Bae Systems Plc · LSE:BA.

Bae Systems — ESG Presentation (October 2021)

62 slides from Bae Systems's sustainability presentation, October 2021

Slide 1: BAE Systems - ESG Presentation October 2021
1 “Sustainability is important to us and our stakeholders. We recognise BAE Systems - ESG Presentation that the way we do business is vital for the future strength of our business. The long term outlook for the company and the defence October 2021 sector means we need to anticipate change and ensure
Slide 2: Agenda
2 Agenda • Part Part 11 • Welcome Sir Roger Carr – Chairman • Board Overview Sir Roger Carr – Chairman • ESG committee Overview Jane Griffiths – Chair of ESG committee • Part Part 22 • Executive Overview Charles Woodburn – CEO • Product Trading Philip Bramwell – Chief Counsel • Environmental and Soc
Slide 4: Defence and Cyber – helping governments fulfil their primary responsibility
4 Defence and Cyber – helping governments fulfil their primary responsibility Protecting the country and its citizens Threat environment is changing and multi-dimensional – protection offered by defence to wider society provides the basis for sustainability We at BAE Systems Unique global portfolio
Slide 5: Our Purpose
5 Our Purpose At BAE Systems we serve, supply and protect those who serve and protect us, in a corporate culture that is performance driven and values led. We have an important role in society because we: Help our customers to provide security Develop cutting-edge technologies Contribute to the econ
Slide 6: Bringing our Purpose and the Case for Defence to life
6 Bringing our “Purpose” and the “Case for Defence” to life • UN ‘Race to Zero’ commitment Environment/Net Zero • Scope 1&2 – our operations 2030/ Scope 3 – supply chain & product 2050 • COP 26 involvement • c.800 Apprentices being hired in 2021 – maintained even during COVID Social • £93m invested
Slide 7: Board Information
7 Board Information Independent Non-Executive Directors All Directors - Board Diversity -Board Diversity • Multi- National company leaders • Engineering & Operations 36% Diverse and 50% • Finance Relevant Skills • Artificial Intelligence 50% 64% • Strategy and HR Female Male Female Male • Chairman 1
Slide 8: Succession Planning – key points
8 Succession Planning – key points • 4 new Non-Executives recruited in last 12 months Non-Executives • 1 further appointment planned in next year • CEO, CFO and CEO Inc new appointments in last 4 years • Succession planning and developing executives a top priority for the Board: • Focusing on an imp
Slide 9: Board Level – Corporate Governance Overview
9 Board Level – Corporate Governance Overview Board Stakeholders Committees • Chairman • Remco RemCo Shareholder Contact • CEO / Executive • Informal Board Dinners* Ian Tyler Government Contact • Regular dialogue with Senior ministers and Political Officials Audit in the UK, US, Australia, KSA and Q
Slide 11: ESG Committee
11 ESG Committee Membership : - Jane Griffiths (Chair) - Nick Anderson The focus for the ESG Committee during 2021 has been: - Crystal Ashby (joined September 2021) • Assuring the Company maintains strong and robust standards of - Chris Grigg - Nicole Piasecki governance • Oversight of: • the Compan
Slide 12: ESG & Board Employee Engagement – activity to date 2021
12 ESG & Board Employee Engagement – activity to date 2021 ESG Committee has reviewed safety & Hear from executives on employee matters such Senior wellbeing, D&I, environment (net zero), as safety, wellbeing, D&I and company decisions Executives community investment. that could impact employees. Th
Slide 13: Vision and Overview, Charles Woodburn - CEO
13 Vision and Overview Charles Woodburn - CEO © 2021 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark. BAE SYSTEMS PROPRIETARY
Slide 14: Our Sustainability Vision
14 Our Sustainability Vision Well-positioned portfolio Long-term programme visibility Environment Social • Goal to reduce Sustainability • Our People and values environmental impact agenda – developing talent of our operations • Positive social & • Committed to TCFD economic impacts recommendations
Slide 15: Sustainability integrated in to governance & operations
15 Sustainability integrated in to governance & operations Board of Directors ESG Committee • The sustainability standards are set at the Group and embedded in Group policies defined within our Operational Framework. Executive Committee • The Sectors are responsible for aligning customer requirement
Slide 16: Sustainability (ESG) in the defence sector
