 3 9 10
13 4
Financial
1 11
risks
Influence of risk
Low High
12 5 12
13

16
11 6
Business and 14
operational 15
10 risks 7
9 8 Compliance
and regulatory Financial

Key
Stakeholder impact Link to Strategic Risk Considered in viability
principal risk priorities trend assessment scenarios
1 Increase V 1 2 3 4
Customers Employees Suppliers 2 3 Stable
Decrease

Governments Shareholder,
and regulators lenders and
other financial
stakeholders

40
Principal Strategic Stakeholder Risk trend Viability
risk priorities impact 20222021 scenario

Strategic
Brand and customer trust 1
1 2 3 2
Chief Strategy Officer

Competitive landscape 1
2 2 3 1 2
Chief Strategy Officer

Critical third parties in the supply chain 1

3 2 3 2
Chief Transformation Officer

Economic, political and regulatory environment 1

4 Chief Strategy Officer/Chief People, Corporate Affairs 2 3 1
& Sustainability Officer

Sustainable aviation 1
5
Chief People, Corporate Affairs and Sustainability 2 3 2 4
Officer

Business and operational

Cyber attack and data security 1
6 2 3 3
Group CIO

IT systems and IT infrastructure 1

7 2 3 3
Group CIO/Chief Transformation Officer

Operational resilience 1
8 2 3 1 2 3
Chief Strategy Officer/Operating company CEOs

People, culture and employee relations 1

9 Chief People, Corporate Affairs and Sustainability 2 3 2
Officer/Operating company CEOs

Safety or security incident 1

10 2 3
Operating company CEOs

Transformation and change 1

11 2 3 2
Chief Transformation Officer

Financial risk including tax

Debt funding 1
12 2 3 1
Chief Financial Officer

Financial and treasury-related risk 1

13 2 3 1
Chief Financial Officer

Tax 1
14 2 3
Chief Financial Officer

Compliance and regulatory

Group governance structure 1
15 2 3
General Counsel

Non-compliance with key regulation and laws 1

16 2 3
General Counsel

41
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Principal risk register

Risks are grouped into four categories: strategic, business and operational, financial including tax and treasury, compliance and
regulatory risks.
Guidance is provided below on the key risks that may threaten the Group’s business model, future performance, solvency and liquidity.
Where there are particular circumstances that mean that the risk is more likely to materialise, those circumstances are described below.
Additional key business responses implemented by management are also set out.
The list is not intended to be exhaustive but does reflect those risks that the Board and Management Committee believe to be the most
likely to have a potential material impact on the Group.

Strategic
Strategic Stakeholder impact Risk trend Viability
1 Brand and priorities 2022 2021 scenario

customer trust 1 V
2 3
Chief Strategy Officer

Status The Group’s ability to attract and secure bookings, and generate revenue depends on customers’ perception and affinity with
the Group airlines’ brands and their associated reputation for customer service and value. The Group airlines’ brands are, and will
continue to be, vulnerable to adverse publicity regarding events impacting service and operations. Reliability, including on-time
performance, is a key element of the brands and of each customer’s experience. Where customers have been impacted as a result of
operational resilience issues in the year, all airlines have worked directly with their customers to resolve the issues and ensure, where
possible, that customers have been able to complete their travel plans. IAG remains focused on strengthening its customer-centricity
to ensure that its operating companies continue to adapt and focus their business models to meet changing customer expectations
and needs. Customer sentiment to travel and their expectations when they travel are intrinsic to brand health. The resilience and
engagement of our people as customer service ambassadors to deliver excellent customer service is critical to retaining brand and
customer trust.

Risk description Strategic relevance Mitigations

Erosion of the brand and customer • The Group’s brands are • All IAG airlines are considered within the brand
trust through poor customer service positioned in their respective portfolio review.
or lack of reliability in operations, markets to meet their • Brand initiatives for each operating company have been
may adversely impact the Group’s customer propositions and identified and are aligned to the plan.
leadership position with deliver commercial value. Any • Product investment to enhance the customer experience
customers and ultimately affect change in engagement or supports the brand propositions and is provided for in
future revenue and profitability. travel preferences could the plan.
impact the financial
If the Group is unable to meet the • All airlines track and report to IAG on their Net Promoter
performance of the Group.
expectations of its customers and Score (NPS) to measure customer satisfaction.
• IAG will continue to focus on
does not engage effectively to • IAG Customer Steering Group meets monthly and
its customer propositions to
maintain their emotional shares initiatives.
ensure competitiveness in its
attachment, then the Group • Hygiene and travel protocols have been implemented
chosen priority customer
may face brand erosion and loss of across the Group’s airlines to address regulatory
demand spaces and to ensure
market share. requirements resulting from the COVID-19 pandemic.
that it adapts to meet
changing customer • Enhanced disruption management tools within airlines to
Failure to meet customer allow customers to manage their travel preferences.
expectations.
expectations on sustainability and
• The Group is clear on the key • Enhanced flexibility in airline booking policies.
the Group’s impact on stakeholders
levers to improve brand • Increased focus on the end-to-end customer journey
and society could impact the Group
perception and satisfaction from flight search through to arrival and baggage
and its brands.
for each of its operating reclaim.
company brands. • The Group’s global loyalty strategy builds customer
loyalty within IAG airlines.
• The Group’s focus on sustainability and sustainable
aviation including the IAG Climate Change strategy to
meet the target of net zero carbon emissions by 2050.
• Robust portfolio process to determine the right
investments across the Group.
• The Group’s CIO and Chief Transformation Officer are
members of the IAG Management Committee.
• Additional focus on customer feedback.

42
Strategic
Strategic Stakeholder impact Risk trend Viability
2 Competitive priorities 2022 2021 scenario

landscape 1 V
2 3
Chief Strategy Officer

Status The recovery of demand in the year has seen a significant return of capacity into the market. The distortionary effects of the
governmental support and aviation-specific state aid measures on the competitive landscape, including those provided in response to
the COVID-19 pandemic, continue to be assessed. The Group is investing in new fleet and products to maintain its competitive
position in the markets in which its airlines operate.
IAG acquired 20 per cent of Air Europa by converting its convertible loan in August 2022 and has agreed the acquisition of the
remaining 80 per cent as at February 23, 2023, subject to relevant regulatory approvals.
See Financial review section

The Group continues to lobby over the negative impacts of government policies on aviation or policy asymmetry, such as increases in
Air Passenger Duty (APD).

Risk description Strategic relevance Mitigations

Competitor capacity growth in • The markets in which the • The IAG Management Committee meets weekly and
excess of demand growth could Group operates are highly undertakes regular operating company-specific reviews.
materially impact margins. competitive. The Group faces • The Board discusses strategy throughout the year and
direct competition on its dedicates two days per year to undertake a detailed
Any failure of a joint business routes, as well as from indirect review of the Group’s strategic plans.
or a joint business partner could flights, charter services and • The Group strategy function supports the Management
adversely impact the Group’s other modes of transport. Committee by identifying where resources can be
airline business operations and Some competitors have other devoted to exploit opportunities and accelerate change.
financial performance. competitive advantages such
• The airlines’ revenue management departments and
as government support
Some of the markets in which the systems optimise market share and yield through pricing
or benefits from insolvency
Group operates remain regulated by and inventory management activity. Additional processes
protection.
governments, in some instances and reviews have allowed daily and weekly route analysis
• Regulation of the airline as required to respond to the rapidly changing
controlling capacity and/or
industry covers many of the environment resulting from government actions.
restricting market entry. Changes in
Group’s activities including
such restrictions may have • The Group maintains rigorous cost control and targeted
route flying rights, airport
a negative impact on margins. investment to remain competitive. The Group
landing rights, departure
Procurement function reviews all critical contracts.
taxes, security and
• The Group’s airlines are focused on customer-centricity
environmental controls. The
and operational resilience.
Group’s ability to comply with
and influence changes to • The portfolio of brands provides flexibility as capacity
regulations is key to can be deployed at short notice as needed.
maintaining operational and • The IAG Management Committee regularly
financial performance. reviews market share and the commercial performance
of joint business agreements.
• The Group’s airlines review their relationships with
business partners supported where appropriate by the
Group strategy function.
• The Group’s Government Affairs function monitors
government initiatives, represents the Group’s interest
and forecasts likely changes to laws and regulations.

43
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Strategic
Strategic Stakeholder impact Risk trend Viability
3 Critical third parties in priorities 2022 2021 scenario

the supply chain 1 V

2 3
Chief Transformation Officer

Status The aviation sector has been affected by global supply chain disruption which has impacted aircraft deliveries, component
availability, resource availability and/or threat of employee industrial action in critical third parties and airport services such as Border
Force. It has also been impacted by the high inflationary environment driving additional costs. Operational staffing shortages at hubs
and airports have required capacity adjustments, including managing the impact on British Airways’ customers and operations of the
decision by Heathrow Airport to cap passenger numbers during the summer of 2022. The Group proactively assessed its schedules to
ensure our customers had sufficient notice of any changes to their flight plans wherever possible and within our airlines’ control.
Learnings from the summer disruptions were identified and actions to improve resilience have been implemented. The Group
continues to work with all critical suppliers to understand any potential disruption within their supply chains from either a shortage of
available resource or production delays which could delay the availability of new fleet, engines or critical goods or services, in some
places. This has led to increased costs to secure such services. Additional focus was placed on key suppliers given the inflationary
environment impacting wages and costs of goods, to understand any business or operational continuity impacts.
The Group continues to lobby and raise awareness of the negative impacts of air traffic control (ATC) airspace restrictions and
performance issues on the aviation sector and economies across Europe, particularly with the capacity recovery and continued
closure of Russian airspace. The Group relies on the provision of airport infrastructure and is dependent on the timely delivery of
appropriate facilities. The Group continues to challenge unreasonable levels of increases in airport charges, especially at London
Heathrow.

Risk description Strategic relevance Mitigations

IAG is dependent on the timely • Any sub-optimal service • The Group mitigates engine and fleet performance
entry of new aircraft and the engine delivery or asset supplied by a risks, including delays to delivery and unacceptable
performance of aircraft to improve critical supplier can impact levels of carbon emissions, to the extent possible by
operational efficiency and resilience on the Group airlines’ working closely with the engine and
and meet the commitments of the operational and financial fleet manufacturers, as well as retaining flexibility with
Group sustainability programme. performance as well as existing aircraft return requirements.
disrupting our customers and • The Group engages in regulatory reviews of supplier
IAG is dependent on the timely, impacting our brand and pricing, such as the UK Civil Aviation Authority’s
on-budget delivery of infrastructure reputation. periodic review of charges at London Heathrow and
changes, particularly at key airports. • Infrastructure decisions or London Gatwick airports.
changes in policy by • The Group is active at an EU policy level and in
IAG is dependent on resilience
governments, regulators or consultations with airports covered by the EU Airport
within the operations of ATC services
other entities could impact Charges Directive.
to ensure that its flight operations are
operations but are outside the • The Group pro-actively works with suppliers to ensure
delivered as scheduled.
Group’s control. operations are maintained and the impact to their
IAG is dependent on the performance • London Heathrow has no spare businesses understood, with mitigations implemented
and costs of critical third-party runway capacity. where necessary and inflation minimised.
suppliers that provide services to our • An uncontrolled increase in • The Group procurement function has oversight of all
customers and the Group such as the planned cost of expansion critical contracts across the Group’s businesses.
airport operators, border control and could result in increased • Alternative suppliers are identified where feasible.
caterers. Increases in costs or where landing charges.
• Transformation initiatives to offset inflation.
suppliers face ongoing financial stress • Airport charges represent a
or restructuring where they exit the significant operating cost to
market for supply of services may the airlines and have an impact
impact the Group’s operations. on operations.
IAG is dependent on the availability • Inflationary cost pressures
and production of alternative fuels to within the supply chain may
meet its carbon commitments. This increase the cost of travel.
may require investments in
infrastructure in the markets in which
the Group operates.

44
Strategic
Strategic Stakeholder impact Risk trend Viability
4 Economic, political and priorities 2022 2021 scenario

regulatory environment 1 V
2 3
Chief Strategy Officer
Chief People, Corporate Affairs
and Sustainability Officer

Status The economic impact of energy shortages and increases in commodity and wage costs have driven significant inflation and
uncertainty over the economic outlook. The Group is closely reviewing the impacts of wage and supplier inflation on margins and
customer demand. The Group will continue to adjust its future capacity plans accordingly, retaining flexibility to adapt as required and
where possible.
The Group airlines have utilised the slot alleviation waivers granted by regulatory bodies in 2022. Impacts and consequences of the
pandemic have continued in 2022, such as the gradual opening of China and with restrictions remaining in countries with varying
degrees of passenger and airline operational complexity to comply with.
Wider macroeconomic trends are being monitored such as a potential economic recession, tone of dialogue between the US, Russia,
China and the EU and UK which can influence markets and result in imposition of misaligned policies or tariffs. The trend of increased
nationalism and the potential impact to the Group is also kept under review. Recent supply chain disruptions have occurred in many
markets and the level of disruption and potential impacts are considered across the Group. The Group also considers changes in
government in key markets and the implications for trade, respective economic health and how it views the aviation industry, with
elections expected in the UK, Ireland, Spain and the US over the next two years.
Developments in relevant international relationships, in particular as they affect air services agreements to which the EU or UK are
party, are monitored throughout the year and IAG operating companies’ positions advocated with national governments. Any further
macroeconomic trends or potential requirements arising from Brexit are monitored by the IAG Government Affairs function.
See the Regulatory environment section

Risk description Strategic relevance Mitigations

Economic deterioration in either a • IAG remains sensitive • The Board and the Management Committee review the
domestic market or the global to political and economic financial outlook and business performance of the Group
economy may have a conditions in the through the monthly trading results, financial planning
material impact on the Group’s markets globally, particularly process and the quarterly reforecasting process.
financial position, while foreign in our hub markets. All of the • Reviews are used to drive the Group’s financial
exchange, fuel price and interest following can be influenced performance through the management of capacity,
rate movements create volatility. by political and economic together with appropriate cost control measures
change including the balance between fixed and variable costs,
Uncertainty or failure to plan and management of capital expenditure, and actions to
respond to economic change or • Business and leisure
demand for travel improve liquidity.
downturn impacts the operations of
• Inflation impacts on the • External economic outlook, fuel prices and exchange
the Group.
cost base rates are carefully considered when developing strategy
Changes in government may result and plans and are regularly reviewed by the Board and
• Access to markets for new
in a change in sentiment to aviation IAG Management Committee as part of business
or existing routes
and access to markets. performance monitoring.
• Increasing levels of
• IAG Government Affairs function monitors governments’
regulation
Government policy asymmetry initiatives, represents the Group’s interest and gives the
impacting a domestic market could • Supply of products
Group and its operating companies early sight of likely
increase the burden of regulation changes to laws and regulations, e.g. any review of slot
and cost to our passengers. allocation policy in the UK or EU.
• The Group engages with its regulators, governments and
other political representatives and trade associations to
help represent the views and contribution of the Group
and aviation to society and economies.

45
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Strategic
Strategic Stakeholder impact Risk trend Viability
5 Sustainable aviation priorities 2022 2021 scenario

Chief People, Corporate Affairs and 1 V

Sustainability Officer 2 3

Status IAG is committed to a target of net zero carbon emissions across its operations and supply chain by 2050 along with 2025 and
2030 targets. The Global Business Services (GBS) procurement function will have a key role to play in ensuring its delivery of the
Scope 3 commitment for the Group with supplier sustainability ratings and sustainability clauses in supplier contracts key
considerations for future contract negotiations and renewals. IAG has also committed to 10 per cent Sustainable Aviation Fuel (SAF)
usage on average across its fleet by 2030.
In July 2021, the EU announced its ‘Fit for 55’ package of proposals. The Group continues to model potential impacts and costs, which
includes the removal of aviation jet fuel tax exemption from 2024, with mitigation plans embedded into financial and strategic planning.
All of the Group’s airlines have agreed new deals for the production of SAF to meet the Group’s target on the path to
decarbonisation. Overall aviation industry requirements will require infrastructure investments across markets to support the
production of SAF to meet demand expectations. Availability of SAF may be restricted at airports served by the Group in the medium
to longer-term, where markets may not have such strict eco targets or government set policy.
IAG was an early adopter of the Task Force on Climate-related Financial Disclosures (TCFD) guidelines for climate-related scenario
analysis and climate-specific risk assessments. The Group continues with its assessment of climate-related risks, by testing and
revising the assumptions on updated forecasts for future business growth and the regulatory context and future carbon price. The
Group has also embedded forecasting of its climate impacts into its strategic, business and financial planning processes and is
resilient to material climate-related impacts.
See the Sustainability risk and opportunities section

Risk description Strategic relevance Mitigations

Increasing global concern about • IAG is committed to being • IAG climate change strategy to meet target of net zero
climate change and the impact of the leading airline group carbon emissions by 2050.
carbon affects Group airlines’ in sustainability. This • Annual incentive plans link manager bonuses to annual
performance as customers seek means that environmental carbon intensity targets to enable 2025 target.
alternative methods of transport or considerations are integrated • All of the Group’s airlines have platforms to offset or
reduce their levels of travel. into the business strategy at mitigate passenger flight emissions over time.
every level and the Group
New taxes, the potential removal of • British Airways and Iberia have loans linked to 2025
uses its influence to drive
aviation jet fuel exemptions and carbon intensity targets.
progress across the industry.
increasing price of carbon • Embedded climate impacts into the financial statements,
• Our stakeholders and
allowances impact on demand for balance sheet and other relevant disclosures.
potential investors seek
air travel. Customers may choose to • British Airways customer proposition for carbon renewal
confirmation over our
reduce the amount they fly. credits on BA.com which uniquely offers offsets,
sustainability agenda and may
removals or SAF.
link their purchasing,
The airline industry sector is subject • IAG investment in SAF with operating companies
investment or lending
to increased regulatory securing deals in 2022.
decisions to our commitments
requirements, driving costs and
and progress against them. • Fleet replacement plan is introducing aircraft into the
operational complexity, particularly
• Our customers look to ensure fleet that are more carbon efficient.
with policy asymmetry in key
that our airlines allow them to • EcoVadis partnership with IAG GBS to better track
markets.
offset their flight emissions. sustainability performance in the IAG supply chain and
Sustainable fuels mandates are mitigate supply chain-related sustainability risks.
implemented and demand exceeds • Partnering with ZeroAvia to explore hydrogen-powered
supply or infrastructure and aircraft technology.
production is not available in the • Participating in CORSIA, the ICAO global aviation carbon
markets the Group’s airlines serve. offsetting scheme and the EU-ETS and UK-ETS emission
trading schemes.
• Horizon scanning of potential partners and technology.
• Engagement across UK, EU and global trade associations
to shape effective climate policy and drive support for
low-carbon solutions.

