Environmental Management Systems fact sheet

Does BAE Systems have an Environmental Management System and is it verified by a third party?

Our Climate Response and Environment Policy requires us to develop, implement and maintain an effective Environmental Management System. Our Environmental Management System (EMS) supports our Climate Response and Environment Policy and ensures we comply with applicable laws, regulations, obligations and standards along with contract and other requirements. 
 
We work to International Organization for Standardization (ISO) 14001 criteria. Our Environmental Management System covers all ISO 14001 clauses. Along with internal processes, BAE Systems is audited and certified to ISO 14001 by external, impartial bodies. We are proud to have more than 48 locations (67%), which covers all UK and International major manufacturing sites, with ISO 14001 certified Environmental Management Systems.
 
The BAE Systems Environmental Management System covers the arrangements and processes our organisation has adopted to implement our Climate Response and Environmental Policy and manage its effects. This includes changes to internal or external factors, compliance obligations, objectives and targets, emergency preparedness, assurance activities, corrective and preventative actions, and leadership commitments. We follow a ‘plan, do, check, act’ model to make sure we continually improve. 

What is BAE Systems approach to environmental management?

Environmental factors, including those relating to climate change, have the potential to materially impact the Company. Increasing changes in environmental laws and regulations can expose the Company to increasing unplanned capital and operating costs associated with compliance, remediation and protection of the environment.
 
The Company has set itself the target of achieving net zero GHG emissions across its operations (Scope 1 and 2) by 2030 and working towards a net zero value chain by 2050 and has developed a plan to deliver this goal through a variety of different instruments including engagement on power purchase agreements (PPAs), investing in renewable and other energy efficiency measures and switching to lower carbon fuels where practicable. Our roadmap to 2030 estimates that the reduction associated with each of these is approximately 75% through renewables, 15% through energy efficiency measures and 10% through fuel switch opportunities.
 
The Company uses analytical tools to apply natural catastrophe classifications to its sites worldwide. This has informed its strategy as to where to target a programme of specific flood, windstorm and earthquake assessments of the Company’s sites and implement the subsequent risk reduction recommendations.

What is defined as environmental management?

Environmental management is a systematic approach to understanding, planning and controlling an organisation’s environmental impact. It involves a set of principles and practices aimed at promoting sustainability, reducing negative environmental impacts, and ensuring compliance with environmental laws and regulations.

Who is responsible for environmental issues and impact?

The BAE Systems Environmental, Social and Governance (ESG) Committee oversees environmental issues. Our ESG, Culture and Business Transformation Director is part of our Executive Committee, with responsibility for environmental matters including those related to climate and our net-zero programme.
 
The ESG, Culture and Business Transformation Director leads our Sustainability Council, which meets monthly to recommend priorities and areas for focus; they also support other leaders in implementing our Company sustainability agenda. Our net zero working group reports to the ESG, Culture and Business Transformation Director. The net zero working group meets monthly.

Line leaders are responsible for operations and the performance of BAE Systems’ individual businesses. They must establish policies, processes and charters in their area that put Company-wide policies, processes and charters mandated by the Executive Committee into practice.

Is climate and environment embedded within the remuneration of executives?

The long-term incentive plan features an ESG objective. In 2023, the ESG metric had a 10% weighting and was based on the reduction of Group GHG emissions (Scope 1 and 2) aligned to a science-based pathway.
 
Our in-year and long-term incentives are aligned to the Group achieving a 4.2% operational GHG emissions reduction target year-on-year.

How does BAE Systems manage environmental risks?

BAE Systems businesses maintain  Aspects and Impacts Registers; we identify processes or actions that may affect the environment (known as ‘aspects’), assess their potential effects (the associated ‘impacts') and set out standard operating procedures and local controls to address each area of concern, along with targets for improvement. Any significant risks (based on the level of risk and the likelihood of it occurring) are moved to our Business Risk Register.
 
