Collaborating with our customers and suppliers

The environment and climate change
We have set an ambition for a net zero future that will drive efficiency, innovation and collaboration across our value chain.
We recognise that our value chain emissions are many times those of our Scope 1 and 2 emissions and it is critical that we partner and collaborate with our customers and suppliers to reduce emissions by 2050.
 
Our customers are setting targets and looking for low carbon, sustainable products. We need to continue to work with customers to understand their future requirements to help inform and shape product innovation and development, for example, transitioning products to low or zero carbon fuels.
 
We are reviewing our current products to understand in-life emissions so that we can transfer this knowledge to drive change and innovate. This will also help us over the short term to maintain existing products by embedding emission considerations at key parts of the design stage and identifying new disposal methods.
 
We will focus on innovation and technology development to progress products compatible with zero emissions by advancing our capabilities and solutions to improve the sustainability of our products with better performance. We will continue to build on our portfolio of low carbon products and services in partnership with customers, whilst investing in self-funded R&D into low and zero carbon solutions. Our current programmes include: electrification technologies including electric drive propulsion systems; full electric drives; and hydrogen fuel cell systems for ground, air, and maritime applications, as well as synthetic training.
 
Our two major customers are setting targets and looking for a growing number of sustainable products:
  • US Department of Defence pledged to help the nation achieve net zero emissions by 2050.
  • US Administration has committed to a 50% reduction in national carbon emissions by 2030.
  • US federal R&D budget set to include a considerable portion to sustainable technologies.
  • Defence and commercial opportunities emerging – integrated HED on Bradley already being trialled.
  • UK Ministry of Defence pledged to help the nation achieve net zero emissions by 2050.
  • RAF bases net zero by 2040.
  • Defence and commercial opportunities will arise from existing and developing technologies.
     

Our investment in technology

Technology and innovation are central to our business. They underpin our strategy and the development of our products and services. Developing innovative technologies is a key part of the work we do to ensure we have a sustainable business that will continue to create value for our stakeholders and inspire our employees.

The global defence environment is changing rapidly and is characterised by constant competition, from sub-threshold cyber activities, the deployment of autonomous platforms and the testing of advanced high-speed weapons with global reach. Our customers across NATO are seeking to address these threats and we are developing cutting-edge technology to support them. At the same time, both our defence and civilian customers are seeking more sustainable products, which is central to our future product development and the evolution of our own operations.
 
One of the most important steps we are taking is to help our customers in the integration of air, land, sea, space and cyber domains, in order to combine data into a single view to improve battlefield coordination and speed. As well as developing multi-domain digital battle management solutions, we are also working on the next-generation hardware needed for securely sharing the enormous volumes of data required.
 
We are using this unparalleled breadth of experience across every domain and our systems experience to create multi-domain digital technologies. Together with our partner Sierra Nevada Corporation, the US Air Force awarded us a contract to develop its next-generation signals intelligence technology. The team will provide a sensor prototype that collects and analyses adversaries’ electronic signals to provide actionable insights. Our open architecture design means that our customer can easily add new capabilities in the future to counter evolving threats.
 
In the US we are investing in the development of a virtual System of Systems Testbed, a digital engineering platform that models, simulates and evaluates both emerging capabilities as well as advanced data management processes, before they are deployed into multi-domain operational environments. The US Marine Corps selected BAE Systems’ PIONEER™ prototype to move to the second phase in the development and integration of a new, digitally advanced Wargaming and Analysis Center. Our team is demonstrating its innovative modelling and simulation for the digital transformation of wargaming across multiple domains using cutting-edge, explainable artificial intelligence, machine learning, and predictive analytics to support timely and effective decision-making at all levels.
 
Space has been recognised by many of our customers as a key enabler of multi-domain integration, by allowing communications over global distances and providing real-time intelligence and reconnaissance data. We have acquired In-Space Missions, a specialist Low Earth Orbit company in the UK that gives us the ability to design, manufacture and operate satellites in space.
 
This acquisition adds to the considerable space capability already present in the UK and US businesses. In the US, our radiation-hardened electronics have been at the heart of every NASA mission from Apollo 11 to four generations of Mars Rovers/Landers, including the Perseverance Rover that landed in February 2021. In the UK we have specialist space technologies in waveforms, electronics, antennae and digital signal processing and analytics. We are currently developing a new suite of software-defined radios that could provide both global positioning and command and control services from Low Earth Orbit, helping our customers to be more resilient and connected.
 
The growth of autonomous platforms fielded around the world presents a challenge for western militaries, including how these systems can be effectively countered while maintaining human oversight and decision-making over the use of force. This is a challenge we are committed to helping them meet by contributing to a more resilient global digital infrastructure, as well as autonomous systems that complement humans rather than replace them.
 
In the UK we continue to develop our PAC-24 autonomous boat, which has been extensively trialled with the Royal Navy, while we have also worked with the Australian Defence Force to retrofit the M113 armoured vehicle with our platform-agnostic autonomy module. Both platforms have shown promising results and are acting as testbeds to integrate autonomy into existing operations. We are also working closely between the UK and Australia to use secure open architectures for these platforms, so that they can be integrated into our customers’ existing platforms without limiting their choice of provider. The same Australian-developed autonomous system is being provided in Boeing’s Loyal Wingman for the Royal Australian Air Force.
 

