corporate responsibility and sustainability...and sustainability report summarising our activities...
TRANSCRIPT
Corporate Responsibility and Sustainability2008
The most important thing we build is trust
Allan E Cook CBEChief Executive
Message from the Chief Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Message from the Director, Corporate Responsibility and Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Report Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
About Cobham . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Vision, Strategy and Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Key Focus Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Safety, Health and Environment (SHE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Business Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Stakeholder Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
As a growing, dynamic, international business Corporate Responsibility and Sustainability is regarded as a key consideration in day to day business throughout Cobham. We seek to identify current and emerging social and environmental issues that present both risks and opportunities to our business, develop plans to proactively address these risks and create value by realising opportunities that align with our core business activities. Combining these activities with our proven financial management will continue to deliver added shareholder value for our business.
We are currently focusing our efforts on the safety, health environmental (SHE) impacts arising from our operations, activities, products and services, rolling out internationally our code of business conduct and improving our stakeholder engagement processes. This report presents the improvements we have made during 2008 and sets out what we plan to achieve during 2009. Notably, we have increased our emphasis in this area by hiring a new Director of Corporate Responsibility and Sustainability who works closely with the Executive Committee in developing our approach in these matters. We have established a new Corporate Responsibility and Sustainability Committee chaired by me which focuses on directing our resources in this area and monitoring our performance. As Chief Executive, I also ensure that the Board is kept appraised of our work and takes account of these issues in its Annual Risk Assessment and monitors its progress throughout the year.
Thank you for taking the time to read this report. We hope that you will find it insightful. We will continue to review our Corporate Responsibility and Sustainability strategy to bring it into line with best practice and to align it with our core business strategy. We welcome your feedback and with your support we will continue to make Cobham even more successful as a responsible and sustainable business that protects lives and livelihoods.
Contents Message from the Chief Executive
�
Corporate Responsibility and Sustainability – 2008
Cover picture: International demand for Cobham’s MINEHOUND VMR2 dual sensor mine detector is increasing after successful trials in Cambodia, Bosnia and Angola. The equipment radically improves the efficiency of landmine clearance operations as well as improving the detection of minimum metal mines. Its primary use is for humanitarian clearance of anti-personnel mines.
Andy StevensChief Operating Officer
Julian HellebrandGroup Director of Communications
Eleanor EvansChief Legal Officer and
Company Secretary
Charlie StuffEVP Cobham Corporate
North America
James StreaterDirector, Corporate Responsibility
and Sustainability
Allan E Cook CBEChief Executive
Corporate Responsibility and Sustainability – 2008
2 �
Message from the Director, Corporate Responsibility and Sustainability
Welcome to our latest Corporate Responsibility
and Sustainability Report summarising our
activities in 2008, the last period for which
we have quantifiable results. Our corporate
vision “to be the most trusted global partner of
leading aerospace and defence technologies”
and our core values of trust, talent and
technology are essential in making Corporate
Responsibility and Sustainability central to
our corporate strategy. To build this trust we
must proactively engage with our stakeholders
to understand their needs and concerns in a
proactive and systematic way.
Our first step on this journey has been the
establishment of our Corporate Responsibility
and Sustainability Committee which is chaired
by our Chief Executive. This committee
oversees the development and implementation
of our strategy and guides two subcommittees
which handle Business Ethics and Compliance
and Safety, Health and Environment (SHE).
Plans for 2009 include further training on our
revised Code of Business Conduct to all our
employees globally and standardising our SHE
management across Cobham.
With regards to our safety performance
in 2008, we are pleased to report its
improvement over 2007 with our occupational
injury and illness incidence rate decreasing
from previous years. Ergonomics and manual
handling were identified as significant causes
of our injuries and we encourage management
to focus on reducing the incidence of such
injuries through raising awareness, training and
activity programmes.
From an environmental perspective, we had
mixed success in meeting the goals we set
for ourselves in 2008. Following on from
significant environmental improvements in
2007 we set ourselves new targets at the
start of 2008 in relation to energy efficiency,
waste efficiency and water efficiency. Our
energy efficiency performance continued to
improve but our waste efficiency and water
efficiency performance deteriorated. On
further assessment we identified several causes
which included some extraordinary one-off
events, some communication on targets and
identification of several instances of under
reporting in previous years. We consider that
improving our internal communication and
reporting processes will be key to engaging and
empowering our employees to improve our
performance during 2009.
We produced our first carbon footprint on
our 2008 performance data in accordance
with the GHG protocol and this has been a
crucial first step to help us understand where
our key contributions are in relation to climate
change. As a result we have identified that our
aviation fuel use represents over 80% of our
carbon footprint and aviation fuel efficiency
will become a key focus for Cobham in
contributing to a more sustainable aviation
industry globally. We will continue to develop
our carbon footprint so that we learn more
about our indirect emissions.
We trust you will find this report
enlightening. Please contact us with your
feedback on how we can improve any
aspects of our performance.
James StreaterDirector, Corporate Responsibility
and Sustainability
Report Highlights
New CR&S Committee
New BE&CC Committee
Rolled out a revised Code of Conduct with 1/3
of workforce trained
Established our carbon footprint in general
accordance with the Greenhouse Gas protocol initiative
Improvements in safety performance
Improvements in energy efficiency
and recycling
Deterioration in waste & water efficiency but identified key areas to improve in future through target communication
and reporting processes
Plans to develop Group wide SHE committee, develop
standardised SHE management approach for implementation in
2009/2010
Develop robust reporting tool and define
key SHE metrics
Commit to completing CDP7
Ethics training to be completed on revised code
Single ethics hotline to be made available
2008 Successes 2009 Objectives
Ethics officer to be appointed for each division
Corporate Responsibility and Sustainability – 2008
� �
About Cobham
Cobham’s products and services have been at the heart of sophisticated military and civil systems
for more than 70 years, keeping people safe, improving communications and enhancing the
capability of air, land and marine platforms. The Group has four divisions employing more than
twelve thousand people on five continents, with customers and partners in over �00 countries.
