Key sustainability topics

The materiality matrix, based on the GRI standard and our sustainability strategy, prioritises the key sustainability areas of Lithuanian Airports - the economic, social and environmental aspects that are most important to our stakeholders and have the greatest impact on our operations. It is important to emphasise that all sustainability areas on the materiality map are important, and a medium materiality does not mean that we will not make efforts to fulfil the goals in that category.

To identify and prioritise areas of sustainability, we took the following steps:

we looked at international trends and good practices abroad in our sector;
assessed the current sustainability activities in Lithuanian Airports and the positive and negative impacts on the environment and society;
we have carried out an analysis of stakeholders' expectations;
organising special strategy sessions with Lithuanian Airports' internal experts and management.

ENVIRONMENTAL AREA

Lithuanian Airports is an object of strategic importance, therefore we comply with strict environmental requirements of the legislation of the Republic of Lithuania and the European Union, as well as international standards applicable to our industry. In developing of our activities, we aim to identify and manage the Company's environmental impact, to create a responsible corporate culture and to strategically address environmental challenges: to increase operational efficiency, to save resources and to find new solutions through stakeholder engagement.

These topics are included in Lithuanian Airports: Environmental Strategy 2018-2028, Strategic Action Plan 2023-2026, Strategy till 2030.

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REDUCTION OF GHG EMISSIONS

The main programme we use to calculate and reduce GHG emissions is the Airport Carbon Accreditation (ACA), a globally-recognised, airport-specific programme developed by Airport Council International (ACI). We report annually to meet the programme's requirements and develop CO reduction plans. At least every 2 years, our GHG emissions calculations are verified by a certified programme assessor.

Under the ACA programme, in September 2022, VNO entered the third phase of the international programme, called "optimisation", while KUN and PLQ entered the second phase, called "reduction".

At the beginning of 2023, we adopted the NET ZERO strategy for Lithuanian airports, which sets out our key objectives for reducing our impact on climate change. These are our strategic objectives:

achieving climate neutrality by 2030;
Net zero by 2050.

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PROMOTION OF THE CIRCULAR ECONOMY

We are committed to contributing to the European Green Deal and to reducing waste to landfill in the long term, improving waste management and sorting practices, increasing the share of reused and recycled waste in the overall waste stream, and involving our partners and suppliers in these processes.

In 2023, we plan to start developing a Waste Management Strategy for Lithuanian Airports, which aims to identify priority areas for the development of waste management activities based on the efficient and cost-effective implementation of waste management processes, taking into account the principles of a circular economy. During the preparation of the Waste Management Strategy, we plan to carry out a detailed analysis of the current situation, identify indicators to measure progress in waste management, set specific goals and targets, and develop an action plan.

Key initiatives:

Waste sorting. Paper, plastic and household waste sorting containers are placed in and around passenger terminals and administrative buildings to encourage passengers and staff to separate waste. Under the contracts, Lithuanian Airports tenants are obliged to collect and separate the waste generated by their operations on the premises;
Reducing plastic packaging and packaging. We are implementing various initiatives to reduce the use of single-use plastics, including free drinking water stations at Vilnius Airport, and the use of glass containers in the VIP Terminal and Business Lounge. In the future, we plan to expand this initiative and encourage Lithuanian Airports' partners to choose sustainable products and packaging;
Reducing food and hygiene waste. At Vilnius Airport, due to aviation security standards, items left behind by travellers in hand luggage are not thrown away, but selected and distributed to the needy through the "Maisto bankas". We are currently looking for solutions to transfer other items found abandoned at the airport to the "Maisto bankas" or other charities;
We are building a de-icing fluid recycling plant at Vilnius Airport.

We plan to update our Sustainability Strategy in 2023, including targets on this topic.

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SOIL AND WATER CONSERVATION AND EFFLUENT MANAGEMENT

Airport operations inevitably generate various sources of pollution that affect the environment. We are therefore granted pollution permits for our operations and pay an annual fee for the pollutants we release into the environment.

Key tools:

We monitor, track and control pollution sources, and continuously find ways and implement measures to reduce impacts. Cooperation with operational partners and tenants operating on our sites also plays an important role in this area;
We monitor emissions and/or discharges of pollutants into wastewater in accordance with programmes agreed with the Environmental Protection Agency (EPA): for surface wastewater KUN and PLQ, and for industrial and municipal wastewater VNO. Periodic analyses of surface and industrial effluents are carried out annually, once a quarter;
PLQ monitors groundwater impacts from petroleum product storage facilities in the area and annually submits data to the Lithuanian Geological Survey;
Groundwater impact monitoring is carried out by the lessee at a leased fuel depot owned by VNO;
In all airports we purchase drinking water from centralised water suppliers under contracts: in VNO - from UAB Vilniaus vandenys, in KUN - from UAB Giraitės vandenys, in PLQ - from UAB Palangos vandenys. The wastewater is discharged into the wastewater disposal systems of the same suppliers and then into the wastewater treatment plants of the wastewater treatment companies;
Wastewater from VNO and KUN airports is classified as industrial wastewater due to commercial, service and catering activities in passenger terminals and other buildings. Industrial waste water is also generated at VNO and KUN during the cleaning of various premises, and at VNO during the washing of vehicles in the airport's car wash. In VNO, KUN and PLQ, domestic and/or industrial waste water is discharged into the centralised waste water networks of the cities under contract.

