EMS adding value IEMA regional workshop 07/07/10 Matthew Payne Environmental Improvement Manager

Overview About Rolls-Royce Reasons for having an EMS History of EMS in Rolls-Royce Experience of benefits from having an EMS

Our four markets Rolls-Royce proprietary information

Key statistics Rolls-Royce proprietary information

Why have an “EMS”? “Tick in the box?” “Badge on the wall?” Adding value to the business?

Benefits of an effective EMS Assists in the protection of the environment Helps in reducing potential business risks Turn potential business threats resulting from environmental concerns into business opportunities

Areas an EMS can add value Public Relations Finance Insurance Cost Saving Reputation Competition Customers Liability Avoidance

History of EMS in Rolls-Royce 1994 HS&E Manual (mainly H&S) 1997 Main Board commitment to achieve ISO 14001 certification 1998–1999 EMS implementation programme 1999 Businesses certified to ISO 14001 2000 onwards - new businesses mandated to achieve certification 2009 Move to global certification contract

Our environment strategy Rolls-Royce proprietary information

Scope of our EMS includes… Activities Manufacturing Product test Purchasing – supply chain management Facilities management Offices & support functions Products Design Materials R&D Services Field service

Governance EMS has assisted with governance Focus on what is important (key risks) Exec level responsibility Management review Supporting meeting structure Communication E.g public reporting Independent assurance Management systems Performance data

Stakeholders & company reputation EMS benefits Customers Increasingly requiring formal EMS Ability to respond to technical questions Assurance Regulators Maintain compliance, robust emergency arrangements Public Responsible and responsive neighbour Benchmarking via indexes (BiTC, DJSI etc)

Efficiencies from integration of EMS Combined HS&E management system Synergies with Management System documentation O&T setting and tracking Management review Etc Incorporated into QMS Synergies with: Audit process Document & record control

EMS & maintaining legal compliance Environmental law still developing Licence to operate E.g. Env. Permitting Regs Keeping ahead Maintain access to markets Manage business continuity risks E.g. REACH, RoHS etc Maintain/enhance reputation CRC – league tables Negative publicity for incidents/ breaches of regulation

Continual improvement - performance

Waste reduction & product quality EMS target to reduce waste Foundry sand a dominant waste stream Thermal reclamation plant installed at Bergen foundry ~ 2006 Benefits Less raw materials needed ~ 50% reduction in landfilled sand ~ £350k savings/year Improvements to casting quality

Recycling & resource efficiency EMS target to increase recycling Metal recycling Manufacturing and scrap product Segregation – better financial return Move to closed loop recycling Sustainability of limited resources maintain continuity of access to specific materials Feedstock back into product

Energy saving & productivity Ceramic core manufacture Change from conventional electric to microwave drying oven 90% reduction in energy use 33% reduction in drying cycle

Using EMS to influence behaviour Energy saving (turn it off campaign) Cost saving Waste segregation Easier to recycle Lower disposal costs

EMS and influencing supply chain Increasing stakeholder expectations Journey – part of long term continual improvement Benefits Increased awareness of environmental issues Risk management (e.g. REACH) Business requirements HS&E policy for suppliers Technical issues e.g. hazardous substance management e.g. packaging requirements Support Supplier environmental workshops Awareness materials

Questions Further information www.rolls-royce.com/cr