Climate Change Data

Environmental Metrics

ESG Focus Areas

• Ethics
• Safety, Health and Environment (SHE)
• Diversity
• Community Investment
• Product Stewardship
• Climate Change

Environmental Achievements

• Introduced closed loop cooling systems reducing annual water consumption by 100 million gallons
• Implemented a full environmental, safety, and health (ESH) management system at our Ontario, California site.
• Three new manufacturing sites certified to ISO 14001.
• Reduced energy needed to heat and cool F-35 Lightning II facility, saving £1,000-£2,000 per week.
• Developed a process to remove Tributyltin (TBT) from wastewater, saving around $4.5 million in 2005-2006.

Social Achievements

• 97% of employee grievances in the UK resolved at a local level.
• Met targets to recruit at least an equal proportion of female graduates to those seeking a career in engineering (12% UK, 20% US).
• Global employee fundraising scheme raised £8m.
• Employees volunteered 10,500 days of their own time.
• Launched Lean Learning Academy, a three-week efficiency and leadership training program.

Governance Achievements

• Developed, piloted and rolled out ethics awareness training to 80% of UK employees.
• Established the UK Defence Industry Anti-corruption Forum.
• All employees received annual training on ethics-related topics.

Climate Goals & Targets

Environmental Challenges

• Concerns raised about insufficient efforts to increase diversity.
• Claims of insufficient action on climate change.
• Allegations of bribery and corruption.
• Concerns about the environmental impact of munitions.
• Concerns about the complete lifecycle responsibility of products.

Mitigation Strategies

• Developed diversity improvement plans.
• Engaged external stakeholders on climate change responsibilities; developing a policy in 2007.
• Rejected allegations of bribery and corruption; stated commitment to compliance with all laws.
• Initiated a debate on environmental sustainability of products.
• Shifting to a ‘through life support’ model of working with customers.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Increased demand for rescue equipment

Reporting Standards

Frameworks Used: GRI G3

Certifications: ISO 14001

Third-party Assurance: The Corporate Citizenship Company

Sustainable Products & Innovation

• Lead-free bullets (mentioned in report, but not detailed as a key achievement)
• Fuel cell technology for city buses

Awards & Recognition

• BBC Radio Kent, Healthy Large Employer Award (Platform Solutions)
• Royal Society for the Prevention of Accidents Gold award (Platform Solutions)
• International Safety Award from the British Safety Council (Platform Solutions)
• Business in the Community ‘Big Tick’ Award (Education Programme)

Environmental Metrics

ESG Focus Areas

• Business conduct
• Safety
• Diversity and inclusion
• Environment
• Community

Environmental Achievements

• Improved accuracy and expansion of data collection systems for energy use and carbon footprint (though 2010 data wasn't available at the time of reporting)
• Awarded Seal of Sustainability by the Sustainable Business Institute for its Greenlawn site in New York for initiatives including participation in PowerPay! NY, recycling, water conservation, and renewable energy systems.

Social Achievements

• Reduced number of days lost to work-related injuries by 31%
• Adopted a diversity and inclusion strategy to support recruitment, engagement, and retention of talented employees from all backgrounds
• Total community investment of more than £3.3m, including cash donations and employee fundraising.

Governance Achievements

• Global settlement of certain regulatory investigations with the US Department of Justice and the UK Serious Fraud Office
• On track to meet the 23 recommendations of the Woolf Committee by May 2011
• Review and update of core governance procedures and policies to incorporate Responsible Trading Principles.

Climate Goals & Targets

Environmental Challenges

• Challenging global economic environment impacting customer budgets
• Pressure to reduce government expenditure in the UK and US
• Competition in the defence and security sectors
• Risks associated with operating in a global market (political instability, regulatory changes, etc.)
• Potential for actual performance costs to exceed projected costs on fixed-price contracts
• Dependence on component availability, subcontractor performance, and key suppliers
• Export controls and other restrictions
• Pension funding risks
• Volatility in currency exchange rates

Mitigation Strategies

• Significant cost reduction and efficiency actions
• Geographically diverse and targeted portfolio of businesses
• Strong Services business (48% of sales in 2010)
• Lifecycle Management (LCM) business process for managing contracts
• Robust bid preparation and approvals processes
• Review of financial health of strategically important suppliers
• Formal systems and policies for adherence to regulatory requirements
• Deficit recovery plans for pension schemes
• Hedging of material firm transactional foreign currency exposures

Supply Chain Management

Supplier Audits: Top 1,000 suppliers provided with Code of Conduct

Responsible Procurement

• Standard terms and conditions with clauses on environmental sustainability, business conduct, and responsible trading
• Assessment of major suppliers against Responsible Trading Principles

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• HybriDrive® propulsion system

Awards & Recognition

• Seal of Sustainability (Greenlawn site)
• Best new corporate graduate recruitment website award (UK graduate recruitment website)

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity & Inclusion
• Governance
• Safety and wellbeing
• Responsible supply chain
• Community investment
• Human rights

Environmental Achievements

• Set a target of achieving net zero greenhouse gas emissions across our operations by 2030.
• Joined the United Nations ‘Race to Zero’ campaign.
• Reduced Group-wide greenhouse gas emissions by 20%.