46
Business and operational
Strategic Stakeholder impact Risk trend Viability
6 Cyber attack and priorities 2022 2021 scenario

data security 1 V
2 3
Group CIO

Status The risks from cyber threats continue as threat actors seek to exploit any weaknesses in defences particularly through social
engineering and human behaviours. The threat of ransomware attacks on critical infrastructure and services has increased as a result
of the war in Ukraine and the potential for state-sponsored cyber attacks. The Group continues to focus its efforts on appropriate
monitoring to mitigate the risk.
The regulatory regimes associated with data and infrastructure security are also becoming more complex with different regulators
applying different framework approaches and guidance for reporting. The Group airlines are subject to the requirements of privacy
legislation such as GDPR and the National Information Security Directive (NISD).
Investment in cyber security systems and controls continues as planned, although addressing the risk is also dependent on business
capacity and the delivery of solutions to address technical obsolescence within IAG Tech. All planned investment is linked to a
Group-wide maturity assessment based on a leading industry standard benchmark. Data centre migration activity to the cloud across
the Group’s airlines will further help to improve the security controls environment. As the Group improves its security posture and
maturity, it better understands the rapid nature of potential attack vectors and how to detect them.

Risk description Strategic relevance Mitigations

The Group could face financial loss, • The cyber threat environment • The Group has a Board-approved cyber strategy that
disruption or damage to brand remains challenging for all drives investment and operational planning.
reputation arising from an attack on organisations, including the • A cyber risk management framework ensures the risk is
the Group’s systems by criminals, airline industry. Cyber threat reviewed across all operating companies.
foreign governments or hacktivists. actors, criminals, foreign • The Group Cyber Governance board assesses the
governments and hacktivists portfolio of cyber projects quarterly and each operating
If the Group does not adequately have the capacity and company reviews its own cyber projects at least
protect customer and employee motivation to attack the quarterly.
data, it could breach regulations and airline industry for financial
face penalties and loss of • The IAG Chief Information Security Officer provides
gain and other political or
customer trust. assurance and expertise around strategy, policy, training
social reasons.
and security operations for the Group.
• The fast-moving nature
Changes in working practices and • Detection tools and monitoring are in place. The Group-
of this risk means that the
environments for the Group’s wide security engineering and operations teams
Group will always retain a
employees and third-party suppliers proactively seek to identify and respond to threats and
level of vulnerability.
could result in new weaknesses in vulnerabilities, including ongoing testing of the Group’s
the cyber and data security control defences.
environment. • External attack surface monitoring and threat intelligence
is used to analyse cyber risks to the Group.
• External benchmarking on cyber posture.
• There is oversight of critical systems and suppliers to
ensure that the Group understands the data it holds, that
it is secure, and regulations are adhered to.
• Data Protection Officers are in place in all operating
companies, coordinated through a Group-wide Privacy
Steering Group.
• Working practices are reviewed to ensure the integrity of
the cyber and data security.
• All third-party suppliers have confirmed their adherence
to IAG security requirements within any revised security
protocols.
• Security architecture team embedded into Datacentre
migrations programmes.
• Desktop exercises to test business response plans have
been held across the Group airlines during the year.

47
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Business and operational

Strategic Stakeholder impact Risk trend Viability
7 IT systems and IT priorities 2022 2021 scenario

infrastructure 1
V
2 3
Group CIO
Chief Transformation Officer

Status The Group recognises the importance of technology to business transformation and growth. The Chief Information Officer
(CIO) works with the Chief Transformation Officer (CTO) to ensure appropriate prioritisation and investment in the Group’s
transformation. Both are members of the IAG Management Committee.
The Group has reviewed its IT operating model and has moved more resources into product teams more closely aligned to business
needs. All of the Group’s businesses have a Chief Digital and Information Officer (CDIO) who represents their business within IAG
Tech. This has strengthened IAG Tech’s focus on supporting the transformation of the Group’s legacy estates to deliver digital
customer experiences. The IAG Tech Management Committee governance structure is mirrored across into the Group’s businesses to
ensure that IT investment and operating company requirements are appropriately prioritised and delivered.
The Group is reliant upon the resilience of its systems and networks for key customer and business processes and is exposed to risks
that relate to poor performance, obsolescence or failure of these systems. The Group is currently engaged in a number of major
programmes to modernise and upgrade its IT systems, digital capability, customer propositions and core IT infrastructure and
network where required. Mitigating actions that prioritise operational stability and resilience have been built into all cutover plans.
Operational outages are tracked and root causes identified to help minimise any impact to our customers and operations.

Risk description Strategic relevance Mitigations

The dependency on IT systems and • IAG is dependent on IT • IAG Tech works with the Group operating companies to
networks for key business and systems for most key deliver digital and IT change initiatives to enhance
customer processes is increasing business processes. security and stability.
and the failure of a critical system Increasingly, the integration • Operating companies’ IT boards are in place to review
may cause significant disruption to within IAG’s supply chain delivery timelines.
the operation and lost revenue. means that the Group is also • IAG Tech leadership and professional development
dependent on the framework.
The level of transformational change performance of suppliers’ IT
at pace required by the Group’s • Reversion plans are developed for migrations on critical
infrastructure, e.g. airport
airlines may result in disruption to IT infrastructure.
baggage operators.
operations as the legacy • System controls, disaster recovery and business
• Competitors and new
environment is addressed. continuity arrangements exist to mitigate the risk of
entrants to the travel market
a critical system failure.
may use digital tools and
Obsolescence within the IAG Tech • Robust portfolio process to determine the right
technology more effectively
estate could result in service investments across the Group.
and disrupt the Group’s
outages and/or operational • IAG Tech CIO and MC have strategic relationships with all
business model.
disruption or delays in critical IT suppliers and oversight of all critical IT
implementation of the Group’s contracts across the Group’s businesses.
transformation.
• The Group continues to develop platforms such
Technology disruptors may as the New Distribution Capability, changing distribution
use tools to position themselves arrangements and moving from indirect to direct
between our brands and channels.
our customers. • IAG Tech continues to create early engagement and
leverages new opportunities with start-ups and
technology disruptors.

48
Business and operational
Strategic Stakeholder impact Risk trend Viability
8 Operational resilience priorities 2022 2021 scenario

Chief Strategy Officer 1 V

Operating company CEOs 2 3

Status The COVID-19 pandemic resulted in an unprecedented level of disruption to the aviation sector and changed the Group’s
perspective on how resilient it needed to be to withstand severe unexpected stresses. Potential high-impact, low-likelihood events
have been considered that could have the potential to disrupt IAG and/or the aviation sector. Many of these events remain outside
the Group’s control such as adverse weather, another pandemic, civil unrest or a terrorist event seen in cities served by the Group’s
airlines.
The Group is reliant on critical third parties for services and goods, many of which have been impacted by resourcing challenges,
inflation and supply chain disruption. Ongoing labour shortages, threat of strike action in the aviation sector and staff sickness have
impacted the operational environment of the Group’s airlines as well as the operations of the businesses on which the Group relies.
Many of these events can occur within a close timeframe and challenge operational resilience. In addition, the Group has significant IT
infrastructure changes to complete which could impact operations. The Group is focused on minimising any unplanned outages or
disruption to customers with additional resilience built into the airlines’ networks.

Risk description Strategic relevance Mitigations

An event causing significant • The Group’s airlines may be • Management has business continuity plans to mitigate
network disruption or the inability to disrupted by a number of this risk to the extent feasible, with focus on operational
promptly recover from short-term different events. and financial resilience and customer and colleague
disruptions may result in lost • A single prolonged event, or safety and recovery.
revenue, customer disruption and a series of events in close • Resilience to minimise the impact of ATC airspace
additional costs to the Group. succession, impact on the restrictions and strike action on the Group’s customers
Group airlines’ operational and operations are in place.
Public health concerns impacting capability, financial status • All of the Group’s airlines are focused on developing
populations at scale could see an and brand strength. customer disruption management tools to help our
adverse effect on the Group where
• The Group needs to adhere to customers in times of disruption.
governments choose to impose
local governments’
restrictions, as would any future
restrictions and regulations
pandemic outbreak or other
especially related to safety
material event impacting operations
and public health and is
or customers' ability to travel.
therefore sensitive to any
The Group’s airlines may not be able consequential impact on
to resource their operations demand.
sufficiently resulting in impacts to
customers and brands.

The Group’s airlines are reliant on

critical third parties to deliver
services and any failure of the level
of service may impact operational
resilience and our customers.

49
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Business and operational

Strategic Stakeholder impact Risk trend Viability
9 People, culture and priorities 2022 2021 scenario

employee relations 1 V
2 3
Chief People, Corporate Affairs
and Sustainability Officer
Operating company CEOs

Status The resilience and engagement of our people and leaders are critical to achieving our transformation plans. Our people are a
critical enabler of the Group’s future success. Our leadership recognises the efforts of our staff and their resilience and commitment
supporting the ramp up of operations. Resource shortages and the timelines to secure resource, particularly in the UK and Ireland,
impacted operational readiness and resilience. The Group is focused on measures to attract and secure flight and ground staff into its
airlines to enable them to fulfil their schedules and maintain competitiveness.
The Group is focused on staff well-being and people morale and motivation, including supporting agile and hybrid working models.
Welfare support schemes are in place to support the Group’s staff, and initiatives to build trust and engagement continue across the
Group’s businesses. The Group has identified the skills and capabilities that are required to manage its transformation, which include
enhancing its leadership capability and delivering on the Group’s diversity and inclusion plans. All operating companies recognise the
critical role that their employees will play in the recovery and transformation of the Group and they are focusing on improving
organisational health and employee engagement.

Risk description Strategic relevance Mitigations

Any breakdowns in the bargaining • The Group has a large • Ongoing information sharing, consultation and collective
process with the unionised unionised workforce with bargaining with unions across the Group take place on a
workforces may result in around 89% of colleagues regular basis led by operating companies’ human
subsequent strike action which may represented by a number of resources specialists, who have a strong skillset
disrupt operations and adversely different trade unions under in industrial relations.
affect business performance and collective bargaining • Ensuring that remuneration is aligned to local markets in
customer perceptions of the airlines. agreements. IAG relies on the terms of productivity and pay.
successful agreement of • Operating companies’ people strategies are in place in
Our people are not engaged, or they collective bargaining our businesses.
do not display the required arrangements across its
• Succession planning within and across operating
leadership behaviours. operating companies to
companies has been reviewed by the IAG Management
operate its airlines.
The Group businesses fail to attract, Committee and Board and a consistent process is being
• The right skillsets and culture implemented across the Group.
motivate, retain or develop our
are needed to transform our
people to deliver service and brand • Focus on recruiting and developing skills to run and
businesses at the pace
experience. transform our business.
required.
• Operating companies’ engagement and organisational
Critical skillsets are not in place to • The Group’s airlines require
health surveys have been conducted with subsequent
execute on the required specialist skillsets to continue
action plans developed to create a positive and inclusive
transformation and drive the to operate.
culture.
business forward. • Access to support individuals’ well-being.
If the Group’s airlines cannot recruit • IAG Code of Conduct is supported by annual awareness
to respond to the demand programmes and mandatory training for all of our staff.
environment, given wider
recruitment challenges across
sectors of the economy, manpower
shortages may impact operational
capabilities.

50
Business and operational
Strategic Stakeholder impact Risk trend
10 Safety or priorities 2022 2021

security incident 1
2 3
Operating company CEOs

Status The Group’s airlines were focused on a safe return to operations in the year. As capacity increased, British Airways focused on
recruiting, onboarding training new cabin crew and ground colleagues, with appropriate training to build their skills and knowledge.
The IAG Safety, Environment and Corporate Responsibility (SECR) Committee of the Board and the Board of each operating
company continued to monitor the safety performance of IAG’s airlines. Safety and security responsibility lies with each Group airline
in accordance with its applicable standards. Further detail is provided in the SECR Committee report.

Risk description Strategic relevance Mitigations

A failure to prevent or respond • The safety and security of our • The corresponding safety committees of each of
effectively to a major safety or customers and employees are the airlines of the Group satisfy themselves that they
security incident or intelligence may fundamental values for the have the appropriate resources and procedures
adversely impact the Group. which include compliance with Air Operator Certificate
Group’s brands, operations and requirements.
financial performance. • The Group’s airlines have comprehensive training and
maintenance programmes in place, supported by a just
culture environment.
• There is ongoing security engagement with airports,
regulators and public authorities across the airlines’
networks.
• Incident centres respond in a structured way in the event
of a safety or security incident or intelligence.

51
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Business and operational

Strategic Stakeholder impact Risk trend Viability
11 Transformation priorities 2022 2021 scenario

and change 1 V
2 3
Chief Transformation Officer

Status The Group has established a Transformation Programme Management Office which has oversight of an agreed portfolio of
initiatives across the Group focussed on improving customer service, revenue and cash efficiency. Many of the programmes are
multi-year and all are subject to the ongoing review and investment approvals of the IAG Board.

Risk description Strategic relevance Mitigations

Failure to transform the business to• The transformation agenda is • The Chief Transformation Officer has clear oversight of
effectively deliver cost efficiency critical to the Group’s ability all programmes acrosss the Group’s businesses.
initiatives, maintain or grow share into deliver strong returns, • Mirrored structures in the operating companies.
the new competitive environment, compete in the new • Consistent core metrics and dashboard reporting used to
fully implement all programmes competitive marketplace, assess performance against plan.
across the Group and realise the where distortionary effects of
• The IAG Management Committee has regular operating
benefits of the change initiatives to aviation support schemes
company-specific meetings to assess their
deliver Group digital platforms and may have allowed
transformation agenda and the risks to delivery.
customer propositions. competitors to accelerate
• The Group transformation agenda is subject to Board
their change agendas and
The pace of change may expose the approval and progress is regularly monitored by the
invest to improve capabilities
Group to execution risk as multiple Board.
and customer propositions.
initiatives are delivered across • There is operating company-led communications to our
processes and systems that serve employees on change initiatives and changes that may
our operations and customers. affect them.
• Consideration is given to the Group’s sustainability
The impact on our people of the commitments and agenda for all programmes.
wide-ranging change agenda if
• Any potential changes that could impact the brand are
poorly managed or uncoordinated
reviewed to mitigate against brand damage.
could lead to logistical and
engagement challenges with the
potential to negatively impact NPS,
revenue and efficiency benefits.

Further standardisation,
simplification and efficiencies of the
Group platforms are not delivered.

Competitors, or new entrants, may

invest to deploy digital technologies,
sustainability initiatives and/or
platforms ahead of the Group.

The Group focus on cash

preservation, debt and debt
repayment could limit the
investment available to deliver
initiatives.

