IEMA Sustainable Business: Environmental Professionals Driving Change

© BAE Systems 2010. All Rights Reserved

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IEMA Sustainable Business: Environmental Professionals Driving Change

Henrietta Anstey – BAE Systems FIEMA


Setting the scene

Overview

Building the business case

1 year on – what’s changed?

Examples

Concluding remarks – personal reflections


Setting the scene

Overview

Who are we and what do we do

How we are set up

What are the challenges facing us

What are the environmental issues facing us


Setting the scene - Our Global Presence

United States• 46,900 people• 4th largest supplier to DoD• 126 locations in 38 states Australia

• 6,100 people• 24 business locations

Saudi Arabia• 4,900 people• 8 business locations

Sweden• 1,500 people• 5 business locations

United Kingdom• 31,600 people• Largest supplier to MoD• 57 business locations

South Africa• 600 people• 4 business locations

India• Defence Land Systems

(26%)

2010 Sales £22.3bn


Setting the scene - 2011 Group Strategic Framework

Programme execution

Financial performance

Customer focus


Setting the Scene - Our challenges

• Government Departments with budgetary constraints

• Reputational issues

• Business acquisition brings organisation issues

• Many different cultures within our global business

• A sustainable defence company?


Setting the scene - Our environmental issues

Within our operational control:

• Typical issues associated with engineering and manufacturing activities – material use, waste generation, water use, solvent use, energy and emissions on a global scale

• Some legacy issues associated with acquiring new businesses

For us to influence:

• Hazardous material use in product design

• Energy consumption and emissions in product use

• Design for disposal

For us to work with:

• Key suppliers – assist understanding on environmental sustainability


Overview

Building the business case

What worked for us


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Environmental Sustainability as a lever for efficiency

Financial Risk

(Drives out cost)

• Energy costs predicted to rise at well above the rate of inflation over next 10 yrs. • BAE Systems does not have a definitive picture of global energy expenditure. • Carbon taxes will also apply and will be market led. • Strategies to address energy consumption, including demand management, self generation and behavioural change can deliver efficiency and reduce cost.

Allows compliance with

legislation

• Australian National Greenhouse Energy Reporting System • UK Carbon Reduction Commitment Energy Efficiency Scheme • Accurate and verifiable energy data must be reported and ultimately energy reduction achieved.

Non Financial risk (Reputation)

• BAE Systems Plc will be ranked in the UK CRC publicly disclosed performance league table from October 2011.

• Our performance position could affect our reputation.

Provides competitive

advantage

• Customers (DoD, ADF, MoD) need to deliver resource efficiency which includes efficient buildings, products & operations and there is an expectation for industry to assist. Responding to these needs should make us more efficient.

Fits Total Performance

• Acting on environmental sustainability is consistent with our Values and Total Performance culture

• It ensures we demonstrably deliver our Environmental Policy


TerminologySustainability

Integrated business strategy that drives sustainable performance through managing the interdependencies between financial, social and environmental issues across diverse operations and markets

Environmental SustainabilityDelivery of financial and programme results while progressively reducing resource intensity and environmental

impacts of products and services throughout life cycle

Environmental ManagementManagement of areas where the business impacts the environment

Pollution Control

Process• Waste streams – solid, liquid, vapours• Paints, other volatiles

Product• In-use emissions• After-life disposal

Haz/Toxic Materials

Process• Process chemicals• Toxic or hazardous waste

Product• Asbestos, lead, cad, beryllium, etc.• Nuclear materials• Explosives, munitions

Resource Management

EnergyProcess• Facilities, machinery• Renewables

Product• Supply chain (pre-process).• Customer (post delivery)

WaterProcess• Dip tanks, steam cleaning Product• Water recoup from exhaust• Water generator on board

Materials Efficiency

Process• Impr. yield, less scrap & rework• Recycling

Product• Minimum weight design• Less-energy- intensive materials

Scarce Materials

and items from unreliable,

exploitative or hostile sources

• Rare earths• Titanium• ‘Conflict minerals’• Alloying elements for HS steel


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Backdrop: Peers and Competitors (Public Data)Stakeholder Message Global Target &

TimelineAchievement

“Go Green” 25% absolute reduction

(2007-2012) in waste, water & carbon

2008 11% reduction in water. In 2009 purchased equivalent of 5% total electricity consumption in renewable energy credits

“Create shareholder value by producing energy in a way that is affordable, secure and doesn’t damage the environment”

Unclear if BP have quantified forward looking targets

Between 2002 and 2009, cumulative energy efficiency resulted in greenhouse gas reductions of 7.9m tonnes

“We aim to improve the environmental performance of our products & operations

“developing innovative solutions to help address the global issues of pollution & climate change”

25% reductions (2007-2012) in waste, water, energy & greenhouse gases

In 2009 outperformed in waste, energy and greenhouse gas reductions.

