Transitioning to ISO 14001 2015 an aerospace perspective

Transitioning to ISO 14001: 2015 - an aerospace perspective July 27 th, 2017

Presenters Nigel Marsh Global Head of E&S Rolls-Royce plc Cindy Klöhn Head of EMS Management Airbus SAS

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Agenda • • • Anti Compliance reminder and disclaimer Introduction to IAEG Why an Environmental Management System? ISO 14001 overview Why the IAEG Transition Document? Key Areas – – – Leadership Scope and context Life-Cycle Interested parties Risks & Opportunities Performance • Implementation/Transition – Steps to consider © 2017 IAEG®

Disclaimer THIS WEBINAR IS PROVIDED BY INTERNATIONAL AEROSPACE ENVIRONMENTAL GROUP, INC. (“IAEG”) FOR INFORMATIONAL PURPOSES ONLY. THIS WEBINAR REPRESENTS IAEG THOUGHT AT THE TIME OF PRESENTATION; ANY INACCURACY OR OMISSION IS NOT THE RESPONSIBILITY OF IAEG. DETERMINATION OF WHETHER AND/OR HOW TO USE ALL OR ANY PORTION OF THIS WEBINAR IS TO BE MADE IN YOUR SOLE AND ABSOLUTE DISCRETION. PRIOR TO USING THIS WEBINAR OR ITS CONTENTS, YOU SHOULD REVIEW IT WITH YOUR OWN LEGAL COUNSEL. NO PART OF THIS WEBINAR CONSTITUTES LEGAL ADVICE. USE OF THIS WEBINAR IS VOLUNTARY. IAEG DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THIS WEBINAR OR ITS CONTENTS. NOTE: THIS WEBINAR MAY BE RECORDED BY IAEG RESERVES THE RIGHT TO EDIT THE RECORDING. © 2017 IAEG®

International Aerospace Environmental Group § Trade association formed by major aerospace companies § Focused on the multitude of global laws and regulations impacting health and the environment § Formed to address the complexity and variability of these requirements and associated impact on the Aerospace industry (Civil & Defense) and its supply chain § Seeks to drive continual improvement in the processes used by the industry, thereby delivering consistently high quality products and regulatory compliance with reduced environmental impacts IAEG formally incorporated June 2011 © 2017 IAEG®

IAEG in numbers © 2017 IAEG®

Members 3 M Deutschland Gmb. H ERM Raytheon Airbus GE Aviation Rockwell Collins Airbus Defense & Space GKN Aerospace Engine Systems Rolls-Royce Airbus Helicopters Granta Design Ltd SAAB AB Arconic Gulfstream SAFECHEM Europe Gmb. H Assent Compliance Hangsterfer’s Laboratories Inc SAFRAN BAE Systems Harris Corp Socomore Bergeson & Campbell, PC Hewlett Packard Spirit Aero Systems Boeing Honeywell SR Technics Switzerland Ltd Bollore Logistics Huntsman Advanced Materials STELIA Aerospace Bombardier Aerospace i. Point Systems Gmb. H Sur. Tec International Gmb. H Bureau Veritas Certification France Israel Aerospace Industry Ltd Tetra Tech Inc Cobham plc Lockheed Martin Textron Aviation Dassault Aviation Meggitt PLC Thales Dassault Systemes Mitsubishi Aircraft Co United Technologies Corporation (UTC) Enovia Corp National Quality Assurance Zaki Surface Treatment Consulting Embraer Northrop Grumman Zodiac Aerospace © 2017 IAEG®

Why have an environmental management system (EMS)? • Management tool - Framework to ensure effective control over environmental issues - Provides structured approach to setting objectives and demonstrating their achievement • The Benefits of an effective EMS - Helps to ensure and demonstrate compliance with legal requirements and other obligations - Helps in reducing potential business risks and delivering an improvement in environmental performance - Achieving environmental objectives © 2017 IAEG®

