corporate responsibility and sustainability...and sustainability report summarising our activities...

Corporate Responsibility and Sustainability2008

The most important thing we build is trust

Allan E Cook CBEChief Executive

Message from the Chief Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Message from the Director, Corporate Responsibility and Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Report Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

About Cobham . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Vision, Strategy and Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Key Focus Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Safety, Health and Environment (SHE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Business Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Stakeholder Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

As a growing, dynamic, international business Corporate Responsibility and Sustainability is regarded as a key consideration in day to day business throughout Cobham. We seek to identify current and emerging social and environmental issues that present both risks and opportunities to our business, develop plans to proactively address these risks and create value by realising opportunities that align with our core business activities. Combining these activities with our proven financial management will continue to deliver added shareholder value for our business.

We are currently focusing our efforts on the safety, health environmental (SHE) impacts arising from our operations, activities, products and services, rolling out internationally our code of business conduct and improving our stakeholder engagement processes. This report presents the improvements we have made during 2008 and sets out what we plan to achieve during 2009. Notably, we have increased our emphasis in this area by hiring a new Director of Corporate Responsibility and Sustainability who works closely with the Executive Committee in developing our approach in these matters. We have established a new Corporate Responsibility and Sustainability Committee chaired by me which focuses on directing our resources in this area and monitoring our performance. As Chief Executive, I also ensure that the Board is kept appraised of our work and takes account of these issues in its Annual Risk Assessment and monitors its progress throughout the year.

Thank you for taking the time to read this report. We hope that you will find it insightful. We will continue to review our Corporate Responsibility and Sustainability strategy to bring it into line with best practice and to align it with our core business strategy. We welcome your feedback and with your support we will continue to make Cobham even more successful as a responsible and sustainable business that protects lives and livelihoods.

Contents Message from the Chief Executive

�

Corporate Responsibility and Sustainability – 2008

Cover picture: International demand for Cobham’s MINEHOUND VMR2 dual sensor mine detector is increasing after successful trials in Cambodia, Bosnia and Angola. The equipment radically improves the efficiency of landmine clearance operations as well as improving the detection of minimum metal mines. Its primary use is for humanitarian clearance of anti-personnel mines.

Andy StevensChief Operating Officer

Julian HellebrandGroup Director of Communications

Eleanor EvansChief Legal Officer and

Company Secretary

Charlie StuffEVP Cobham Corporate

North America

James StreaterDirector, Corporate Responsibility

and Sustainability

Allan E Cook CBEChief Executive


2 �

Message from the Director, Corporate Responsibility and Sustainability

Welcome to our latest Corporate Responsibility

and Sustainability Report summarising our

activities in 2008, the last period for which

we have quantifiable results. Our corporate

vision “to be the most trusted global partner of

leading aerospace and defence technologies”

and our core values of trust, talent and

technology are essential in making Corporate

Responsibility and Sustainability central to

our corporate strategy. To build this trust we

must proactively engage with our stakeholders

to understand their needs and concerns in a

proactive and systematic way.

Our first step on this journey has been the

establishment of our Corporate Responsibility

and Sustainability Committee which is chaired

by our Chief Executive. This committee

oversees the development and implementation

of our strategy and guides two subcommittees

which handle Business Ethics and Compliance

and Safety, Health and Environment (SHE).

Plans for 2009 include further training on our

revised Code of Business Conduct to all our

employees globally and standardising our SHE

management across Cobham.

With regards to our safety performance

in 2008, we are pleased to report its

improvement over 2007 with our occupational

injury and illness incidence rate decreasing

from previous years. Ergonomics and manual

handling were identified as significant causes

of our injuries and we encourage management

to focus on reducing the incidence of such

injuries through raising awareness, training and

activity programmes.

From an environmental perspective, we had

mixed success in meeting the goals we set

for ourselves in 2008. Following on from

significant environmental improvements in

2007 we set ourselves new targets at the

start of 2008 in relation to energy efficiency,

waste efficiency and water efficiency. Our

energy efficiency performance continued to

improve but our waste efficiency and water

efficiency performance deteriorated. On

further assessment we identified several causes

which included some extraordinary one-off

events, some communication on targets and

identification of several instances of under

reporting in previous years. We consider that

improving our internal communication and

reporting processes will be key to engaging and

empowering our employees to improve our

performance during 2009.