Major works planned for 2023:

At VNO, we plan to build an automated recycling plant for aircraft de-icing wastewater, which will produce glycol, a material suitable for secondary use. This will not only prevent pollutants from entering the soil and water, but will also help conserve resources and implement the principles of the circular economy. The wastewater treatment/recycling plant has been designed to have the capacity to accept future KUN and PLQ surface effluents;
Due to the expansion of KUN's northern apron, the reconstruction of the surface water management system, we plan to update and agree with the Environmental Protection Agency on KUN's pollution permit and monitoring programme.

RESULTS OF WASTEWATER TESTS (LT)

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SOCIAL AREA

Caring for employees and the communities around airports is at the heart of successful airport operations. Every passenger's experience, airport security and quality of service depend on our people. It is essential that we continue to focus on enhancing the well-being and emotional health of our employees, ensuring that airports are workplaces that embrace diversity and respect people's differences. We need to be responsible neighbours to those who live closest to us, ensuring that these communities can enjoy cleaner air, calmer nights and a better quality of life.

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NOISE REDUCTION

Balanced noise management and the protection of communities around airports from aircraft noise is a prerequisite for the success of our operations and development, and we are guided by the United Nations' International Civil Aviation Organisation (ICAO) Aircraft Noise Management Approach based on 4 principles:

Reducing aircraft noise at the point of generation;
Apply spatial planning;
Change operational procedures;
Restrict the use of the noisiest aircraft.

We monitor (measure) aircraft noise at all airports. We prepare and submit annual noise monitoring reports to the Lithuanian Transport Safety Administration (LTSA), draw up annual noise dispersion maps, and determine the size of supra-normal noise zones and the number of people in supra-normal noise zones. We assess the effectiveness of noise management through the indicators presented in the reports.

Lithuanian Airports controls those operations and procedures that take place prior to take-off and landing (taxiway movements, engine tests, etc.). Therefore, we cooperate with the air navigation service provider VĮ Oro navigacija, which manages and routes air traffic, and other partners to provide comprehensive noise reduction solutions. Decisions on noise abatement procedures related to aircraft operations are taken by aircraft operators or their crews.

Noise maps for all three airports: LITHUANIAN AIRPORTS NOISE MAPS (LT)

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PROACTIVE COMMUNICATION

Clear, proactive and open communication is a recurring expectation among all stakeholders and is highlighted as one of the priority aspects of our sustainability. Proactive communication is a key axis for the implementation of each point in Lithuanian Airports sustainability strategy.

Lithuanian Airports engage in two types of communication:

Regulatory: ensuring that airports comply with all the information publishing requirements for public companies;
Proactive: different communication tools are used to ensure that relevant and complementary information reaches all stakeholders in a timely manner.

We periodically review stakeholder expectations and our internal and external communication tools. For example, we conduct an annual employee internal communication survey. From the survey data, we identify the main communication problems and areas for improvement, and develop an action plan. We also send periodic newsletters to our airport partners to keep them up to date with key developments. The need to identify proactive communication as a distinct aspect of sustainability was born out of an appreciation of the recurrent expectation among stakeholders for clear, proactive and open communication.

Aiming to comply with good governance practices by achieving an ESG rating of A+.

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ENHANCING EMPLOYEES’ WELL-BEING

To ensure the efficient operation and development of airports, we focus on building a relationship based on partnership and care between the employee and the organisation. We continuously improve our remuneration policy and the adaptation process for new employees, develop employees' competences, encourage and enable career development within the company and strive for ever greater employee engagement.

One of our key strategic indicators to strengthen employee well-being is the Engagement Index, which we have measured annually since 2015 through a survey. The results of the survey help to identify the key expectations of colleagues and highlight areas for improvement.

In 2022, the overall engagement index target was met and exceeded, and we will aim to maintain the same good performance in the coming years. At the same time, the survey showed that we should pay more attention to the areas of career opportunities, fair pay, motivation, and operational efficiency (information sharing and collaboration), which we have taken into account in our plans for the future of this area.