Cobham Defence Systems Division
Cobham Avionics and Surveillance Division
Cobham Mission Systems Division
Cobham Aviation Services Division
Cobham specialises in components, sub-systems and services that:
• Keep people safe• Improve communications – voice, data, video• Enhance the capabilities of aerospace and defence platforms
Supporting People and Platforms to See and be Seen
Capabilities• Avionics – integrated systems and
communication solutions
• Surveillance solutions
• SATCOM – land, marine and airborne
communication systems
• Avionics, antennas, sliprings and microwave
components for French markets
Moving and Analysing Information on the Digital Battlefield
Capabilities• Sensor systems – radar, communication and
electronic warfare
• Antenna systems – microwave antennas,
composites and masts
• Defence communications – tactical
communication, command and
control systems
• Analytic solutions – defence and
national security
Mission Systems for Extreme Environments
Capabilities• Air-to-air refuelling systems
• Weapons carriage and release systems
• Safety and survival systems
• Weapons systems
• Space systems
Outsourced Aviation Services
Capabilities• Warfare training
• Special mission operations
• Flight inspection services
• Support services
• Airline – outsourced commercial aviation
• Freight services
• Aerospace engineering
Revenue
£432 .8m2007: £�26.9m
29%2007: �0%
Revenue
£529 .3m2007: £299.9m
36%2007: 28%
Revenue
£302 .0m2007: £262.8m
20%2007: 2�%
Revenue
£221 .9m2007: £�92.�m
15%2007: �8%
Trading Profit
£71 .7m2007: £��.9m
28%of trading profit 2007: 2�%
Trading Profit
£105 .2m2007: £7�.8m
41%of trading profit 2007: �7%
Trading Profit
£52 .2m2007: £��.�m
21%of trading profit 2007: 27%
Trading Profit
£24 .8m2007: £2�.9m
10%of trading profit 2007: ��%
Group Revenue Growth
Principal LocationsUSA, UK, Canada,
Denmark, France,
South Africa
Principal LocationsUSA, UK, Mexico,
Finland, Sweden
Principal LocationsUSA, UK
Principal LocationsUK, Australia,
Germany
Employees
3,280 2007: �,��0
Employees
5,2852007: 2,700
Employees
1,715 2007: �,8�0
Employees
1,760 2007: �,8�0
By Destination
Group Revenue Analysis
By Market Driver
£m
2007 FX Translation Acquisitions FX Transaction Growth 2008
1,061.1
800
900
1000
1100
1200
1300
1400
1500
1600
80.8
216.1 1.4
107.1
10.2% Organic growth
1,466.5
7.6% 20.4% 0.1% 10.1%
1
2
3
4
5
15%
10%
10%
10%
55%
2008 2007
Mainland Europe 15% 17%
Australia 10% 12%
UK 10% 13%
RoW 10% 11%
USA 55% 47%
1
2
3
4
5
1
2
3
4
5
44%
17%
13%
11%
15%
2008 2007
US Military/Govt. 44% 36%
Non US Military/Govt. 17% 21%
Commercial/GA Aerospace 13% 13%
Other communication 11% 12%
Aviation Services1 15% 18%
1
2
3
4
5
29% 36% 20% 15%
28% 41% 21% 10%
�. Two-thirds of Aviation Services revenue is for military and government contracts.
Calendar of events in 20083 January Complete purchase of autopilot specialist S-TEC
22 FebruaryComplete purchase of EW subsystem specialist Sensor and Antenna Systems, Lansdale
27 MarchAwarded FSTA air-to-air refuelling contracts worth US$�00m
7 AprilAcquire MMI Research – cellular communications for intelligence services
13 MayReach agreement to purchase M/A-COM
3 June Complete purchase of SPARTA – US intelligence and missile defence company
16 JulyUS$�0m LBT Transmitter production order for Sensor and Antenna Systems, Lansdale
11 AugustCobham selected to provide radio and audio integrated management system for A��0
15 SeptemberJeremy Wensinger appointed President Designate Cobham Defence Systems
29 SeptemberComplete purchase of M/A-COM – global leader in microwave systems
10 OctoberComplete purchase of GMS – HD video transmission specialist
3 DecemberGeneral (retired) Michael W. Hagee appointed a Non-executive Director
Corporate Responsibility and Sustainability – 2008
6 7
Vision, Strategy and Governance
Vision and Strategy In accordance with our vision, we plan to
deliver sustainable long term value by
building trust with our key stakeholders
by considering their economic, social and
environmental issues in our day-to-day
business activities. To do this we are
pursuing the following objectives:
• Embedding the principles of Corporate
Responsibility and Sustainability into our
corporate governance and strategy;
• Developing processes that help us
understand material changes in society,
technology and natural resources that can
affect our business;
• Connecting our business to serving a social
purpose in ways that engage, incentivise
and empower our employees;
• Developing robust data gathering processes
that collect and disseminate information
on metrics on our key business activities
internally and externally; and
• Developing and implementing strategies
that utilise our technology, innovation and
entrepreneurial strengths to add social and
environmental value while increasing our
top and bottom line.
These objectives align and support our
corporate vision and strategy and will allow
Cobham to grow and transform into an
integrated leading subsystems supplier of
innovative aerospace, defence and civil
technologies that protect lives and livelihoods
by keeping people safe and secure, enhancing
communication and decision-making
processes and enable aerospace and defence
platforms in all types of environments.
Corporate Responsibility and Sustainability has
a key role to play in delivering the key enablers
we have identified in our corporate strategy.
Growth
With respect to Growth, many of Cobham’s
key customers have an increasing focus on
sustainability and Cobham will respond by
focusing on enabling them to meet their
own objectives while meeting our own.
Application of our governance and values
will also enable us to enter emerging growth
markets with confidence.