Collaboration

Collaborative working is core to how we will help solve tomorrow’s technology challenges. In the UK, the University of Nottingham has become our sixth strategic university partner in fields such as advanced manufacturing and electrification of aircraft. Together we are re-writing the rules of manufacturing high value, low production rate products, which is vital in creating Tempest, the future combat air system.
 
Our Australian business has a similar partnership with Flinders University and the University of New South Wales, who are helping create what we aim to be the world’s most sustainable shipyard, which will build the Hunter Class frigates. The US business partners with an extensive number of colleges and universities to not only collaborate on building our STEM talent pipeline, but also to solve technology challenges. For example, in 2021 the Electronic Systems FAST Labs™ team supported students at Rochester Institute of Technology in a capstone project to develop a search-and-rescue system in which multiple drones, equipped with on-board, autonomous mission software, could collaborate to quickly and efficiently search an area and find an object.
 
As well as academic partners, we collaborate with businesses in other industries such as Williams Advanced Engineering, a key player in motorsport. They are helping us bring electrification technology to some of our most critical products, replacing highly volatile fuel with batteries and improving the efficiency of electric motors.

We also apply technology from one domain into others. Our US business has brought its decades of flight control expertise to the UK’s Dreadnought Class submarines. The team is developing electronics that control the heading, pitch, depth and buoyancy of the submarines to the highest levels of safety and reliability, adapting controls usually used in fly-by-wire aircraft to a maritime environment.
 

Sustainability 

Technology will be at the heart of meeting our net zero targets. The work we are doing now on new digital manufacturing techniques is finding new ways to save energy, while the improvements we are making to operational bases is already saving energy. As an example of this, working with the Royal Navy, estate CO2 emissions from Portsmouth Naval Base in the UK have fallen by more than 40% since 2004, even though energy demand has almost doubled recently due to the needs of the aircraft carriers at the base.
 
In the US we are bringing our proven expertise in electrification – with more than 14,000 electric drive propulsion systems installed worldwide today – into an area of potential global significance, electric flight. We are progressing technologies that will enable lighter weight, cost-competitive energy storage solutions for hybrid aircraft engines including our collaborative work with Jaunt Air Mobility and others.
 
We are working with Malloy Aeronautics, a UK-based SME specialising in electric uncrewed air vehicles, to create a new all-electric heavy lift quadcopter. This has the potential to deliver cost-effective, sustainable rapid response capability to military, security and civilian customers, without putting human pilots at risk when used in hazardous locations.
 
We have secured funding from the UK Department of Transport to design, develop and demonstrate new power and propulsion technologies for London, with the potential to reduce emissions across global waterways. In addition to electric propulsion and power management, we are exploring the use of autonomous maritime capabilities to transport people and goods around the city.
 

Research & development (R&D)

We structure our R&D activities around our business and product strategy, ensuring a clear focus for our R&D spend. We also continually scan the horizon for new technologies and developments in defence technology around the world.
 
In 2021, we spent £1.6bn (2020 £1.6bn) on R&D, of which £255m (2020 £236m) was funded by BAE Systems. In addition, the Group’s share of the R&D expenditure of its equity accounted investments in 2021 was £0.4bn (2020 £0.4bn).
 
We continue to protect our investments in technologies and have a portfolio of patents and patent applications covering more than 2,500 inventions internationally. Combined with a clear strategy for managing our intellectual property (including technology and know-how), we seek to create value in different ways through, for example, collaboration, licences and sales of rights to others.
 

2022 priorities

BAE Systems already offers data and digital services across all the domains it operates in, including sub-sea, sea, land, air, cyber and space. In 2022 we will focus on creating an information advantage for our customers by working with them to better integrate digital services across these domains.
 
Our acquisitions in 2021 help to underpin this approach, enhancing our space-based secure communication services and satellite design and operation through In-Space Missions, and our electromagnetic hardware services through Pulse Power and Measurement Limited (PPM).
 
Electronic Warfare continues to be a focus in our US business, as full-spectrum awareness and the ability to respond give our customers a distinct competitive advantage. As a world leader with six decades of proven experience in electronic warfare capabilities, we will continue to grow this area of the business to address emerging requirements, to include developing interoperability in the joint environment across all domains, which is a critical element of current and next-generation programme requirements and force modernisation.
 
We are also continuing our development of autonomy to complement humans, both in crewed vehicles such as Typhoon and in new uncrewed platforms such as PAC-24 and the Loyal Wingman in Australia. The future battlefield will become increasingly autonomous, so it is essential that we help our customers fight at the speed of machine-warfare and maintain command and control of their assets.
 
Sustainability remains an important area of focus for our business and our customers. We continue to offer low and zero emissions solutions, to include electric, battery electric, fuel-cell electric, and hydrogen options, supporting clean air and net zero initiatives, while also advancing vehicle mobility, efficiency and capability in urban transit, maritime and military markets.
 
As well as making our sites more energy efficient we are developing Industry 4.0 technologies to make manufacturing more sustainable. We are working with several university partners in the UK and Australia on sustainability with digital design, additive manufacture, novel materials and new power generation systems. 
 
These continue to play an important role on the Tempest combat air programme. In the US, we are applying innovative modelling, simulation and digital engineering across multiple business programmes, such as combat vehicle design, the US Marine Corps Wargaming and Analysis Center work, and our modernisation support of the US Navy’s Strategic Systems Program.