52
Financial risk including tax
Strategic Stakeholder impact Risk trend Viability
12 Debt priorities 2022 2021 scenario

funding 1 V
2 3
Chief Financial Officer

Status Access to the unsecured debt markets may be restricted for sub investment-grade organisations, which may reduce the
external funding options available to the Group for new aircraft financing or where it chooses to re-finance upcoming maturities. The
Group successfully raised financing for all its aircraft deliveries during 2022, using normal long-term aircraft financing arrangements.
Rising interest rates also increase the debt servicing cost for floating rate debt and new debt arrangements. As at December 31, 2022
approximately one quarter of the Group’s debt was floating rate.
See Financial review section

Risk description Strategic relevance Mitigations

Failure to finance ongoing • The Group has substantial • The IAG Board and Management Committee review
operations, committed debt that will need to be the Group’s financial position and financing strategy
aircraft orders and future repaid or refinanced. The regularly.
fleet growth plans. Group’s ability to finance • The Group has maintained clear focus on protecting
ongoing operations, liquidity with c.€14bn of liquidity at 31 December 2022.
New financial arrangements, in committed aircraft orders and • During 2022, the Group extended the availability of its
addition to the repayment of future fleet growth plans is $1.755 billion revolving credit facility by one year to
existing arrangements, and vulnerable to various factors March 2025.
government support schemes (as including financial market
applicable) may impact plans to • Maintain strong relationship with banks, lenders and
conditions, financial
transform the Group and will lessors.
institutions’ appetite for
influence the timing for IAG to • Scenario planning for different financial environments.
secured aircraft financing and
resume paying dividends to its the financial market’s
shareholders. perceptions of the future
resilience and cash flows of
Higher interest rates in the market
the Group.
for new finance arrangements or
re-financing may impact the Group’s
cost base.

53
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Financial risk including tax

Strategic Stakeholder impact Risk trend Viability
13 Financial and priorities 2022 2021 scenario

treasury‑related risk 1 V
2 3
Chief Financial Officer

Status Fuel cost increases have been partly mitigated by the Group’s fuel hedging policy. Access to fuel hedging instruments or the
ability to pass increased fuel costs on to consumers could impact the Group’s profits. The Group continues to assess the strength of
the US dollar against the euro and pound sterling and the potential impacts on the Group’s operating results. All airlines hedge in line
with the Group hedging policy.
The approach to fuel risk management, financial risk management, interest rate risk management, proportions of fixed and floating
debt management and financial counterparty credit risk management and the Group’s exposure by geography continue to be
assessed to ensure the Group responds to the rapidly changing financial environment appropriately. Details are set out in the Group
financial statements.

Risk description Strategic relevance Mitigations

Failure to manage the volatility in • The volatility in the price of oil • Fuel price risk is partially hedged through the purchase
the price of oil and petroleum and petroleum products can of oil derivatives in accordance with the Group risk
products. have a material impact on the appetite.
Group’s operating results. • All airlines hedge in line with the Group hedging policy
Failure to manage currency risk on • The volatility in currencies under the Group Treasury oversight.
revenue, purchases, cash and other than the airlines’ local • The IAG Audit and Compliance Committee and IAG
borrowings in foreign currencies currencies can have a material Management Committee regularly review the Group’s
other than the airlines’ local impact on the Group’s fuel and currency positions.
currencies of euro and sterling. operating results. • Currency risk is hedged through matching inflows and
Failure to manage the impact of • The volatility in floating outflows and managing the surplus or shortfall through
interest rate changes on floating interest rates can have a foreign exchange derivatives.
finance debt and floating operating material impact on the • All airlines review routes to countries with exchange
leases. Group’s operating results. controls to monitor delays in the repatriation of cash
• The Group is exposed to and/or with the risk of material local currency
Failure to manage the financial non-performance of financial devaluation.
counterparties’ credit exposure contracts that may result in • The impact of rising interest rates is mitigated through
arising from cash investments and financial losses. structuring selected new debt and lease deals at fixed
derivatives trading. rates throughout their term as well as through derivatives
instruments.
• The Group has a financial counterparty credit limit
allocation by airline and by type of exposure and
monitors the financial and counterparty risk on an
ongoing basis.
• The IAG Management Committee and the IAG Audit and
Compliance Committee regularly review the financial
risks and the hedged amounts. Any position outside of
policy limits has to be approved by the IAG Audit and
Compliance Committee.

54
Financial risk including tax
Strategic Stakeholder impact Risk trend
14 Tax priorities 2022 2021

Chief Financial Officer 1

2 3

Status Tax is managed in accordance with the Tax Strategy, found in the Corporate Policies section of the IAG website. Further
information about taxes paid and collected by IAG is set out in note 10 of the Group financial statements.

Risk description Strategic relevance Mitigations

The Group is exposed to systemic • Payment of tax is a legal • The Group adheres to the tax policy approved by the
tax risks arising from either changes obligation. Changes in the tax IAG Board and is committed to complying with all tax
to tax legislation and accounting regulatory environment, laws, to acting with integrity in all tax matters and to
standards or challenges by tax including changes in tax rates, working openly with tax authorities.
authorities on the interpretation or may result in additional tax • Tax risk is managed by the operating companies in
application of tax legislation. costs for the Group and in conjunction with the IAG Tax function.
additional complexity in • Tax risk is overseen by the Board through the Audit and
Businesses and consumers may be complying with such changes. Compliance Committee.
subject to higher levels of taxation The Group’s tax strategy aims
as governments seek to increase • The Group seeks to understand its stakeholders’
to balance the needs of our
environmental taxes, redesign the expectations on tax matters, e.g. cooperative working
key stakeholders, recognising
global tax framework and recover with tax authorities and its interaction with non-
that tax is one of Group’s
the national debts arising from governmental organisations.
positive contributions to the
COVID-19 pandemic support • The IAG Board annually reviews the tax strategy.
economies and wider
measures. societies of the countries in
which IAG operates.
The Group’s stakeholders’
expectations of the tax behaviours
of large corporates may lead to
reputational risk from the Group’s
management of tax.

55
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Compliance and regulatory

Strategic Stakeholder impact Risk trend
15 Group governance priorities 2022 2021

structure 1
2 3
General Counsel

Status The aviation industry continues to operate under a range of nationality and other restrictions, some of which are relevant to
market access under applicable bi-lateral and multi-lateral air service agreements, while some are relevant to eligibility for applicable
operating licences. The Group will continue to encourage stakeholders to normalise ownership of airlines in line with other business
sectors.
See Corporate governance section

Risk description Strategic relevance Mitigations

IAG could face a challenge to its • Airlines are subject to a • The Group has governance structures in place that
ownership and control structure. significant degree of include nationality structures to protect Aer Lingus’,
regulatory control. In order for British Airways’ and Iberia’s operating licences and/or
air carriers to hold EU route rights. These have been approved by the relevant
operating licences, an EU national regulators.
airline must be majority- • IAG will continue to monitor regulatory developments
owned and effectively affecting the ownership and control of airlines in the UK
controlled by EU nationals. and EU.
British Airways is a UK carrier
and not subject to the same
requirement.

Strategic Stakeholder impact Risk trend

16 Non-compliance with key priorities 2022 2021
1
regulation and laws
2 3
General Counsel

Status The Group has maintained its focus on compliance with key regulations and mandatory training programmes have continued
throughout the year. For safety- and security-related regulatory risks, please refer to the ‘Safety and Security Incident’ risk.

Risk description Strategic relevance Mitigations

The Group is exposed to the risk of • Carrying out business in a • The Group has clear frameworks in place including
an individual employee’s or groups compliant manner and with comprehensive Group-wide policies designed to
of employees’ inappropriate and/or integrity is fundamental to the ensure compliance monitored by the IAG Audit and
unethical behaviour resulting in values of the Group, as well as Compliance Committee.
reputational damage, fines or losses the expectation of the • There are mandatory training programmes in place
to the Group. Group’s customers to educate employees as required for their roles in these
and stakeholders. matters.
• Compliance professionals specialising in competition
law and anti-bribery legislation support and advise the
Group’s businesses.
• IAG Code of Conduct is supported by annual awareness
programmes and mandatory training for all of our staff.
• Data Protection Officers are in place in all operating
companies.

56
Viability assessment

Risk assessment across the timeline Longer-term trends and risk Viability scenario process
of the plan considerations

The directors have assessed key threats The directors have assessed industry, When considering the viability of the
and trends faced by the industry, emerging Group-specific and non sector-specific Group, for the purposes of this report, the
risks and opportunities, as well as other longer-term trends over a timeframe beyond directors have evaluated the risk landscape
industry and Group-specific risks that the plan period, such as climate change facing the Group and recommended
could impact the Group’s business plan: regulation, infrastructure proposals at hubs, plausible but severe downside scenarios
availability and timing of technologies in fleet that could impact the Group’s refreshed
• These are considered in light of their
that will benefit the environment, move to three-year plan to determine the Group’s
impact on our business model and
and exploitation of the cloud and disruptive resilience to such impacts. The results of
relevance, operations, customers,
innovation. This may require the business to these scenarios on the plan have been
financial status and include changes in
consider strategic responses, plans to adapt presented both pre and post an
regulations, customer trends and
and require new skillsets to implement ahead assessment of the likely effectiveness of
behaviours, macroeconomic predictions
of any potential impact to the Group plan. the mitigations that management
on growth, regional market
reasonably believes would be available
opportunities, technology trends, • Other considerations include:
over this period (and not already reflected
environmental implications and
• economic trends and shifts in the relative in the plan).
infrastructure developments that could
strengths of global economies including
impact our operations, as well as more • The scenarios have been defined by
market dynamics and inflation, the
existential threats to aviation. management and designed to consider
competitive landscape and changes in
• When developing the Group’s three-year principal risks that could materialise over
customer behaviours or sentiment to
business plan, longer-term the viability period and weaken the
travel
considerations have been assessed by Group’s liquidity position, and therefore
• supply chains and connectivity,
the Management Committee and the its financial sustainability. Each scenario
movement of physical goods, inflationary
Board in conjunction with the priorities considered the impact on liquidity,
and availability pressures on key
of and risks faced by the business. solvency and the ability to raise
suppliers
• The Board has also conducted its annual financing in an uncertain and volatile
• costs of compliance to environmental environment.
strategy session in addition to progress
and climate change regulations and/or
reviews during the year. Following this • Management has also assessed
lack of availability of infrastructure within
process, short-, medium- and longer- mitigations that are available to the
countries to meet commitments or
term priorities, challenges and business beyond operating cost
government mandates
opportunities have been identified and reductions including further financing,
• areas of risk or opportunity for the capital expenditure plans and potential
actions agreed.
Group, such as workforce availability, war disposals. Options that may not have
for talent, diversity and inclusion been previously considered are
Scenarios modelled ambitions, hybrid ways of working and presented as appropriate to the Board
The Group undertakes extensive analysis, different career expectations from new to assess. In reviewing and approving
forecasting and scenario modelling joiners into workforces and the aviation
throughout the year. Stresses reflect the scenarios, the Board considered,
industry amongst other matters, the availability
specifics to markets and regions relevant to
the Group’s airlines as well as the analysis • structural changes in how customers and sufficiency of potential mitigations,
completed at the Group level. travel and the potential macroeconomic the expected speed of implementation in
When considering the viability of the Group, consequences of rising unemployment response to the uncertainty and the
the directors evaluated the risk landscape
and inflation future flexibility required for the Group
and recommended the following plausible
but severe downside scenarios. • the potential longer-term economic to adapt further as needed.
impact of Brexit • Sensitivities in the scenarios’
1. Downside case
• the Group’s resilience to future events assumptions have been highlighted by
2 4 8 12 13
impacting aviation or global markets, management and challenged by the
2. Business transformation financial markets, interest rates and Board. In addition, the Board reviewed
and operational resilience exchange rates, particularly the US dollar the results of capacity and margin
1 2 3 5 8 9 11 • stakeholder expectations over reverse stress tests, which demonstrated
commitment to acting with integrity to the level of sustained capacity
3. Cyber security and IT infrastructure protect our planet, particularly climate reductions, with losses capped as
6 7 8 change and carbon impacts experienced through the pandemic and
losses followed by margin decline
4. Sustainability Management has assessed and the Board
(before mitigations) that would result in
considered the longer-term sustainability and
5 the Group using all available liquidity
climate risks, applying scenario analysis
(including cash and currently available
Full details of modelled scenarios provided techniques as set out by the TCFD process.
on the next page
undrawn credit facilities) and compared
Further details can be found in the
this to the outputs from the scenarios.
Link to Principal risks Sustainability report.

57
RISK MANAGEMENT AND PRINCIPAL RISK FACTORS CONTINUED

Scenarios modelled
Link to
No. Title principal risks
1 Downside case
Downside case stressing the plan models a combination of risks facing the Group, including risks to economies 2, 4, 8, 12, 13
following the pandemic and as a result of the war in Ukraine. Scenario configures a blend of commercial and
operational adverse impacts which would result in capacity reductions over and above the Group’s business
plan assumptions. In addition, a more severe downside case with increased sensitivities, including increased fuel
prices, has also been considered.
Economic considerations include demand impact from global economic pressures resulting in reduced
revenues, and increased operating costs due to inflationary pressures.
Operational considerations factor in operational disruption as a result of airport capacity, resourcing issues or
strike action; and further schedule disruption as a result of severe weather, winter resourcing or other
operational issues. Reduction in capacity modelled from these considerations further impacts the Group’s
revenues.
The Downside case assumes that €350 million of the €3.3 billion of available general credit facilities are required
to be drawn, assuming no further mitigating actions.
As part of the modelling, consideration was given to some of the key factors that could influence the evolution
of cash in the Downside case. Cost mitigations were considered across all operating cost lines, including the
sensitivity to cost variability being lower than that assumed. Fuel was modelled directly, based on fuel curves
and hedging plans. Working capital and capital expenditure adjustments were applied within the scenarios. The
scenarios assume that the Group is able to continue to secure financing for future aircraft deliveries, having
successfully financed all aircraft deliveries during 2020, 2021 and 2022 and, in addition, has further potential
mitigating actions, including asset disposals, it would pursue in the event of adverse liquidity experience.
The Group has considered the acquisition of Air Europa Holdings for the purposes of the viability assessment.
The period to June 2024 of this Downside case has also been applied as the Downside case set out in the going
concern analysis (see note 2 of the Group financial statements).
2 Business transformation and operational resilience
Potential for lost revenue impact arising from delays in delivering and realising the benefits of business 1, 2, 3, 5,
transformation initiatives and increased costs of securing required resourcing levels.
8, 9, 11
Lost revenue within some IAG airlines from pre-emptive flight cancellations with resultant reputational impact in
response to resourcing challenges.
Increased staff attrition and industrial relations strike action across IAG airlines due to nature and pace of
business transformation plans increases costs and impacts revenues.
Further revenue impact considered from reduced capacity as a result of airport capacity and air traffic control
airspace restrictions.
3 Cyber security and IT infrastructure
A stress to model the impact of a ransomware attack on an IAG airline. The scenario assumes a disruption 6, 7, 8
period of one week resulting from the attack before full connectivity is restored, impacting customers and
operations of the affected airline. It also assumes lost revenue due to disruption of operations at the affected
airline with knock-on impacts to other IAG airlines due to need to isolate and switch off connectivity of Group
shared credentials platforms. There are also further lost revenues due to reputational impact and increased EU
261 costs. Associated costs of recovering from the incident include the disruption through the investigation
period including increased IT costs as well as brand impacts, and the potential for regulatory scrutiny and fines.
In addition, the scenario considers an unplanned outage owing to data centre migration activity resulting in
short notice flight cancellations causing further lost revenue and increased EU 261 costs.
4 Sustainability
An increasing revenue stress on shorthaul operations across the Group to reflect changes in customer 5
behaviours towards shorthaul travel where other travel options exist, with the additional imposition of costs
from sustainable fuel usage (with no/limited ability to pass this on to the customer). Transatlantic revenues
below plan expectations also modelled to reflect a potential long-term change in corporate business travel
behaviours.
Revenue impact from schedule disruption due to extreme weather events also considered within the scenario
alongside increased costs from new taxes and additional fuel costs in years 2 and 3 due to biofuels mandate.
Longer-term consideration of the impacts of climate change and carbon and regulatory initiatives to address
this within the aviation sector, such as the implementation of new regulatory policy, carbon costs and the cost
and availability of Sustainable Aviation Fuel are also subject to assessment and modelling by the Group.