Technology
With significant fiscal pressure on traditional
sources of military revenue, some of our
key customers are repositioning themselves
to focus on emerging growth markets such
as global security including energy and
environment. Cobham is well-positioned
to continue serving these customers with
its technology and designing products and
services with the environment in mind is a key
element of our strategy.
Talent
Competing for high-performance talent
will continue to be significant area of focus
and Cobham recognises that for the new
high performance talent, working for a
company that views sustainability as core is
becoming increasingly important. Changing
demographics and skills availability continue to
remain a considerable issue across science and
engineering sectors.
Transformation
Standardising our businesses processes and
fostering organisational learning is a key
component to supporting the transformation
effort. This includes how we address issues
like business ethics, compliance, health &
safety, environment and engaging with our
key stakeholders. Standardisation that builds in
our core values will also help to create a shared
sense of identity and enable us to build and
leverage our brand.
GovernanceDuring 2008, the emphasis has been on
developing our governance structure to expand
upon, among other things, the inclusion of
social and environmental dimensions in our
decision-making, to identify the material
issues we need to focus on and to develop our
strategies for taking these areas forward.
During 2008 we established a Corporate
Responsibility and Sustainability Committee to:
• Review the effectiveness of the Cobham’s
internal process and controls for identifying
risks and opportunities in relation to material
issues in relation to society, technology and
natural resources;
• Review and challenge Cobham’s
performance on managing these issues; and
• Monitor the integrity and effectiveness
of the Group’s communications on its
performance.
The Corporate Responsibility and
Sustainability Committee is chaired by the
Chief Executive who has overall accountability
for Corporate Responsibility and Sustainability
matters affecting Cobham. Its members
include the Chief Operating Officer, the
Group Communications Director, the EVP
Cobham Corporate North America, the Chief
Legal Officer and the Director, Corporate
Responsibility and Sustainability. The
committee oversees the Business Ethics and
Compliance Committee which was established
in early 2008 and will oversee a Safety, Health
and Environment (SHE) Committee to be
established in 2009.
In addition we have reviewed our governance
documentation to further embed our
values and our strategy into the way we
do business. We have clearly set out the
Corporate Responsibility and Sustainability
roles and responsibilities of our key company
officers , our decision-making processes, our
performance evaluation processes and our
assurance processes. Corporate Responsibility
and Sustainability ranks equally in terms
of importance with our proven financial
performance management processes.
Vision
Strategic objectives
Enablers
1Be a leading subsystems supplier with a comprehensive range of distinctive technologies
Growth
Focus on the customer and performance management
Build on a significant and growing USA presence
Develop capabilities in emerging growth markets
Grow export business in home markets
Be an acquirer of choice
Technology
Invest in advanced, market driven technologies
Exploit core technologies in adjacent markets
Increase PV investment to 6% of Technology Divisions’ revenue
Create a vibrant technical community with strong external links
Develop products and services that consider the environment in their design
Talent
Develop key leadership and technology capabilities
Actively manage careers with opportunities across markets and internationally
Be an employer of choice – attracting, recruiting, retaining and motivating the best talent
Transformation
Create scalable Strategic Business Units able to incorporate acquisitions
Drive economies of scale across divisions
Share expertise and consistently apply core Cobham processes
Build and leverage the Cobham brand
To be the most trusted global partner for leading edge aerospace and defence technologies
2Be in the top three in each of our chosen markets
3Grow faster organically than the markets in which we operate
4Materially enhance growth through strategic acquisitions
5Develop a global market presence with a unified brand and identity
6Have an efficient organisation with a high performance culture and motivated people
Corporate Responsibility and Sustainability – 2008
8 9
Key Focus Areas
In 2008 we decided to consolidate our previous six key focus areas into three broader focus areas:
• Safety, Health and Environment (SHE) – Providing safe working conditions and practices for
our people and reducing our environmental footprint
• Business Ethics – Acting ethically and responsibly towards our key stakeholders
• Stakeholder Engagement – Proactively and systematically engaging our key stakeholders to
understand their concerns and changes in our operating environment
These three focus areas encompass and build on the six narrower focus areas we reported on
in the previous two years. Staff safety, carbon footprint, chemicals and hazardous materials
management, waste reduction and supply chain management are all now covered under SHE.
Anti-corruption now forms part of our broader Business Ethics focus area.
Our strategy is to standardise and systemise our management approaches in these focus areas
such that our performance can be effectively and efficiently monitored, challenged and enhanced.
A summary of our performance data can be found at the back of this report.
Safety, Health and Environment (SHE)
Overview
2008 was a year of significant change at
Cobham. The business was restructured and
consolidated into four operating divisions,
each comprising a number of market facing
strategic business units (SBUs), with several key
divisional leadership appointments and over
£� billion of new acquisitions. We are now in
the process of transforming Cobham into a
more integrated, market facing subsystems
supplier and services provider. As part of
this transformation, we have recognised an
opportunity to place more strategic emphasis
on SHE. This is in keeping with our belief that
our people are our most important asset. The
safety of our people, our customers and other
stakeholders is our highest priority.
Policy and StrategyWith the standardisation of our SHE
management approach, accountability
and responsibility for SHE remains with our
operational line management while overall
policy and strategy development will be
provided by the SHE committee reporting to
the Corporate Responsibility and Sustainability
Performance
i. Safety and Health
The occupational injury and illness incidence
rate in our fully owned subsidiaries was 260
injuries that resulted in three or more days
absence per �00 000 employees. This was
significantly lower than ��8 reported in 2007
and significantly below the UK Health and
Safety Executive’s manufacturing benchmark
of 7��. However, we recognise that we can do
more to reduce this rate. During 2009 and 20�0
we propose to:
• Implement a standardised SHE
management approach;
• Develop health and safety indicator metrics;
• Collect quarterly health and safety data;
• Identify trends in injury types and develop
preventative programmes; and
• Develop a more just and equitable reporting
culture to allow deeper understanding
around the full extent and causes of our
occupational injuries and illnesses.