What is ISO 14001? - A standard framework - Developed by the International Standards Organisation (ISO) - Originally launched in 1996, revised in 2004 and 2015 - Provides the means for third party certification - 300 000 certificates issued globally - A common language © 2017 IAEG®

Benefits of ISO 14001 - Engaging Top Management Driving improvement Facilitating supply chain collaboration Better understanding of and managing interested parties’ needs and expectations - Demonstrating credibility - Identifying business opportunity rather than just managing risk - Supporting the long term viability of organisations and the industry © 2017 IAEG®

ISO 14001: 2015 Key Changes since 2004 Better integration with Business Processes and a greater focus on: - - Active Leadership commitment and accountability Environmental policy / objectives compatible with the strategic direction of the company Scope & context of the organisation Environmental performance improvements Risks and opportunities (in addition to the environmental aspects assessment) – part of management review Life cycle thinking Determining the needs and expectations of Interested Parties From an ISO focus on Pollution Prevention & Compliance to a Lifecycle approach © 2017 IAEG®

ISO 14001: 2015 Continual Improvement © 2017 IAEG®

IAEG Document: Transitioning to ISO 14001: 2015 • Effective implementation • Common interpretation of Scope of EMS – Across the life-cycle – What is significant, relevant & controllable • A robust aerospace industry approach • NOTE - internal operations are not addressed • Document can be found at iaeg. com Provide aerospace industry with voluntary guidance for transition © 2017 IAEG®

Transition to ISO 14001: 2015 Key Areas: Leadership Scope & Context Life Cycle Interested Parties Risks & Opportunities Performance Reference ISO 14001, 3 rd edition 2015 -09 -15, Environmental management systems - Requirements with guidance for use ® 15 © 2017 IAEG

Leadership Extract from ISO 14001: How t o leader involve you s r - Brie f them on the ir role - Und erstan d an comm unicat d e h enviro nment ow al manag ement co to visio n and ntributes busine object ives ss - Ens ure t contin hey promot e ua comm l improveme un n of goo icate impor t and tance d envi ro perfor mance nmental © 2017 IAEG®

Leadership Examples of requirements integration • Understanding and communicating how the EMS can contribute to the organisation’s overall business goals • Including environmental risks and opportunities as part of the corporate/enterprise risk management process • Using communication, sustainability or corporate social responsibility strategies to support the process of identifying interested parties and their needs and expectations • Reporting environmental performance alongside financial reporting • Developing and reviewing environmental indicators as part of the business performance process © 2017 IAEG®

Scope & Context • Consider different levels of the organisation • Use existing methodologies to understand internal and external issues • PESTLE: Political, Economic, Social, Technological, Legal, Environmental issues • Gather input from different functions of the organisation • Identify internal and external issues Reference ISO 14001, 3 rd edition 2015 -09 -15, Environmental management systems - Requirements with guidance for use © 2017 IAEG®

Life Cycle The revised Standard requires organisations to consider a high level life cycle ‘perspective’ rather than a detailed Life Cycle Assessment (LCA). Source: IAEG – Transitioning to ISO 14001: 2015 (iaeg. com) © 2017 IAEG®

Life Cycle From Appendix 2 – Applying a life cycle perspective Life cycle stage Example activity Example aspect(s) Example impact(s) Supply chain: material/compon Engine Manufacturing Material Resource waste, energy depletion, ent processing. (design-build). consumption, air emissions, water consumption. landfill use, air quality, water quality, climate change. Possible considerations Example risks to the Example opportunities Examples of actions including for control or influence? organisation for the organsiation operational control or influence Control over specification. Organisation and engine Specification from buyer to meet manufacturer lose out to competitors who are partnering with a more efficient engine manufacturer increase sales due to more efficient engine design. certain standards relating to fuel burn and product weight. Influence design. Limited influence on supplier’s manufacturing methods. manufacturer. Organisation and engine manufacturer benefit from lower production costs. Source: IAEG – Transitioning to ISO 14001: 2015 (iaeg. com) © 2017 IAEG®