16 Sustainability (ESG) in the defence sector Environment Social Governance How efficient are companies at How do we treat our employees, How are companies managing managing natural resources and customers, supply chain, communities current & future ESG risk? impacts and other stakeholders? Carbon C
Slide 17: Accelerating our ambitions
17 Accelerating our ambitions Environment/Net Zero Social Governance • UN ‘Race to Zero’ commitment • Gender diversity ambition 30% women by 2030 • Committed to cease handling white • Scope 1&2 – our operations 2030 phosphorous • Key pledges: gender, ethnicity, LGBTQ+, mental • Scope 3 – supply chai
Slide 19: Product Trading Policy
19 Product Trading Policy • To identify Responsible Trading Risks the Product Trading Policy requires an evaluation on all Products and Trading activities, in line with the Responsible Trading Principles. The process ensures that in addition to commercial assessment, consideration is given to wider
Slide 20: Product Trading Policy
20 Product Trading Policy Evaluation considerations • Does the product fulfil its intended purpose and match the customer’s stated requirement? Policy Applicability • Does the product conform to our product safety policy? When & how to evaluate • Is the product able to distinguish planned from unint
Slide 21: Controversial Weapons
21 Controversial Weapons Weapon/capability Current BAE Systems position Cluster munitions We do not manufacture or sell cluster munitions banned under the terms of the Convention on Cluster Munitions (Oslo Convention) Anti-personnel mines We do not manufacture or sell Anti-personnel mines banned und
Slide 22: Controversial Weapons Nuclear capability
22 Controversial Weapons Nuclear capability Current BAE Systems nuclear involvement We do not provide or manufacture nuclear weapons: • We are building the Royal Navy’s new Dreadnought submarines which will provide the UK’s continuous sea deterrent for decades to come. We are not involved in manufac
Slide 23: Controversial Weapons Autonomy
23 Controversial Weapons Autonomy Current BAE Systems position • There are a clear range of benefits to unmanned systems. • We are developing a range of autonomous systems and future concepts to enable naval, land and air forces to carry out a diverse range of roles including attack, electronic warf
Slide 24: Defence contracting in our primary markets
24 Defence contracting in our primary markets • US contracts either with US DoD or other government agencies • FMS via the US DoD • With other US defence primes (Lockheed, Northrop, Boeing etc) • Defence exports subject to • UK contracts generally direct with UK MoD or other offices of state stringe
Slide 26: Environment – Overview & Key Facts
26 Our Commitment Environment – Overview & Key Facts We have set a target of achieving net zero GHG emissions across our operations by 2030 aiming to do this in line with the 1.5°C pathway and working towards a • We have set our Scope 1 and 2 targets to be Net Zero by 2030 net zero value chain by 20
Slide 27: Net Zero Roadmap
27 Phase 1 (2020) feasibility study to define Net Zero ambition and Net Zero Roadmap  commitment Phase 2 (H1 2021) developed strategic business case and roadmap  for achieving phase 1’s net zero ambition Phase 3 (H2 2021 - ) design of transformation programme and implement governance to deliver Ne
Slide 28: Environment & Climate Transition
28 65% Environment & Climate Transition reduction in energy emissions at Portsmouth Major workstreams & examples Naval base Samlesbury, UK- 9,000 over last 15 • Energy sourcing & efficiency solar panels save 500 years • 40 of our UK sites (including majority of our manufacturing entities) now using
Slide 29: Supply chain and our customers
29 Supply chain and our customers • We recognise we cannot do this alone - Collaboration with supply chain and customers is crucial • Supply chain - Our major suppliers are multi-nationals in the sector driving their own ESG strategies like Rolls Royce and Thales • Uplifting our Supplier Principles
Slide 30: Electrification
30 Electrification  Global leader in electric drive systems for zero emission bus propulsion with more than 14,000 systems delivered  Our systems are capable of saving more than 30 million gallons of fuel and more than 335,000 tons of CO² from entering Earth's atmosphere each year  Advancing vehi
Slide 31: Sustainability driven product innovation
31 Sustainability driven product innovation Current Future Current programmes Example opportunities • Hybrid electric propulsion • Electric flight system • Future defence platforms • bus mass transit • PHASA-35 solar aircraft • maritime use • All-electric ‘heavy lift’ UAS • Full electric drives also
Slide 33: Social Section - Contents
