Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health and safety
• Diversity and inclusion
• Reducing climate change
• Employee wellbeing

Environmental Achievements

• Reduced COD accumulated weekly by 80% at Chemring Nobel's wastewater treatment facility.
• GHG and carbon emissions remained flat (<1% difference year on year).

Social Achievements

• 100% of senior leaders participated in diversity, equity, and inclusion workshops.
• Launched a UK-wide Early Careers development program for all new graduates and apprentices.

Governance Achievements

• Updated Code of Conduct and training issued.
• Continued implementation of Chemring Compliance Portal.
• Enhanced operational assurance process.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacted data collection and some initiatives.
• Climate change potential impact on operations (flooding, wildfires).

Mitigation Strategies

• Implemented a revised Crisis Management Plan and travel risk management process.
• Improved drainage at Tennessee facility and maintained lower vegetation heights at Australian and Norwegian sites.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct requiring adherence to ethical standards and human rights.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding, wildfires

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Streamlined Energy and Carbon Reporting (SECR)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 5 (Gender Equality)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 10 (Reduced Inequalities)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 16 (Peace, Justice and Strong Institutions)

Chemring's operations, products, and strategy align with these SDGs.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Roke received MOD Employer Recognition Scheme Silver Award.

Environmental Metrics

ESG Focus Areas

• Health and safety
• Environment
• People
• Ethics and business conduct

Environmental Achievements

• 7.3% reduction in market-based scope 1 and scope 2 carbon emissions from 20,684 tCO2e in 2021 to 19,175 tCO2e in 2022
• Improved steam heat distribution system at Scotland facility, reducing natural gas usage and greenhouse gas emissions
• Replaced ageing HVAC systems at Pennsylvania facility, reducing electricity use and associated scope 2 emissions
• Increased use of biodiesel fuels

Social Achievements

• 100% of senior leaders participated in diversity, equity and inclusion workshops
• All new graduates and apprentices participated in a UK-wide Early Careers development programme
• Established a Healthy Workplace Committee to promote occupational health and wellbeing
• Launched the Women’s Inclusivity Network

Governance Achievements

• Updated Code of Conduct and training issued
• Continued implementation of Chemring Compliance Portal
• Enhanced operational assurance process

Climate Goals & Targets

Environmental Challenges

• Wildfires (potential disruption to production and product delivery)
• Severe weather events (potential damage to facilities and disruption to operations)
• Changing climate-related requirements in customer procurement contracts (potential increased costs and loss of contracts)
• Supply chain resilience (reliance on sole suppliers)

Mitigation Strategies

• Cutting back grassland close to operations and ensuring local mitigations for activities such as planned burns (wildfires)
• Drainage improvements and further mitigations planned to reduce the impact of potential flooding events (severe weather events)
• Continual assessment of government priorities in terms of technology roadmaps and procurement requirements (technology)
• Understanding supplier risks and developing redundancy (supply chain resilience)

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Wildfires
• Severe weather events

Transition Risks

• Changing technology requirements in customer contracts

Opportunities

• More efficient production
• Sourcing low-emission energy
• Supply chain resilience

Reporting Standards

Frameworks Used: TCFD, CDP

Certifications: Null

Third-party Assurance: ERM Certification and Verification Services Limited

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)

Initiatives to reduce GHG emissions, improve energy efficiency, and source renewable energy

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• MSCI ESG Rating of AAA

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Environment
• People
• Ethics and Business Conduct

Environmental Achievements

• Scope 1 and scope 2 market-based GHG emissions reduced by 9.1% on higher revenue
• Water consumption decreased by 3.9%
• Waste decreased by 31.2% across the business

Social Achievements

• Employee engagement positivity score up at 76% in FY23 (2022: 75%)
• Board diversity improved further to 44%/56% female to male gender split (2022: 38%/62%)

Governance Achievements

• Code of Conduct training issued to employees
• Ethics & Compliance Committee consolidated into the ESG Committee

Climate Goals & Targets

Environmental Challenges

• Slight increase in total recordable injury frequency rate (0.90 vs 0.78 in 2022), but still below the annual limit of 1.
• Challenges associated with inflationary cost increases and higher energy prices.
• Resourcing challenges, particularly in parts of the US, making it difficult to recruit and retain employees.
• Shortages of engineers and skilled maintenance personnel.
• Salary inflation impacting several businesses.
• Increasingly sophisticated cyber-security threats.

