Israel Aerospace Industries Ltd. 2016 Sustainability Report
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Israel Aerospace Industries Ltd. 2016 Sustainability Report WHEN RESULTS MATTER 20162016 in a in nutshell a nutshell billion$ billion$ of procurementof procurement 3.6 in Sales3.6 in Sales 61% is local61% is local st in localst patentin local patent 1 registration1 registration Backlog Backlog of orders of at orders 9 of billion$ at 9 of billion$ Largest high-tech company15,359 15,359 2016 in a nutshell in Israel employees employees 18,237 18,237 volunteeringvolunteering hours hours Sustaining over 50,000 th th households nationwide 9 ranking9 in theranking “best inplace the to“best work” place list to work” list 54% 54% hazardous wastehazardous waste recycled or reusedrecycled or reused 58% 58% non-hazardousnon-hazardous waste waste recycled or reusedrecycled or reused 435 435 GWh GWh Saved since Saved2007 since 2007 Message from our Board of Directors G4-1 On September 2017 I took over as Chairman of the Board of As one of the few companies in Israel with immense impact on Directors of IAI. It is an honor and a challenge to assume the lives and security of Israeli citizens, we acknowledge that responsibility for leading IAI into the future together with our our success is made possible only by the dedication of our passionate employees, valued customers and respected people, partners and surrounding communities. We will partners. continue to build on this foundation by focusing on central goals and processes: create constructive discourse and IAIs board of directors governs the long term companys collaborations with all of our stakeholders, make IAI a diverse sustainability plans and implementation based on the solid and inclusive workplace as a priority, invest in more sustainable understanding that sustainability is not an add-on but a and cost-effective energy solutions, continue to reduce current foundation that affects everything we do, make business sense costs, raise the bar in our safety and occupational health and builds resilience and continuity throughout our programs and demand stronger social and environmental operations. responsibility from our suppliers. IAI has a long-standing record of state-of-the-art technologies Let this report be an open invitation for any feedback, and services, aimed at providing our customers with innovative questions or new ideas to be presented, I hope you will nd our solutions in multiple areas – from aerospace to land, in cyber journey an inspiration. and at sea. We relentlessly grow our global reach and expand to new and exciting markets. In todays global business climate, IAI faces many risks and global changes. IAI works to adjust its operations and activities in order to cope with these new challenges and remain a leader in the aerospace and defense industry through continued technological excellence, creativity and growth combined with hard work, integrity and commitment. Harel Locker Chairman of IAIs Board of Directors 04 A message from our President and CEO G4-1 | G4-2 I am privileged to present to you the second report on IAIs Although the economic situation means tougher choices at sustainable development. This report is a record of signicant times, it also challenges us to make the right products, solutions strides made during 2016, but is also looking ahead at what we and offerings. wanted to achieve in 2017 and beyond. We regard this IAI is one of Israels largest exporters, providing direct and non-nancial reporting as a critical managerial process, which indirect income to tens of thousands of families. Our guides our performance and keeps us on track to full performance and progress are attributed to the tireless efforts of sustainability in anything we do. our employees. Over the past year we employed innovative During 2016 we have solidied our sustainability vision with the approaches to investing in our people, such as the launch of introduction of an updated sustainability policy, included in this LEADAIR, our training program for future leaders, and PEIMA, an report. The new policy reects the material aspects identied as academic program for our technicians and practical engineers, signicant for IAI and its stakeholders. to name a few. Since its inception in the 1950's, IAI never ceased to grow and expand, becoming a pivotal player in Israels economy and Over the past year IAIs management and its employees’ defense. Concurrently, IAI never lost sight of aspects of ethical organization signed a new collective agreement that constitutes business conduct, regulatory compliance, social equality, a central component of the companys growth plan. The diversied hiring, and advancement of technological education. agreement builds on the mutual commitment of our employees Just as important, IAI holds its commitment to reduce its and managers to work together to ensure IAIs resilient future. ecological footprint through energy savings and improved As we look into the future, we are determined to embrace a waste management. practical and doable approach to the triple-bottom line of Accordingly, we continue to seize opportunities for creating