. 33 Social Section - Contents • Overview • Our response to Covid • Safety and wellbeing • Employee Engagement • Diversity and inclusion • Skills and education • Communities, skills and education • Economic prosperity Our people are at the heart of our sustainability agenda © 2021 BAE Systems. All R
Slide 34: Social Overview
34 Social Overview • Community involvement including Covid initiatives & • Investment in STEM & early careers training Around local support 3,000 young people in learning in the UK in 2020 with flagship apprentice programmes in UK, KSA and Australia • Diversity ambition set for 30% women by 2030. Ye
Slide 35: Supporting our communities through the pandemic
35 Supporting our communities through the pandemic • Engineers from our Submarines business, with Lancastle and the University Hospitals of Morecambe Bay NHS Foundation Trust, developed pioneering new PPE for staff on Covid-19 wards. • Supported 45 foodbanks close to our UK sites. • Donated hundreds
Slide 36: Safety
36 Safety Workplace Safety • Recordable injuries – overall 3 year rolling average continues to decrease but increased during first part of 2021 • Handling, lifting & carrying and Slips, trips & falls continue to be responsible for more than 50% of recordable injuries 2021 data year to date. • Austra
Slide 37: Wellbeing
37 Wellbeing Mental Health & Wellbeing Engagement • Strong focus on supporting employees through Covid • New Mental Health Awareness training (launched July • Emphasis on personal communication 2021) for all employees • Access to Employee Assistance Programme • Introduced Unmind App (May 2021) to su
Slide 38: Employee Engagement
38 Employee Engagement • Increasingly personal, open and ‘human’ tone from leadership, acknowledged and welcomed by employees • Engagement across the full breadth and depth of the organisation, including regular discussion with CEO and senior leadership (listening forums, top 100, HiPoTs and graduat
Slide 39: Employee engagement Sustainability Week
39 Employee engagement Sustainability Week • More than 5,000 employee registrations for events and workshops organised by graduates • Involved a wide range of internal and external speakers • 20,000 employee interactions with Sustainability Week themed content • Responsibly printed collateral distri
Slide 40: Diversity & Inclusion - Overview
40 Gender Diversity Trend 2018 - Q2 2021 22.0% 21.7% 21.7% 21.8% 21.5% Diversity & Inclusion - Overview 21.6% 21.4% 21.2% 21.4% 21.7% 21.7% 21.6% 21.8% 21.2% 21.4% 20.9% 21.3% 21.0% 21.1% 20.8% 20.5% • Board Diversity – 36% women; breadth of sector experience 20.6% and nationalities 20.4% 20.2% • 50
Slide 41: Advancing our DEI initiatives
41 Advancing our DEI initiatives • 2020 launch of Courageous Conversations and CARE: Colleagues Advancing Racial Equity initiatives • Established DEI Council to sustain focus on CARE initiatives • Published first DEI Impact Report: A Decade of Progress in September • Spotlights our long-term DEI jou
Slide 42: Community, Skills & Education
42 Community, Skills & Education Investment in STEM & early careers training • Around 3,000 young people in learning in the UK in 2020 with flagship apprentice programmes in UK, KSA and Australia • Rolled out Coding Success with RAF and RN – over 1,000 applicants for 600 school places • Supporting K
Slide 43: Our role in communities – Case study
43 Our role in communities – Case study Town of 67,000 people BAE Systems Submarines, Barrow-in-Furness c.29% of working population is employed at the shipyard • Barrow–in–Furness has three of the country’s most disadvantaged wards • BAE Systems Submarines is the home of UK submarine design Communit
Slide 44: Our contribution to the UK economy
44 Our contribution to the UK economy In 2020 our operations in the UK supported: • £10.1bn contribution to UK GDP, equivalent to 0.5% of the domestic economy • 143,000 jobs, for every 100 jobs at BAE Systems, 410 jobs were supported in the UK economy • £3.9bn worth of exports, equivalent to 0.7% of
Slide 46: Governance for E & S - summary
46 Governance for “E” & “S” - summary • Triennial refresh of Code of Conduct – updated to improve access, reflect hybrid working and increased focus on IT & data security Ethics Programme - Supporting Information • Business integrity training – annual all employee scenario training Employee Survey M
Slide 47: BAE Systems Cyber Security
47 BAE Systems Cyber Security “Security for a digital society” © 2021 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark. BAE SYSTEMS PROPRIETARY
Slide 48: Cyber: The critical capabilities we provide
