Carbon Disclosure
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Corporate Responsibility & Sustainability 2017 Environmental Performance Data This report details our performance on material environmental risks, impacts and opportunities including greenhouse gas emissions, waste and water. Carbon Disclosure The Group measures and discloses its GHG governance, strategy, risk management, and performance through the annual CDP investor climate change and customer supply chain surveys. CDP is a not-for- profit charity that runs the global disclosure system for companies and others to manage their environmental impacts. Governance The Corporate Responsibility and Sustainability (CR&S) Committee, chaired by the Chief Financial Officer, has overall accountability for CR&S strategy, including climate change and carbon management. The Committee has responsibility for reviewing the effectiveness of controls in place for identifying and managing risks and opportunities, challenging Group performance, and maintaining strategic policy oversight. Strategy Climate change affects the Group’s approach to its drivers of change. Climate change regulation, taxes, international agreements such as the Paris accord, volatile energy costs and changes in weather conditions have all informed the Group’s strategic decisions as Cobham adapts to changing operating environments. Investment in new technology that reduces size, weight and power consumption of products is an important differentiator in the Group’s markets. Material issues identified include: • Greenhouse gas (GHG) emissions from aircraft fuel combustion in its Aviation Services Sector; • GHG emissions from electricity and fuel used in the lighting, heating, ventilation and cooling of its facilities and supply chain Group-wide; • The impact of the size, weight and power efficiency of Cobham products upon the fuel burn and GHG emissions of customer aerospace platforms; and • Business interruption at its facilities, and those of its key suppliers, due to adverse weather events (e.g. flooding, wildfire). Risk Management Risks and opportunities are monitored, prioritised and managed in a number of ways, including by the Group insurance partner, in local risk registers and business unit SHE self-assessments. Failure to address environmental sustainability issues aligns with the Group’s principal risks of failure to comply with laws and regulations. The Group addresses environmental sustainability issues by: • Reducing environmental impacts from its operations wherever practicable; • Reducing legacy aircraft fuel consumption and seeking to transition to more fuel efficient aircraft where possible; • Reducing GHG emissions across a number of operating sites through practical energy efficiency measures, including upgrades to lighting, heating, ventilation and air conditioning; • Investing in design to reduce the size and weight of products which reduces energy consumption with a corresponding reduction in environmental impacts; • Reinforcing business continuity measures and effective emergency response planning, in preparation for adverse weather events and natural disasters; • Aligning the Group’s environmental standards to ISO14001 and encouraging business units to certify to ISO14001 standards. COBHAM PRIVATE Performance Measurement CDP Questionnaire Our disclosure score has steadily improved from 84B in 2013, to 92A in 2014 to 97B in 2015 to A- in 2016. In 2017, Cobham maintained the A- Leadership rating, placing it among the best performers in the UK aerospace and defence sector. Our response provides investors and other stakeholders with in-depth information on our climate changes strategy, the risks and opportunities we face and our performance against our targets. Emissions Overview The Group’s total carbon footprint, including Scope 1, 2 and 3 emissions is measured using the operational control approach as set out by the World Business Council for Sustainable Development (WBCSD) & World Resources Institute (WRI) Greenhouse Gas (GHG) Protocol, to ensure we can effectively disclose and manage our contribution to climate change. Cobham’s approach to cutting our carbon footprint is based on improving energy efficiency to reduce energy consumption and the related GHG emissions, while allowing for business growth. Figure 1 below shows emissions by scope. Carbon Footprint by Scope 2015 Scope 1 Scope 2 2016 Scope 3 2017 0 100000 200000 300000 400000 500000 600000 700000 Figure 1 : Cobham Carbon Footprint The majority (86%) of the Group’s total greenhouse gas (GHG) emissions come from its aviation activity). Scope 1 and Scope 3 fuel burn has decreased across the Aviation businesses as a result of a reduction in active contracts and flight numbers. Reduction in fuel burn was also achieved through the implementation of a number of measures, including the use of improved flight planning software with more accurate weather forecasts, a reduction in flight speeds and reduced engine usage during the taxi phase of the flight. Other operational improvements