Rolls-Royce’s gas-powered turbine demonstrates how the company is embracing decarbonization strategies and its willingness to embrace more climate-friendly solutions in pursuit of profit, according to GlobalData. The leading data and analytics company notes that Rolls-Royce took a significant hit to profits during the pandemic, accruing significant debt due to its exposure to the civil aerospace sector. The new ‘UltraFan’ engine – with the ability to be scalable to both narrow and widebody aircraft - is looking to convince investors that it will be a winner in adapting to climate change.
The company may be in luck, as GlobalData’s report, ‘ESG in Aerospace and Defense’, ranks Rolls-Royce as a significant player in the climate change theme because of its work with electric aircraft and its overall decarbonization strategy. Other leading companies include Boeing and Airbus according to the report, and to be a leader in the area Rolls-Royce will have to invest in a diverse portfolio of climate-friendly solutions, including electric aircraft and hydrogen fuel solutions.
ESG is significant to the aviation sector for Two reasons: firstly there is increasing societal pressure to reduce carbon emissions, and secondly that states and multilateral institutions are increasingly likely to increase costs surrounding fossil fuels – leaving alternative fuel solutions as more cost friendly alternatives in future.
William Davies, Associate Defense Analyst at GlobalData, comments: “The new ‘UltraFan’ engine is more fuel efficient and touted as a key part of the transition to more sustainable fuels. The engine will be 25% more efficient than the older ‘Trent’ engines also produced by Rolls-Royce.
“This step is part of an attempt to mitigate the damage done to the company by the pandemic and return to profitability. The move comes alongside cost-cutting measures, including a restructuring plan, and the company clearly sees significant profits in environmental solutions in civil aviation.”