As an example, the delivery of oil to a site (Activity), could result in an oil spill (Aspect) and contamination of land or a water course (Impact) the aspects and impacts assessment will identify the activity, product or service which can interact with the environment and the potential environmental impacts along with existing controls. Generally a scoring matrix is then used to determine the likelihood and consequence which results in an impact rating. Any significant aspects are brought to senior management’s attention. 
 
The Board has overall responsibility for determining the nature and extent of the risks the Group is willing to take, and ensuring that risks are managed effectively across the Group. Risk is considered on a regular basis at Board and Board committee meetings and the Board reviews risk (including emerging risk) as part of its business planning and annual strategy review process. This provides the Board with an appreciation of the key risks within the business and oversight of how they are being managed. 
 
The Group’s Risk Management Policy is set out in the Operational Framework, the Group’s detailed governance framework. The Group’s approach to risk management is aimed at the early identification of material risks, mitigating the effect of those risks before they occur and dealing with the effectively if the crystallise.
 
The Environmental, Social and Governance Committee monitors the Group’s performance in managing those risks arising in respect of business conduct, health and safety and the environment. The Committee reports its findings to the Board on a regular basis.

Does BAE Systems comply with environmental regulation?

The Business has a well-established legal and regulatory compliance structure aimed at ensuring adherence to regulatory requirements and identifying restrictions that could adversely impact the Group’s activities. The Business actively manages its current legal requirements using the EMS as a tool, we have systems in place for review, assurance and improvements. We also horizon scan for future legal changes and plan to meet these legal requirements. Compliance obligations related to environmental aspects are covered by a wide range of legislation including for the UK: 

• Environmental Permitting regulations – set out the requirements for Pollution prevention and control, waste management licences, water discharge consents and the management of radioactive substances. 
• Waste (England & Wales) Regulations – sets out the requirements for managing waste in line with the waste hierarchy Prevention, preparation for re use, recycling, recovery and disposal. 
• Water Resources Act – sets out the licencing regime for abstraction from surface or ground water. 
• Hazardous Waste Regulations – sets out the requirements for registering with the applicable agency, identifying and segregating hazardous waste and tracking the movements of the waste. 
• Control of pollution oil storage (England) Regulations – defines that standards for the positioning of oil storage containment and the type of storage vessels.

 

Does BAE Systems consult its employees with regard to environmental management?

Environmental representatives working alongside Health, Safety and Environmental teams ensure communication between employees and the Business on environmental matters is a two way conversation. The environmental representatives attend site environmental meetings and keep  employees informed about what the Business is trying to achieve and may look to integrate any ideas that the employees may have. We established a Sustainability Working Group in 2018 which collaborates on a number of sustainability related projects and engages with employees around the Sustainability agenda during lunch and learn webinars.

Do employees receive training on good environmental management?

Every employee is issued with our Code of Conduct which introduces them to the Company’s commitment to address its climate related impacts and the use of natural resources, including minimising water consumption, reducing waste and using energy efficiently. Each of our Businesses have their own independent training modules specific to that Business. Environmental awareness training is varied, far reaching and embedded within other training courses ranging from permit awareness, environment and fire awareness, aspects and impacts assessments and design for environment. General environmental awareness training is available for all employees on our training platform which allows employees to understand the link between their role and the environment. The training is designed for all employees and allows them to work through modules on topics such as travel, incident response, net zero, waste production, biodiversity, hazardous materials, water consumption and energy use.

What is BAE Systems’ approach to environmental management within the supply chain?

We recognise that our supply chain contributes to our total GHG emissions footprint beyond that of our Scope 1 and 2 emissions. We acknowledge the importance of continuing to partner and collaborate with our customers and suppliers to reduce emissions by 2050.
 
We have estimated the contribution of our global supply chain and developed a Supply Chain Decarbonisation Roadmap, which outlines how we will work with our peers, suppliers and industry groups to collectively reduce upstream emissions by 2050. We are initially focused on prioritising this activity within our businesses in the UK, Australia and the Kingdom of Saudi Arabia.

The information contained in this fact sheet is for PLC managed businesses and is accurate as at the date of its publication.
 
Publication date: 31/07/24