48 Cyber The critical capabilities we provide Defending Critical Tackling Active Organisations Threats BAE Systems Cyber Security Building National Pursuing a Safer Capability Society Working with governments and industry for a safer society in a digital world © 2021 BAE Systems. All Rights Reserved
Slide 49: Cyber – The critical capabilities we provide – Case Studies
49 Cyber – The critical capabilities we provide – Case Studies Global payments Espionage via service providers Modern ransomware Working with governments and industry for a safer society in a digital world © 2021 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark. BAE SYSTEMS PR
Slide 50: ESG Priorities - Looking ahead
50 ESG Priorities - Looking ahead Deliver on our commitments, drive our future ambitions and consolidate our approach to increase our visibility and impact • Confirm material issues but anticipate change • Use external benchmarks to set targets and metrics to drive improvements, measurement and repo
Slide 51: Summary – key takeaways
51 Summary – key takeaways ESG important to me as Chairman, the Board and company as a whole – accelerating our ambitions This is not new to BAE Systems – long-term evolving commitment Commitment pan business – critical to recruitment & retention Management committed to putting BAE Systems at the fo
Slide 53: Supporting Information
53 Supporting Information A Key compliance policies within the Operational Framework B Advisors Policy C Export control Policy D External Reporting, Commitments & Disclosures E TCFD reporting F UN Sustainability Development Goals G Ethics programme H Ethics helpline reporting I ESG Committee Activit
Slide 54: Key compliance policies within the operational framework
54 Key compliance policies within the operational framework • Advisers Policy • Lobbying and Political Donations Policy • Community Investment Policy • Offset Policy • Conflicts of Interest Policy • Procurement Policy • Export Control Policy • Product Trading Policy • Facilitation Payments Policy •
Slide 55: Advisers Policy
55 Advisers Policy • Covers appointment and management of third parties engaged to influence, promote or assist our sales and marketing efforts or the strategic development of the Company. • Appointment managed by central Business Conduct Compliance/International Compliance Team. • All Advisers asse
Slide 56: Export control Policy
56 Export control Policy • Mandates compliance with all applicable trade control • Is not limited to a particular jurisdiction and includes US and UK regulations including the US International Traffic in Arms databases/lists Regulations (ITAR) and Export Administration Regulations (EAR), • Conducts
Slide 57: External Reporting, Commitments & Disclosures
57 External Reporting, Commitments & Disclosures External reporting Commitments & disclosures • MSCI - AA rated last 3 years • Race to Zero • Sustainability Accounting Standards Board (SASB) – completed • UK Real Living Wage Accredited Employer • Taskforce on Climate Related Financial Disclosure – o
Slide 58: TCFD Reporting
Back 58 TCFD Reporting • Committed to TCFD reporting from 2022 • Conducted gap analysis against TCFD reporting requirements and produced roadmap for short, medium and long-term • Swiss RE provided modelling of climate on our facilities using RCP development factors 2.6, 4.5 and 8.5 for 2030, 2050 an
Slide 59: Our commitment to the UN Sustainable Development Goals
Back 59 Our commitment to the UN Sustainable Development Goals We have selected 4 of the UN SDGs we can demonstrate strong support to : SDGs 4, 8, 9 and 12 Quality education • We work closely with schools, colleges and universities as well as engineering and business organisations in our principal •
Slide 60: Ethics Programme
Back 60 Ethics Programme Global Code of Conduct – externally benchmarked, reviewed and updated every 3 years Independent ethics helpline providing 24/7, local language access for employees, suppliers and others working on our sites. Network of 189 Ethics Officers in UK, US, KSA, Australia providing
Slide 61: Ethics Helpline Reporting
61 Ethics Helpline Reporting (figures shown for mid-year 2021) Independent ethics helpline providing 24/7, local 313/ language access for employees, suppliers and 14.9 others working on our sites. Numbers dipped during lockdown periods but returning to previous levels Network of 189 Ethics Officers
Slide 62: ESG Committee Activity 2021
Back 62 ESG Committee Activity 2021 February 2021 July 2021 September 2021 December 2021 Environment • Environment & Climate Transition – • Environment & Climate Transition – • Environment & Climate Transition – • Environment & Climate Transition – Net Zero Programme update Net Zero Programme update

