Investors are being urged to carefully assess the risks tied to sustainable aviation fuel (SAF), as a new guide warns that neglecting environmental, social and just transition considerations could create long-term portfolio risks.
The report, published by NGO Climate Catalyst and the SASHA Coalition, highlights the need for robust due diligence to ensure investments in aviation biofuels and e-fuels are both environmentally sustainable and financially sound.
Key Risks for Investors in Aviation Fuels
The guide — Just transition, environment & social considerations for the aviation fuel transition: An investor guide — identifies three often-overlooked categories of risk in SAF production and procurement:
- Environmental: Biofuel feedstocks may cause biodiversity loss, land-use change emissions, or breach environmental rules, leading to regulatory penalties.
- Just Transition: Poor worker reskilling, lack of local economic planning, or weak community engagement could destabilise jobs and damage reputations.
- Social: Misuse of resources like food, water or energy could exacerbate insecurity, undermining community wellbeing and long-term investment stability.
To mitigate these risks, the guide provides a framework of questions investors can use to engage with portfolio companies, including requirements for transparent lifecycle emissions accounting, holistic risk assessments, and greater accountability in SAF projects.
Climate Catalyst and SASHA argue that this approach not only protects investors but also ensures that the aviation industry’s fuel transition genuinely contributes to a sustainable and equitable climate pathway.
“Alternative fuels from truly sustainable feedstocks are critical for achieving net zero aviation, and with supply currently low, significant investment is needed to scale these solutions at the necessary pace,” said Nuala Doyle, Advocacy Manager at the SASHA Coalition.
“However, without proper precautions, misplaced investments today risk locking in economic, environmental or social harms for years to come.”
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