Case Study Air France KLM

32 Pages Posted: 25 Jul 2019

See all articles by Willem Schramade

Willem Schramade

RSM Erasmus University; Sustainable Finance Factory

Date Written: July 24, 2019


This is the second in a series of RSM case studies on sustainable finance. Using a list of questions, we show how to integrate sustainability into investment analysis by connecting sustainability to business models, competitive position, strategy and value drivers. Here the questions are answered for Air France KLM, a company that faces substantial sustainability headwinds, on both the social and environmental dimensions. Our findings suggest that Air France KLM creates too much value on S (social) for its pilots, at the expense of value destruction in F (financial) and E (environmental) terms. We explore the likely (and substantial) impact of a serious carbon price. This could put the company out of business, but could also help it to solve its S problem. The case highlights the need for fundamental analysis (that is, going well beyond ESG ratings) to properly assess a company’s transition preparedness, which we deem the essence of corporate sustainability.

Keywords: sustainable finance; ESG integration; externalities

Suggested Citation

Schramade, Willem, Case Study Air France KLM (July 24, 2019). Available at SSRN: or

Willem Schramade (Contact Author)

RSM Erasmus University ( email )

P.O. Box 1738
Room T09-53
3000 DR Rotterdam

Sustainable Finance Factory ( email )

Rotterdam, 3034 SG
0682011037 (Phone)

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