BAE Systems — ESG Presentation (October 2021) on 6ix

Bae Systems — ESG Presentation (October 2021)

Slide 1: BAE Systems - ESG Presentation October 2021

Slide 2: Agenda

Slide 3: Sir Roger Carr, Chairman

Slide 4: Defence and Cyber – helping governments fulfil their primary responsibility

Slide 5: Our Purpose

Slide 6: Bringing our Purpose and the Case for Defence to life

Slide 7: Board Information

Slide 8: Succession Planning – key points

Slide 9: Board Level – Corporate Governance Overview

Slide 10: Dr Jane Griffiths, Chair of ESG Committee

Slide 11: ESG Committee

Slide 12: ESG & Board Employee Engagement – activity to date 2021

Slide 13: Vision and Overview, Charles Woodburn - CEO

Slide 14: Our Sustainability Vision

Slide 15: Sustainability integrated in to governance & operations

Slide 16: Sustainability (ESG) in the defence sector

Slide 17: Accelerating our ambitions

Slide 18: Product Trading Policy

Slide 19: Product Trading Policy

Slide 20: Product Trading Policy

Slide 21: Controversial Weapons

Slide 22: Controversial Weapons Nuclear capability

Slide 23: Controversial Weapons Autonomy

Slide 24: Defence contracting in our primary markets

Slide 25: Environment and our Net Zero Journey

Slide 26: Environment – Overview & Key Facts

Slide 27: Net Zero Roadmap

Slide 28: Environment & Climate Transition

Slide 29: Supply chain and our customers

Slide 30: Electrification

Slide 31: Sustainability driven product innovation

Slide 32: Social

Slide 33: Social Section - Contents

Slide 34: Social Overview

Slide 35: Supporting our communities through the pandemic

Slide 36: Safety

Slide 37: Wellbeing

Slide 38: Employee Engagement

Slide 39: Employee engagement Sustainability Week

Slide 40: Diversity & Inclusion - Overview

Slide 41: Advancing our DEI initiatives

Slide 42: Community, Skills & Education

Slide 43: Our role in communities – Case study

Slide 44: Our contribution to the UK economy

Slide 45: Governance of the E and S

Slide 46: Governance for E & S - summary

Slide 47: BAE Systems Cyber Security

Slide 48: Cyber: The critical capabilities we provide

Slide 49: Cyber – The critical capabilities we provide – Case Studies

Slide 50: ESG Priorities - Looking ahead

Slide 51: Summary – key takeaways

Slide 52: Q&A

Slide 53: Supporting Information

Slide 54: Key compliance policies within the operational framework

Slide 55: Advisers Policy

Slide 56: Export control Policy

Slide 57: External Reporting, Commitments & Disclosures

Slide 58: TCFD Reporting

Slide 59: Our commitment to the UN Sustainable Development Goals

Slide 60: Ethics Programme

Slide 61: Ethics Helpline Reporting

Slide 62: ESG Committee Activity 2021