It is with great regret and sadness that we
report the loss of life of a military flying
instructor and student when their Army Squirrel
helicopter, maintained by FB Heliservices (FBH)
in which Cobham has a �0% stake, crashed
during a low level flying exercise in North
Devon. The findings from the Board of Inquiry
have yet to be released.
ii. Environment
Energy and Carbon EmissionsOur energy efficiency (measured as energy
consumption per £m of turnover) improved
by 20% from �,�98 MWh/£m turnover in 2007
to �,206 MWh/£m turnover in 2008. This
represents a consistent year on year reduction
since 2006 and we are currently on target
to meet our planned �0% reduction in 20�0
against 2007 levels. These improvements in
this measurement have partly resulted from
the implementation of energy saving initiatives
within our businesses and partly by the
increase in our turnover during 2008.
The most significant contribution (86%) to our
carbon emissions during 2008 period originated
from aviation fuel consumption, with 60% of
this amount being provided to us by customers
for use in high-capacity passenger, freight and
aerial surveillance operations.
Excluding aviation fuel consumption, our
carbon emissions are derived from electricity
consumption (82%), natural gas (�6%) and
heating oil (2%). Energy efficiency, when
excluding aviation fuel, improved by �% on
2007 to �0�MWh/£m of turnover. However,
our absolute carbon emissions increased by
�0% from ��8,906 tonnes CO2 equivalent in
2007 to �8�,8�7 tonnes CO2 equivalent in 2008
which is attributed to the acquisitions we made
during 2008.
Waste and RecyclingCobham’s annual waste generation rose from
�,��6 tonnes in 2007 to �2,7�� tonnes for 2008.
This absolute increase in waste is attributed
to the 2008 acquisitions and under reporting
identified from previous years. Although our
waste efficiency metric (tonnage normalised
against £m turnover) deteriorated, our recycling
rates increased from 29% in 2007 to �7% in
2008. Forty-five percent of our solvent waste
and 60% of our paper and cardboard waste
were recycled. We will continue to focus on
waste reduction in order to achieve our 20�0
target. Improved internal communications,
metrics and tools and advice on performance
improvement will be key areas to improve our
performance in this important area.
Water UsageWater use increased in 2008 primarily due to
the acquisition of several multi-site businesses,
increased consumption arising from extended
production shift patterns and several one-off
events (e.g. dust suppression required during
factory demolition). As a result, our water
efficiency metric deteriorated from �62m�/£m
turnover in 2007 to 2�9m�/£m turnover in
2008. We are expecting our water use to
decrease in 2009 and we will continue to focus
on improving our water efficiency to achieve
our 20�0 target of a 20% improvement on
2007 levels.
committee. We have now revised our SHE
policy to strive towards the following key goals:
• Provide workplaces that are free of
occupational injury and illness for all our
employees, visitors and contractors;
• Enhance the well-being of our employees
and the local communities in which we
operate; and
• Minimise our impact on the local
and global environment arising from
our operations, activities, products
and services.
In order to achieve these goals, we have
developed a two year action plan for 2009 and
20�0 which comprises three key elements:
i Prioritising SHE;
ii Standardising our management approaches
to improve consistency and implementing
best practice in a way that will recognise
the strengths and development needs in
the different areas of our business; and
iii Piloting SHE initiatives across Cobham that
will improve our operating efficiency and
create top and bottom line value.
Corporate Responsibility and Sustainability – 2008
�0 ��
REACHCobham is fortunate to have a team of in-
house expert consultants at Cobham Technical
Services that have supported us in assessing
the impact of the European Union REACH
(Registration, Evaluation and Authorisation
of Chemicals) Directive across our business.
Through this work we have identified that the
majority of our businesses are downstream
users that use chemicals only for their intended
purposes (e.g. adhesives, paints, thinning
agents, lubricants etc) while only a small
number of our business units were required
to pre-register substances. We are working
with both our customers and supply chain to
identify the type and amount of substances in
our articles. Based on our work, we currently
consider that the most significant impact to
our business will be in relation to substances
being removed from the supply chain and we
are working with our suppliers to ensure they
can source suitable alternatives if necessary.
Performance Initiatives
Safety and Health
Following the introduction of strict regulations
by the US Environmental Protection Agency
on the use of hexavalent chromium (Cr
VI), Cobham Sensor Systems (Lansdale, PA,
USA) developed a cross-functional team to
comply with the new standards, minimize Cr
VI exposure to employees and to substitute
Cr VI primers with a non-chromium primer.
To minimize Cr VI exposure to employees
in the grinding/sanding area, a new room
was designed and implemented to include
several new downdraft tables, ductwork and a
collection system to minimize chromium Cr VI
exposure. In addition to the sanding/grinding
room, the paint shop was improved to meet
EPA requirements with the installation of a
new ventilation system also includes two
multi tier filter system that meet the filtration
efficiency requirements set forth by the
National Emission Standards for Hazardous Air
Pollutants (NESHAP).
Cobham Defence Communications (Blackburn,
UK) implemented �S as part of their Business
Improvement Programme to organise their
work areas, remove unnecessary health
and safety risks and improve morale and
productivity. The initiative introduced
numerous health and safety improvements,
translating into a 60% reduction in reported
accidents and incidents between 2007 and
2008. No lost time was recorded in the period,
and along with other business improvement
benefits, the programme realised almost £�
million in cash savings over the past year.
Cobham Aviation Services (RAF Kinloss, UK)
introduced in-house first aid training as a
cost-effective way to ensure its staff, maintain
the skills that could save lives in an emergency
situation. As aircraft maintenance specialists
working on large military platforms, Cobham
Aviation Services found it essential that staff
receive continuous up-to-date training by
becoming a satellite centre for all first aid
training at Kinloss and nearby Aberdeen.
Environment
Energy and Climate Change
Cobham business units continued with
various energy-saving improvements in
2008 that centred on lighting upgrades,
heating, machinery and re-evaluation of
cooling processes:
Cobham Technical Services (Leatherhead, UK)
took proactive steps to further manage and
reduce energy consumption through basic
and practical improvement activities. This
included installing a conformal draught-proof
silicon seal in the main building windows
which resulted in 26% savings in energy costs
per quarter, equivalent to 8.� tonnes of CO2.