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FOSTERING DIVERSITY AND INCLUSION

It is essential for us that Lithuanian Airports, in its daily work, creates an environment where people's diversity is respected, where equal and non-discriminatory treatment is fostered and where people's rights are guaranteed. We want everyone to feel 100% themselves in our environment, so we have started to work intensively on this topic since 2022:

Every year, we carry out a Diversity Charter survey, which helps us to identify where we need to do more and to measure our progress. In 2021, 89 employees took the survey and in 2022, 204 employees have already taken it;
We work with the Diversity Charter, taking part in their trainings, seminars and sharing good and bad practices;
We have a Diversity and Inclusion Ambassadors project involving 26 employee ambassadors. We are developing our ambassadors' skills on this topic and have an action plan on how we can increase diversity and inclusion.

In 2022, we have prepared the following two policies to guide us in promoting diversity and inclusion:

This topic is one of the company's strategic focus areas, so we have an indicator for this topic, which comes from the annual Diversity and Inclusion survey, where employees are asked to indicate their level of agreement with the statement: "at work I am free to express myself and be who I am". Percentages indicate the number of employees who ticked the values of FULLY AGREE or AGREE.

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EMPLOYEES' PHYSICAL AND EMOTIONAL HEALTH

Safe working conditions and employee health is one of the priority areas for the success of airports, and in addition to our legal and regulatory obligations, we have a number of complementary projects and benefits for our employees, such as medical solutions, extra vacation days, incentives for physical activity, etc.

Due to the specific nature of airport operations, Lithuanian Airports carries out a variety of activities that are associated with a higher than normal risk of injury or adverse health effects, including driving special snow clearance vehicles, driving fire-fighting vehicles, fire-fighting and rescue work, working in unusual weather conditions, working in other conditions that are harmful to health (noise, vibration, air or the working environment temperature), working at height, etc. In order to ensure a comprehensive safety at working and to take proper care of the employee health, the Company carries out occupational risk assessments, health checks, implements numerous preventive measures, prepares safe work instructions, organises mandatory employee briefings, training, etc. All employees of the Company are covered by supplementary health insurance. Employees can get free vaccinations against tick-borne encephalitis, and we organise flu vaccinations during the season.

From 2023, we will also include targets to improve the emotional health of our staff in our strategic action plan:

We strive to help employees avoid conflicts, reduce and better manage stress, and maintain a good work-rest balance. We hope that increased focus on this topic will help improve staff performance, enhance staff engagement and cooperation, better manage potential conflicts and prevent mobbing;
We will organise anti-bullying training to equip management teams and employees with the knowledge and practical skills they need to create a healthy and safe working environment and prevent bullying at work;
We will carry out occupational risk assessments at workplaces in Kaunas and Palanga airports;
We will re-assess psychosocial risk factors to evaluate the results in terms of emotional health.

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ECONOMIC AREA

Lithuanian Airports are one of the economic engines that attract foreign direct investment and create jobs. We have set out that as the wings of Lithuania's sustainable growth, we will ensure the sustainability of our operations by increasing connectivity to transit airports, sustainably expanding our managed infrastructure, continuously improving the customer experience, and ensuring green public procurement. From an economic sustainability perspective, ensuring comprehensive safety and fostering a culture of security, including the continued development of a corruption-proof culture, remain key areas.

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IMPROVING CUSTOMER EXPERIENCE

Improving the passenger/customer experience has been a strategic focus of our business since 2014 and the percentage of loyal passengers (as measured by the NPS survey) is one of our strategic performance indicators.

We aim to meet the needs of all passengers, to help them reduce the stress of their journey, and to adapt infrastructure and processes to ensure that all customers feel comfortable at airports, guided by our Passenger Experience Strategy 2030, adopted in 2022. The strategy sets out a number of actions and measures to improve the customer experience when travelling.

We have processes and tools that we use on an ongoing basis:

In our day-to-day operations, both ourselves and our partners adhere to the Customer Service Standard and the Customer Service Quality Control processes;
All airports measure the NPS indicator and, in addition, VNO measures the Airport Service Quality (ASQ) indicator. Based on the results of the surveys, an annual NPS programme - a set of actions to improve the customer experience is developed;
We work with all partners that provide services to our clients: 12 meetings a year, discussing customer experience management guidelines, quality indicators, achievements and key projects
We review and update our customer experience programme annually, and discuss how we are complying with our longer-term (5-year) performance targets;
The Lithuanian Transport Safety Administration carries out annual external audits of the service provided to customers with special needs;
We organise a range of training courses for staff.

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PROMOTING A SECURITY CULTURE AND ENSURING SAFETY

Developing a safety culture and ensuring safety is one of our key sustainability themes. Managing this theme involves two areas: safety and security.

