GRI Compliance / Economic
Economic Performance 2016
Direct economic value generated and distributed
Our revenues this year totalled £4,182.7 million. Economic value distributed contains operating costs (£1,669.1 million), employee salaries and benefits (£1,615.9 million) and tax benefits (£15.3 million).
Omissions: this information is not presented by country.
Financial implications and other risks and opportunities due to climate change
Climate change will impact on our business in a variety of ways and present both risks and opportunities. This is explained in more detail in the Sustainable Business section of our Annual Report on pages 62 to 83.
As of 2020, we have highlighted climate-related risk within our Principal risks and management controls section of the annual report. Please see page 84 of our Annual Report for more information.
We are taking steps to better understand the direct and indirect impacts of climate change on our business, so that we can develop plans to ensure that our business activities remain robust and are affected by climate change as minimally as possible. We recognise the importance of considering climate-related risks and opportunities in business decisions and strategic planning. For the year ending 31 March 2022 we will be adopting the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to enable us to identify and address physical and transitional risks and quantify the impact of climate change on the Group.
Defined benefit plan obligations and other retirement plans
All of the Group’s UK retirement plans (other than the Additional Compensation Program) are either established under Trust (which are at arm’s length to the Company and administered by the appropriate Board of Trustees) or by way of a direct contract between the employee and the provider (such as a personal pension plan). The Additional Compensation Program provides certain categories of ex-employees with additional pensions, the costs of which for many of these amounts are met by other parties through contractual agreements. The estimated value of the liabilities for Additional Compensation Payments not reimbursed by other parties is £2m.
Outside of the UK, the Group’s employing entities participate in pension programs as appropriate to the relevant country. No defined benefit programs are in place whereby liabilities are met from Group’s general resources.
As at 31 March 2021, the Group’s Trust based defined benefit pension schemes assets covered 94.2% of the liabilities as calculated for IAS19 purposes.
The full basis is given within the Group’ Report and Accounts for the year ending 31 March 2021. As at 31 March 2021, the discount rate assumption used was 2.0% and the CPI inflation assumption used was 2.7%.
In recent years, the Group has agreed revised strategies with the trustees of the Babcock International Group Pension Scheme and the Rosyth Royal Dockyard Pension Scheme designed to target these schemes being self-sufficient by 2026.
The level of participation in retirement plans is approximately 95% for the UK.
Omissions: we do not disclose the percentage of salary contributed by employer and employee.
Financial assistance received from government
Babcock is a publicly-listed company and is not part-owned by any government.
Tax credits are included in Note 10 on page 225 of our Annual Report. Government grants received during the year are immaterial and therefore are not disclosed in an individual note.
Omissions: this information is not broken down by country.