Social Achievements

• Recruited a record 1,373 apprentices and graduates in the UK.
• Established new gender diversity metrics.
• Committed to cease handling white phosphorus.
• Gained accreditation as a real living wage UK employer.
• Improved UK gender pay gap to 8.7% (2020 9.1%).
• Supported over 3,500 young people in training in 2021 through apprenticeships and graduate programs.
• Contributed more than £11m to local, national and international charities.

Governance Achievements

• Refreshed Code of Conduct.
• Revised online Gifts and Hospitality Register.
• Refreshed job-specific anti-corruption training.
• Completed a human rights desktop review of directly controlled operations and policies.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and associated global macro impacts.
• Supply chain disruptions.
• Brexit impacts (limited).
• Climate change physical risks (extreme weather events).
• Climate change transition risks (cost of substituting existing products with lower emissions options, disposal of legacy assets, attracting and retaining talent).
• Increased Recordable Accident Rate (despite improvements in major injury rates).

Mitigation Strategies

• Enhanced business resilience.
• Proactive approach to manage supplier relationships.
• Long-term supplier partnerships.
• Analytical tools to assess natural catastrophe classifications at operational sites.
• Climate change scenario analysis.
• Net zero roadmap development.
• Comprehensive performance improvement plan targeting most challenged sites.
• Virtual reality safety training.
• New and improved assurance programmes to reduce risk related to safety, health, and environmental impacts.

Supply Chain Management

Supplier Audits: 25% of global spend

Responsible Procurement

• Supplier Principles – Guidance for Responsible Business
• Prompt Payments Code (UK)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting operational sites and equipment.

Transition Risks

• Cost of substituting existing products and services with lower emissions options.
• Disposal of legacy assets.
• Attracting and retaining talent.

Opportunities

• Development of innovative new technologies to support low carbon transition.
• Growing demand for low emissions products and services.

Reporting Standards

Frameworks Used: TCFD, SASB

Certifications: ISO 14001

Third-party Assurance: Ramboll US Consulting, Inc. (limited assurance on GHG emissions)

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 13 (Climate Action)
• SDG 16 (Peace, Justice and Strong Institutions)
• SDG 8 (Decent Work and Economic Growth)
• SDG 12 (Responsible Consumption and Production)
• SDG 4 (Quality Education)

BAE Systems' initiatives contribute to these goals through its sustainability agenda, including net zero emissions target, community investment, responsible supply chain management, and investment in education and skills.

Sustainable Products & Innovation

• Electric drive propulsion systems
• Hydrogen fuel cell systems
• Electric heavy-lift uncrewed air system

Awards & Recognition

• Prime Minister’s Veterans’ Employment awards – large employer category (Australia)

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity, Equity, and Inclusion (DEI)
• Responsible business practices
• Community investment
• Armed forces support

Environmental Achievements

• Reduced Scope 1 and 2 GHG emissions by 11.0% compared to 2022
• Increased recycled waste to 48% (from 70% in 2022)
• Power Purchase Agreements signed for renewable energy in the UK

Social Achievements

• 29% of Executive Committee members are female
• £11,267,109 contributed to communities
• Ranked second by female engineers in the UK's Most Attractive Employers list
• Military-Friendly and Best for Vets awards in the US (13th and 10th consecutive years, respectively)
• Increased UK early careers recruitment by 37% compared to 2022

Governance Achievements

• Updated global Code of Conduct
• Progressed workstreams on improving due diligence on modern slavery in the UK
• Sustained robust corporate governance

Climate Goals & Targets

Environmental Challenges

• Global supply chain disruptions
• High inflation
• Increased major injuries (25% increase compared to 2022)
• Competition for talent
• Cybersecurity threats

Mitigation Strategies

• Effective supply chain management
• Inflation management
• Review of controls around significant safety risks
• Robust succession planning
• Targeted recruitment
• Increased safety training
• Investment in talent development programs
• Strengthened cyber security measures

Supply Chain Management

Supplier Audits: More than 30% of global spend

Responsible Procurement

• Supplier Principles – Guidance for Responsible Business
• Anti-corruption and anti-bribery provisions in contracts
• Compliance with laws and regulations (human rights, anti-slavery, environment)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water scarcity

Transition Risks

• Regulatory changes
• Technology shifts
• Energy-related taxes

Opportunities

• Development of energy-efficient products
• Green energy options

Reporting Standards

Frameworks Used: TCFD, SASB

Third-party Assurance: Deloitte LLP (limited assurance)

Sustainable Products & Innovation

• Electric drive propulsion systems
• PHASA-35 solar-powered aircraft
• Collaboration with Heart Aerospace on electric aircraft battery systems

Awards & Recognition

• Military-Friendly (US)
• Best for Vets (US)
• Best Working Environment for Women (KSA)