Reporting Boundaries and Methodologies

Babcock’s first GRI Reporting Standards describe the environmental, social and governance (ESG) disclosures set out in our Annual report. They demonstrate Babcock’s commitment to sustainable development which create value for all our stakeholders, including our local communities.

This Report has been prepared in accordance with GRI Standards according to the Core option. Outlined below is the process for data collection and verification related to our ESG disclosures, as published in our Annual Report and GRI Disclosures.

Reporting boundaries

The reporting process, collation of the data and drafting of the ESG Report, is managed by the Group Sustainability team prior to review and verification by functional owners and subject matter experts using their local systems and processes.

The Report’s contents have been defined according to the principles of accuracy, balance, clarity, comparability, reliability and timeliness.

Whilst the aim of our reporting processes is to provide data that is complete, accurate and reliable with built in verification, it must be noted that this report has required numerous complex streams of data and it is not possible to guarantee this. For clarity, any limitations to the reporting boundary or clarifications are indicated in the relevant sections of the document.

This document was approved by our Chief Corporate Affairs Officer. Our sustainability data has not been subject to external assurance unless indicated.

Exceptions

We have listed below the disclosures where Babcock is unable to provide results because the information is unavailable, not relevant or not material to our business:

• GRI 410: Security Practices 2016
• GRI 414: Supplier Social Assessment 2016
• GRI 416: Customer Health and Safety 2016
• GRI 417: Marketing and Labelling 2016
• GRI 418: Customer Privacy 2016

Materials

Data was collected from sites where Babcock International Group plc have operational control.

The reporting period is the calendar year (01 January to 31 December), this is opposed to financial year as we have previously reported. The transition to calendar year reporting has allowed more time to collate, analyse and report our environmental data, which has improved the accuracy and completeness of our data sets.

Greenhouse Gas Emissions

We have set a net zero emissions target for 2040. We have set out a roadmap with milestones to achieve our new goals, linked to our KPI on CO2e emissions for measuring our progress.

Our emissions data is reported in line with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard under the ‘Operational Control’ approach.

Figures for UK operations follow conversion factors published by BEIS. Non-UK operations utilise emission factors applicable to the fuel source and location. Appropriate conversion factors have been used to calculate the underlying energy consumption figures. Scope 1, 2 and 3 sources have been divided by the annual revenue to provide the intensity ratio (tCO2e per £m).

The reporting period for our energy consumption and carbon emissions is the calendar year (01 January to 31 December), this is opposed to financial year as we have previously reported. The transition to calendar year reporting has allowed more time to collate, analyse and report our environmental data, which has improved the accuracy and completeness of our data sets.

Certain data, estimated to be immaterial to the Group’s emissions, has been omitted as it has not been practical to obtain (including operations in Oman, South Korea, Canada and Australia). Metering and monitoring improvements are being implemented to capture these data streams.

During the reporting period our approach to energy and carbon management included a holistic review and the re-establishment of our baseline. We have developed our new net zero carbon strategy, Plan Zero 40, which details our journey to net zero.

Biodiversity

Distance to protected areas as listed by the UK Government, were measured for all UK sites where Babcock International Group plc have operational control.

Each row within the table represents a Babcock International Group plc location within 1km of a protected site. The exact geographic locations of each site have been removed for security considerations.

Community Engagement

We play an active part in our local communities to enhance development and inspire the next generation, with our offices supporting a range of charities and good causes from local sport clubs to local theatres.

During the year we supported a broad range of activities for local communities and the armed forces community. This includes Science, Technology, Engineering and Maths (STEM) programmes, strengthening our relationship with indigenous peoples, support for armed forces and reserves, partnering with a broad range of academic establishments to support funded research and local sponsorship.

The number of active STEM ambassadors and the volume of their activities is collected by an external platform that we are able to access for reporting purposes. We report the number of our STEM Ambassadors in our Annual Report.

Armed Forces data is collected internally, partly in our HR Information System (SuccessFactors) and partly manually. We report data to the MOD and within our Annual Report.

Donations and sponsorships are recorded at a local business level. A high-level overview of Group-wide activities is shared at the Corporate ESG Committee for information.

Safety, Health and Environmental Protection

Our vision is that everyone goes Home Safe Every Day and that what we do and how we do it does not cause harm to our people or the planet.

Our focus is to embed a robust framework of standards and provide the tools that enable us to manage safety, health and environmental protection in a common way across Babcock. Our people are at the heart of all that we do and developing the Engaged Safety Culture, where people are questioning, they report events and are able to learn, is fundamental to achieving our vision. We are building solid foundations to enable sustainable improvements in performance.

We encourage people to report near misses and safety observations as well as accidents and incidents so that we can make things safer before an accident happens. All accidents, regardless of how severe the injury, are reported, whilst recordable injuries relate to those accidents that require medical treatment beyond first aid. The Total Recordable Injury Rate is expressed as the number of recordable injuries in a 12-month period per 200,000 hours worked (to equate to 100 people’s working hours per year). Those work-related injuries or illnesses that resulted in person being away from work for one day or more are recorded as Days Away Cases and are expressed as a Days Away Case Rate per 200,000 hours worked. These align to the Occupational Safety and Health Administration (OSHA) definitions to standardise reporting across our international business.