The 2007 programme of installing T8 lighting
continued to deliver cumulative energy savings
with a reduction in average electricity usage
from �20,000kWh per month to approximately
70,000kWh per month.
Similar lighting upgrades were implemented
at Cobham Antenna Systems (Stevenage, UK)
in December 2008 with an approximate ��%
reduction in electricity costs being realised
within the first month of implementation.
An estimated ��6,000kWh of energy are
forecasted to be saved within the first year
from installation.
During 2008, Cobham Aviation Services in
Christchurch, UK trialled collection of waste
aviation fuel from across its operations for
use in the site’s oil heaters resulting in both
reduced heating oil costs and hazardous
waste disposal costs. The business also
commissioned trials to investigate the use of
heat harvesters and sun catchers to reduce
energy consumption and emissions. The heat
harvesters re-circulate hot air collecting at the
top of the hangars throughout the rest of the
building which effectively saves energy during
the winter. The trials have indicated that the
heat harvesters will reduce heating bills and
energy consumption by thirty to fifty percent.
The sun catchers, which are mirror-finished
aluminium pipes, reflect sunlight into buildings
to reduce lighting requirements, and are able
to reduce energy consumption and emissions
by twenty to thirty percent.
A major process improvement was put in
place by the SHE team at Cobham Defence
Communications in Blackburn and Exeter,
UK. The improvement focussed on the
evaluation and implementation of an
online Environmental Legislation Update
Service (ELUS) that created a bespoke legal
register providing structured summaries
of all applicable legislation that could be
automatically updated every month. Previously
this had required manual update of offline
written legal registers that was time consuming
and ineffective in maintaining up to date
monitoring of incoming legislation.
Waste Reduction and Recycling InitiativesIn December 2008, Cobham Sensor Systems
(Exeter, NH, USA) was awarded a $��.9 million
United States Air Force (USAF) contract
to refurbish damaged F-�6 jet fighter radar
antenna arrays and integrated network
equipment had been assemblies. Previously
this equipment was completely replaced and
the lead times were in the order of�8 to 2�
months. By refurbishing this equipment, lead
times were reduced to approximately � to 6
weeks and saved the USAF over $�6 million
while reducing the amount of electronic
equipment being disposed of as waste.
Cobham Aviation Services (Christchurch, UK)
has undertaken several initiatives including
joining the UK government’s National Industrial
Symbiosis Programme (NISP) and arranging
take-back schemes with suppliers for batteries,
toner and ink cartridges, paper and cardboard.
NISP connects organisations of all types
through exchange of materials, energy and
water and sharing of assets, logistics and
expertise. An example included the diversion
of � tonne of used target tow nets from landfill
for use by the local authority in its garden
allotments saving Cobham Aviation Services
the disposal costs and the local authority
the cost of purchasing new netting. Supplier
take-back schemes have already diverted
approximately � tonnes of waste resources
from landfill in 2008. The business is arranging
additional take-back schemes with suppliers for
other waste streams such as glass bottles and
fluorescent lights.
Cobham Sensor Systems (Lansdale, PA,
USA) completed a major site renovation
project in 2008. As part of this project, the
business recycled 2,�06 tonnes of asphalt
from improvements to its main parking lot,
improved its energy efficiency by switching to
T8 lighting, recycled 2.7 tonnes of fluorescent
bulbs and recycled 26 tonnes of metal scrap.
Cr VI Multi-functional Team at Cobham Sensor Systems in Lansdale, PA.
SHE Team at Cobham Defence Communications, UK
5S Team at Cobham Defence Communications in Blackburn, UK
RAF Kinloss First Aid Graduates
Corporate Responsibility and Sustainability – 2008
�2 ��
Business Ethics
Cobham has operated a Code of Business
Conduct (“Code”) for several years. In 2008
an updated Code was issued and a phased
approach to training on the new Code was
commenced. We believe that acting ethically
and responsibly towards our key stakeholders
creates fundamental value.
Additionally Cobham has signed up to and
fully supports Aerospace and Defence
Industries association of Europe’s Common
Industry Standards for European Aerospace
and Defence.
The Code sets out Cobham’s approach to legal
and ethical conduct and specifies employee’s
responsibilities. It covers matters of personal
integrity, employee relationships, relationships
with customers, suppliers, the community and
others, and possible breaches of the Code.
The Group pursues and will reward the highest
standards of ethical behaviour in all aspects of
its business. Ethical behaviour is an asset to
be valued, optimised and realised. This is more
than a matter of compliance. Our leaders lead
by example and ethics and integrity is a way of
business at Cobham.
As of year end 2008 over one third of our
employees have received ethical awareness
training and the remainder are due to receive
such training in 2009. Our training programme
will continue to be developed such that
business ethics issues are communicated and
training provided at every level in Cobham.
Compliance training on selective topics will
be provided. Training is provided through a
mixture of on-line training, written briefings
and face to face and video/DVD presentations.
Business ethics and compliance officers
(“BECOs”) have been or will be appointed to
each Cobham business unit who are primarily
responsible for implementation of the Code
within his or her business unit. We plan to
appoint Divisional ethics officers to whom the
BECOs can look for support and guidance.
We operate help-lines for employees to call
in the event of issues and each call (or other
contact) is reviewed by the Business Ethics
and Compliance Committee. Each complaint
is fully investigated and the results reported
to the complainant (where their identity is
known). The audit committee of the Board
reviews the process for calls to the help-line on
a regular basis with the chair of the Business
Ethics and Compliance Committee.
We continue to develop systems, plans and
tools to:
a Track corrective actions to completion.
b Actively manage and promote ethical
behaviour in employee performance
management systems.
c Assess employee awareness of the Code
and adherence to the values in the Code.
