PwC with BAE Systems

Sustainability Award

BAE Systems (BAES) is the largest defence contractor in Europe, and ranked the seventh-largest in the world. In the face of growing pressure from customers, regulators and investors – not to mention its own desire to be a sustainable business – it is keen to take decisive action on climate change and contribute to the UN Sustainable Development Goals (SDGs).

BAES has committed, as part of its sustainability agenda, to a net zero ambition, developing milestones in line with the UN Race to Zero, and thereby playing its role in taking action on climate change in the aerospace and defence industry. What’s more, as with most FTSE100 companies, BAES has committed to achieving net zero carbon emissions by 2050.

Focusing on decarbonisation enables BAES to deliver on its purpose as a responsible defence contractor, and provides a competitive advantage allowing it to attract top talent and meet the needs of customers. In addition, an effectively implemented decarbonisation plan helps BAES contribute to six UN SDGs (4, 8, 9, 12 13, 16), while influencing the others.

In decarbonising its supply chain, however, BAES faces significant challenges. It comprises over 17,600 suppliers, and is the source of a significant proportion of BAES’ Scope 3 emissions. So, to begin its supply chain decarbonisation, BAES wanted to identify and quantify its global supply chain emissions, allowing it to develop an informed strategy to engage with its suppliers to drive meaningful change.

PwC was engaged to baseline and analyse BAES’ supply chain emissions from those ~17,600 suppliers, assess its readiness to achieve Net Zero, and identify tangible actions to deliver net zero in its supply chain by 2050.

PwC managed not only BAES’ scale and complexity, but also navigated a range of legal and regulatory complexities related to data sharing, on its way to producing detailed analyses and insights that helped prepare BAES for its supply chain decarbonisation journey. To kick-start progress in addressing supply chain emissions, the firm ran a pilot to serve as a proof of concept based on one of the division’s Source-to-Pay Processes, with the aim to scale implementation globally across all areas of procurement and supply chain, to develop one cross-enterprise net-zero strategy.

PwC deployed two established approaches, and worked with its client to deliver the project objectives in just 12 weeks, giving BAES momentum to make the changes it needs to meet its ambition. PwC’s readiness assessment and roadmap have empowered BAES with a plan to engage with its supply chain on decarbonisation activities and work towards its Net Zero commitments.

The programme for BAES saw innovative use of technology and tools, as well as the operationalisation into project work of PwC’s thought leadership with the World Business Council for Sustainable Development. The outputs provide the analytical detail needed to support mandatory and voluntary disclosures, inform business decision making, and effectively engage suppliers and other stakeholders. They will also ultimately set BAES up to be in a leading position to achieve its Net Zero commitments.

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