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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
‘Environmental sustainability’ – business response and challenges
Nigel Marsh Global Head of Environment, Rolls-Royce plc
What I’m covering Context of Rolls-Royce What is sustainability?
Our approach to sustainability The challenge of skills & capability
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.
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.
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.
So, what is sustainability?
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.
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.
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.
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.
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?
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
So what about Operations?
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
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
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
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
So where’s the problem??
IEMA Perfect Storm Report
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’
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