In 2009 we plan:
• Further updates to the Code and to
translate it into other languages;
• To consolidate to one global help line
provider with local country codes;
• To upgrade our reporting system to a
new provider to facilitate a company
wide confidential case tracking system
thus enabling us to track cases in a variety
of ways;
• To look at ways to report the results of
investigations and disciplinary action taken.
• Further deployment of our desire for all
Cobham’s employees to live up to the Code
and to act with integrity at all times.
Stakeholder Engagement
ApproachFor Cobham to fullfil its corporate vision of
becoming the most trusted global partner
for leading edge aerospace and defence
technologies, we need to build long-standing
relationships with our key stakeholders,
listening to and understanding their concerns,
responding after careful consideration and
developing partnerships where this adds value
to our business.
We already engage with many of our key
stakeholders (i.e. our shareholders, customers,
our employees, our suppliers, our regulators,
the wider investment community, potential
recruits and potential business partners) but
we recognise that this is not yet undertaken in
a way that fully enables us to proactively and
systemically assess our operating environment,
to identify changes in society, technology and
resources that have the potential to create new
risks and new opportunities.
As part of our plan going forward we
propose to develop our policy and strategy
in this area to develop systemic processes
and tools that proactively engages our key
stakeholders in an open, culturally sensitive
and appropriate manner, involves stakeholders
in determining the issues material to our
business, seek out the views of less influential
stakeholders, communicates effectively
and creates partnerships that have mutually
beneficial results.
Key Stakeholder Issues
Climate ChangeCobham recognises that the climate is
changing and that this change is likely to
impact our business in terms of physical,
regulatory and competitive risks as well as
providing us with significant commercial
opportunities. Many of our customers and
investors recognise these impacts, risks and
opportunities and the need to transition to a
low carbon economy.
In order to keep our stakeholders informed
of our progress in this area we have
committed to participating in the 2009
Carbon Disclosure Project that will set out
our understanding that these changes will
have on our business and what we plan to
do in response. Our submission will provide
information on our first carbon footprint and
how we will use this as a basis for developing
our climate change strategy during 2009.
Cobham applies its core technology in
adjacent markets such as wind and solar
power. Our slipring technology is used by
some of the world’s largest wind turbine
manufacturers (e.g. Enercon, Siemens and
Vergnet) and we are adapting our antenna
technology to provide unique solar panel
tracking systems. Civil defence agencies have
utilised our satellite communications expertise
to provide temporary satellite communication
links following severe weather events when all
other conventional systems have failed (e.g.
Hurricane Katrina). We anticipate increased
opportunities to apply our technology and
innovation to opportunities in renewable
energy, communications, monitoring and
surveillance resulting from the impacts of
climate change.
Cluster Munitions and Anti-Personnel MinesIn the lead up to the signing of the Convention
on Cluster Munitions in Oslo in December
2008 we received several queries from
the investment community regarding our
involvement with these weapons. In response
to these queries we can confirm that Cobham
does not make or sell cluster munitions or
anti-personnel mines and we are committed
to complying with the national legislation of
the countries where we are present, as well
as with any relevant international regulations
or conventions that our operations are legally
bound to comply with. We do not condone
the use of any weapons which result in the
maiming or loss of civilian life. We are active in
developing both detection and neutralisation
equipment that mitigates the risks to both
forces and civilians arising from unexploded
cluster bomblets, anti-personnel mines and
improvised explosive devices (IEDs).
Cobham Technical Services (Leatherhead,
UK) has developed a dual sensor mine
detector (Minehound VMR2) that can
detect metalled and non-metalled
landmines. Its primary use is for humanitarian
clearance of anti-personnel mines and has
been trialled in several countries including
Cambodia, Bosnia and Angola with excellent
results. The development project was
part funded by the UK Department for
International Development (DifD).
Cobham Slip Ring Technology
Use of Cobham SATCOM technology by Sichuan earthquake relief team.
Corporate Responsibility and Sustainability – 2008
�� ��
A vehicle-mounted detection and
neutralisation system, known as ‘Zeus’, has
been developed by Cobham Analytic Solutions
(Arlington, VA, USA). The system uses a
laser to neutralise surface and near-surface
ordnance from a vehicle at distance thereby
reducing the risk of explosion to ordnance
clearance personnel when approaching these
sometimes unstable explosive objects.
People DevelopmentTalent development is one of the core values
of Cobham and to this end we continue to
invest in the skills and personal development
of our workforce. Our approach to sustained
employee development and retention is a major
factor in our success. Our recruitment, training
and development methodology is one of the
four key enablers (Growth, Technology, Talent
and Transformation) in driving our corporate
vision and overall business strategy. The “Talent”
aspect allows us to focus our effort in achieving
three key human resource objectives:
1 Develop key leadership and technology
capabilities;
2 Actively manage careers with opportunities
across markets and internationally; and
3 Be an employer of choice.
To meet these objectives Cobham has a
structured talent management strategy
with three components. The first component
is our Leadership and Management
development framework geared to ensuring
an influx of talent in the leadership pipeline.
This includes three key programmes
comprising the following:
• Divisional High Potential (DHP) programme – identifying and developing personnel
capable of becoming direct reports to
divisional presidents or higher within a �
year timeframe;
• Senior Development Programme (SDP) – identifying and developing personnel
capable of becoming senior leaders within
the business; and
• Executive Development Programme (EDP) – providing ongoing talent development
to the most senior management in the
organisation.
Our Mission Critical Workforce (MCW)
programme is aimed at developing employees
in various areas such as engineering, life cycle
management, procurement, finance, supply
chain and human resource functions.
This structured framework enables employees
to advance their careers and have access
to progress opportunities in their areas of
expertise without the pressure of switching
professions in order to reach senior
management levels within the business. This is
also a vital employee retention strategy that
ensures employees are constantly offered
ongoing streams of opportunity along with
provision of a support structure that identifies,
aligns and develops their core competencies
with those of the business.
