Measuring What Matters: Why Aviation Needs a Better Way to Track Decarbonisation Progress

Thomas Conlon Professor of Finance, University College Dublin, Ireland conlon.thomas@ucd.ie

Philipp Goedeking Professor, Johannes Gutenberg University Mainz, Germany, and Aviation Strategy Consultant goedeking@avinomics.com

Ulrike Ziegler Chairperson of Impact on Sustainable Aviation E.V. ziegler@impact-on-sustainable-aviation.org

Aviation has committed to achieving Net Zero by 2050. Yet one of the industry's most persistent challenges remains surprisingly simple: how should progress be measured? There is still no universally accepted methodology for assessing whether aviation is genuinely decarbonising or merely becoming more efficient.

Historically, the industry has relied heavily on emissions-intensity metrics, particularly CO₂ per traffic unit1. These measures have undeniable value. They allow comparison of operational efficiency over time and have helped demonstrate the significant fuel-efficiency gains achieved by successive generations of aircraft. However, efficiency alone does not necessarily equate to decarbonisation. If traffic growth outpaces efficiency improvements, absolute emissions will continue to rise even while intensity metrics improve.

This creates a fundamental challenge for stakeholders seeking to understand transition progress. To understand individual airlines' and/or the industry's exposure to transition risk, investors, lenders, lessors, policymakers and corporate decision-makers increasingly require metrics that provide a clearer picture of whether (financed) emissions are genuinely being decoupled from growth. The distinction is important because long-term capital allocation decisions depend upon confidence that transition strategies are delivering meaningful outcomes rather than simply demonstrating incremental efficiency improvements.

1. As the case may be: ASK, ATK, RSK, RTK

The Transparency Challenge

The aviation transition is characterised by uncertainty. Sustainable aviation fuels, fleet renewal, operational improvements, carbon removals, emerging propulsion technologies and evolving policy frameworks are all developing simultaneously, but at different speeds and with varying levels of maturity.

As a result, many current approaches to measuring progress rely heavily on assumptions, forecasts and future pathways, rendering respective metrics unfit for incorporation into mid- to long-term loan or lease agreements. These methodologies can be valuable planning tools, but they often require frequent updates, which is contrary to the interest of the contracting parties, who aim for maximum stability over the term of the loan or lease agreement. Reasonable experts can reach very different conclusions depending on the assumptions they choose.

This creates understandable concerns regarding comparability, credibility and, increasingly, greenwashing. Market participants are asking whether reported progress reflects actual decarbonisation achievements or simply optimistic projections about future performance.

A Different Approach

The scientifically-vetted Milestone Concept2 was developed by impact on sustainable aviation e.V. to address this challenge through a principle that is intentionally straightforward: based on data readily available to airlines, measure what has actually happened rather than what is expected to happen.

At its core, the methodology focuses on the decoupling of CO₂ emissions growth from traffic growth. Instead of evaluating organisations against “assumption-heavy” pathways or modelled scenarios, it assesses real-world progress through a transparent scoring system based on observable performance.

The concept is built around increasingly ambitious milestones that reflect different combinations of traffic growth and emissions performance. As organisations achieve higher levels of decoupling, their sustainability scores improve accordingly. Importantly, the framework does not require assumptions regarding future technology development or policy interventions. The rules and thresholds remain transparent and constant, enabling consistent measurement over time. It also enables like-for-like comparisons of airlines' decarbonisation performance, irrespective of their underlying business models, making it a non-discriminatory and broadly applicable metric.

2. D Victor, T Conlon, P Goedeking, A Schäfer: “Mobilizing capital and technology for a clean aviation industry”, Science, 16 Oct 2025, Vol 390, Issue 6770, pp. 242–245. Open access: https://escholarship.org/uc/item/0b24h907

Why Capital Markets Care

For financial institutions, the attraction of a milestone-based approach lies in its practicality.

Sustainable finance increasingly depends on measurable, verifiable and auditable performance indicators. Whether incorporated into transition- or sustainability-linked loans, lease agreements or portfolio-monitoring frameworks, metrics need to be understood by all parties and capable of independent verification.

The Milestone Concept was specifically designed with these requirements in mind. It provides a framework that can be integrated into financing and leasing structures while remaining largely resilient to greenwashing concerns because it focuses on achieved outcomes rather than forecast aspirations. It is equally applicable at transaction level and portfolio level, allowing lenders, lessors and investors to monitor the performance of their clients over time.

In practice, this can take several forms: milestone achievement as a covenant or reporting trigger, a margin ratchet tied to decoupling performance, or a simple monitoring metric layered onto an existing facility. Unlike third-party transition pathways – which typically model a route to a future target and therefore require periodic revision as assumptions change – a milestone tied to observed outcomes can be fixed for the life of the loan or lease without renegotiation.

In many respects, this mirrors developments seen elsewhere in sustainable finance. Markets typically evolve from broad commitments toward increasingly robust measurement frameworks. As expectations regarding accountability increase, demand for transparent and scientifically grounded methodologies will grow.

Building Credibility Through Measurement

Ultimately, the debate is not about replacing targets. Long-term ambitions remain important. Rather, it is about complementing those ambitions with a measurement approach capable of demonstrating whether real progress is being achieved.

Aviation's transition will require enormous investment across aircraft technology, fuels, infrastructure and operations. Maintaining stakeholder confidence throughout that process will depend on the industry's ability to provide transparent evidence of progress.

Aviation must demonstrate credibly that decarbonisation is occurring. By focusing on the relationship between traffic growth and emissions growth, and by measuring achieved outcomes rather than forecast expectations, the Milestone Concept seeks to contribute to that objective.

The EU's Omnibus initiative should not be interpreted as a retreat from sustainability reporting. Instead, it signals a shift from reporting volume to reporting value, prioritising robust, material and decision-useful data over compliance-driven disclosure. The Milestone Concept responds directly to this need. By measuring actual decarbonisation progress through a transparent and peer-reviewed methodology, it provides a level of credibility that is increasingly critical for investors, lenders and other stakeholders in a capital-intensive and inherently cyclical sector.

For aviation, that may ultimately prove to be one of the transition's most important milestones.