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Supplier Diversity Program: Green Procurement Survey

At Southwest Airlines, we recognize that our environmental impact includes not only our operations, but also the goods and services we acquire from others. To better understand the environmental performance of our suppliers, we conduct a green procurement survey as part of our supplier diversity program. This survey provides information such as:

• Use of recycled materials in the manufacturing and packaging of products
• Current and future activities and/or programs to help reduce impact on the environment
• Documentation of environmental efforts, achievements, and certifications
• Notices of environmental violations from federal, state, and local regulatory agencies

The green procurement survey has led to an increasingly greener supply chain. For instance, FedEx, who handles our shipping needs, works constantly to improve the efficiency of its vehicle and aircraft fleets and facilities. Our computer product supplier, Dell, supplies us products manufactured with at least 10 percent post-consumer recycled plastic in many of their enclosures as well as innovative sustainable packaging materials such as bamboo, designed to be easily recycled or composted. Sourcing for our office supplies through Office Depot has helped us green our procurement by using minimal packaging material and promoting green products. In 2011, more than 30 percent of items Southwest Airlines sourced through Office Depot were recycled or remanufactured items. These suppliers’ environmental efforts translate to a greener and more efficient supply chain.

Renewable Energy Program: Green Power Purchasing

Another way we operate with a green filter is by purchasing power generated from renewable resources such as wind, solar, geothermal, low-impact hydro, biogas, and biomass. These renewable resources, often referred to as green power, emit substantially less greenhouse gas emissions during power production than traditional means of power generation. Thanks to the efforts of our Purchasing Department in negotiating the lowest available price for energy, including alternative energy credits, Southwest Airlines is proud to be a leading corporate user of green power. We are continuing our 60-month agreement with Reliant Energy to purchase 30 percent renewable energy for our Dallas and Houston operations. In 2011, we met our commitment by purchasing more than 15.7 million kilowatt-hours of wind power in the form of renewable energy certificates. As a result, we were ranked 37th1 on the U.S. Environmental Protection Agency’s FORTUNE 500 Green Power Partnership list.

Eco-Friendly Products and Materials

In 2011, we continued our ongoing environmental initiatives related to products and materials. Our systemwide onboard co-mingled recycling program diverted more than 2,600 tons of paper, plastic, aluminum, and cardboard from landfills in 2011. Rebates earned from this program will allow us to purchase renewable energy-driven equipment such as solar compactors. More information on recycling can be found in Recycling and Waste Management.

Green Plane

The Southwest Airlines Green Plane has been our flying laboratory for the evaluation of eco-friendly and lighter-weight materials since 2009. On Jan. 17, 2012, the results of our testing of these sustainable materials culminated with our unveiling of Evolve, the new Southwest Airlines interior that features environmentally responsible and lighter weight materials. More information on Evolve can be found in Future Planet Initiatives, Future Performance Initiatives, and Future People Initiatives.

Chemical Management

The use of chemicals is necessary in the airline industry. At Southwest Airlines, we work tirelessly to safely utilize the chemicals we need. New chemicals are reviewed for environmental and Safety impacts before approved for use. Our Chemical Review Board assesses chemicals prior to purchase and our chemical management system tracks the use of chemicals in our facilities. The Chemical Review Board—which includes Employees from the Safety, Environmental Services, Purchasing, Hazardous Materials, Engineering, and Aircraft Appearance departments—reviews all requests for new chemicals, and each department represented on the board must approve the chemical before it can be purchased.

One of the most important issues surrounding chemical management is the use of ozone-depleting substances. The ozone layer prevents harmful ultraviolet light from passing through the atmosphere, and the use of these substances can cause a decrease in the total volume of the ozone layer. The only ozone-depleting substances Southwest Airlines presently uses are refrigerants found in the HVAC systems of Southwest Airlines-operated buildings. In 2011, we estimated that the use of these substances resulted in 3,395 metric tons of carbon dioxide equivalent (CO2e) emissions based on an upper-bound assumption of the expected losses that would occur from Southwest Airlines facilities. No ozone depleting substances are produced or imported as a result of Southwest Airlines operations.

1	The U.S. Environmental Protection Agency FORTUNE 500 Green Power Partnership rankings are updated quarterly. Southwest Airlines ranked 37th as of Oct. 5, 2011.