1. Nigel Marsh, Global Head of Environment, Rolls-Royce plc
Keynote speaker: Environmental sustainability – business response and challenges
Nigel Marsh, Global Head of Environment, Rolls-Royce plc

2. ‘Environmental sustainability’ – business response and challenges
Nigel Marsh
Global Head of Environment, Rolls-Royce plc

3. What I’m covering Context of Rolls-Royce What is sustainability?
Our approach to sustainability
The challenge of skills & capability

4. We create power.
That power can then be used on land to generate electricity or compress gas through trans-continental pipelines. We power ships both commercial and naval. And in the air we are a leading producer of engines for major airlines and for defence forces around the world.

5. Our business model is built around our strategic themes of customer, innovation and profitable growth.
At our heart we are a power systems company based on two technology platforms: gas turbines and reciprocating engines.
We invest in research and development (R&D) to create intellectual property that allows us to grow sales of advanced products and services around the world. We do this by developing strong routes to market based on customer relationships, understanding and knowledge.
We allocate capital in a disciplined way, deciding where to grow and where not to.
The Group focuses on reducing costs and generating cash to enable profitable growth and maintain a strong balance sheet.
This then allows us to fund further R&D and capital infrastructure for future programmes and delivery of the order book.

6. Rolls-Royce does business all over the world.
Our revenue split by geography illustrates that the Group has a truly global revenue stream from Europe, North America and, the Middle East and Asia.
In line with our customer base, the Group also has a strong physical and employment presence in each of these geographical areas.

7. So, what is sustainability?

8. Sustainability The UN defines corporate sustainability as:
“a company’s effort to drive profitable growth while achieving a positive economic, social and environmental impact”
A sustainable business is one that works to manage its impact – not just the environment but also community, society and economy
It’s about how a company leads and responds to the bigger global issues in order to survive and be competitive for the future.

9. Challenges
Key challenges that will increasingly impact our business and markets:
the world’s population is increasing
there is a growing demand for natural resources making them more expensive and scarcer
externalities, such as carbon taxes, are increasingly being priced into the cost of doing business
customers, investors, NGO’s and wider society are scrutinising businesses and demanding greater transparency
skills gap.

10. BUT, Sustainability will help to:
improve reputation
generate new revenues
reduce costs and risks
deliver competitive advantage and long-term value in financial, social, environmental and ethical terms
for E move up the waste hierarchy.

11. As part of the Group’s vision to create ‘better power for a changing world’ we want to create a business that is sustainable.
For Rolls-Royce, that means driving profitable growth whilst achieving a positive economic, social and environmental impact. We will deliver better power to our customers, use innovation to secure a better future, and build on today’s achievements to develop a better business, ready to meet the challenges ahead.

13. Scale of Environmental Impact
99.9% of the greenhouse gas emissions associated with an aero engine occur during the ‘in service’ life cycle phase
Product Use
Supply Chain
Operations
Where is the focus?

14. Long-term consistent technology
None of the historical reductions in fuel burn, noise and other emissions would have been possible if we had not invested significant sums of money and skills in technology development.
Technology development is a lengthy and complex process – which will be covered later.
For this reason we place huge importance to understand what is required today, what we can apply in 10 years and what concepts we should explore that may emerge in 20 years time and beyond.
We will use our best skills and expertise to help translate this vision to real solutions that can be implemented in the market place.
Last year we spend over £850 million on R&D approximately two thirds of which has the aim of improving the environmental performance of our products and operations.
£~1bn spent on research & development each year

15. So what about Operations?

16. The Group case for action
Over 50,000 tonnes waste/year from our own internal operations
Represents significant, mainly hidden cost of waste to the business
Waste disposal (less recycling revenues)
Visible costs
>£00,000,000
Raw material costs
Hidden costs
Energy to process
Labour
Storage
Environmental protection costs
Dispose and recycle >50ktonnes waste/yr
£250m = disposal costs less recycling revenue, plus cost of buying the quantity of material that became waste
Suite of Sustainability targets recently approved by ELT include 25 % reduction in quantity of solid and liquid waste normalised by turnover
Reducing waste will make contribution to the ‘4Cs’ notably reduced operating costs, hence aim to also reduce costs by £25m
Additional costs (not calculated)
New Group 2020 targets include: - 25% reduction in solid and liquid waste
- zero waste to landfill

17. Waste Action Programme has 4 workstreams
How we manage waste
Improve
Waste management mind-set
Compliance
Competency
Data quality
Success
Implementation of company standards
Accountability & Responsibility for waste
No compliance issues
Range of validated tools
Innovation
Implement
Solutions to difficult wastes
New ways of preventing or reducing at source
Scalable, cost effective solutions available
Cross-cutting solutions
Deployment of standard solutions across applicable businesses/sites
Success (at scale)
Tangible cost savings
Waste reduction and/or increased recycling
Local ideas adopted/ recognised globally
Site based improvements
Opportunities identified from Waste Mapping
Delivered packages in priority of payback/ business case
Success (locally)
Waste reduction and/ or increased recycling
4 key themes underpinned by communications
CS 08 is our new HS&E control standard on waste management

18. WAP Toolkit – 4 specific elements to help identify and prioritise opportunities
Waste stream costing tool template
Waste mapping template & checklists
Project hopper & prioritiser
Simple cost/benefit sheet

19. We ARE AIMing for ZERO to Landfill
Bigger cost savings could be achieved by focusing on the top of the Waste Hierarchy
Prevent
Reduce
Reuse
Recycle
Recover
Dispose
Try to prevent waste first
If you can’t prevent it then try to reduce it
If you can’t reduce it then aim to reuse it
If you can’t reuse it then segregate for recycling
If you can’t recycle, then look to recover some value e.g. energy from waste
If there’s no alternative available then dispose e.g. to landfill
The project aims to increase awareness of using the waste hierarchy to take a top down approach to waste as a means of moving away from disposal. Prevention, reduction and reuse present the biggest potential opportunities to also reduce cost.
We ARE AIMing for ZERO to Landfill

20. So where’s the problem??

21. IEMA Perfect Storm Report

23. IEMA Skills Map
IEMA calls for ‘enhanced collaboration between business, universities and training providers to ensure courses deliver a workforce with the fundamental knowledge, practical skills and core behaviours needed to contribute to the delivery of sustainable outcomes’

24. Behavioural Change

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