58
Viability statement
The directors have assessed the viability The Group has modelled the impact of • the Group can implement any further
of the Group over three years to mitigating actions to offset further structural changes required in
December 2025. They have considered deterioration in demand and capacity, agreement with any union consultation
the post pandemic global macro- including reductions in operating processes and regulatory approvals;
economic environment and uncertainty, expenditure and capital expenditure. The • future COVID-19 pandemic or other
the health of the aviation industry and its Group expects to be able to continue to public health related restrictions do
supply chain, the assumptions of the secure financing for future aircraft not result in further prolonged and
plan, the strategy of the Group and the deliveries and in addition has further substantial capacity reductions and
Board’s risk appetite. Although the potential mitigating actions it would groundings beyond 2022; and not
prospects of the Group are considered pursue in the event of adverse liquidity to Q2 2020 levels, as governments
over a longer period, the directors have experience. do not have the appetite for the
determined that a three-year period is an economic impact and stress that
Further details on debt financing can be
appropriate timeframe for assessment as it would place on their respective
found in the Going Concern disclosures
it is aligned with the Group’s strategic economies;
in note 2 of the Group financial
planning period (as reflected in the plan) • any new virus strain or threat to public
statements.
and the external uncertainties facing the health that emerges during the
aviation sector more widely are Based on this assessment, the directors
viability period can be managed within
significantly beyond any experience to have a reasonable expectation that the
existing health and testing regimes
date and continue to drive change in the Group will be able to continue in
without recourse to government
external risk environment. The Board operation, meet its liabilities as they fall
regulations that significantly affect our
recognises the pace of change required due and raise financing as required over
airlines’ operations.
within the Group to further adapt and the period to December 2025. However,
respond to this environment in addition this is subject to a number of significant In the event of another risk scenario
to the rapidly changing competitive factors that are outside of the control of resulting in an adverse liquidity impact in
landscape and wider global the Group. In reaching this assessment excess of the Downside case and other
macroeconomic conditions. the directors have made the following stresses it has considered, the Group
assumptions when considering both the would need to implement additional
plan and the Downside case (the most mitigation measures and would likely
severe and plausible of the viability need to secure additional funding over
scenarios considered): and above that which is forecast at
February 23, 2023.
• the Group will continue to have access
to funding options and that the capital
markets retain a level of stability and
appetite for funding within the aviation
sector;

59
REGULATORY ENVIRONMENT

Positive engagement
to support recovery
Engagement context vaccination for inbound travel to Ireland impacts on customers and airports and
IAG continued to face considerable on March 6. This was followed by the in the case of London Heathrow and
uncertainty in the political and regulatory withdrawal of the Irish Government’s Amsterdam Schiphol, even imposed caps
environment during 2022, not least Aviation Protocol covering remaining on passenger numbers.
because travel restrictions designed to COVID-19-related restrictions on May 16.
IAG engaged with governments to
limit the spread of COVID-19 remained in In the UK, all travel requirements were highlight the real causes for shortages.
place around the world to varying degrees. lifted on March 18 with the UK Government In the UK, where the impact was felt most
Throughout the year, therefore, IAG explicitly recognising the importance of severely, these causes included a smaller
engaged with policy makers to understand travel to the country by removing them in pool of labour from which to recruit but
and manage changes to travel rules, as time for the busy Easter holidays. also that the time to complete security
well as to explain the benefits of a return references tripled. Variations in
to normal travel. We encouraged focus on The requirement for travellers to be
employment patterns, with applicants
key issues, in particular sustainability, vaccinated against the disease remains a
having more jobs due to the instability
where policy intervention can provide standard one in many key markets,
in the employment market, meant that
mutual benefit to customers and all including the US. The necessary customer
very many more checks with previous
stakeholders in wider society as well as to communications have been embedded in
employers were required and applicants
IAG itself. IAG’s operating companies but variations
often had to wait over three months for
in the details of rules around the world
The impacts of the pandemic in 2022 have roles to be confirmed.
continue to mean monitoring of changes is
been felt not just in the practical needed. IAG and British Airways were also able to
implications of travel restrictions but in provide governments with a clear picture
impacts on other specific areas of aviation In some countries, largely in Asia,
of the knock-on effects in the industry
policy and in the approach of regulators. restrictions on travel still present
where, for example, lack of air traffic
The pace of political change in the UK, significant barriers to resuming normal
controllers in parts of Europe can cause
with its wider impacts on business, has operations. In these cases, where there are
delays at UK airports.
also required monitoring and re- complex requirements on airlines, IAG and
engagement with new ministerial teams. its operating companies continue to War in Ukraine
engage, both directly and through their The impact on the aviation industry of
IAG aims to make the case for the relevant national regulators, with the Russian’s invasion of Ukraine in February is
economic and social benefits of aviation relevant authorities to simplify and lift not to be compared with the human
through connecting people and legacy rules. tragedy of the war but there are significant
businesses, facilitating trade and enabling
Other impacts in 2022 impacts on airline operations by
positive international relationships. To do
preventing European and UK airlines from
so, the Group directs its engagement Although the safety-critical and strategic
accessing Russian airspace. IAG has
largely towards governments and nature of international aviation has always
engaged with its government stakeholders
regulators in the countries of its operating meant there is a role for government and
to keep them apprised of the impacts on
airlines and with the institutions of the regulators in the sector, IAG observes that
both operations and on other policy areas.
European Union, working closely with our one legacy of the pandemic is the
trade association Airlines 4 Europe. We tendency for governments to seek to be Sustainability
have also contributed to supra-national more closely involved in the operation of IAG has continued to champion the cause
policy fora such as ICAO (through IATA) the aviation industry than before. In the UK of sustainable aviation and to share its
and directly with governments in key this has resulted in increased scrutiny and plans for reducing carbon emissions as the
world markets to support market access or demands for information. IAG has worked industry recovers. To explain and promote
manage doing business issues for our with British Airways and its other its sustainability position, the Group and its
operating companies. operating companies to reduce the individual companies have engaged with
associated administrative burden through representatives of the institutions of the
COVID-19
positive and regular engagement. EU and governments of Spain, Ireland and
Travel restrictions
During 2022, demand returned largely as the UK.
The removal of travel restrictions has been
IAG had anticipated but, in contrast, the IAG welcomes the EU Green Deal and its
a staged process through the year, with
very significantly increased time that it objectives, with which the Group is aligned,
changes at irregular intervals. For example,
took to provide resources to meet that as a powerful package for change.
while the European Commission advised
demand could not have been foreseen and Accelerating the pace of decarbonisation
on March 1 that all EU countries should
presented a serious challenge to all parts will, however, require support from all
essentially allow all travel by those with an
of the aviation system. Airlines, airports, stakeholders in the industry and the
approved vaccination, a variety of
ground handlers and air navigation service involvement of all national governments
requirements existed across the EU
providers in different parts of the world and European institutions. In this regard, a
through 2022. While travel to Spain in the
saw considerable operational difficulties, targeted design of the elements of the
summer season was enabled, full entry
resulting in delays and flight cancellations package, together with that of other
restrictions were not lifted until September.
in the spring and early summer as relevant EU aviation regulations, is key to
Ireland saw the removal of requirements restrictions were lifted. Airlines reduced ensuring the sector’s ability to invest in
for passenger locator forms and proof of capacity to lower the risk of short-notice reducing its carbon footprint.

60
IAG has made clear in its advocacy that the both systems to flights between EU Infrastructure charges
Group does not support the removal of the Member States risks undermining support The effective and fair regulation of airport
current jet fuel tax exemption. This is not a for CORSIA outside Europe. Similarly, we and air navigation service charges, set at a
solution for decarbonisation but will reduce encourage the use of emissions trading reasonable level, continued to be an
the sector’s ability to invest in more system revenues (in the EU and UK) for important regulatory issue in 2022 with
effective measures with a significant impact investment in carbon reduction measures, consultations in each of IAG’s home
for citizens and the economy. Instead, we as originally envisaged at the creation of markets.
are firmly of the view that policy should the ETS.
IAG and British Airways made detailed
focus on increasing the use of SAF and
Slot allocation representations to the UK CAA in response
market-based measures such as the EU ETS
Regulations introduced to restrict air to its consultation on the price cap for
and ICAO’s Carbon Offsetting and
services during the pandemic meant that Heathrow Airport’s charges. Having
Reduction Scheme (CORSIA).
some aviation policies that are essential in allowed Heathrow Airport Limited (HAL)
IAG contends that increasing the use of normal circumstances were not effective to increase charges by over 50 per cent in
SAF, which reduces lifecycle CO2 emissions or appropriate for crisis conditions. Rules setting an interim price cap for 2022,
by 70 per cent, provides the primary that govern the allocation of slots at subsequently extended to 2023 at the
near-term opportunity to drive down airports with scarce capacity provide a same rate, the CAA’s Final Proposals
industry emissions. In April 2021, IAG good example since low demand made required the airport to reduce its overall
became the first European airline group them unnecessary. yield per passenger by RPI -5.75 per cent
to commit to fulfilling 10 per cent of its fuel over the remaining three years of the
Although the capacity of the sector was
needs with SAF by 2030 and the Group regulatory period. This will return charges
restored to a considerable degree in 2022,
supports a 10 per cent mandate for SAF to roughly the same level in 2026 as they
there was still need for global regulatory
for 2030 for all flights within the EU. We are in 2022. IAG considers that the 2022
relief from the elements of slot rules that
call for a global SAF commitment covering and 2023 interim price cap is too high but
require airlines to operate 80 per cent of
all international flights through ICAO. We welcomes the overall position the CAA has
any one slot in order to retain it in the
also encourage the EU and its Member adopted with the trend of reducing
following year. The continued relief
States to include a package of investment charges. We continue to provide
granted this year recognised that there
incentives to enable scaled-up production information to the regulator as we await
were divergent recovery rates worldwide
of SAF alongside the blending mandate confirmation of the final position, expected
and continuing COVID-19 restrictions in
requirement that the Green Deal in at the end of the first quarter of 2023.
some regions. IAG worked with IATA to
introduces. IAG also continues to advocate the need
advocate the adoption of industry-agreed
In engaging with UK policy makers, for greater transparency of HAL’s capital
relief measures, as developed jointly with
we promote the same public policy levers. plans and regulatory asset base in future
airports and slot coordinators. These
We are encouraged that the UK regulatory reviews.
guiding principles recognised the value to
government confirmed its commitment consumers of allowing temporary waivers In Spain, Iberia and Vueling, together with
of £165 million to its Advanced Fuels Fund, from, or more flexible application of, ‘use it IATA, participated in the consultation
established to support planning and or lose it’ rules so as to maintain long- process on airport charges to minimise
production of five SAF plants in the established airline networks for future cost increases, and secured a decision by
country. In December the first £82 million seasons. the regulator to keep charges flat until
of the fund was awarded to five projects, 2026 with a specific decrease in charges
The UK, the EU and other jurisdictions
including three with which IAG is for 2022 of -3.17 per cent. In Ireland,
sensibly adopted a range of alleviation
partnering. IAG also welcomed the UK’s Aer Lingus engaged with the Commission
measures, but the patchwork of market-
declaration in July of a mandate for 10 per for Aviation Regulation which is
based approaches adopted worldwide
cent SAF by 2030 (in line with IAG’s own conducting its third interim review of the
introduced further inconsistencies and
target) and we encourage the government 2019 regulatory decision. In December, IAG
complexity to the sector during the
to pass the necessary legislation as soon responded to the UK CAA’s consultation
recovery phase. Such waivers have been
as possible. on an increase to NATS En Route Limited’s
gradually lifted so that from summer 23
Throughout 2022, IAG has promoted a (NERL) charges, which initially proposed
the industry is effectively returning to
further policy step necessary to progress an increase of up to 27 per cent.
pre-COVID-19 rules. IAG continued to
towards net zero. In conjunction with support the use of the proven and Market access
industry partners, we advocate adopting effective global policies and procedures IAG continues to support individual
a price stability mechanism in the UK for set out in the IATA Worldwide Airport Slot operating companies in securing market
SAF. The successful development of the Guidelines both while the need for waivers access, expanding partnerships with other
offshore wind sector in the UK was due to remains but also in the long-term. Through airlines and enabling operations on new
the introduction of Contracts for 2022 we continued to advocate this routes. This included attendance at, or
Difference and IAG recommends this tool internationally agreed system as a way to contribution to, talks on international air
should be adopted for SAF to reduce the provide certainty for investors and service agreement talks and other bilateral
risk for investors and so boost investment consumers as well as to maintain global discussions, as well as support for new
in new technology. networks and to introduce competition Group initiatives, such as the creation of
On the international stage IAG has long and is engaging with the European British Airways Euroflyer subsidiary at
been an advocate for and contributor to Commission in its on-going review of the London Gatwick Airport.
the design of CORSIA. We welcomed the Slot Regulation that launched in
October commitment by ICAO to a September.
Long-Term Aspirational Goal for
international aviation of net zero carbon
emissions by 2050. The Group believes the
EU Green Deal must work alongside global
measures, not duplicate them, and that the
EU ETS should apply to intra-EU flights
and CORSIA to extra-EU flights. Applying

61
Additional disclosures
Table of contents
Section Subsections
A.1.3a.-3.b. Planet – climate change Scope 1 and 2 emissions and commentary, Scope 3 emissions and commentary
A.2.a.-2.4. Planet – wider issues Noise definitions, waste definitions, biodiversity, water
B.2.a-2.d. People Key workforce metrics, employment and working organisation, workforce turnover,
other social and employee-related matters and metrics
B.8.1.-8.3. Remuneration and salary gap Average remuneration by gender/age/job category, Board and Management
Committee remuneration
B.9.1.-9.5. Prosperity Impact of Company on local employment and development, consumer relationship
management, public subsidies received, accounting profit/loss before tax, income tax
paid
C.8. Governance Description of EU Taxonomy and 2022 related activities: methodology/data gathering,
eligible activities, KPI – revenues, KPI – OPEX, KPI – CAPEX
D. Table of contents References to GRI standards and pages

62
ADDITIONAL DISCLOSURES CONTINUED

A. Planet – Climate change

See Sections A.1. and A.2. for 2022 metrics and five-year trends.

A.1.3a. Scope 1 and 2 emissions

Relevant standards: GRI 301-1, 302-1, 303-3, 305-3/4/5

Commentary on key climate change metrics

Footprint metric Description Commentary on 2022 trends
Scope 1 emissions (gross) Direct emissions associated with IAG operations 2022 emissions increased to 21 million tonnes
including use of jet fuel, diesel, petrol, natural gas, (MT) due to increased flying demand but remain
and halon. Sources of emissions include aircraft 31% below 2019 levels.
engines, boilers, auxiliary power units and ground
SAF use saved 30,332 tonnes of CO2e.
vehicle engines. Gross emissions includes reductions
from Sustainable Aviation Fuel (SAF), in line with
globally recognised accounting standards.
Scope 2 emissions Indirect emissions associated with electricity use in 2022 market-based emissions increased to 12 kt
ground facilities like offices, lounges, data centres due to increased business activity, but remain
and hangars. Market-based emissions are based on below the 2019 level of 20 kt due to lower
the carbon intensity of electricity purchased from electricity use and greener national grids
suppliers. Location-based emissions are based on compared to 2019.
the carbon intensity of national electricity grids.
Where electricity data from overseas offices was
CO2e is calculated using gCO2e/kWh factors from not available, kWh was calculated based on
national agencies in Ireland, Spain and the UK, and leased space in m2, multiplied by relevant kWh/
IEA national electricity emissions factors. m2 factors based on historical data.
Scope 3 emissions Indirect emissions associated with products the The Group is on track to deliver the 2030 target
Group buys and sells. 12 out of 15 Scope 3 categories, of 6.6 MT (a 20% reduction versus 2019), based
as defined by the GHG Protocol, are assessed to be on internal forecasts.
relevant.
Scope 3 emissions increased to 5.5MT due to
IAG continues to review Scope 3 emissions increased business activity.
calculations in line with the latest approaches and
See Section A.1.3b. for more details.
data.

Progress metric Description Commentary on 2022 trends

Flight-only emissions Grammes of CO2 per passenger kilometre (gCO2/ The improvement to 83.5 g CO2/pkm is driven
intensity pkm) is a standard industry measure of flight fuel by a recovery in passenger load factors,
efficiency. It is calculated by dividing total jet fuel operational efficiency initiatives and the use of
use by total passenger-km, assuming one cargo- SAF. The Group is on track for the 2025 target
tonne-km is equivalent to 10 passenger-km - then of 80g CO2/pkm.
multiplying this value by a conversion factor of 3.15.
The passenger-km value used in the 2022
This calculation excludes the jet fuel used by calculation is 213,376 million and the cargo-
franchises, cargo carried on other airlines, and tonne-km value is 3,712 million.
engine testing. It excludes no-show passengers, in
line with industry guidance.
Scope 1 emissions (net) Net emissions are calculated based on gross The Group is on track to deliver the 2030 target
emissions and then by subtracting any carbon of 22 MT (a 20% reduction versus 2019), based
savings from EU, Swiss and UK Emissions Trading on the roadmap in Section A.1.2.
Scheme (ETS) compliance obligations, volumes of
2022 net emissions were reduced by 1.8 MT due
offsets purchased to meet Carbon Offsetting and
to participation in ETS schemes, as well as
Reduction Scheme for International Aviation
British Airways offsetting of domestic flights
(CORSIA) compliance obligations, and the volumes
and Group offsetting of staff and duty travel.
of offsets voluntarily purchased by IAG.
Net emissions reductions will be achieved via
EU ETS allowances purchased from other sectors
CORSIA credits when global international
equate to a net reduction, aligned to European
emissions rise above the baseline agreed at the
Commission guidance. IAG has been disclosing net
International Civil Aviation Organisation (ICAO)
emissions since 2017 using this methodology.
General Assembly. This is expected to be 2024.
Renewable electricity The share of electricity generated by renewable This percentage includes electricity use from
sources such as solar power and wind, based on facilities partially outside IAG’s operational
volumes procured from renewable electricity control. The 2022 drop to 81% reflects the
suppliers. In overseas offices where data on availability of renewable electricity at relevant
electricity sources was unavailable, the source of airport facilities and leased overseas offices.
electricity is assumed to be the national grid.
63
Description of and commentary on additional climate change metrics
Metric Unit Description Commentary on 2022 trends
Emissions gCO2/ Based on Scope 2 location-based emissions divided The improvement to 0.20 gCO2/pkm is a return
intensity pkm by business activity, as measured in revenue to pre-pandemic levels of efficiency, as
(Scope 2) passenger-km including cargo. Complements the passenger load factors return to normal levels.
flight-only emissions intensity metric.
GHG reduction ’000 Reductions in CO2e as a result of specific efficiency The 38% increase to 82 kt is due to the Group
initiatives tonnes initiatives which started in the reporting year. This delivering efficiency initiatives across the full
CO2e excludes reductions from externally driven changes flight phase including take-off, cruise, approach
applicable to all airlines, such as airspace changes. and landing and engine washes.
Electricity kWh Consumption of electricity across IAG ground Electricity use remains 20% lower than 2019 due
facilities, in millions of kWh. This includes usage in to lower-than-normal occupancy in ground
main offices, overseas offices, hub airports and facilities and offices following the COVID-19
maintenance facilities. A detailed description of the pandemic.
Scope 2 emissions calculation is on the previous
page.
Energy kWh The sum of the above kWh and energy use from fuel. Energy use rose 93% due to increased flying
Fuel energy use is based on volumes of jet fuel, activity. 0.4% of kWh is derived from renewable
diesel, petrol, natural gas and gasoil, multiplied by sources, predominantly renewable electricity.
appropriate UK Government conversion factors. Jet fuel is over 99% of MWh and limited volumes
of SAF are available.
UK factors are used across the Group as these are
considered the most robust available.
Revenue per €/tonne Calculated by dividing total Group revenue by the The 2022 value improved to €1,088/tonne CO2e,
tonne CO2e CO2e sum of Scope 1 emissions and Scope 2 location- better than pre-pandemic levels.
based emissions.
Jet fuel use tonnes Jet fuel used within the aircraft fleet and for engine The 94% increase in jet fuel use, to 6.6 MT, is due
testing during the reporting year. to the recovery in flying demand. Jet fuel
remains 31% below 2019 level.
Fleet age years The average age of aircraft in the IAG fleet as of Average fleet age increased from 11.2 to 11.9
December 31, 2022. years. Those aircraft already in the fleet aged by
a year, while 27 new aircraft deliveries lowered
The average age of operational aircraft increases
the average age.
each year. This is offset by the impact of new
deliveries and retirements.