Underpinning the whole structure, the third
component focuses on recruiting new talent
in the form of graduates and apprentices. In
2008, Cobham continued its commitment to
investing in the skills of young people within
our sector through our Apprentice Scheme
and Graduate Programme. We are one of the
few companies to have increased the numbers
in our programmes during the recent financial
crisis because we recognise that developing
the technical and management skills of our
young people will enable us to continue
in developing state of the art, advanced
aerospace and defence technologies.
Our Apprentice Scheme has been highly
successful because it is founded on the
recognition that future success and long
term business continuity requires strategic
investment in the skills of young people.
Currently, the scheme operates in Dorset,
UK with �7 apprentices and maintains a
close relationship with Bournemouth and
Poole College of Further Education which is
located near two of our larger UK operations
at Cobham Mission Equipment (Wimborne,
UK) and Cobham Aviation Services
(Christchurch, UK).
Our graduate programme now employs over 2�
graduates across the UK having started initially
with just four graduates in 200� at Cobham
Mission Equipment (Wimborne, UK). The
programme is a structured, closely monitored
scheme that focuses on the professional and
educational development of the participants
over a two to three year period.
Graduates typically complete several
placements of six to nine months duration
each in various business functions and
projects as well as attending training
programmes to assist them in widening their
skill sets and building on individual strengths.
As a result, graduates are able to shape their
own long term career aspirations in line with
Cobham’s requirements.
During 2008, graduates took training in IT,
Finance and Accounting to provide them
with important commercial awareness skills.
Similarly non-technical graduates were also
able to gain exposure to more technical areas
of the business by undertaking placements
at a business unit or site level where most
manufacturing and product development
takes place.
Zeus
Cobham Talent Management
Leadership & Management Mission Critical Workforce
Engi
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Life
Cyc
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anag
emen
t
Pro
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men
t
Fin
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Sup
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Ch
ain
Hu
man
Res
ou
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EDP
SDP
DHP
External Partners
Cobham HR Portal
Support Infrastructure
Graduates and Apprenticeships
Cobham Competencies
Corporate Responsibility and Sustainability – 2008
�6 �7
As a corporate member of the Royal
Aeronautical Society, Cobham is fully
committed to providing support to graduates
who wish to work towards gaining professional
registration qualifications such as C.Eng,
CIPD and CIMA etc., while others prefer to
experience various business disciplines before
committing to developing their career within
any one area.
Training
In 2008, a total of approximately �6�,000 hours
were spent training our employees in personal
development, SHE, technical and professional
development, inductions and management
skills. Of this, over �0% was related to technical
and professional development.
Diversity and Equality
Cobham’s workforce rose by almost �0% from
2007 to 2008. The proportion of men to
women has continued to improve since 2006
with the ratio falling by almost 8% from 2.�� in
2006 to 2.�7 in 2008.
As is typical in the developed economies of
the world, Cobham’s workforce is an ageing
workforce with the number of employees
aged �� and younger falling as a proportion of
our total workforce with those aged between
�6 and over increasing. This trend is expected
to increase as the baby boomer generation
retires and pensionable age increases.
It is important that we continue to monitor
these trends in our workforce to ensure that
we maintain the right balance of experience,
skills and succession planning necessary
to maintain our leadership positions in our
chosen markets.
Corporate Philanthropy and Community InvolvementCobham’s engagement in the community
extends from corporate level to business
unit level. Our corporate effort focuses on
supporting national and international causes
that support our service men and women and
development of a sustainable aerospace and
defence industry. Throughout 2008, Cobham
continued to be a corporate sponsor and
partner of the following organisations:
• Soldiers, Sailors, Airmen and Families Association (SSAFA) Forces Help – a
national UK charity committed to helping
and supporting both current and ex-service
personnel as well as their families;
• The Science Museum in London, UK – an
education centre bringing science to life for
thousands of young people;
• The Institution of Mechanical Engineers Schools Aerospace Challenge – an annual
challenge to win a place on a residential
course at the School of Engineering,
Cranfield University, UK to learn about the
aerospace industry; and
• Young Engineers – a national charity
inspiring young people to develop an
interest in engineering as a future career.
Our graduate trainees are encouraged in
community involvement through undertaking
charitable team-building events and advising
young people in relation to careers in
aerospace and defence such as the Royal
Aeronautical Society career day and the 2008
Skills Festival.
Our operating businesses are also encouraged
to involve themselves in their local
communities and to support local charities.
A few examples of their involvement are
detailed as follows:
Cobham Sensor Systems (Bolton, MA, USA)
supported soldiers spending the festive
season in Iraq away from their loved ones.
�00 employees put together a care package
of food, toiletries, playing cards, books and
other festive treats making sure �00 soldiers
had a present from the folks back home. The
business unit also responded to the Wounded
Warriors Family Support charity, helping
to build a library for US Marines deployed
at Camp Al Taqaddum in Iraq. Donations
of personal items requested by the charity
Vettes to Vets, supported by the North Shore
Corvettes Club, have also been sent to the
Bedford Veterans Administration Hospital.
Employees at Cobham Surveillance
(Waterlooville, UK) Cobham employees have
been getting on their bikes in a bid to raise
money for charities close to their hearts
by participating in the �� mile London to
Brighton bicycle race raising over £�00 for the
British Heart Foundation.
Brian Potts and Keith Holland of Cobham
Antenna Systems (Marlow, UK) raised over
£�80 for CLIC Sargent, a local children’s cancer
charity. This was a superb team effort, with
Brian cycling from London to Oxford in � hours
�2 minutes while Keith took charge of the
fund-raising.
Cobham Life Support (St Petersburg, FL, USA)
was one of the six Silver Sponsors of a major
black tie event for a Florida hospice that cares
for over 200,000 terminally ill patients each year.
A review of the charities being supported by the
business units identified that the Hospice was
having by far the greatest impact on the lives of
its employees and their families.
