Presentation on theme: "Nigel Marsh, Global Head of Environment, Rolls-Royce plc"— Presentation transcript:
1 Nigel Marsh, Global Head of Environment, Rolls-Royce plc Keynote speaker: Environmental sustainability – business response and challengesNigel Marsh, Global Head of Environment, Rolls-Royce plc
2 ‘Environmental sustainability’ – business response and challenges Nigel MarshGlobal Head of Environment, Rolls-Royce plc
3 What I’m covering Context of Rolls-Royce What is sustainability? Our approach to sustainabilityThe 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.
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 economyIt’s about how a company leads and responds to the bigger global issues in order to survive and be competitive for the future.
9 ChallengesKey challenges that will increasingly impact our business and markets:the world’s population is increasingthere is a growing demand for natural resources making them more expensive and scarcerexternalities, such as carbon taxes, are increasingly being priced into the cost of doing businesscustomers, investors, NGO’s and wider society are scrutinising businesses and demanding greater transparencyskills gap.
10 BUT, Sustainability will help to: improve reputationgenerate new revenuesreduce costs and risksdeliver competitive advantage and long-term value in financial, social, environmental and ethical termsfor 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 phaseProduct UseSupply ChainOperationsWhere 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
16 The Group case for action Over 50,000 tonnes waste/year from our own internal operationsRepresents significant, mainly hidden cost of waste to the businessWaste disposal (less recycling revenues)Visible costs>£00,000,000Raw material costsHidden costsEnergy to processLabourStorageEnvironmental protection costsDispose and recycle >50ktonnes waste/yr£250m = disposal costs less recycling revenue, plus cost of buying the quantity of material that became wasteSuite of Sustainability targets recently approved by ELT include 25 % reduction in quantity of solid and liquid waste normalised by turnoverReducing waste will make contribution to the ‘4Cs’ notably reduced operating costs, hence aim to also reduce costs by £25mAdditional 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 wasteImproveWaste management mind-setComplianceCompetencyData qualitySuccessImplementation of company standardsAccountability & Responsibility for wasteNo compliance issuesRange of validated toolsInnovationImplementSolutions to difficult wastesNew ways of preventing or reducing at sourceScalable, cost effective solutions availableCross-cutting solutionsDeployment of standard solutions across applicable businesses/sitesSuccess (at scale)Tangible cost savingsWaste reduction and/or increased recyclingLocal ideas adopted/ recognised globallySite based improvementsOpportunities identified from Waste MappingDelivered packages in priority of payback/ business caseSuccess (locally)Waste reduction and/ or increased recycling4 key themes underpinned by communicationsCS 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 templateWaste mapping template & checklistsProject hopper & prioritiserSimple 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 HierarchyPreventReduceReuseRecycleRecoverDisposeTry to prevent waste firstIf you can’t prevent it then try to reduce itIf you can’t reduce it then aim to reuse itIf you can’t reuse it then segregate for recyclingIf you can’t recycle, then look to recover some value e.g. energy from wasteIf there’s no alternative available then dispose e.g. to landfillThe 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
23 IEMA Skills MapIEMA 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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