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2020 Corporate Sustainability Report

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2020 Corporate Sustainability Report TRANSPARENCY. TRUST. ALIGNMENT. HONESTY. 2020 Corporate Sustainability Report OUR ETHOS TRANSPARENCY. TRUST. ALIGNMENT. HONESTY. These four values undergird everything we do at General Dynamics — they are our defining moral character. All of us at General Dynamics have a duty to behave according to these values. Through our shared Ethos, we ensure that we continue to be good stewards of the investments our shareholders, customers, employees and communities make in us, now and in the future. TABLE OF CONTENTS OUR ETHOS 2 A Letter From Our CEO 4 OUR BUSINESS 5 Our Values at Work 6 Business Overview 7 Corporate Responsibility 10 Global Supply Chain 12 GOVERNANCE 14 Corporate Governance 15 Ethics 18 Information Security 21 HUMAN CAPITAL MANAGEMENT 25 Employee Safety 26 Employee Well-Being 27 Developing and Engaging Our Talent 28 DIVERSITY AND INCLUSION 29 Diversity Is Critical to Innovation 30 Talent Recruiting and Retaining Diverse Talent 32 Awards & Recognition 36 ENVIRONMENT 37 Environmental Responsibility 38 Examples From Our Businesses 41 COMMUNITY RELATIONS 45 Investing in Our Communities 46 COVID-19 Response 50 REPORTING APPROACH 52 A Letter from Our CEO Dear Fellow Shareholder, Corporate sustainability at General Dynamics is rooted in our Ethos — our defining moral character as a company and the standard to which we hold ourselves and our more than 100,000 employees worldwide. It informs all that we do and guides us as we deliver value to our shareholders, our customers and our communities. Ongoing conversations with all of our stakeholders have been an integral part of building and evolving our sustainability program. We remain committed to reducing our global environmental impact, including our carbon footprint; protecting and promoting human rights; increasing the diversity of our workforce; supporting the health, welfare and safety of our employees; and fostering mutually beneficial relationships with our communities. As with all aspects of our business, we strive for constant improvement. Our sustainability initiatives are no exception. In this report, you will see our Ethos manifest in our people and actions. Our goals, policies and behavior highlight and demonstrate our commitment to responsible investment and enduring value creation for all our stakeholders. Thank you for your continued support of General Dynamics. Sincerely, Phebe N. Novakovic Chairman and Chief Executive Officer 4 / Our Ethos OUR BUSINESS 5 / Sustainability Report Our Ethos at Work TRANSPARENCY, TRUST, ALIGNMENT, HONESTY: Drive how we operate our business. We pursue operating excellence by anticipating customer needs, driving innovation, improving processes and reducing waste, emissions and energy consumption. We believe in being wise stewards of capital and resources. Govern how we engage with each other and our customers, partners and suppliers. We must be forthright and open to change. We seek employees, partners and suppliers that adhere to these values in their businesses and hold them to the same high standards as we hold ourselves. Guide the way we treat our workforce. We promote the health, welfare and safety of our employees; part of our responsibility includes treating all employees with dignity and respect, and providing them with fair compensation and equal employment opportunity in a principled and productive work environment. Our values motivate us to promote strong workplace practices with diversity, opportunities for scholarship and training. We stand behind basic universal human rights, including that employment must be voluntary. We unequivocally oppose human trafficking in all forms. Determine how we connect with our communities. Our obligation to be a good corporate citizen means that we engage in actions that support the well-being of our communities. We do this by supporting participation in social welfare organizations and promoting volunteerism as well as undertaking initiatives to mitigate climate change, drive out hazardous waste from our processes and protect water resources. 6 Our Business Business Overview General Dynamics is a publicly traded global aerospace and defense company listed on the New York Stock Exchange. We offer a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; information technology (IT) services; C4ISR solutions; and shipbuilding and ship repair. Our core competency is the design, engineering and manufacturing of complex and differentiated products and services for aerospace and defense. We understand the importance of the solutions we deliver and work to ensure quality and safety in all things we create. General Dynamics at a Glance* y Total Revenue: $39.4 billion y Headquarters: Reston, Virginia y Employees: 102,900 employees in all 50 U.S. states and 74 countries Customers (Percent of Revenue) 66% 16% 9% 9% U.S. government U.S. commercial Non-U.S. commercial Non-U.S. government *All data are as of December 31, 2019. 