A team of ten women from Cobham Defence
Communications (Blackburn, UK) took part in
Cancer Research UK’s Race for Life. Through a
combination of walking, jogging and running
the five kilometre course at Witton Park
in Blackburn on the �rd of June, these ten
women demonstrated their heart warming
commitment to fighting cancer. The ladies
raised £2,�00 to help the charity continue its
pioneering work to help those affected by the
illness and continue their research into possible
ways to beat the condition.
The total amount donated for charitable
purposes during 2008 was £8�,�9� compared
to £67,7�� in 2007. No contributions were
made to political organisations.
Data Verification
Cobham is committed to providing reliable
information regarding its Corporate
Responsibility performance. Data verification
has taken place since 200�. This was initially an
internal programme checking compliance with
corporate standards, monitoring systems and
raw data. During 2008 the organisation moved
to an external assurance process focussing
on the effectiveness of SHE management
systems and performance data. Fourteen
business units drawn from all divisions across
the USA, UK and Australia (representing �9%
of our turnover) participated in the 2008
audit programme. Business units are required
to provide an action plan to address any
recommendations made. The action plans are
reviewed regularly at corporate level.
Data is reconciled to account for
acquisitions and disposals, and changes
in foreign exchange rates.
Cobham Graduates at the 2008 Royal Aeronautical Society (RAeS) career day in London
Cobham graduates participate in the Three Peaks Challenge raising funds for Youth Cancer Trust
Carol Officer, Norma MacPherson, Julie Bentley, Caroline Mather, Debbie Monk, Irene Connor, Jackie Kelly, Manda Heald, Karen Stickland and Pauline Cowperthwa
Corporate Responsibility and Sustainability – 2008
�8 �9
Performance
Sustainability Indicator 2008 2007 2006
Economic
Turnover £�,��6.�m £�,06�.�m £�,0��.7m
Trading Profit £2��.6m £�98.8m £�86.�m
Dividends (Pence) �.9�� �.�00 �.7�0
Wages and Salaries £�7�.�m £27�.2m £27�.6m
Pensions £2�.�m £��.�m £�6.�m
Social
Employees: Total �2,78� 9,0�0 8,�9�
Graduates (UK only) 2� �� 6
Apprentices (UK only) �7 �6 ��
Gender diversity ratio: (Male/Female) 2.�7 2.�9 2.��
Age diversity ratio (%): <2� 6.2% 7.6% �0%
26-�� �8.�% 2�.6% 2�.�%
�6-�9 �8% �9.8% �6.�%
�0-�9 26.2% 2�% 22%
<�9 9.�% 7% �%
Staff Safety: Major Injury Incidence Rate (No of injuries resulting in �
or more days absence per �00,000 employees)260 ��8 720
Number of Reportable Injuries �� �� 7�
Lost working days �,6�8 �,��7 �,�76
Community giving total (GBP) 8�,�9� 67,7�� 77,8�6
Environmental
Energy Consumption: Total (GWh) �,8�� �,67� �,89�
Electricity �.�% �.�% �%
Natural Gas 2.9% 2.�% �.7%
Aviation fuel 9�.6% 9�% 9�.�%
Energy Efficiency: (MWh/£m turnover) �,206 �,�99 �,892
Carbon footprint: Scope � Direct emissions (tonnes CO2 equivalent) ��6,226 - -
Scope 2 Indirect emissions (tonnes CO2 equivalent) ��,2�� - -
Scope � Indirect emissions (tonnes CO2 equivalent) 292,29�
Waste generated (tonnes) �2,�6� �,677 �,�9�
Waste efficiency (tonnes/£m turnover) 8.2 �.7 �.�
Water consumption (m�) �90,2�2 �77,8�8 287,728
Water efficiency use (m�/£m turnover)� 2�9 ��� �92
� Aviation fuel used in leased aircraft or provided to us by customers for use in their operations. Other fuel sources are negligible and have been omitted for this reason.
Staff Safety (No of injuries resulting in 3 or more days absence per 100,000 employees)
548
720
2007
2006
2008 260
Age Proportions
24%26%
7%
9%
8%
6%
22%
18%
39%
41%
<25
26 to 35
36 to 49
50 to 59
>59
2008
2007
2006
10%
25%
37%
22%
6%
Gender Diversity
2008
2007
2006
70.3%
71.5%
71.2%
29.7%
28.5%
28.8%
Males Females
Training Hours Breakdown
Personal Development
Technical/Proffessional
Safety, Health, Environment
Management
Induction
12%
15% 19%
6%
14%
14%
42%
54%
13%
11%
2007
2008
Corporate Responsibility and Sustainability – 2008
20 2�
Performance
Annual Energy Use Comparison (G Wh)
Aviation Fuel
1840
1674
2008
2007
18932007
Electricity
100
74
2008
2007
742007
Gas
52
38
2008
2007
302007
Waste Recycled/Not Recycled as Proportion to Total Waste (Tonnes)
2008
2007
2006
47.2%
39.5%
28.2%
52.8%
60.5%
71.8%
Waste Recycled Not Recycled
Water Efficiency (m3/£m)
1622007
1892006
2008 259
Energy Efficiency (M Wh/£m Turnover)
1,498
1,892
2007
2006
2008 1,206
Waste Efficiency (Tonnes/£millions Turnover)
2007
2006
2008
5.3
5.7
8.2
Lost Working Days
1,317
1,576
2007
2006
2008 1,638
Number of Reportable Injuries
54
73
2007
2006
2008 33
2008 Accidents by Type
Repetitive strain
Manual handling
Contact with stationary object
Contact with moving object
Fall from height
Exposure to harmful substance
Contact with moving parts
Explosion
Electricity
Other (includes slip/trip/fall at same level)
34%
10%
7%5%5%
4%
4%
15%
15%
2008
1%
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When you have finished with this report, please pass it onto other interested parties or remove the cover and dispose of it in your recycled paper waste .
For further information:
Corporate Responsibility and Sustainability DepartmentCobham plcBrook RoadWimborneBH21 2BJ
E: crs@cobham .com
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