“well placed to help society address the problems of climate change and energy security.

To achieve world class performance at every site. 2007 – 2009 10% reduction in energy consumed

23% energy reduction in 2008 against an interim target of 6.6%


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Start point and desired end point?

BlissfulIgnorance

Defensive Compliant Managerial Strategic CivilPartnerships

“There’s no issue or

problem here”

“It didn’t happen, it’s

not our fault, it isn’t our job to

fix it”

“We’ll do as much as we

have to”

“It’s business, stupid”

“It gives us competitive

edge”

“We have to make sure everybody

does it”

Institute of Environmental Management & Assessment (IEMA), “Change Management for Sustainable Development – Understanding where the organisation is”


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What was best for BAE Systems?

Passive Proactive

“Do nothingnow…reconsider later”

“A global leader in Environmental Sustainability”

Forego opportunity tosave cost

No requirement for investment(in the short term)

Accept the UK CRC financial penalties

Shrug off external CR Report criticism

Requires verifiable baseline data, maturing to credible, externally assured dataset

When ready, sign up toquantifiable & realistic resource efficiency targets

Needs some level of investment

“Proceed at a pace at which we can sensibly and responsibly deliver”

Leadership

Allows outward publication of intentions and achievements

Needs global involvement, and agreement

Requires considered and planned investment to remain a leader

Benefit from improved public image


Overview

1 year on – what’s changed?


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1 year on • An EC Objective from January 2011 which required

• All our global businesses needed to confirm their baseline for energy, waste and water and set targets and achieve them before the end of 2011.

• Use the Environmental Sustainability Maturity Matrix (ESMM) to determine their level of maturity for Operations, Product and Supplier.

• Level 4 states

“The Enterprise values environmental sustainability as delivering a strategic advantage. It supports the need to take a longer term view. Employee commitment drives change. The strategy is understood and delivered locally.”


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1 year on • Data – improved data (both coverage and consistency) & reporting

tools• Educational packages – material for engineers and procurement

professionals, IEMA courses for SHE practitioners • The main functions are taking ownership of the subject and seeking to

skill up their employees• Sustainability competencies for engineers throughout their careers –

IEMA and other engineering institutes• Working together to produce guidance and advice for the subject

through various working groups• Giving those that are knowledgeable access to influence the decision

makers• Publicising and sharing good practice • Building networks and increasing the professionalism of the

environmentalists – CEnv • Staying close to the customer – SPWG and DSTL programme


Overview

Examples


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In the businesses

Transforming Munitions

• In 2002 facing closure but working together

• 15yrs £2bn partnering agreement 2008

• 3 sites

• No explicit sustainability but we did it anyway

• BREEAM Standards

• Spend to save – forge and other key equipment

• 18,000tonnes of CO2 p.a. saved

• Increased business and environmental efficiency and huge improvements for the workforce


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In the businesses

‘Sustainability Pathfinder’

• Frigate replacement Type 26

• Sustainability measures at the design phase

• Policy requirement

• Contractual requirement

• Affordability requirement


DE&S Sustainability Priorities

• P1 - Energy efficiency, emissions and resilience– all platforms

• P2 - Reducing use of materials of concern/scarce resources

• Reducing through-life training costs

• real versus simulation

• cohort v individual paced training, drip-feed training for task

• Reducing through-life costs, including support miles, packaging, consumables & waste

• non-oil plastics

• remote support technology

• Ensuring resilience to long-term climatic changes

• modular design

• operational posture changes

• Optimising social and economic benefits


Implications on the environment

Emissions to Water

Water Pollution

Emissions to Air

Air Pollution

Contribution to Climate Change

Emissions to Land

Contaminated Land

Noise, Odour, Light

Nuisance

Disturbance of Protected

Species

Loss of Biodiversity

Fuel, Energy


Use of Non-Renewable Resources

Materials, Consumables



Implications on the MOD

Emissions to Water

Water Pollution

Emissions to Air

Air Pollution


Emissions to Land

Contaminated Land

Noise, Odour, Light

Nuisance

Disturbance of Protected

Species

Loss of Biodiversity

Fuel, Energy



Materials, Consumables


Cost of fuel

Scarcity of materials, restrictions on hazardous materials, disposal issues

Stakeholder interest, reputation

Legislation, prosecution, limitations on port use

Legislation, prosecution, limitations on port use


Overview

Concluding remarks – personal reflections


Concluding remarks

Images courtesy of Google ‘Herding Cats’

Documents

IEMA Sustainable Business: Environmental Professionals Driving Change