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© BAE Systems 2010. All Rights Reserved
1
IEMA Sustainable Business: Environmental Professionals Driving Change
Henrietta Anstey – BAE Systems FIEMA
© BAE Systems 2010. All Rights Reserved
Setting the scene
Overview
Building the business case
1 year on – what’s changed?
Examples
Concluding remarks – personal reflections
© BAE Systems 2010. All Rights Reserved
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
© BAE Systems 2010. All Rights Reserved
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
© BAE Systems 2010. All Rights Reserved
Setting the scene - 2011 Group Strategic Framework
Programme execution
Financial performance
Customer focus
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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
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9
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
© BAE Systems 2010. All Rights Reserved
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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11
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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12
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”
© BAE Systems 2010. All Rights Reserved
13
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
© BAE Systems 2010. All Rights Reserved
Overview
1 year on – what’s changed?
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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.”
© BAE Systems 2010. All Rights Reserved
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
© BAE Systems 2010. All Rights Reserved
Overview
Examples
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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
© BAE Systems 2010. All Rights Reserved
19
In the businesses
‘Sustainability Pathfinder’
• Frigate replacement Type 26
• Sustainability measures at the design phase
• Policy requirement
• Contractual requirement
• Affordability requirement
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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
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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
Contribution to Climate Change
Use of Non-Renewable Resources
Materials, Consumables
Use of Non-Renewable Resources
© BAE Systems 2010. All Rights Reserved
Implications on the MOD
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
Contribution to Climate Change
Use of Non-Renewable Resources
Materials, Consumables
Use of Non-Renewable Resources
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
© BAE Systems 2010. All Rights Reserved
Overview
Concluding remarks – personal reflections
© BAE Systems 2010. All Rights Reserved
Concluding remarks
Images courtesy of Google ‘Herding Cats’