SAFETY

At airports, we must ensure the highest level of safety in all ground operations: to prevent dangerous situations from arising, to eliminate the possibility of accidents and incidents. Safety management at Lithuanian Airports complies with the requirements of the European Aviation Safety Agency (EASA). All airports are subject to a Safety Management System (SMS) approved by the Operational Supervisory Authority (OSA), of which the Safety Policy is a component. The Policy defines that aviation safety is the Company's highest priority over any commercial, operational, environmental or social interest.

All Lithuanian Airports aviation partners are subject to the same regulations (in terms of scope of activities) and operate under the same safety management systems. In order to further improve the effectiveness of the Safety Management System, we have envisaged the establishment of Safety Committees, through which we will involve an even greater proportion of partners in active safety management.

We plan to update our Sustainability Strategy in 2023, which will include targets on this topic.

SECURITY

Aviation safety, like security, is essential to the success of our operations. The company has a Security Policy approved by the Supervisory Authority (SAA) and an internal Aviation Security Programme based on the requirements of the International Civil Aviation Organization (ICAO). The programme includes actions and measures to develop and foster a security culture. All partners in the aviation activities of Lithuanian Airports are also involved in security. We are constantly implementing new technological solutions, cooperating and sharing best practices with the relevant state authorities to improve security procedures and strengthen cyber security at airports.

To make safety even more clearly perceived as part of the organisational culture among employees, we plan to focus on it in our internal communications.

We plan to update our Sustainability Strategy in 2023, which will include targets on this topic.

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ENSURING GREEN PROCUREMENT

Our public procurement is governed by the Law of the Republic of Lithuania on Procurement by Contracting Entities in the Field of Water Management, Energy, Transport or Postal Services (the ""Law"") and other legal acts.

We are consistently increasing the number of green purchases:

In 2022, 71.1% of our purchases by value were green, i.e. we checked the suppliers involved against environmental criteria. In 2022, we did not apply social criteria (e.g. median wages) to suppliers in our procurement. Also in 2022, we adopted a Code of Conduct for Business Partners and defined the provisions to which our suppliers must adhere in their activities and cooperation with us;
From 2023, when the changes to the Law come into force, we will aim to ensure that procurements of goods, services or works contribute to social issues. We will also ensure that all (100%) of our purchases are green from 2023 onwards, in accordance with the Law and the Procedures approved by the Minister of the Environment by Order D1-401. We set the requirements for green procurement through the preparation of technical specifications, the establishment of supplier qualification requirements or qualification selection criteria, the evaluation criteria for the evaluation of tenders, the terms and conditions for the performance of the procurement contract and/or other requirements for suppliers.

In the competition "Most Effective Public Procurement 2022", organised by the Ministry of Economy and Innovation in cooperation with the Public Procurement Service, we were recognised as the winner in the category of the most intelligently organised procurement. Our procurement of the VNO T4 terminal and transport access works, which applied green procurement criteria, was recognised for efficient time management and the application of international best practice.

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SUSTAINABLE INFRASTRUCTURE DEVELOPMENT

The main projects planned for the sustainable development of Lithuanian Airports infrastructure:

VNO Aerodrome Expansion Projects (to be completed in 2022, investments worth more than EUR 27 million, partly financed by the EU);
Construction of a new departure terminal at Vilnius Airport;
Automated recycling plant for aircraft de-icing wastewater;
Special transport renewal programme;
Expansion of the KUN terminal.

One of the most important projects that will contribute to the sustainable expansion of infrastructure is the construction of a new departure terminal at Vilnius Airport. The new building:

will be energy class A++;
will use five times less heating energy than existing buildings;
will be environmentally friendly - the solutions used in the project are based on renewable energy, for example by providing space for solar panels;
For this project, we will seek BREEAM Good level of certification.

For more information on this project, click here.

In 2023, we plan to review the sustainability strategy, develop a tactical plan for the Net Zero strategy and assess the need for additional infrastructure projects. We will involve airport partners and ground service providers in the planning process.

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INCREASING CONNECTIONS TO TRANSIT AIRPORTS

Gains in this area help to increase aviation's contribution to Lithuania's GDP, increase the number of tourists, help create a sustainable business environment and attract business investment. Convenient access to major transit airports would provide revenue for Lithuanian Airports which could be used for other sustainability initiatives.

In 2022, we awarded a contract to Informa Markets Ltd (UK), the successful tenderer in the Ministry of Transport and Communications' international tender, to develop a business plan for the operation of flights to strategic destinations to provide air connectivity to target markets important for Lithuania's economic development.

We will continue to negotiate with airlines to increase connectivity to transit airports, through various incentive packages, B2B marketing measures and the development of a flight promotion model. We plan to create a platform for cooperation with institutions, associations and bodies that apply flight promotion measures.

One of our strategic objectives is to offer a competitive network of destinations and a wide range of services and a caring service, as measured by the number of destinations (table below).

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