within Airline Services, such as Auxiliary Power Unit (APU) usage reduction initiatives also contributed. COBHAM PRIVATE Aviation Fuel (Mwh/£m) 2015 2016 2017 0 200 400 600 800 1000 1200 Figure 2 : Aviation Intensity Scope 1 Scope 3 Although there was a greater variation in ambient temperatures during the year resulting in an increase in natural gas consumption, total emissions from non-aviation activities decreased from 2016. This reduction is due to the implementation of energy saving initiatives across multiple sites reducing electricity consumption and deployment of a new sustainability reporting in 2017. Improved data gathering and management, and a broader use of emission factors has improved accuracy and robustness of GHG reporting across the Group. Figure 3 shows Facility energy use by source. Figure 3 : Energy Consumption over time Natural Gas Usage (MWh) Electricity Usage (MWh) 0 20000 40000 60000 80000 0 50000 100000 150000 2015 2016 2017 2015 2016 2017 COBHAM PRIVATE Heating Oil Usage (MWh) Non-automotive Diesel Usage (MWh) 0 1000 2000 3000 4000 5000 0 10 20 30 40 2015 2016 2017 2015 2016 2017 Owned Vehicle Usage (MWh) LPG Usage (MWh) 0 500 1000 1500 0 500 1000 1500 2015 2016 2017 2015 2016 2017 Aviation Target Our aviation sector has set a target of 0.5% reduction in aviation fuel consumption for its commercial aviation services. In 2017 it met this target with a 3.25% reduction, a saving 1,714 tonnes CO2e.This reduction is equivalent to the energy use of 185 homes for a year or taking 367 passenger vehicles off the road for a year.1 Our commercial aviation businesses are tracking their fuel usage on a monthly basis to maintain an overview of how they are performing against the target. The target is being tracked through measuring fuel burn by business unit, aircraft type and location. An example of the charts used to track performance against the aviation fuel KPI can be seen below. Figure 4 : Aviation fuel consumption tracking charts 1 Calculated using the US Environmental Protection Agency ‘Greenhouse Gas Equivalencies Calculator’. Available at: https://www.epa.gov/energy/greenhouse-gas-equivalencies- calculator COBHAM PRIVATE Intensity Target 2015 is the GHG emissions baseline year against which targets will be set. Cobham’s target is to reduce facility energy intensity (energy consumption in MWh per £m revenue) by 10% year-on-year. 2 Facility Energy Use 100 90 80 70 60 50 40 30 Energy Use Energy Use 20 10 0 2015 2016 2017 Figure 5 : Facility Energy Intensity Cobham’s energy intensity decreased by 8% in 2017, narrowly missing the intensity reduction target. Following a review, Cobham is replacing this target in 2018 with an absolute emissions reduction target of a 15% over 5 years in facility scope 1 and 2 energy use. The target was set against 2016 figures using C-FACT science based methodology and considers market based scope 2 emissions.3 Emissions Summary We collect data for our Scope 1, Scope 2 and Scope 3 emissions. Scope 1 and Scope 2 data is included in the scope of limited external assurance. Scope 1 and 2 breakdown by country: Country / Region Scope 1 Scope 2 Australia 85.7% 4.5% China 0.0003% 0.07% Denmark 0.4% 4.5% Finland 0.2% 0.3% France 1% 0.5% Germany 0.02% 0.05% Ireland 0.01% 0.07% Israel 0.02% 0.03% Singapore 0.05% 0.3% South Africa 0.02% 1.4% Sweden 0.002% 0.02% United Kingdom 5.5% 8.4% United States 7% 79.03% 2 Facility energy is the direct energy use of Cobham facilities and includes: natural gas, heating oil, non-automotive diesel, LPG, and electricity usage. 3 CAES excluded COBHAM PRIVATE Scope 1, 2 and 3 breakdown by emissions source Source Category Scope 1 Scope 2 Scope 3 Mobile Combustion (owned) 14.4% Stationary Combustion 1.4% Fugitive Emissions 0.2% Purchased and Used Electricity 8.7% Downstream Leased Assets 64.7% Employee Business Travel 2.5% Energy Related Activities 0.8% Purchased Goods & Services 0.01% Upstream Leased Assets 7.3% Percentage of Carbon Footprint 15.6% 8.8% 75.6% Scope 1 and 2 breakdown by Cobham Sector: Sector Scope 1 Scope 2 Cobham Advanced Electronic Solutions (CAES) 6& 61.5% Cobham Aviation Services (CAvS) 90.5% 5.7% Cobham Communications and Connectivity (CCC) 105& 15.5% Cobham Mission Systems (CMS) 1.1% 17.3% Water Our processes are not water intensive, but inefficient usage represents a cost to our business and the environment so we are looking at ways to improve. Water Consumption (Intensity) 140 120 100 80 60 40 20 Water Consumption (m3/£m) Consumption Water 0 2015 2016 2017 Figure 6 : Water Consumption Intensity In 2017, for the second year, total water consumption has reduced. General decrease in water use across the businesses coupled with an increase in annual revenue led to water intensity dropping from 103m3/£m in 2016 to 94m3/£m in 2017. Sector water consumption: Sector Share of total water consumption (%) CAES 59.28% CAvS 5.34% CCC 23.74% COBHAM PRIVATE CMS 11.64% Waste We are committed to reducing the amount of waste we create, and to reusing or recycling the remaining waste wherever possible.