64
ADDITIONAL DISCLOSURES CONTINUED

A.1.3b. Scope 3 emissions

In 2021 IAG was the first airline group worldwide to target net zero Scope 3 emissions by 2050. This was complemented by a target of
a 20 per cent reduction in net Scope 3 emissions by 2030, compared to a 2019 baseline.
These targets will be delivered in collaboration with suppliers and other stakeholders, by monitoring supplier sustainability
performance, engaging with suppliers on their sustainability plans, embedding climate requirements into supplier contract clauses and
product specifications, and accounting for delivery of existing supplier targets. IAG is already on track to meet the 2030 target.
IAG has assessed all 15 categories of Scope 3 emissions, as defined by the global GHG Protocol, and identified 12 relevant categories.
The Group has over 13,000 suppliers and the scope of emissions calculations within these categories is based on material categories of
spend – the two most material categories being jet fuel and aircraft spend, reported under Category 3 and 2 respectively. Four
categories represent over 90 per cent of IAG’s assessed Scope 3 impact.
IAG continues to refine Scope 3 calculations based on the latest data and assumptions. Standardised conversion factors are used
where data from suppliers is not available, and as more data from suppliers becomes available, some values may be restated. Any
significant restatements will be provided in future reports with explanations provided.
Total Scope 3 emissions in 2022 are 5,480,816 tonnes CO2e, versus 3,324,992 tonnes CO2e in 2021.

versus versus
Scope 3 category in tonnes CO2e1 Method2 last year 2019 2022 2021 2020 2019
Category 3: Fuel and energy-related Fuel-based/ 93% (31%) 4,385,293 2,266,561 2,284,992 6,371,621
production average data
Category 2: Capital goods Hybrid data (45%) (59%) 232,000 424,000 912,000 568,000
Category 14: Franchises Franchise-specific 29% (41%) 475,576 369,718 235,167 810,334
Category 9: Downstream transportation Fuel-based (6%) (34%) 165,037 174,708 157,554 248,574
and distribution
Category 11: Use of sold products Other 133% (38%) 152,268 65,391 59,081 244,459
Category 7: Employee commuting Average data 32% (58%) 7,294 5,514 5,720 17,515
Category 5: Waste generated in operations Waste-type- 25% (26%) 2,790 2,234 2,872 3,747
specific
Category 1: Purchased goods and services Average data 17% (61%) 268 229 525 689
Other categories: 4, 6, 8 Varies 186% 2155% 7,330 1,807 2,567 325
Category 13: Downstream leased assets Asset-specific 276% n/a 52,860 14,042 0 0
TOTAL Scope 3 emissions 65% (34%) 5,480,816 3,324,992 3,659,717 8,265,262
1 Listed in order of highest to lowest climate impact in 2019. Categories less than 1,000 tonnes in 2019 are grouped together.
2 As described in the GHG Protocol ”Technical Guidance for Calculating Scope 3 Emissions”.

2018 data is not provided as the methodology has changed substantially since that year.

65
Scope 3 category Description Commentary on 2022 trends
Category 1: Emissions from activities which represent material IAG GBS is undertaking an in-depth review of
Purchased goods categories of spend and available data. Currently, this is the categories of purchased goods and
and services based on water supply and consumption in offices and services and expects to revise the
facilities, laundries, and potable water carried on-board. methodology for calculating Category 1
CO2e values are calculated by multiplying m3 water use by emissions in 2023.
UK government conversion factors.
Category 2: Emissions associated with aircraft manufacture and The decrease in 2022 is due to lower numbers
Capital goods disposal. Calculated by multiplying the number of aircraft of aircraft deliveries and retirements. 2020 is
delivered and retired within the reporting year, by an unusually high due to the number of
effective tCO2e per plane, based on disclosed operational accelerated fleet retirements related to
emissions from aircraft and engine manufacturers in 2018 COVID-19.
and 2019.
Category 3: The well-to-tank emissions from jet fuel use, Scope 1 fuel This value is directly correlated to fuel use. The
Fuel and energy-related use, and Scope 2 electricity kWh. CO2e values are increase is due to a recovery in flying demand.
production calculated by multiplying the weight or energy content of
various fuels by the latest standardised UK Government
GHG conversion factors.
Category 4: Emissions from subcontracted vehicles used in hub Based on 2020 data but not material. The
Upstream transportation operations or cargo operations. methodology will be reviewed in 2023.
and distribution

Category 5: Emissions associated with processing waste via recycling, The increase in 2022 is driven by higher
Waste generated recovery, incineration or landfill. Calculated by multiplying volumes of waste generated as a result of
in operations. total extrapolated global waste volumes by appropriate increased flying activity.
CO2e/tonne conversion factors from the UK Government.
Category 6: Emissions from jet fuel related to IAG staff travel on other Increased in 2022, driven by an expanded
Business travel airline carriers. Staff travel on IAG aircraft is captured in scope of reporting.
Scope 1 emissions. Emissions from crew hotels were
included in 2022, where such data was available.
Category 7: Emissions from staff travelling to and from workplaces. In An increase due to higher business activity, but
Employee commuting the absence of detailed staff travel data, this is calculated lower than 2019 as some staff continue to
by multiplying the number of FTE employees in the work from home.
reporting period by the average commuting distance (km)
and average weighted carbon intensity (CO2e/km) of
commuting based on the UK Government National Travel
Survey.
Category 8: Jet fuel emissions from any aircraft leased from other Not relevant in 2022 as no leasing was carried
Upstream leased assets carriers on a seasonal basis. out, but may be relevant in future.
Category 9: Emissions from the fuel use of subcontracted air or ground The increase in 2022 is due to increased cargo
Downstream freight. activity.
transportation
and distribution
Category 11: Emissions related to products purchased by Avios The increase in 2022 is due to Avios customer
Use of sold products members using Avios points. Purchases of IAG flights are purchasing behaviour returning to near
reported under Scope 1 emissions. Product categories pre-pandemic levels as travel demand
reported here are flights on non-IAG carriers, hotel stays recovers.
and car hire, as these are the most material categories.
Category 13: Jet fuel emissions from any aircraft leased to other carriers In 2022, a non-zero value is reported due to
Downstream on a seasonal basis. leasing of aircraft to another airline.
leased assets
Category 14: Emissions from the jet fuel burn of aircraft franchises. The increase in 2022 is due to higher activity in
Franchises franchises, as flying demand recovers.

66
ADDITIONAL DISCLOSURES CONTINUED

A.2. Planet – Other

A.2.1a. Waste definitions
Relevant GRI standards: GRI 306-1/2/3 (2020)
See Section A.2.1 for 2022 waste metrics and a description of the ’5 by 2025’ waste targets.

Waste type Waste metric Description of metric

Single-use-plastic Volume Items made wholly or partly of plastic which are typically intended to be used just once or
for a short period of time before they are thrown away. This aligns to the EU definition.
Onboard kg/passenger Numerator: Onboard waste is both cabin and catering waste. Cabin waste is defined as
items collected from the cabin following flights, including newspapers, blanket and
headphone wrapping, and packaging which passengers have brought onto the aircraft.
Includes rubbish bins from toilets and excludes lost luggage. Catering waste is defined as
food and packaging left over from onboard catering, including drinks cans, and IAG-
owned waste from food preparation at catering facilities. Includes all categories of
catering waste covering international and domestic flights.
Denominator: The number of inbound passengers at hub airports, plus outbound
passengers on short-haul flights whose waste was kept onboard the aircraft and offloaded
at the hub when the plane returned.
Cargo kg/tonne of cargo Numerator: Total waste from handling and packaging cargo. This consists largely of
handled recyclable materials such as plastic, wood and cardboard but is impacted heavily by ad
hoc disposal of perishable or hazardous cargo.
Denominator: Tonnes of cargo and mail handled in three main hubs: Dublin, Madrid, and
London Heathrow.
Maintenance kg/person-hour Numerator: Materials from specific maintenance/engineering facilities including paper,
metal, and hazardous waste. Excludes airport waste, aircraft disposal, construction waste
and effluent.
Denominator: Number of available person-hours at maintenance facilities, as compiled by
maintenance teams.
Office kg/employee Numerator: Materials from printing, office stationery, and onsite catering. Includes offices,
training facilities, and Irish, Spanish and UK call centres. Includes technology waste,
defined as primarily data centre equipment and IAG-owned IT equipment.
Denominator: Total FTE employees at the end of the reporting period.

Waste disposal method Description (as per GRI 306 standards)

Landfilled Defined as “final depositing of solid waste at, below, or above ground level at engineered
disposal sites”.
Includes: waste sent directly to disposal.
Excludes: waste sent to third parties.
Incinerated Defined as “controlled burning of waste at high temperatures”.
Includes: incineration with energy recovery.
Recovered Defined as “any operation wherein products, components of products, or materials that
have become waste are used or prepared to be used to fulfil a purpose in place of new
products, components, or materials that would otherwise have been used for that
purpose.”
Includes: incineration including energy from waste if the incinerator meets set standards.
Excludes: reprocessing into materials that are to be used as fuels.
Recycled Defined as “reprocessing of products or components of products that have become
waste, to make new materials”.
Includes: downcycling, upcycling, composting and anaerobic digestion, uniforms re-used,
and plastics turned into new plastic products.
Excludes: reprocessing into materials that are to be used as fuels.

67
A.2.2a. Noise definitions
Description and commentary of noise metrics is in section A.2.2. IAG only reports on the most stringent ICAO and ICAO Committee on
Aviation Environmental Protection (CAEP) standards for aircraft. The Group has been over 97 per cent compliant with ICAO Chapter 4
and CAEP Chapter 4 standards for several years.
Metric Unit Description Commentary on 2022 trends
Noise per QC/LTO Average noise per flight considering arrival and departure noise This value has improved by 12% since
LTO for each aircraft type. Based on the number of flights of all 2019, due to the use of newer quieter
aircraft which operated during the year, including leased aircraft. Values can fluctuate year on
aircraft. year due to factors such as the mix
of shorthaul and longhaul flying.
Quota Count (QC) values from the UK Government are used to
create a relative categorisation based on certified noise levels.
For example, for a single flight, a Boeing 747 would have had a
score of 6.0 while an Airbus A320NEO would have a score of
0.5 or lower.
NOx per LTO kg/LTO Average emissions of the air pollutants nitrogen oxides (NOx) This value continues to improve due
as aircraft take off and land. This calculation considers the to the use of newer aircraft.
engine certifications and aircraft types of all aircraft which
operated during the year, including leased aircraft, referencing
information from the ICAO emissions database.
ICAO % of fleet ICAO Chapter standards compare aircraft noise against Compliance continues to improve
Chapter 14 at standard standardised limits that are a combination of lateral, approach, due to the use of newer aircraft in
and flyover noise levels. Higher standards are more stringent. the fleet and retirement of older
Chapter 14 applies to new aircraft certified from January 1, 2017. aircraft.
CAEP % of fleet ICAO CAEP standards are for NOx emissions from aircraft The apparent worsening in 2022 is
Chapter 6 at standard engines. Higher standards are more stringent. The CAEP 6 NOx due to a more accurate calculation
standard applies to engines manufactured from January 1, 2008. method. Compliance is expected to
improve in 2023.
CAEP % of fleet The CAEP 8 standard applies to engines manufactured from The improvement is driven by fleet
Chapter 8 at standard January 1, 2014. modernisation.

A.2.3. Biodiversity
Biodiversity is not currently seen as a material issue for IAG, but the business is taking steps to manage and mitigate its impacts on
biodiversity where relevant. A key method of mitigating biodiversity impacts is ensuring that SAF projects align with principles from
the Roundtable on Sustainable Biomaterials (RSB) or International Sustainability & Carbon Certification (ISCC) standards. Other steps
to manage biodiversity impacts include:
• IAG airlines are signatories to the Buckingham Palace Declaration on preventing global wildlife trafficking.
• The Group implements active governance around overseas offset projects to account for their impact on biodiversity. Reducing
Emissions from Deforestation (REDD+) projects are included in the portfolio of voluntary offsets available to customers.
• British Airways owns approximately 20 acres of 300 acres of parkland surrounding the London head office, which includes grassland,
lakes and ponds and has rangers actively managing these habitats.

A.2.4. Water
Relevant GRI standards: GRI 303-3
Water consumption is not a material issue for IAG. However, water use is monitored across the Group and IAG consumed 637,738 m3
of water in 2022 in offices, ground facilities and potable water onboard aircraft. The 2022 increase is due to the post-pandemic
recovery in Group operations and an expanded scope of reporting.

Metric Unit vly 2022 2021 2020 2019 2018

Water consumption ’000 m3 17% 638 544 525 655 nr
nr means ”not reported”.

68
ADDITIONAL DISCLOSURES CONTINUED

B. People and Prosperity

Sections B.1. to B.6. are on prior pages of this NFIS.

B.2a. Key workforce metrics

Relevant standards: GRI 102-41, 403-9, 404-1

Social dialogue and trade unions

Relevant standards: GRI 102-41

Employees covered by collective bargaining agreements (CBAs)

Employees covered by CBA % of employees covered by CBA
Metric vly 2022 2021 vly 2022 2021
United Kingdom 19% 30,253 25,523 (2pts) 91% 93%
Spain 7% 21,185 19,749 (1pt) 95% 96%
Ireland 14% 3,954 3,473 (1pts) 85% 86%
Other 14% 2,265 1,993 (3pts) 47% 50%
Group total 14% 57,657 50,738 (2pts) 89% 91%

Description
Collective bargaining can cover a wide array of issues pertaining to working conditions, such as remuneration, working time, perks and
benefits, and occupational safety and health. This coverage rate refers to the proportion of employees who are covered by one or more
collective agreements. Calculated using headcounts at the end of the reporting period.

Commentary
Refer to Risk Management and principal risk factors section.
Coverage rates have remained stable in core markets (UK, Spain and Ireland).

69
Average hours of training
Relevant standards: GRI 404-1

Gender distribution
Training hours completed % of employees trained Avg. Training hours
Metric vly 2022 2021 vly 2022 2021 vly 2022 2021
Men 61% 1,420,183 880,049 (1pt) 91% 92% 53% 43.3 28.4
Women 137% 1,591,903 673,263 (1pt) 86% 87% 113% 67.1 31.4
Total 94% 3,012,086 1,553,313 (1pt) 89% 90% 80% 53.3 29.6*

Employee category distribution

Training hours completed % of employees trained Avg. Training hours
Metric vly 2022 2021 vly 2022 2021 vly 2022 2021
Cabin Crew 127% 1,695,211 747,228 (3pts) 86% 89% 103% 92.2 45.3
Pilots 3% 225,151 217,654 (1pts) 96% 97% 5% 31.4 29.9
Airport Operations 103% 470,019 231,442 3pts 93% 90% 77% 38.2 21.6
Corporate Function 187% 404,992 141,267 0pts 84% 84% 159% 34.5 13.3
Maintenance 0% 216,712 215,722 (4pts) 92% 96% 7% 31.5 29.4
Total 94% 3,012,086 1,553,313 (1pt) 89% 90% 80% 53.3 29.6*
*re-stated 2021 value

Description
All mandatory and non-mandatory training is in scope and can cover a wide array of topics, including human rights, anti-corruption,
flight simulator, and e-learning courses. The “% of employees trained” rate refers to the proportion of employees who completed any
training within the report period and “avg. training hours” is based on the total training hours performed per Group Full Person
Equivalent (FPE), pro-rated to Full Time Equivalent (FTE).