sustainability. We drafted a plan around ve major sustainability progressive manufacturing processes and innovative products, goals presented in this report. This plan will form the basis for a as demonstrated by our national leadership in patent application long-term roadmap that will be introduced later on. and registration and by the establishment of the Israeli Cyber Consortium. We seek to add value wherever we operate, and we will continue to reach out to communities and to our stakeholders in general, As a company ranked in the top third of the Aerospace and Defense industries in the world, we follow a long-sighted who offer us new ways to think and contribute. business model, in which we seek to predict the needs and requirements of the next generations – our future employees and customers. Surely, they will expect us to embrace a vantage point of sustainability for them to prosper. In the meantime, our Joseph Weiss commitment to our current customers, suppliers and employees President and Chief Executive Ofcer remains unwavering. 05 Independent Limited Assurance Report In a limited assurance engagement the evidence gathering We were engaged by the management of Israel Aerospace procedures are more limited than for a reasonable assurance Industries Ltd. (further referred to as IAI) to provide limited engagement and therefore signicantly less assurance is assurance on the specied parts as mentioned in the table obtained than in a reasonable assurance engagement. The below (further referred to as “Specied parts”), marked within procedures selected depend on the practitioners judgement. the report, regarding the information presented on IAI 2016 This includes the assessment of the risks of material Sustainability Report for the year ended 31 December 2016 misstatements of the sustainability information in the (further referred to as “The Report”). Sustainability Report with regard to the GRI-Criteria. Within the IAIs Management is responsible for: scope of our work, we performed amongst others the following The preparation and presentation of the report in procedures: accordance with the Sustainability Reporting Guidelines Examination of the specied parts in the report, for the (G4) of the Global Reporting Initiative (GRI) as described in purpose of performing a limited assurance, based on public page 102 of the report, and the information and assertions information sources. contained within it; Inquiries of relevant staff to gain an understanding of IAI Determining IAIs objectives in respect of sustainable processes for determining the material issues for IAI key development performance and reporting, including the stakeholder groups. identication of stakeholders and material issues for reporting; Interviews with relevant staff at corporate and business unit level responsible for providing the information in the Establishing and maintaining appropriate performance Report. management and internal control systems from which the information is derived, to be free from omissions and Interviews with relevant staff at group level and selected material misstatements whether due to fraud or error. business unit level concerning corporate responsibility Our responsibility is to provide a limited assurance strategy and policies for specied parts, and the engagement and to express a conclusion based on the work implementation of these across the business. performed. We conducted our engagement in accordance with Review of a selection of the supporting documentation International Standard on Assurance Engagements (ISAE) Review of a sample of the underlying processes and controls 3000, Assurance Engagements other than Audits or Reviews of that support the information in the Report. Historical Financial Information, issued by the International Auditing and Assurance Standards Board (IAASB). That Where relevant, conducting interviews regarding the standard requires that we comply with applicable ethical calculation, aggregation and methods used to collect and requirements, including independence requirements, and that report the specied parts in the report. we plan and perform the engagement to obtain limited assurance about whether the Report is free from material misstatement. 06 We believe that the procedures we have performed and the evidence we have obtained is sufcient and appropriate to provide a basis for our conclusion. Conclusion Based on the limited assurance procedures performed and the evidence we have obtained, described in this report, nothing has come to our attention to indicate that the specied parts as mentioned in the table below, in IAIs 2016 Corporate Responsibility Report are not presented, in all material respects, in accordance with the GRI-G4 and IAIs reporting criteria. Our limited assurance report is made solely to IAI in accordance with the terms of our engagement. Our work has been undertaken so that we might state to IAI those specied parts we have been engaged to state in this limited assurance report and for no other purpose or in any other context. We do not accept or assume responsibility to anyone other than IAI for our work, for this limited assurance report, or for the conclusions we have reached.