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IEMA Sustainable Business: Environmental Professionals Driving Change Henrietta Anstey – BAE Systems FIEMA © BAE Systems 2010. All Rights Reserved 1 Overview Setting the scene Building the business case 1 year on – what’s changed? Examples Concluding remarks – personal reflections © BAE Systems 2010. All Rights Reserved 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 © BAE Systems 2010. All Rights Reserved Setting the scene - Our Global Presence United Kingdom • • • Sweden 31,600 people Largest supplier to MoD 57 business locations • • 1,500 people 5 business locations India • Defence Land Systems (26%) United States • • • 46,900 people 4th largest supplier to DoD 126 locations in 38 states Saudi Arabia • • 4,900 people 8 business locations South Africa • • 600 people 4 business locations 2010 Sales £22.3bn © BAE Systems 2010. All Rights Reserved Australia • • 6,100 people 24 business locations Setting the scene - 2011 Group Strategic Framework Customer focus © BAE Systems 2010. All Rights Reserved Financial performance Programme execution 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? © BAE Systems 2010. All Rights Reserved 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 © BAE Systems 2010. All Rights Reserved Overview Building the business case What worked for us © BAE Systems 2010. All Rights Reserved 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 Fits Total Performance • 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. • Acting on environmental sustainability is consistent with our Values and Total Performance culture • It ensures we demonstrably deliver our Environmental Policy © BAE Systems 2010. All Rights Reserved 9 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 Haz/Toxic Materials Pollution Control Process • Waste streams – solid, liquid, vapours • Paints, other volatiles Product • In-use emissions • After-life disposal Process • Process chemicals • Toxic or hazardous waste Product • Asbestos, lead, cad, beryllium, etc. • Nuclear materials • Explosives, munitions 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 © BAE Systems 2010. All Rights Reserved Materials Efficiency Scarce Materials Process • Impr. yield, less scrap & rework • Recycling and items from unreliable, exploitative or hostile sources Product • Minimum weight design • Less-energyintensive materials • Rare earths • Titanium • ‘Conflict minerals’ • Alloying elements for HS steel Backdrop: Peers and Competitors (Public Data) Stakeholder Message Global Target & Timeline Achievement “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 “developing innovative solutions to help address the global issues of pollution & climate change” 25% reductions (20072012) 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% “We aim to improve the environmental performance of our products & operations © BAE Systems 2010. All Rights Reserved 11 Start point and desired end point? Blissful Ignorance Defensive Compliant Managerial Strategic “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” Civil Partnerships “We have to make sure everybody does it” Institute of Environmental Management & Assessment (IEMA), “Change Management for Sustainable Development – Understanding where the organisation is” © BAE Systems 2010. All Rights Reserved 12 What was best for BAE Systems? Passive “Do nothing now…reconsider later” Forego opportunity to save cost No requirement for investment (in the short term) Accept the UK CRC financial penalties Shrug off external CR Report criticism Proactive Leadership “Proceed at a pace at which we can “A global leader in sensibly and responsibly deliver” Environmental Sustainability” Requires verifiable baseline data, maturing to credible, externally assured dataset Allows outward publication of intentions and achievements When ready, sign up to quantifiable & realistic resource efficiency targets Needs global involvement, and agreement Needs some level of investment Requires considered and planned investment to remain a leader Benefit from improved public image © BAE Systems 2010. All Rights Reserved 13 Overview 1 year on – what’s changed? © BAE Systems 2010. All Rights Reserved 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.” © BAE Systems 2010. All Rights Reserved 15 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 © BAE Systems 2010. All Rights Reserved 16 Overview Examples © BAE Systems 2010. All Rights Reserved 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 © BAE Systems 2010. All Rights Reserved 18 In the businesses ‘Sustainability Pathfinder’ • Frigate replacement Type 26 • Sustainability measures at the design phase • Policy requirement • Contractual requirement • Affordability requirement © BAE Systems 2010. All Rights Reserved 19 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 © BAE Systems 2010. All Rights Reserved 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 Loss of Biodiversity Noise, Odour, Light Emissions to Land Emissions to Water Emissions to Air Contaminated Land Water Pollution Air Pollution Contribution to Climate Change © BAE Systems 2010. All Rights Reserved Nuisance Implications on the MOD Contribution to Climate Change Use of Non-Renewable Resources Cost of fuel Use of Non-Renewable Resources Scarcity of materials, restrictions on hazardous Materials, Consumables materials, disposal issues Fuel, Energy Disturbance of Protected Species Loss of Biodiversity Stakeholder interest, reputation Noise, Odour, Light Emissions to Land Contaminated Land © BAE Systems 2010. All Rights Reserved Emissions to Water Water Pollution Legislation, prosecution, limitations on port use Emissions to Air Air Pollution Contribution to Climate Change Nuisance Legislation, prosecution, limitations on port use Overview Concluding remarks – personal reflections © BAE Systems 2010. All Rights Reserved Concluding remarks Images courtesy of Google ‘Herding Cats’ © BAE Systems 2010. All Rights Reserved