Commentary
Overall, there has been a 94 per cent increase in total training hours undertaken across the Group – most of which is associated with
substantial increases in Cabin Crew (+127 per cent).
The 2022 increase in average hours of training per employee is associated with the 8 per cent increase in FPE for the Group and
associated induction training – especially in our operational roles (e.g. Airport Operations and Cabin Crew), where some of our largest
recruitment campaigns have been focused. Pilot training numbers remained relatively flat, compared to other operational areas, as
there were no large-scale recruitment campaigns this year and the majority of Pilot re-introduction training occurred in the first half of
2022 (e.g. British Airway’s A380 re-introduction and ex-Boeing 747 re-training programmes all occurred in 2021).

70
ADDITIONAL DISCLOSURES CONTINUED

Health and safety at work

Relevant standards: GRI 403-9; GRI 403-10

Lost Time Injuries

Lost Time Injury (LTI) Lost Time Injury (LTI)
Number of injuries severity rate frequency rate
Metric vly 2022 2021 vly 2022 2021 vly 2022 2021
Cabin Crew 135% 523 223 (46%) 17.7 32.8 106% 4.3 2.2
Pilots 117% 50 23 (55%) 14.1 31.2 108% 1.0 0.5
Airport Operations 31% 571 438 3% 28.0 27.3 13% 5.8 5.2
Corporate Function 106% 33 16 456%* 41.4 7.4 79% 0.3 0.2
Maintenance (44%) 102 182 (12%) 32.8 37.2 (35%) 1.9 3.0
Total 45% 1,279 882 (21%) 24.0 30.5 33% 3.0 2.3

Absenteeism
Number of instances Hours absent Absenteeism rate
Metric vly 2022 2021 vly 2022 2021 vly 2022 2021
Cabin Crew 72% 15,456 8,984 63% 1,755,966 1,077,390 0.6% 7.1% 6.5%
Pilots 42% 5,131 3,609 23% 466,356 377,671 (0.5%) 4.5% 5.0%
Airport Operations 31% 11,942 9,118 38% 1,921,075 1,389,921 1.4% 8.9% 7.5%
Corporate Function 58% 6,181 3,917 37% 630,804 459,050 0.4% 3.0% 2.6%
Maintenance (3%) 5,047 5,257 (9%) 590,816 646,937 0.3% 5.2% 4.9%
Total 41% 43,757 30,885 36% 5,365,018 3,950,969 0.6% 6.0% 5.4%

Occupational illness
Number of instances
Metric vly 2022 2021
Men (9%) 20 22
Women (76%) 4 17
Total (38%) 24 39

Workplace fatalities
Number of instances
Metric vly 2022 2021
Cabin Crew - 0 0
Pilots - 0 0
Airport Operations - 0 0
Corporate Function - 0 0
Maintenance - 0 0
Total - 0 0
* Increase in Corporate LTI severity rate is associated to two accidents related to falls and slips which resulted in long-term absence.

71
Description and methodology
Metric Description Formula for calculation
Lost Time Injury severity This measures the impact of occupational accidents as reflected in (Working days lost)/(Number
rate time off work by the affected workers. of LTIs)

Lost Time Injury frequency A lost time injury (LTI) is a non-fatal injury arising out of, or during, ((Hours lost due to
rate work, which leads to a loss of productive work time. workplace injury)/
(Hours worked )) x 200,000
The unit of measurement is LTI per 200,000 hours worked, using
actual hours worked.
Hours absent For the purpose of this metric, only unplanned or unauthorised Sum(Hours absent)
absences – which means employees missing partial or whole days of
work – are included.
Examples in scope are short-term and long-term sickness, time off
due to injuries, and no-shows, which are absences without leave or
permission.
Absenteeism rate The absenteeism rate is calculated as total employee absences (Number of hours absent)/
divided by total scheduled hours in the reporting period, expressed (Number of hours scheduled)
as a percentage.
In general, most of the Group record absence in hours. Where days
are recorded (mostly in Pilots and Cabin Crew category), days are
converted to hours at a rate of 7.5 hours per day (Group average full
day).
Occupational illness: An occupational illness is a medical condition or disease that Number of occupational
develops gradually over time as a result of work performed and/or illness medically diagnosed
exposure to risk factors in the workplace. The illness must be
confirmed by a medical diagnosis.
Occupational illnesses in scope for the UK follow Reporting of Injuries,
Diseases and Dangerous Occurrences Regulations (RIDDOR)
standards and can be found on the Health and Safety Executive’s
(HSE) website.
Occupational illnesses in scope for Spain are published in the Royal
Decree 1299/2006.
Fatalities: Work-related fatalities associated to an occupational illness or Number of work-related
diseases. fatalities
To align with GRI guidance, fatalities as a result of commuting
accidents are only included in cases where the transport has been
organised by the business, such as via a company or contracted bus
or vehicle. The exception is employees in Spain, where inclusion of
these types of fatalities is a legal requirement.

Commentary
In 2022, the Group recorded 1,279 LTIs which is an increase versus 2021 (+397). This change reflects the increase in hours worked,
especially in our operational roles (e.g., Cabin Crew and Pilots).
Overall, the Group’s LTI severity rate has decreased to 24 average days per incident but the LTI frequency rate has increased to 3.0
average incidents per 200,000 hours worked. A substantial part of this evolution is associated with our Pilot and Cabin Crew
employees, who have seen their LTI frequency rate increase to 1.0 and 4.3 respectively. These figures are similar to what was reported
in 2019, when our crews were operating a comparable flying schedule, and is associated with the increases in hours worked by these
teams.
The Group’s absenteeism rates have remained consistent at 6 per cent and overall 5.3 million absence hours were recorded in 2022.
Most employee groups have seen modest increases in their absenteeism rates of less than 1 percent. Airport operations seen a slightly
higher increase of 1.4 per cent of their absenteeism rate.
Occupational illness in 2022 decreased to 24 incidents, with the majority of these being associated with fractures and abrasions.
There were no recorded fatalities associated with occupational injuries or illnesses in 2022.

72
ADDITIONAL DISCLOSURES CONTINUED

B.2.b. Employment and working organisation

Relevant standards: GRI 102-8

Total number of employment contracts and distribution by type (annual average number of permanent, temporary and part-time
contracts)

Gender distribution
Permanent contracts Temporary contracts
Metric vly 2022 2021 vly 2022 2021
Men 4% 33,003 31,619 92% 1,590 827
Women 7% 24,941 23,360 103% 1,658 819
Total 5% 57,943 54,979 97% 3,248 1,646

Full-time contracts Part-time contracts

Metric vly 2022 2021 vly 2022 2021
Men 6% 29,602 28,021 13% 4,991 4,425
Women 15% 19,059 16,626 0% 7,540 7,553
Total 9% 48,661 44,647 5% 12,531 11,977

Age distribution
Permanent contracts Temporary contracts
Metric vly 2022 2021 vly 2022 2021
Under 30 10% 7,748 7,030 97% 1,697 860
30–50 2% 29,938 29,489 93% 1,438 744
Over 50 10% 20,256 18,460 158% 108 42
Total 5% 57,943 54,979 97% 3,248 1,646

Full-time contracts Part-time contracts

Metric vly 2022 2021 vly 2022 2021
Under 30 19% 8,303 6,961 23% 1,142 929
30–50 5% 24,895 23,676 (1%) 6,480 6,557
Over 50 10% 15,461 14,010 9% 4,903 4,491
Total 9% 48,661 44,647 5% 12,531 11,977

73
Employee category distribution
Permanent contracts Temporary contracts
Metric vly 2022 2021 vly 2022 2021
Cabin Crew 7% 18,768 17,567 113% 1,478 692
Pilots 1% 7,710 7,652 - 0 0
Airport Operations 11% 12,923 11,660 103% 1,155 568
Corporate Function 7% 11,648 10,889 216% 524 166
Maintenance (4%) 6,894 7,210 (58%) 92 219
Total 5% 57,943 54,979 97% 3,248 1,646

Full-time contracts Part-time contracts

Metric vly 2022 2021 vly 2022 2021
Cabin Crew 14% 14,780 12,988 4% 5,465 5,271
Pilot (10%) 5,682 6,312 51% 2,028 1,340
Airport Operations 27% 10,506 8,286 (9%) 3,572 3,942
Corporate Function 11% 10,928 9,829 1% 1,244 1,227
Maintenance (6%) 6,765 7,232 12% 222 197
Total 9% 48,661 44,647 5% 12,531 11,977

Description
Average numbers for each employment contract and type are based on the FPE (Full Person Equivalent). FPE looks at how much of
the (whole) person’s working time is engaged in a particular activity. For instance, an employee working half of the reporting period
would be a 0.5 FPE, no matter the type of contract or working-day hours.

Commentary
Refer to ‘Composition’ commentary in ‘Description and commentary for key workforce metrics’ in section B.2. Key metrics
and progress.

74
ADDITIONAL DISCLOSURES CONTINUED

B.2.c. Employee turnover

Relevant standards: GRI 401-1
Relevant CNMV title: Total number of dismissals and voluntary leavers (distribution by gender, age and job category)

Total number of leavers and turnover rate by gender

% of voluntary leavers Voluntary attrition rate % of non-voluntary leavers Non-voluntary attrition rate
Metric vly 2022 2021 vly 2022 2021 vly 2022 2021 vly 2022 2021
Men 4pts 53% 49% 4.6pts 8.9% 4.3% 6pts 60% 54% 0.2pts 1.4% 1.2%
Women (4pts) 47% 51% 3.3pts 7.7% 6.0% (6pts) 40% 46% 0.3pts 1.6% 1.3%
Total - 100% 100% 3.2pts 8.4% 5.2% - 100% 100% 0.3pts 1.5% 1.2%

Total number of leavers and turnover rate by age

% of voluntary leavers Voluntary attrition rate % of non-voluntary leavers Non-voluntary attrition rate
Metric vly 2022 2021 vly 2022 2021 vly 2022 2021 vly 2022 2021
Under 30 5pts 40% 35% 8.6pts 21.1% 12.5% 24pts 32% 8% 2.4pts 3.1% 0.7%
30 – 50 (4pts) 42% 46% 2.3pts 6.7% 4.4% (13pts) 34% 47% (0.1pts) 1.0% 1.1%
Over 50 (1pts) 18% 19% 1.5pts 4.5% 3.0% (11pts) 34% 45% (0.2pts) 1.5% 1.7%
Total - 100% 100% 3.1pts 8.4% 5.1% - 100% 100% 0.3pts 1.5% 1.2%

Total number of leavers and turnover rate by employee category

% of voluntary leavers Voluntary attrition rate % of non-voluntary leavers Non-voluntary attrition rate
Metric vly 2022 2021 vly 2022 2021 vly 2022 2021 vly 2022 2021
Cabin Crew 0pts 27% 27% 2.3pts 6.7% 4.4% (7pts) 30% 37% (0.1pts) 1.3% 1.4%
Pilots 1pt 3% 2% 0.8pts 1.7% 0.9% 3pts 8% 5% 0.6pts 1.0% 0.4%
Airport Operations 9pts 25% 16% 5.4pts 9.1% 3.7% 24pts 42% 18% 1.7pts 2.7% 1.0%
Corporate Function (8pts) 36% 44% 2.8pts 14.3% 11.5% (18pts) 16% 34% (0.9pts) 1.2% 2.1%
Maintenance (2pts) 9% 11% 3.1pts 6.7% 3.6% (2pts) 4% 6% 0pts 0.6% 0.6%
Total 100% 100% 3.1pts 8.2% 5.1% 100% 100% 0.3pts 1.5% 1.2%

Description
Refer to ‘Workforce turnover’ description in ‘Description and commentary for key workforce metrics’ in section B.2. Key metrics
and progress.

Commentary
Refer to ‘Workforce turnover’ commentary in ‘Description and commentary for key workforce metrics’ in section B.2. Key metrics
and progress.

75
B.2.d. Other social and employee-related matters and metrics
Work-life balance and support for co-parenting responsibilities
Relevant standards: GRI 103-2, 401-2
All of the Group’s operating companies have taken approaches which coordinate and support the promotion of work-life balance whilst
allowing employees to disconnect from work. These policies, at their core, focus on promoting a balanced and flexible working model,
reflecting business needs and individual preferences and circumstances.
Our employees have also been offered substantial amounts of information and guidance on creating and managing a healthy work-life
balance through digital portals and platforms (e.g., well-being platforms and employee assistance programmes).
With regard to co-parenting responsibilities, the Group’s operating companies all have policies on job-sharing, maternity, adoption,
paternity and shared parental leave. In addition, there are also active online platforms for working parents and carers to share ideas and
to provide mutual support to one another.

Working hours
Relevant standards: GRI 103-2, 401-2
Time worked and holidays are different in each operating company as per the respective collective bargaining agreements. As a result,
the Group does not have a group-wide working hours policy.

Employees with disabilities

Relevant standards: GRI 405-1
Metric vly 2022 2021 2020
Employees with disabilities1 +20% 724 603 593
Overall share of headcount 0% 1.1% 1.1% 1.1%
1 Aer Lingus data is out of scope

Description
Employees with disabilities as a percentage of headcount at the end of the year.
Collecting disability information on employees is not a legal requirement in the UK or Ireland, unlike in Spain. Disabilities in scope are
medically certified in Spain but self-declared in all other jurisdictions.

Commentary
The 2022 percentage has remained stable in 2022 despite the increase in employees with disabilities, this is because there has been a
significant increase in headcount for the Group in parts of the business where disability status is self-declared (e.g., UK). The total
number of employees with disabilities, however, has increased to 724, compared to 603 in 2021.

76
ADDITIONAL DISCLOSURES CONTINUED

Social dialogue in the field of health & safety

Relevant standards: GRI 403-4
IAG operating companies comply with all relevant legislation and work hard to improve and maintain workforce engagement and
representation. Operating companies use a combination of human resources and employee engagement programmes and technology,
to share information about the business with employees, their representatives and trade unions. Most employees are represented
through collective bargaining agreements and Group companies have well-established mechanisms for negotiation and dialogue with
relevant trade unions and employee groups. These include regular reviews of matters relating to the health and safety in the workplace.
• British Airways has regular health and safety engagements with trade unions at a local, departmental and directorate level across all
areas of the business.
• Iberia has well established health and safety committees in each of their relevant work centres which meet every two months.
• Aer Lingus have a Safety Engagement Programme which empowers managers and supervisors to discuss both safe and unsafe
actions and behaviours they observe from their team on a daily basis to improve safety culture and reduce the risk of injuries
occurring.
• Vueling holds quarterly meetings with a health and safety committee, composed of Vueling management and trade union appointed
safety representatives.

Universal accessibility for people with disabilities

Relevant standards: GRI 103-2
The Group complies with all relevant legislation and, along with our operating companies, ensures universal access for employees and
customers with disabilities. Our operating companies comply with all relevant legislation with regards to accessibility for disabled
employees and customers in our buildings and throughout our operations.
All our operating airlines have made efforts to ensure that the customer journey is seamless for all customers, but in particular those
with disabilities, whilst travelling with us. Operating airlines work with a variety of external organisations, such as the Business Disability
Forum in the UK, to help inform and support efforts and strategy.
Our operating companies have also ensured universal accessibility of their booking processes through their website design. Iberia, for
example, has partnered with the ONCE Foundation for Cooperation and Social Inclusion of the Disabled to ensure that all the
information provided on their website about the booking process, travel requirements and other parts of the customer journey are
accessible. This has also included the implementation of accessibility guidelines for Web 2.0 set by W3C-WAI.
The employee and customer accessibility strategies work in conjunction by ensuring front-line employees, such as cabin crew, are
trained in disability awareness. This training has a particular focus on hidden disabilities.

77
B.8. Remuneration and salary gap
Relevant standards: GRI 405-2

B.8.1. Average remuneration by gender, age and job category –

salary gap
Remuneration 2022 by seniority level (€) and by age band (€)
Overall Male Female Salary gap
Category vly 2022 2021 vly 2022 2021 vly 2022 2021 vly 2022 2021
Seniority Senior
executives 30.5% 295,510 226,454 30.3% 302,829 232,392 57.8% 283,207 179,510 (16.3%) 6.5% 22.8%
Other
management 71.9% 242,393 141,018 56.7% 262,080 167,297 34.1% 123,364 91,981 7.9% 52.9% 45.0%
All other
employees 50.8% 52,155 34,596 41.9% 53,636 37,793 60.9% 50,512 31,396 (11.1%) 5.8% 16.9%
Total
Workforce 50.0% 55,521 37,026 39.8% 59,226 42,357 63.0% 51,758 31,759 (12.4%) 12.6% 25.0%
Age <30 52.4% 41,069 26,949 35.6% 41,107 30,317 68.9% 41,018 24,291 (19.7%) 0.2% 19.9%
Group 30-50 56.5% 56,637 36,192 46.3% 60,507 41,378 70.7% 53,582 31,396 (12.7%) 11.4% 24.1%
>50 50.3% 67,882 45,152 47.2% 72,421 49,214 58.0% 62,804 39,746 (6.0%) 13.3% 19.2%
Total
Workforce 50.0% 55,521 37,026 39.8% 59,226 42,357 63.0% 51,758 31,759 (12.4%) 12.6% 25.0%

The difference between the Gender Pay Gap and Pay Equity
The Gender Pay Gap is a measure based essentially on pay averages across an organisation. It takes no account of the different roles
that people occupy.
Pay Equity is the principle that people doing the same work should receive the same pay, allowing for legitimate differences such as
tenure, performance and experience.
It is perfectly possible for an organisation that pays its people fairly and equitably within different roles to have a Gender Pay Gap. The
existence of a Gender Pay Gap does not in itself mean that there is any problem with Pay Equity.
IAG has strong pay equity principles in place, ensuring that our male and female employees are paid equitably for the work they do,
based on experience and performance (within other factors).