Contractors and consultant events whilst working on Babcock property are included within employee figures as we are responsible for contractor health and safety so do not differentiate between contractors and employees.

Events are reported across Babcock using the group-wide Safety, Health and Environmental Protection Management Information System. The management of events has been assured internally and is included in routine management reviews at all levels.

Inclusion and Diversity

Deepening inclusion and increasing diversity in recruitment and in all our people processes is critical to ensuring we continue to develop a workplace culture where our people can flourish and contribute to the shared success of the business.

Data for over 85% of our employees is held in our HR Information System (SuccessFactors). Data for the other 15% is held in local HR Systems for their respective country or entity. This data is manually aggregated to form a complete picture for our global workforce. Note that while we hold employee data in SuccessFactors, employees might not have disclosed diversity data. We actively encourage our people to provide their personal data and offer a full range of options for each area, including the option of “prefer not to say”.

The data has been calculated in line with the GRI guidance provided per question.

The data included in our responses covers our global workforce. Any exceptions to this have been noted in the individual response.

Any assumptions have been detailed in the individual question responses.

Talent and Development

Recruiting, maintaining and developing the best talent through a robust talent pipeline is key to ensuring that we maintain a competent workforce with the capacity to meet current and future needs.

Data for over 85% of our employees is held in our HR Information System (SuccessFactors). Data for the other 15% is held in local HR Systems for their respective country or entity. This data is manually aggregated to form a complete picture for our global workforce.

The data has been calculated in line with the GRI guidance provided per question.

The data included in our responses includes data covering our global workforce. Any exceptions to this have been noted in the individual response.

Any assumptions have been detailed in the individual question responses.

Business, Ethics and Integrity

We have policies and procedures in place to ensure that employees are aware of business ethics and the importance of information security/cybersecurity.

A number of training courses such as Acceptable Use Policy, Cyber Security Awareness and Anti-bribery and Corruption, are mandatory for Babcock employees and must be completed annually.

Employees that have a full Picasso account, will have to complete all mandatory training courses whilst employees that have a light Picasso account (i.e., some contingent workers, warehouse operatives, etc.) are only required to undergo two of the mandatory courses: Cyber Security Awareness and Acceptable Use Policy.

Where required, we create training materials in local languages.

If an employee does not complete these courses, and any required refreshers/updates, their IT access will be revoked for security reasons. They will not be able to access any external websites, send external emails or use removable media (such as USB sticks) until they have completed all outstanding courses. Once the required training has been completed, their access will be restored overnight, ready for the following day.

All new Babcock employees using our network must also complete mandatory training before they are given the above access rights.

Any employee who is absent from work due to long-term sickness, maternity or other extended leave, for the period over which the activity is required to be completed is considered out of scope.

Governance Accountability and Culture

We maintain internal policies and procedures in order to ensure that the Group complies with all applicable laws and regulations. We also have suitably qualified and experienced employees and/or expert external advisors to advise and assist on regulatory compliance. We have management systems involving competent personnel with clear accountabilities for operational regulatory compliance.

Our Code of Conduct, together with our Ethics policy, sets out the clear expectations that we have of our employees. We seek to reinforce these values with all employees through a number of different processes, for example, our training.

Our whistleblowing telephone service and online portal is confidential and is available 24 hours a day, seven days a week in over 20 countries and multiple languages. The independent confidential reporting service is operated by an independent company. Employees can leave their name and contact details if they wish or choose to leave a completely anonymous message. Employees’ concerns will be relayed, on a confidential basis, to the Company Secretary who will make sure that they are investigated.

Sustainable Supply Chain

We are committed to conducting business honestly, transparently and with integrity. To protect the Company and reduce risks, we have set out a policy on how we should conduct business, which we summarise in the form of the Babcock Code of Business Conduct. Compliance with this policy is compulsory for our employees, business advisors and business partners (or, in the case of business advisors and partners, they must have equivalent standards and procedures in their own businesses).

We believe that a culture of respect for, and protection of, human rights is embedded throughout our business and can be demonstrated by our commitment to principled conduct in everything we do. Our Modern Slavery Transparency Statement, which is referenced again in the ESG Governance section of our Annual Report, is reviewed and approved annually by the Board.

We recognise the very real risk of malicious cyber breach and work hard to ensure both our customers’ and our own information assets remain protected. Babcock’s Group Security Board meets quarterly to provide governance covering cyber and other security and informational assurance risks, issues and threats facing the Group. For UK and International Government contracts, Babcock holds multiple Operating Authority Accreditations/ Certifications (additionally including Cyber Essentials Plus certification within the UK) which are mandatory for all suppliers of Government contracts involving handling of personal information and the provision of certain IT products and services.

The focus for FY22 is to continue working towards aligning procurement processes and standards with ISO 20400 and this includes ensuring that we consider circular economy principles including recycling and disposal options.

We follow the Payment Practices and Performance Regulations which require us to report on a half-yearly basis on our payment practices, policies and performance. This information is published through an online service provided by the government and is available to the public.