IEMA Sustainable Business: Environmental Professionals Driving Change

1. IEMA Sustainable Business: Environmental Professionals Driving Change Henrietta Anstey – BAE Systems FIEMA

2. Overview Setting the scene Building the business case 1 year on – what’s changed? Examples Concluding remarks – personal reflections

3. Overview Setting the scene 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

4. United States 46,900 people 4th largest supplier to DoD 126 locations in 38 states 2010 Sales £22.3bn Setting the scene - Our Global Presence United Kingdom • 31,600 people • Largest supplier to MoD • 57 business locations Sweden • 1,500 people • 5 business locations India • Defence Land Systems (26%) Australia • 6,100 people • 24 business locations Saudi Arabia • 4,900 people • 8 business locations South Africa • 600 people • 4 business locations

5. Setting the scene - 2011 Group Strategic Framework Customer focus Financial performance Programme execution

6. 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?

7. 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

8. Overview Building the business case What worked for us

9. Environmental Sustainability as a lever for efficiency

10. Terminology Sustainability Integrated business strategy that drives sustainable performance through managing the interdependencies between financial, social and environmental issues across diverse operations and markets Environmental Sustainability Delivery of financial and programme results while progressively reducing resource intensity and environmental impacts of products and services throughout life cycle Environmental Management Management of areas where the business impacts the environment • Resource Management • Energy • Process • Facilities, machinery • Renewables • Product • Supply chain (pre-process). • Customer (post delivery) • Water • Process • Dip tanks, steam cleaning • Product • Water recoup from exhaust • Water generator on board • Haz/Toxic Materials • Process • Process chemicals • Toxic or hazardous waste • Product • Asbestos, lead, cad, beryllium, etc. • Nuclear materials • Explosives, munitions • Materials Efficiency • Process • Impr. yield, less scrap & rework • Recycling • Product • Minimum weight design • Less-energy- intensive materials • Pollution Control • Process • Waste streams – solid, liquid, vapours • Paints, other volatiles • Product • In-use emissions • After-life disposal • Scarce Materials • and items from unreliable, exploitative or hostile sources • Rare earths • Titanium • ‘Conflict minerals’ • Alloying elements for HS steel

11. Backdrop: Peers and Competitors (Public Data)

12. CivilPartnerships BlissfulIgnorance Defensive Compliant Managerial Strategic “There’s no issue or problem here” “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” “It didn’t happen, it’s not our fault, it isn’t our job to fix it” Institute of Environmental Management & Assessment (IEMA), “Change Management for Sustainable Development – Understanding where the organisation is” Start point and desired end point?

13. What was best for BAE Systems? Proactive Leadership Passive “Proceed at a pace at which we can sensibly and responsibly deliver” “A global leader in Environmental Sustainability” “Do nothingnow…reconsider later” Requires verifiable baseline data, maturing to credible, externally assured dataset When ready, sign up toquantifiable & realistic resource efficiency targets Needs some level of investment Forego opportunity tosave cost No requirement for investment(in the short term) Accept the UK CRC financial penalties Shrug off external CR Report criticism 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

14. Overview 1 year on – what’s changed?

15. 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.” 15

16. 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 16

17. Overview Examples

18. 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 18

19. In the businesses • ‘Sustainability Pathfinder’ • Frigate replacement Type 26 • Sustainability measures at the design phase • Policy requirement • Contractual requirement • Affordability requirement 19

20. 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

21. Implications on the environment Contribution to Climate Change Use of Non-Renewable Resources Use of Non-Renewable Resources Materials, Consumables Fuel, Energy Disturbance of Protected Species Noise, Odour, Light Nuisance Loss of Biodiversity Emissions to Land Emissions to Water Emissions to Air Contaminated Land Water Pollution Air Pollution Contribution to Climate Change

22. Implications on the MOD Contribution to Climate Change Use of Non-Renewable Resources Use of Non-Renewable Resources Scarcity of materials, restrictions on hazardous materials, disposal issues Materials, Consumables Cost of fuel Fuel, Energy Disturbance of Protected Species Noise, Odour, Light Nuisance Loss of Biodiversity Emissions to Land Emissions to Water Emissions to Air Stakeholder interest, reputation Legislation, prosecution, limitations on port use Contaminated Land Water Pollution Air Pollution Contribution to Climate Change Legislation, prosecution, limitations on port use

23. Overview Concluding remarks – personal reflections

24. Concluding remarks Images courtesy of Google ‘Herding Cats’