MGMT 8615M Week 10 Report Comparison Example

Two Airlines, Eight Disclosure Elements, No Fair Ranking: A Report Comparison Aligning Two Carriers' Climate Disclosures Element by Element, Sorting Their Differences by Scope, Measurement and Weight, and Pricing Each Fuel Pledge in Its Own Terms

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Walden University

MGMT 8615M: Financial Corporate Social Responsibility and Ethics

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Month Day, Year

Two Airlines, Eight Disclosure Elements, No Fair Ranking: A Report Comparison Aligning Two Carriers' Climate Disclosures Element by Element, Sorting Their Differences by Scope, Measurement and Weight, and Pricing Each Fuel Pledge in Its Own Terms

The Comparison and Its Purpose

Northstar Airways and Coastal Pacific Airlines, two composite U.S. network carriers of similar size, each published a climate report in 2026. Each reports an emissions intensity per passenger mile, and a reader might be tempted to rank them on it: Northstar reports 76.2 grams of carbon dioxide per revenue passenger kilometer, Coastal Pacific 71.8. This comparison argues that the two figures cannot be ranked as published, because the airlines count different flights, report fuel purchases differently and bought different levels of assurance.

The Alignment Table

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Page references are to each airline's 2026 climate report.

Table 1

Alignment of the Two Airlines' Climate Disclosures

Partner Flights and the Boundary

The largest difference is the boundary. Both reports cite the same corporate accounting standard (Greenhouse Gas Protocol, 2004), but it lets each company choose how to treat flights operated by contracted partners. Northstar's regional partners operate about a quarter of its departures, mostly short flights with smaller, less efficient aircraft per seat. Northstar excludes those flights from its intensity figure; Coastal Pacific includes its partners'. Short regional flights have higher emissions per passenger kilometer, so including them raises Coastal Pacific's intensity relative to Northstar's. Northstar's lower-looking figure, on a like-for-like basis, would likely be higher than Coastal Pacific's.

Fuel Bought Versus Fuel Promised

Both airlines pledge to use sustainable aviation fuel for 10 percent of fuel by 2030. Northstar reports fuel contracted for future delivery, 210 million gallons; Coastal Pacific reports fuel delivered and burned in 2025, 9 million gallons. The figures measure different things and cannot be compared.

Differences Sorted by Type

Berg et al. (2022), studying why environmental, social and governance ratings diverge across rating agencies, decomposed divergence into scope, which attributes are measured; measurement, how each is measured; and weight, how much each counts. They found measurement the largest source. Adapting their taxonomy, the airline differences sort as follows. Boundary and partner treatment are differences of scope. The intensity denominator and the fuel reporting basis are differences of measurement. Assurance coverage affects how much weight a reader can place on each figure. Christensen et al. (2022) found that greater disclosure can increase disagreement among raters rather than reduce it, a reminder that more published numbers do not by themselves make companies comparable.

Each Fuel Pledge in Its Own Terms

Each airline's report quotes the premium it expects to pay for sustainable aviation fuel. Northstar's report cites a premium of about $3.50 a gallon over conventional jet fuel; Coastal Pacific's cites about $4.10. Northstar's 2025 fuel use was about 3.9 billion gallons, so its 10 percent pledge implies about 390 million gallons and, at its own premium, about $1.37 billion a year by 2030. Coastal Pacific used about 3.4 billion gallons, implying 340 million gallons and about $1.39 billion a year at its premium. The pledges cost similar amounts in each company's terms, about 23 and 26 percent of their respective 2025 operating incomes.

What Adjustment Would Allow

A reader could partly adjust for the boundary difference by asking Northstar for its regional partners' fuel use, which its report says is tracked but not published. With that figure, both airlines' intensity could be computed on the same basis. The fuel reporting difference is harder to fix, because contracts for future delivery may never be fulfilled, so only delivered fuel can be compared.

Why No Ranking Follows

A ranking on intensity would reward Northstar for excluding the flights that make its system less efficient. A ranking on fuel volumes would compare contracts with deliveries. The honest comparison is the table itself, with adjustments a reader could make, and the conclusion that the published figures do not support a judgment about which airline is cleaner.

References

Berg, F., Kölbel, J. F., & Rigobon, R. (2022). Aggregate confusion: The divergence of ESG ratings. Review of Finance, 26(6), 1315-1344. https://doi.org/10.1093/rof/rfac033

Christensen, D. M., Serafeim, G., & Sikochi, A. (2022). Why is corporate virtue in the eye of the beholder? The case of ESG ratings. Accounting Review, 97(1), 147-175. https://doi.org/10.2308/TAR-2019-0506

Greenhouse Gas Protocol. (2004). The greenhouse gas protocol: A corporate accounting and reporting standard (Rev. ed.). https://ghgprotocol.org/corporate-standard