Mitigation Strategies

• Launched Chemring Fundamental Safety Principles and SWIM approach.
• Implemented energy-saving programmes across facilities.
• Continued focus on commercial contracting, inventory levels and cash management.
• Deployed a new Group HR Operating Model.
• Continued investment in development initiatives (Early Careers Programme, leadership development programme).
• Enhanced IT and cyber-security standards, partnered with managed detection and response providers.
• Improved business continuity plans.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Wildfires
• Extreme weather events

Transition Risks

• Technology changes impacting procurement contracts

Opportunities

• Resource efficiency
• Low emissions energy

Reporting Standards

Frameworks Used: TCFD

Third-party Assurance: ERM CVS (limited assurance for scope 1 and 2 emissions)

UN Sustainable Development Goals

• Goal 3
• Goal 5
• Goal 7
• Goal 8
• Goal 10
• Goal 12
• Goal 13
• Goal 16

Initiatives contribute to these goals through various programs and policies related to health and safety, gender equality, energy efficiency, economic growth, reduced inequalities, responsible consumption and production, climate action, and peace, justice and strong institutions.

Awards & Recognition

• MSCI ESG Rating of AAA
• Investec’s Sustainable Investment Research 2023 rising star

Environmental Metrics

ESG Focus Areas

• Health and safety
• Environment
• People
• Ethics and business conduct
• Governance

Environmental Achievements

• Market-based scope 1 and scope 2 GHG emissions reduced by 13.0% on higher revenue
• Market-based scope 1 and scope 2 emissions reduced by 18.0% per £m of revenue
• 86% of all waste diverted from landfills or incineration

Social Achievements

• Total recordable injury frequency rate decreased to 0.69 (2023: 0.90)
• Process safety event (“PSE”) incident rate was 2.09 (2023: 2.87)
• Employee engagement positivity score up at 72% in FY24
• Board diversity remained at 44%/56% female to male gender split

Governance Achievements

• Completion of training in the Chemring Compliance Portal over 98% (2023: 88%)
• Updated Code of Conduct and supplier Code of Conduct issued in November 2024

Climate Goals & Targets

Environmental Challenges

• Rising geopolitical tensions and customer demand leading to increased production capacity and revised net-zero target to 2035.
• Maintaining compliance with tightening environmental regulations and meeting emissions targets.
• Managing risks associated with extreme weather events, temperature fluctuations, and precipitation stress.
• Adapting to the shift to low-carbon technologies and meeting customer sustainability requirements.
• Ensuring accurate data collection and monitoring across the supply chain.

Mitigation Strategies

• Investment of £200m in Energetics manufacturing facilities.
• Implementation of a new environmental data collection and reporting system.
• Drainage improvements, stormwater management upgrades, and backup power systems.
• Enhanced pipe insulation, temperature-controlled storage, and HVAC upgrades.
• Development of a long-term transition plan to achieve net zero emissions by 2050.
• Regular HSE audits and emissions monitoring.
• Enhanced tracking systems for accurate environmental data reporting.
• Employee training and environmental awareness initiatives.
• Strong governance framework and continually updated environmental policies.
• Collaboration with suppliers to reduce scope 3 emissions.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Extreme temperature fluctuations
• Precipitation stress
• Wildfires

Transition Risks

• Shift to low-carbon technologies
• Exposure to litigation

Opportunities

• Resource efficiency
• Low-emissions energy

Reporting Standards

Frameworks Used: TCFD, SECR, GHG Protocol

Third-party Assurance: ERM CVS

UN Sustainable Development Goals

• Goal 7
• Goal 13