Description
Using a consistent basis since 2019, remuneration data is presented at the median for gender, age and seniority population groupings.
The reported components of remuneration continue to include basic salary, shift pay, allowances and employer pension contributions,
taxable benefits and annual incentives, so that a clear view to overall, total remuneration is provided.
The presentation of remuneration values and the population included continues on an unchanged basis, in that:
• All values are shown on an annualised basis;
• All values are shown are on a full time equivalent basis;
• Values are only reported for time worked. Remuneration received for not working is excluded from reported values;
• To ensure consistency 2021 non euro remuneration have been restated using 2022 exchange rates;
• For employees who do not have a representative relationship between the value of their company-paid remuneration and the
number of hours worked for that remuneration, contractual pay is reported in order to reduce the number of group of employees
excluded. Supporting the aim of providing a comparable view of pay for employees with differing contractual terms and working
patterns, and ensuring the report covers all employees with pay data. Presenting a clear read-across to overall fixed and variable pay
relative to time worked is very important in an industry with a high proportion of seasonal, part-time and fixed-term employees with
highly variable working schedules;
• The reported salary gap for each population continues to represent the difference between men’s and women’s median
remuneration, expressed as a percentage of men’s remuneration; and
• Regarding seniority population groupings ‘Senior executives’ includes Group management committee members, operating company
management committee members, directors and other senior/executive positions. ‘Other management’ includes all other
management roles, including pilots at the captain seniority level. The ‘All other employees’ grouping includes all other roles across the
group, including the majority of pilots and cabin crew.

78
ADDITIONAL DISCLOSURES CONTINUED

Commentary
Within IAG’s operating model, employee reward is owned and managed within each operating company to enable them to deliver the
right customer and employee experience. Our employees have been central to our recovery and key to delivering for our customers.
Operating companies continue to put in place a range of tools that are appropriate in their respective markets and geographies to
support our people through these challenging times and ensure our pay models are sustainable, fair and aligned to the Group’s future
success.

B.8.2. Salary gap analysis

As the Group returns to a more normalised network and flights schedule, the impact to the salary gap from interim pandemic response
measures will continue to diminish. The result is that at Group level, there has been a year-on-year reduction in the median salary gap
from 25 per cent in 2021 to 12.6 per cent in 2022, and from 43.6 per cent to 31.7 per cent for the mean salary gap.
There are three key drivers of this change:
• COVID-19 and associated restructuring activities had an adverse impact on workforce composition and gender pay in 2021.
• As markets re-opened and travel restriction eased, airlines built the capacity to meet increasing demands for travel. This included
recruiting around 17,400 new colleagues across the Group, with the majority of new hires in Cabin Crew and Airport Operations. This
changing resource profile has resulted in a change in the median pay point for men and women.
• Pilot pay remains the most significant driver of IAG’s gender pay gap, reflecting both lower numbers of female pilots and the impact
of seniority. This is a key area of focus across all airlines in the Group, and for example, Iberia Express improved female representation
in First Officer pilot roles, up from 9 per cent to 11 per cent.
At the start of 2022 we announced our ambition for 40 per cent of women in senior leadership roles by 2025. This new ambition was
underpinned by a new diversity and inclusion framework and strategy, and we have been making strong progress in making IAG a
more inclusive place to work.
In 2022 we have seen the percentage of women in the IAG Management Committee increase by 8 percentage points with the
appointment of Sarah Clements as IAG’s new General Counsel. We ended the year at 34 per cent of women in senior leadership roles,
up from 33 per cent in 2021.
Operating companies have implemented a range of initiatives to support gender equality, including reviewing its recruitment processes
to ensure diverse shortlists and interview panels, setting up mentoring and networking opportunities for women, and providing
educational programmes for girls and young women considering careers in aviation.
At IAG we remain committed to equity, diversity and inclusion, and have made strong progress in 2022.
Further explanations of the steps that IAG is taking to promote diversity and inclusion across the Group are set out in the ‘Diversity,
inclusion and equality’ section of the sustainability report.

79
B.8.3. Board and Management Committee remuneration
Description:
Average remuneration of Board members and directors, including variable remuneration, allowances, professional indemnity,
contributions to pension and welfare systems and any other parts of the remuneration broken down by gender.

vly 2022 2021 2020 2019 2018

Board

Men 64.0% 836,667 510,167 407,326 638,010 721,159

Women 20.4% 138,000 114,600 109,798 133,799 154,804
Management Committee
Overall 18.3% 1,523,328 1,287,780 653,403 1,012,671 1,105,034

Description
• The reported components of remuneration include:
• Executive directors: basic salary, taxable benefits (Company car and private health insurance), employer pension contributions,
annual incentives paid in the reporting period, long-term incentives vesting in the reporting period and personal accident and life
insurance.
• Non-executive directors: all fees (Board, chair, committee membership etc) and (taxable) personal travel benefits.
• Using the methodology established in 2020, only directors or Management Committee members, who were in service for the full year
reporting period are included in the year on year comparison.
• As per previous years, the remuneration of the IAG CEO is omitted from Management Committee remuneration reporting on the
basis it is already reported as part of Board director remuneration.
• These figures are derived from the methodology as per the Remuneration Report filed with the Spanish National Securities Market
Commission (CNMV).

Explanation for Board remuneration

The higher level of average remuneration paid to male directors compared to female directors is a direct consequence of male
incumbents holding the more highly remunerated CEO and Chairman roles. Where male and female non-executive directors perform
the same responsibilities, the level of remuneration paid is equivalent as a result of the Group’s standardised non-executive fee
framework.
In 2022 and 2021 the remuneration of ten non-executive directors and the IAG CEO is included, with the same split of six male and five
females.
The key factors influencing the increased remuneration for directors, are:
• The increase in IAG CEO remuneration from 2021 to 2022, driven by:
• First year since appointment in which the CEO received his full contractual salary (following a 10 per cent reduction in 2021 and 20
per cent reduction in 2020);
• As the Group emerges stronger from the pandemic, 2022 was the the first year since 2019 that the IAG CEO received an Annual
Incentive Award;
• The vesting to the IAG CEO in 2022 of deferred share awards granted in 2019; and
• The release from holding to the IAG CEO of the 2017 PSP award.
• Non-executive directories fees reverted to contractual rates in 2022 (in 2020 a 20 per cent COVID-19- related reduction operated
against all directors’ salaries/fees, and a similar 10 per cent reduction operated in 2021; and
• As markets re-opened and travel restriction eased, there is an increase in the take-up of personal flight benefits.
Further explanations of Board remuneration are set out in the Directors Remuneration Report section of the governance report.

80
ADDITIONAL DISCLOSURES CONTINUED

Explanation for Management Committee remuneration

Both the components of remuneration and the opportunity associated with those components for Management Committee members
remained unchanged from 2021 to 2022. The increase in average Management Committee member remuneration in 2022 was driven
by factors such as:
• Changes in Management Committee membership between 2021 and 2022;
For 2022, this reports the total remuneration of ten Management Committee members, eight male and two females. For comparison,
last year’s data set was comprised of nine Management Committee members, eight male and one female. No gender break-out is
shown for confidentiality reasons, given the female data set relates to only two employees.
• The respective release and vesting of historical 2017 and 2019 deferred share awards. The performance outturn for both of these
awards was assessed before the start of pandemic period and as such should be seen as trailing remuneration and not remuneration
earned during the pandemic period;
• A return to contractual salary being paid to Management Committee members in 2022, versus COVID-19-related salary reductions in
2020 and 2021 (reductions of up to 50 per cent of salary were put in place in 2020, with lesser reductions in 2021); and
• Payment of approved 2022 annual incentive awards.
The awards resulting from the change in long term incentive approach from a Performance Share Plan (PSP) to a Restricted Share Plan
(RSP), will be reported in the year of vesting, from 2024 onwards, at the point the realised value is known. This is consistent with our
approach of reporting the value of long-term incentives in other CNMV disclosures.

B.9. Prosperity
B.9.1. Community and employment impacts
Relevant CNMV title: Impact of the Company’s activities on employment and local development; impact of the Company’s
activities on local populations and territories; relations with actors in local communities and forms of engagement
IAG sees work experience as a valuable way of supporting local employment, by engaging young people with IAG’s business and
preparing them for potential careers in aviation. All our operating companies offer programmes and initiaitves which support this aim.
British Airways has a variety of graduate and apprenticeship programmes and has welcomed 125 new apprentices and 47 graduates in
2022 - with plans to increase these numbers to 50 graduates and 160 apprentices in 2023. These programmes are consistently ranked
highly in the Cibyl Top 300 Graduate Employer rankings and the National Graduate Recruitment Awards for Engineering and
Transport. British Airways has reviewed the entry requirements for its Apprenticeship programme to aid social mobility. This has
resulted in 41.7% Female representation in STEM programmes (against government target of 23%) and, for all programmes, 23% BAME
representation (against government target of 13.9%).
Iberia has continued to run its successful internship scholarship programme with Fundación Universidad Empresa, offering
postgraduates students unique oportunities within the airline. In addition Iberia continues to offer vocational programmes within their
MRO area and they have multiple agreements with several vocational training schools in the Madrid area for their Aeronautical
Maintenance Technician programme.
Aer Lingus continues to directly engage with colleges across Ireland, running career days and recruitment fairs to inform students of
career opportunities in aviation. They have also continued with their partnership with Enactus, to help students at key colleges and
universities across Ireland on projects to help develop their entrepreneurial skills to address complex issues within the wider
community. Aer Lingus have also continued to focus on initiatives which encourage more females to apply for apprenticeship
programmes with Aer Lingus engineering.
At Vueling, they sponsor the Cranfield University Job Fair and the ESADE Brand Management Challenge which focuses on supporting
and attracting the best young talent into the aviation sector. Vueling has also participated in the Disjobs job fair for people with
disabilities as part of their overall EDI strategy.
IAG Loyalty have launched their Early Talent agenda which pays attention to a multitude of EDI topics, including a new partnership
with Innovate Her - who’s vision is to make the tech sector more equitable, by increasing diversity and creatingmore inclusive
workplaces. They have also launched their first Intern programme and launched new partnerships with Greycoats school and Liverpool
University. IAG Loyalty also have a strong apprenticeship programmes and currently have 6 apprentices in their Product and Data team
completing their Level 7 apprenticeship.

81
B.9.2. Consumer relationship management
Relevant standards: GRI 102-43, 103-2

Claims systems and complaints

Unit vly 2022 2021 2020 2019 2018
# per 1,000
Customer complaints passengers (8%) 4.5 4.9 6.5 3.2 N/A

Description
Calculated by dividing total customer complaints for the year, by total passengers.

Commentary
IAG airline customers are able to provide feedback and details of complaints in multiple ways, including via IAG airline websites, by
mail, or by phoning customer contact centres. The types of customer complaint received vary significantly but typically relate to delays
and cancellations, baggage, journey experience, bookings and reservations. To handle customer complaints, IAG airlines have
dedicated customer relations teams who are specially trained to deliver excellent customer service and resolve issues quickly and in a
satisfactory manner. Through their complaint systems, IAG airlines actively track and monitor resolution of customer complaints using
metrics which include the time between a complaint being received and the first communication provided back to the customer, or the
number of cases raised that have been successfully closed.
In 2022, across the IAG airlines, an average of 4.5 complaints were received per 1,000 flown passengers. This ratio was slightly lower
than in 2021 but still higher than in 2019. The volume of complaints throughout 2022 was heavily impacted by the huge level of
disruption in its many forms across the group.
All IAG airlines also provide facilities for customers to exercise their rights to claim compensation under Regulation (EC) No. 261/2004
of the European Parliament and of the Council of February 11, 2004 establishing common rules on compensation and assistance to
passengers in the event of denied boarding and of cancellation or long delay of flights. Customers are additionally able to use the IAG
airline contact channels to submit claims for financial compensation relating to baggage incidents and other out–of–pocket expenses,
which are assessed and resolved by IAG’s customer relations teams.

B.9.3. Public subsidies received

Relevant standards: GRI 201-4
Unit vly 2022 2021 2020 2019 2018
Total public subsidies € million (59%) 293 707 474 94 nr
UK and EU ETS allowances at zero cost € million (1%) 273 277 122 nr nr

Public subsidies were not reported in 2018 as they were assessed as immaterial.

Description
Public subsidies are defined as EU, Swiss and UK Emissions Trading Scheme (ETS) allowances granted at zero cost, and furlough and
job retention schemes in the UK and Ireland for British Airways and Aer Lingus respectively. EU ETS allowances are valued at the
carbon market prices at December 31 in the reporting year.

Commentary
Operating companies in the Group receive some EU and UK ETS emission allowances at zero cost and purchase the remainder in the
EU and UK ETS markets.
The Group has also received government assistance, which is not considered as public subsidies in accordance with International
Financial Reporting Standards and is therefore not included in the amount above, for the following:
• Iberia and Vueling both benefited from the Temporary Redundancy Plan (ERTE) that the government of Spain implemented in March
2020. Under this scheme, employment is temporarily suspended and designated employees are paid directly by the government and
there is no remittance made to the Group.
• The Group benefited from a number of financial facilities supported by national governments of the jurisdictions in which the
operating companies principally operate. These include the UK’s Export Finance (UKEF), Spain’s Instituto de Crédito Oficial (ICO)
and the Ireland Strategic Investment Fund (ISIF).

82
ADDITIONAL DISCLOSURES CONTINUED

B.9.4. Accounting profit/(loss) before tax

Relevant standards: GRI 207-4
Unit vly 2022 2021 2020 2019 2018
UK € million (2%) 46 (2,417) (4,512) 1,618 2,770
Spain € million (58%) 408 (705) (2,538) 489 512
Republic of Ireland € million 11% (41) (368) (556) 240 272
Other countries € million (14%) 2 (16) (204) (72) (67)

Description
Profits by country – the Group’s consolidated accounting profit or loss for the year split by country in which it is taxable.

Commentary
The return to profitability in most of IAG’s main countries of operation reflect the recovery of the Group’s businesses from the global
outbreak of COVID-19.

B.9.5. Income tax paid

Relevant standards: GRI 207-4
Unit vly 2022 2021 2020 2019 2018
UK € million 9% 3 31 77 161 191
Spain € million (135%) 126 (93) (95) (71) 92
Republic of Ireland € million 0% 0 (2) (28) 27 61
Other countries € million 519% 5 1 1 2 (1)

Description
Taxes paid by country – the Group’s consolidated cash tax payments for the year split by country in which they were made. The
numbers in brackets above represent refunds.

Commentary
The total net payment of €134 million is greater than the expected tax charge for the Group of €102 million. The difference arises
primarily due to the delay between when losses are included in the accounting result, and the future period when those losses are
taken into account in calculating tax payments.
“Other” comprises Belgium, Costa Rica, Dominican Republic, Germany, Guatemala, Honduras, India, Maldives, Mexico, Peru, Poland,
Puerto Rico, Senegal, South Africa and the United States.

83
C. Governance
Sections C.1. to C.7. are on prior pages in this NFIS.

C.8. Description of EU Taxonomy and 2022 related activities

The EU Taxonomy regulation is a new framework to identify and to facilitate sustainable investment across the EU.
IAG has further developed its approach on the EU Taxonomy and has reported on its sustainable activities in line with the EU
Taxonomy Regulation (2020/852) and related delegated acts, collectively referred to as the Taxonomy, which aim to identify
environmentally sustainable activities linked to the Taxonomy.
This report covers the “eligible” and “aligned” economic activities undertaken by the Group in 2022. The report only considers activities
relating to the Taxonomy objectives of climate change mitigation and climate change adaptation as these are the only objectives
currently under the Taxonomy.
While there are draft proposals to bring aviation and other activities into the Taxonomy, these have not yet been passed into EU law
and as such, there are no Taxonomy–related categories for aviation. Therefore, the majority of the expenditure incurred by the Group is
taxonomy–ineligible. In 2022:
• None of the Group’s revenue was eligible under the Taxonomy;
• 0.3% of overall Capex was eligible and;
• 0.2% of Opex was eligible Taxonomy-related activity1.
However, the categories relating to buildings infrastructure; energy; information technology; transport (ground); waste/recycling; and
innovation, research and development are applicable to the activities of the Group and these have been the primary focus of our
Taxonomy screening activity.

