The UK Defence ESG Charter: What it is and why it matters

Written by ADS ESG Executive, Jordan Croskery

Background

In January 2024, ADS launched the UK Defence ESG Charter. This milestone initiative for the UK defence sector was developed in collaboration with seven leading industry members: Airbus, Babcock, BAE Systems, Leonardo, MBDA, QinetiQ, and Thales.

The Charter underscores an industry collective commitment to Environmental, Social, and Governance (ESG) principles, reflecting a unified stance across the supply chain and allowing the sector to demonstrate its progress. The nine commitments made in the Charter are comprehensive, ensuring that they are applicable across widespread operations and for companies throughout the supply chain. Commitments include pledges on the climate transition & clean tech, as well as on the societal impact and governance structures.

The importance of ESG for success in the defence sector

The Charter’s initial focus was to highlight the level of commitment to ESG principles within the defence sector, and the level of resources businesses of a range of sizes across the sector were, and are, willing to commit to deliver on those principles.

Signatories to the Charter send a clear message across the businesses they work with, the wider defence sector, and potential investors that their dedication to realising the benefits of investment in ESG is strong. Similarly, the signatories as a bloc highlight this dedication within the whole UK defence sector, which provides even greater value.

In our recent webinar to introduce the Charter to the wider defence industry, ADS Chief Economist Aimie Stone and Diane Shaw, Managing Director and Partner at Alix Partners emphasized the importance of showcasing the defence sector’s improvements and commitment to ESG, both within the sector and to external stakeholders. Acknowledging that the sector faces unique challenges, the charter aims to demonstrate the positive impact being made by companies to address ESG and bring both customers and suppliers along in the journey.

Aimie Stone made an important comment on the value over time of continued data collection as part of the Charter: “We can identify what’s happening today, but also we want to understand temporally what’s going to happen in the future. Over time, we’ll be able to identify trends and give a really positive picture of defence industry going forwards to all of its stakeholders.”

ADS, through the Charter, is facilitating an industry-wide approach, collating data to provide a holistic view of ESG efforts within the defence industry that align to standards and frameworks being set. As part of these efforts, we will be developing the community of ESG supporters within the sector to help companies progress their ESG understanding and goals.

Joining the charter

The UK ESG Defence Charter is now open to new signatories. ADS is focused on increasing the number of signatories and expanding the Charter’s coverage within the UK defence sector, where the Charter’s nine commitments will provide your business with a framework to build your ESG efforts around, and the data collected through the charter over time will allow you to mark progress. For ADS, the data is invaluable for evidencing ESG success in the sector for the awareness of external stakeholders to spark policy change in the interest of the defence sector.

Interested in getting involved? Contact ESG@ADSGroup.org.uk.

 In case you missed it: Webinar recording available now for members to watch.