7 Our Business Our Businesses Overseen by our board of directors, our corporate headquarters is responsible for setting the strategic direction and governance of the company, allocating capital and ensuring a culture of ethics and integrity that defines how we engage our employees, communities, customers and suppliers. Our operating processes and activities incorporate initiatives to improve diversity, promote inclusion, reduce emissions and waste, and adhere to standards that lower risk and drive a healthier and safer workforce and community. Each of our 10 business units closely adheres to our corporate vision while maintaining individual responsibility for executing operations. This model empowers our businesses to stay close to their customers while having the agility to make wise decisions quickly. It also allows our businesses to anticipate, adapt and react to our customers’ rapidly changing needs. 8 Our Business Our Business Units | AEROSPACE | MISSION SYSTEMS Gulfstream produces the world’s most Mission Systems is a leading C4ISR integrator technologically advanced business jets and of secure communications and command-and offers unmatched customer support. control systems, sensors and cyber products. Jet Aviation provides comprehensive business aviation services, custom completions and a | MARINE SYSTEMS global network of facilities for aircraft owners and operators. Bath Iron Works designs and builds guided- missile destroyers for the U.S. Navy and provides | COMBAT SYSTEMS repair services for multiple ship classes. European Land Systems (GDELS) is a global Electric Boat is the premier designer and builder leader in the design and manufacture of wheeled of nuclear-powered submarines for the U.S Navy. and tracked combat vehicles and bridge systems. NASSCO specializes in the design and Land Systems (GDLS) produces highly capable construction of auxiliary and support ships, military vehicles, including the Abrams tank, oil tankers and dry cargo carriers, and is a Stryker combat vehicle, Light Armored Vehicle major provider of repair services for the and AJAX armored fighting vehicle. U.S. Navy. Ordnance and Tactical Systems (OTS) is a leading designer, developer and manufacturer of munitions, weapons and tactical systems. | INFORMATION TECHNOLOGY Information Technology (GDIT) designs, builds and operates large-scale enterprise information systems for the U.S. government, its agencies and others to deliver a broad range of technical, professional and training services. 9 Our Business Corporate Responsibility dignity is embedded at all levels of our business. Strict adherence to these values, as well as to We endeavor to conduct business ethically applicable laws, are expected by us everywhere and transparently, and to abide by responsible we operate. business practices in order to provide our shareholders with a fair return. Our governance We build awareness of human rights issues processes ensure that our decisions recognize among employees through resource groups, the economic, environmental and social professional education and mentorships. And we considerations in our operational strategy. reinforce this commitment through our Ethos and procurement policies. Putting a stop to human trafficking and child labor, respecting human Product Safety rights and obeying applicable laws are important Our customers use our products to perform parts of our supply chain management process. no-fail missions. Safety is never compromised. True to our Ethos, we commit to providing our Materials Sourcing customers with products that raise the bar for safety, performance and quality. Our purposeful We are committed to responsible sourcing investment in research and development propels throughout our global supply chain. As such, we superior design that incorporates the latest take steps to vet suppliers for their sustainable in safety solutions and includes technological labor and materials sourcing practices, advances to create a competitive edge. That edge purchase long-lasting products with low extends to initiatives that promote operating carbon footprints, deal only with non- efficiency to include a reduction in fuel burn and embargoed countries and act to prevent carbon emissions from our aircraft and other counterfeit parts from entering our vehicles. As a result, we manufacture and operate supply chain. some of the safest and most advanced products We have established mechanisms ever made, from nuclear-powered submarines to to assess risk and ensure high-speed, long-range business jets. compliance, and we constantly look
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