Methodology/data collection and validation

Data collection and validation have been conducted through the established governance structure described in section C.2, with IAG
Group Finance performing an integral role in the design, collection and validation of the Taxonomy data. Reviews of existing and
proposed Taxonomy regulation is conducted through the monthly IAG Sustainability Network throughout the year.
Using the Taxonomy regulations and the online “Taxonomy Compass” the Group Sustainability team and IAG Group Finance have
co-ordinated the identification of eligible activities (i.e. those that should be screened) and their conclusions have been confirmed by
further analysis at the airline/operating company level. In order to calculate the relevant Key Performance Indicators (KPI) and
numerators, each airline/operating company reviewed all activities undertaken against the following categories:

Key activities
Construction and real estate activities
Renovation of existing buildings
Acquisition and ownership of buildings
Installation, maintenance and repair of energy–efficiency equipment
Installation, maintenance and repair of charging stations for electric vehicles in buildings
(and parking spaces attached to buildings)
Installation, maintenance and repair of renewable energy technologies
Energy
Electricity generation using solar photovoltaic technology
Information and communication
Data processing, hosting and related activities
Computer programming, consultancy and related activities
Data-driven solutions for GHG emissions reductions
Technical, scientific and professional activities
Research into innovative low–carbon technologies
Transport
Transport by motorbikes, passenger cars and light commercial vehicles
Water supply, sewerage, waste management and remediation
Material recovery from non-hazardous waste

1 0.2% of total operating expenditure as reported in the 2022 Annual Report and Accounts

84
ADDITIONAL DISCLOSURES CONTINUED

Co-ordination at Group level ensures the correct allocation of expenditure between numerators and denominators and that intra-group
transactions are excluded. The Group issued guidance to ensure that the activities were apportioned appropriately between capital
spend (CAPEX) and operational spend (OPEX). Operating companies were instructed regarding the determination and composition of
both the CAPEX and OPEX denominators. During the 2022 data–gathering process the categories included in the OPEX denominator
were widened to include all repairs and maintenance (including aircraft maintenance activity) across the business, including some
activities that are sub-contracted: for example some building maintenance and cleaning activities. Most of this activity does not fit
under aligned activity within the existing Taxonomy.
The Group and the operating companies listed all possible Taxonomy–eligible activities arising in 2022. While there were no revenue
Taxonomy–eligible activities identified, activities relating to CAPEX and OPEX were identified and quantified by the operating
companies and subsequently reviewed for compliance with the Group guidance and the Taxonomy Compass to ensure that they have
been appropriately recorded in line with the defined activities of the Taxonomy.
Following the identification of eligible spend, each airline/operating company undertook an assessment of compliance against the
“substantial contribution” criterion for each activity as outlined in the Taxonomy Compass in order to establish alignment. Where
overall OPEX or CAPEX per activity was below €2 million per airline/operating company, this was immaterial and therefore no further
action was taken. For those activities where spend was over €2 million, further screening was performed, assessing each project
undertaken.
At a Group level, IAG undertook a climate vulnerability risk assessment as specified in line with the relevant Annex of the Delegated
Regulation (EU) 2021/2139 defining the criteria for “do no significant harm” and minimum safeguards criteria.

Taxonomy–eligible and aligned activities

The Group incurred limited Taxonomy–eligible spend in 2022. Areas of spend included:
• The maintenance and refurbishment of buildings - this expenditure was minimal;
• Activity in the category of transport relating to electric vehicles, vehicle charging and maintenance of the ground vehicle fleet;
• Electricity generation from solar photovoltaic technology; and
• The programme to migrate a number of data centres to cloud-based systems and some computer programming expenditure.
The Group’s multiple investments and offtake agreements in Sustainable Aviation Fuel (SAF) manufacture and hydrogen propulsion
are presently not eligible activities under existing Taxonomy regulation.
IAG’s final Taxonomy Report and associated data are reviewed through the Group’s sustainability governance process with final sign–
off by a Taxonomy sub-group of the Sustainability Steering Board, with senior representation from the Chief People, Corporate Affairs
and Sustainability Officer and the Group Financial Controller.

KPI – Revenues
The Group continues to work to develop more sustainable products and services as detailed in the At a Glance section of this NFIS.
However, IAG generated no revenues from Taxonomy–eligible products and services during 2022. Group airlines presently offer
customers the opportunity to fly more sustainably through sponsoring SAF flights or through the purchase of carbon offsets and
removals. These are ineligible under present Taxonomy rules. During 2023 to 2025 the airlines’ sustainable product offers will be
enhanced and made more widely available to customers including the broader provision of SAF which may be eligible as revenue once
aviation becomes part of the Taxonomy.
The denominator has been determined in line with Article 2, point (5), of Directive 2013/34/EU.
The KPI for revenue is that zero per cent of total revenue (€23.1 billion) is currently aligned under the Taxonomy.

85
KPI – CAPEX
In determining the denominator for Capex, the calculation of relevant spend was carried out in accordance with Annex I, section 1.1.2.1
of the Delegated Regulation (EU) 2021/2178. All spend aligning to Group reporting aligned to IFRS rules has been collated – including
fleet–related expenditure.
The table below shows the specific activities that were carried out across the Group that align with the Taxonomy as defined in the
Climate Delegated Act 2021/2139.

Table of Taxonomy–eligible and aligned CAPEX

DNSH criteria
Substantial (Does no
Contribution Criteria significant harm)
Taxonomy-
aligned
Climate Climate Climate Climate proportion Category Category
Taxonomy Absolute Proportion Change Change Change Change of CapEx, (enabling (transitional
Economic activities codes Capex of Capex Mitigation Adaptation Mitigation Adaptation 2022 activity) activity)
Unit €’m % Y/N Y/N Y/N Y/N % E T
A. TAXONOMY
ELIGIBLE
ACTIVITIES
A1, CAPEX of n/a 0% n/a n/a n/a n/a 0%
Environmentally
Sustainable
Activities
(Taxonomy-
aligned)
A2, CAPEX of 15 0.3%
Taxonomy-
eligible but not
environmentally
sustainable
activities (not
Taxonomy-
aligned
activities)
Computer 8.3 10 0.2% n/a T
programming,
consultancy and
related activities
Renovation of 7.2 5 0.1% n/a T
existing
buildings
Total (A1+A2) 15 0.3% 0%
B. CAPEX of 5,120 99.7%
Taxonomy
non-eligible
activities
Total (A+B) 5,135 100.0%

The denominator for this calculation includes aircraft–fleet–related expenditure, although the Group is unable to report any direct or
associated eligible expenditure related to the fleet. Given the largest proportion of our expenditure relates to fleet, the percentage of
Taxonomy–eligible CAPEX reported is not material. The proportion of Taxonomy–aligned spend was zero per cent.

86
ADDITIONAL DISCLOSURES CONTINUED

KPI – OPEX
The Group has identified the following OPEX activities associated with the Taxonomy: buildings and plant maintenance and repair,
vehicles and vehicle charging, maintenance of solar photovoltaic equipment, computing and data processing and hosting. This has
resulted in limited activities being Taxonomy–eligible or aligned. Small amounts of expenditure have been incurred in building
maintenance. In addition, there are certain third-party outsourced expenses directly associated with the energy transition the Group is
committed to undertake, that have been incorporated into OPEX. The Group’s multi-year expenditure on IT data transformation
activities has continued and will continue through 2023, with a particular focus on finalising the migration to cloud environments.
In determining the denominator for OPEX, the overall calculation of relevant spend was carried out in accordance with Annex I,
sections 1.1.3.1 and 1.1.3.2 of the Delegated Regulation (EU) 2021/2178. The following table shows the eligible activities at Group level that
are above €2 million. The expenditure related to short–term leases was negligible as most of this was associated with aircraft rather
than buildings.

Table of Taxonomy- eligible and aligned OPEX

DNSH criteria
Substantial (Does no
Contribution Criteria significant harm)
Taxonomy-
aligned
Climate Climate Climate Climate proportion Category Category
Taxonomy Absolute Proportion Change Change Change Change of Opex, (enabling (transitional
Economic activities codes Opex of Opex Mitigation Adaptation Adaptation Mitigation 2022 activity) activity)
Unit €'m % Y/N Y/N Y/N Y/N % E T
A. TAXONOMY
ELIGIBLE
ACTIVITIES
A1, OPEX of n/a 0% n/a n/a n/a n/a 0%
Environmentally
Sustainable
Activities
(Taxonomy-
Aligned)
A2, OPEX of 51 3.5%
Taxonomy-
eligible but not
environmentally
sustainable
activities (not
Taxonomy-
aligned
activities)
Data Processing, 8.1 31 2.1% n/a T
Hosting and
Related
Activities
Computer 8.3 20 1.4% n/a T
programming,
consultancy and
related activities
Total (A1+A2) 51 3.5% 0%
B. OPEX of 1,400 96.5%
Taxonomy
non-eligible
activities
Total (A+B)1 1,451 100.0%
1 Total OPEX for the purpose of meeting the definitions of the Taxonomy does not align with the Group’s consolidated financial statements prepared
under IFRS.

The Group’s overall OPEX Taxonomy–aligned KPI for 2022 was zero per cent, reflecting the limited scope of eligible and aligned
Taxonomy activities applicable to the operations of the Group.

87
C. Table of contents
(F) means fully compliant, (P) means partially compliant. (1) means internal framework: see corresponding pages.
Reporting criteria/
Area GRI standard Page
General Information
Business model description GRI 2-6 (2021) (P) 3
Organisation and structure GRI 2-6 (2021) (P) 3
Market presence GRI 2-1,6 (2021) (P) 3
Objectives and strategies GRI 2-1, 22 (2021) (P) 29
Main factors and trends that may affect future performance GRI 3-3 (2021) (P) 29
Reporting framework used GRI 1 (2021) 5
Materiality assessment GRI 3-1/2 (2021) (P) 6, 29

Social & employee related matters

Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (P) 50
Main risks related to these issues50 GRI 3-3 (2021) (P) 50
Employment
Total number of employees and distribution by country, gender, age and job category GRI 102-7 (P), 405-1 (P) 22
Employment contracts distribution and annual average distributed by gender, age GRI 2-7 (2021) (P) 73
and job category
Total number of dismissals and its distribution by gender, age and job category GRI 3-3 (2021), 401-1 (P) 75
Average remuneration broken down by gender, age and job category GRI 405-2 (P) 78
Salary gap GRI 3-3 (2021), 405-2 78
Average remuneration of board members and directors GRI 3-3 (2021), 405-2 80
Policies to allow employees to disconnect from work GRI 3-3 (2021) (P) 76
Number of employees with disabilities GRI 3-3 (2021) (P), 405-1 (P) 76
Working organisation
Working hours organisation GRI 3-3 (2021) (P) 76
Absenteeism rates GRI 3-3 (2021), 403-9 (P) 71
Measures to promote work-life balance GRI 3-3 (2021), 401-3 76
Health and safety
Occupational health and safety conditions GRI 3-3 (2021) (P), 403-1a, 403-8 71
Number of workplace accidents and accident rates broken down by gender GRI 403-9/10 (P) (1) 71
Occupational illness cases broken down by gender GRI 403-9,/10 (P) 71
Labour relations
Social dialogue organisation GRI 3-3 (2021) (P) 69
Percentage of employees covered by collective agreements broken down by country GRI 2-30 (2021) (F) 69
Results of collective agreements, especially in the field of health and safety GRI 3-3 (2021) (P), 403-4 (P) 77
Description of the mechanisms and procedures the company has in place to promote the GRI 3-3 (2021) (P) 33
involvement of workers in the management of the company, in terms of information,
consultation and participation
Training
Policies implemented GRI 404-2 (P) 33
Total number of training hours broken down by employee category GRI 3-3 (2021), GRI 404-1 70
Universal accessibility of people with disabilities
Universal accessibility of people with disabilities GRI 3-3 (2021) (P) 77
Equality
Measures taken to promote equal treatment and opportunities between women and men GRI 3-3 (2021) (P) 33
Equality plans GRI 3-3 (2021) (P) 33
Measures taken to promote employment GRI 3-3 (2021) (P) 33
Protocols against sexual harassment and on the basis of gender GRI 3-3 (2021) (P) 33
Integration and universal accessibility for persons with disabilities GRI 3-3 (2021) (P) 77
Policy against all types of discrimination and policy on diversity GRI 3-3 (2021) (P) 33
* difference between men’s and women’s median pay, divided by men’s median pay.

88
ADDITIONAL DISCLOSURES CONTINUED

Reporting criteria/
Area GRI standard Page
Environmental matters
Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (P) 32
Main risks related to these issues GRI 3-3 (2021) (P) 36
Environmental management
Information of the current and foreseeable impact of the Company’s activities GRI 3-3 (2021) (P) 11
on the environment
Environmental assessment and certification procedure GRI 3-3 (2021) (P) 19
Resources devoted to environmental risks prevention GRI 3-3 (2021), (1) 36
Implementation of the precautionary principle GRI 2-23 (2021) 36
Amount of provisions and warranties for environmental risks GRI 3-3 (2021) (P), (1) 36
Pollution
Measures to prevent, reduce or repair emissions GRI 3-3 (2021) (P), 305-7 (P), (1), 11, 20
(including noise and light pollution) light pollution not material
Circular economy and waste prevention and management
Measures related to prevention, recycling, reuse and other GRI 306-1 /2/3/5 (2020) (P) 19
form of waste recovery and disposal
Actions to avoid food waste GRI 3-3 (2021) (P), 306-4 (P) 19
Sustainable use of resources
Water consumption GRI 303-1/3/5 (P) 68
Raw materials consumption Not material 29
Direct and indirect energy consumption GRI 302-1/3 (F) 13
Measures to improve energy efficiency GRI 3-3 (2021) (P), 201-1 (F) 11, 14
Use of renewable energy GRI 302-1 (P) 13
Climate change
Relevant aspects regarding greenhouse gas emissions (GHG) GRI 305-1/2/3 (F) 8
Measures to adapt to climate change GRI 3-3 (2021), 201-2 (2021) (P) 15-17
Objective related to GHG reduction GRI 3-3 (2021) (P), 305-5 (F) 6, 11
Biodiversity
Measures to preserve or restore biodiversity Not material 68
Impacts caused by activities or operations in protected areas Not material 68

89
 Reporting criteria/
Area GRI standard Page
Respect for human rights
Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (F) 26
Main risks related to these issues GRI 3-3 (2021) (P) 26
Specific contents
Implementation of human rights due diligence procedures GRI 2-23/26 (2021) (P), 410-1 (P), 26
412-1/3 (P)
Measures to prevent and manage potential human rights abuses GRI 3-3 (2021) (P), 406-1 (P) 26
Reported cases of human rights violations GRI 3-3 (2021) (P) 26
Promotion and compliance with ILO´s provisions GRI 407-1 (P) 33
Elimination of forced or compulsory labour GRI 409-1 (P) 33
Effective abolition of child labour GRI 408-1 (P) 33

Anti-corruption and bribery matters

Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (P) 35
Main risks related to these issues GRI 3-3 (2021) (F) 35
Specific contents
Measures to prevent corruption and bribery GRI 3-3 (2021), 2-23/26 (2021) (P), 35
205-1/3
Measures to prevent money-laundering GRI 3-3 (2021) (P), 2-23/26 (P), 35
205-1/3
Contributions to not-for-profit organisations GRI 2-28 (2021) (P), 201-1, 415-1, (1) 27

Other information on the Company

Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (P) 38
Main risks related to these issues GRI 3-3 (2021) (P) 41
Commitment to sustainable development
Impact of the Company’s activities on employment and local development GRI 3-2 (2021) (P), 203-2 (P), 81
204-1 (P)
Impact of the Company’s activities on local populations and territories GRI 3-3 (2021) (P), 413-1/2 (P), 81
411-1 (P), (1)
Relations with actors in the local communities and forms of engagement with them GRI 2-29 (2021) (P), 413-1 (P) 18, 27
Partnership or sponsorship actions GRI 3-3 (2021) (P), 201-1 (F) 18, 27
Sustainable supply chain management
Inclusion of social, gender equality and environmental issues in the procurement policy GRI 3-3 (2021) (P), (1) 34
Consideration of suppliers’ and subcontractors’ social and environmental responsibility in GRI 2-6 (2021) (P), 308-1 (P), 34
relations with them 414-1 (P), (1)
Supervision and audit systems GRI 2-6 (2021) (P), 308-2 (P), 34
414-2 (P), (1)
Consumer relationship management
Measures to protect consumer health and safety GRI 3-3 (2021) (P), 416-1 (P) 26, 82
Claims systems and complaints GRI 3-3 (2021) (P), 418-1 (P), (1) 82
Complaints received and their outcome GRI 3-3 (2021) (P), 418-1 (P) 82
Tax information and transparency
Profits broken down by country GRI 3-3 (2021) (P), 207-4 (P) 83
Corporate income tax paid GRI 3-3 (2021) (P), 201-1 (P), 83
207-4 (P)
Public subsidies received GRI 201-4 (P), Accounting criteria 82

90