Interested Parties Understanding the needs and expectations of interested parties • Identify and use existing interested party processes • Identify interested parties relevant to the environmental management / performance • Identify relevant needs and expectations • Determine compliance obligations (considering risks and opportunities) • Document and implement compliance obligations • Consider communication requirements in relation to compliance obligations © 2017 IAEG®

Interested Parties From Appendix 3 – Examples of aerospace interested parties Interested party group Examples of interested parties Examples of environmental needs and expectations Examples of compliance obligations Society at large, individual citizens. Industry to consider societal needs (e. g. climate 2°C target). Corporate responsibility/sustainability Industry to be innovative to address environmental issues. reporting. Community and neighbours. The community and neighbours will Agreement to hold an annual Including neighbouring can organise themselves into a have requirements related to their own community meeting. industries. group to represent their views, for example an action group or non-governmental organisation (NGO) (see entry below). context and that of the facility but could relate to noise, emissions, odour and parking. Neighbours are those adjacent to or in close proximity to an aerospace facility. The community includes neighbours but also those who may be subject to associated socioeconomic factors. To some extent the community and neighbours’ requirements are enforced by local agencies and regulators (see entry above). The community and neighbours may require financial support, assistance or expertise with an environmental project. Regular reporting of emissions. Regular reporting of noise monitoring data. Providing a dedicated telephone line or email account for enquiries or complaints. Participation in an annual environmental project. Employees of aerospace companies. Employees may be represented by a workers union. Individual employees. Integrity and honesty. Monthly reporting. Groups of employees (informal). Safe and healthy working environment. Substitution of hazardous Workers union (formal). Communication on environmental performance. substances. © 2017 IAEG®

Risks & Opportunities © 2017 IAEG®

Risks & Opps From Appendix 5 – Examples of risks and opportunities Internal and external issues Risks Opportunities Actions Climate change. Increased sales in products adapted to a Ensure corporate risk, procurement, material planning, changing climate. business continuity functions consider impact of a changing climate. If environmental training and communication is Training department to advise on how to train and communicate to enhanced then could result in substantial environmental improvement and cost saving. different audiences on environment. Opportunity to influence Ensure that employees/or the restructure to optimise department overseeing environmental management. divestiture and integration consider arrangements for environmental management in their brief. Increased likelihood of flooding at production sites. Disruption to supply chains from increased instances of extreme weather. Design of aircraft will need to change to operate in a changing climate. Environmental awareness of employees. Difficult to engage employees or train them on environmental procedures. Literacy levels. Difficult to implement culture or behavioural change. Company restructure/merger with other organisation. EMS suffers from a lack of focus. Time will need to be taken to combine EMS. Morale of employees makes it difficult to obtain engagement on environmental management. Financial resources may not be available during restructure/merger. Apprentice training to include environmental awareness. Opportunity to take the ‘best of both’ from the two merging organisations. © 2017 IAEG®

Performance • Plan what needs to be monitored and measured • Identify appropriate indicators • Monitoring and measuring • Analysing data • Evaluating performance • Communicating performance ISO 14001: 2015 places greater emphasis on evaluating environmental performance rather than simply monitoring and measuring. Reference ISO 14001, 3 rd edition 2015 -09 -15, Environmental management systems - Requirements with guidance for use © 2017 IAEG®

ISO 14001: 2015 Steps to consider • Complete a gap analysis • Raise top management awareness • Involve representatives from relevant functions • Demonstrate the business value • Evaluate third-party certification vs. self -declaration • Consider the need for further awareness and/or competency • Consider how the changes relate to other management systems • Develop an implementation plan © 2017 IAEG®

Key Take Away READ THE DOCUMENT Transitioning to ISO 14001: 2015

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