We produced our first carbon footprint on

our 2008 performance data in accordance

with the GHG protocol and this has been a

crucial first step to help us understand where

our key contributions are in relation to climate

change. As a result we have identified that our

aviation fuel use represents over 80% of our

carbon footprint and aviation fuel efficiency

will become a key focus for Cobham in

contributing to a more sustainable aviation

industry globally. We will continue to develop

our carbon footprint so that we learn more

about our indirect emissions.

We trust you will find this report

enlightening. Please contact us with your

feedback on how we can improve any

aspects of our performance.

James StreaterDirector, Corporate Responsibility

and Sustainability

Report Highlights

New CR&S Committee

New BE&CC Committee

Rolled out a revised Code of Conduct with 1/3

of workforce trained

Established our carbon footprint in general

accordance with the Greenhouse Gas protocol initiative

Improvements in safety performance

Improvements in energy efficiency

and recycling

Deterioration in waste & water efficiency but identified key areas to improve in future through target communication

and reporting processes

Plans to develop Group wide SHE committee, develop

standardised SHE management approach for implementation in

2009/2010

Develop robust reporting tool and define

key SHE metrics

Commit to completing CDP7

Ethics training to be completed on revised code

Single ethics hotline to be made available

2008 Successes 2009 Objectives

Ethics officer to be appointed for each division


� �

About Cobham

Cobham’s products and services have been at the heart of sophisticated military and civil systems

for more than 70 years, keeping people safe, improving communications and enhancing the

capability of air, land and marine platforms. The Group has four divisions employing more than

twelve thousand people on five continents, with customers and partners in over �00 countries.

Cobham Defence Systems Division

Cobham Avionics and Surveillance Division

Cobham Mission Systems Division

Cobham Aviation Services Division

Cobham specialises in components, sub-systems and services that:

• Keep people safe• Improve communications – voice, data, video• Enhance the capabilities of aerospace and defence platforms

Supporting People and Platforms to See and be Seen

Capabilities• Avionics – integrated systems and

communication solutions

• Surveillance solutions

• SATCOM – land, marine and airborne

communication systems

• Avionics, antennas, sliprings and microwave

components for French markets

Moving and Analysing Information on the Digital Battlefield

Capabilities• Sensor systems – radar, communication and

electronic warfare

• Antenna systems – microwave antennas,

composites and masts

• Defence communications – tactical

communication, command and

control systems

• Analytic solutions – defence and

national security

Mission Systems for Extreme Environments

Capabilities• Air-to-air refuelling systems

• Weapons carriage and release systems

• Safety and survival systems

• Weapons systems

• Space systems

Outsourced Aviation Services

Capabilities• Warfare training

• Special mission operations

• Flight inspection services

• Support services

• Airline – outsourced commercial aviation

• Freight services

• Aerospace engineering

Revenue

£432 .8m2007: £�26.9m

29%2007: �0%

Revenue

£529 .3m2007: £299.9m

36%2007: 28%

Revenue

£302 .0m2007: £262.8m

20%2007: 2�%

Revenue

£221 .9m2007: £�92.�m

15%2007: �8%

Trading Profit

£71 .7m2007: £��.9m

28%of trading profit 2007: 2�%

Trading Profit

£105 .2m2007: £7�.8m

41%of trading profit 2007: �7%

Trading Profit

£52 .2m2007: £��.�m

21%of trading profit 2007: 27%

Trading Profit

£24 .8m2007: £2�.9m

10%of trading profit 2007: ��%

Group Revenue Growth

Principal LocationsUSA, UK, Canada,

Denmark, France,

South Africa

Principal LocationsUSA, UK, Mexico,

Finland, Sweden

Principal LocationsUSA, UK

Principal LocationsUK, Australia,

Germany

Employees

3,280 2007: �,��0

Employees

5,2852007: 2,700

Employees

1,715 2007: �,8�0

Employees

1,760 2007: �,8�0

By Destination

Group Revenue Analysis

By Market Driver

£m

2007 FX Translation Acquisitions FX Transaction Growth 2008

1,061.1

800

900

1000

1100

1200

1300

1400

1500

1600

80.8

216.1 1.4

107.1

10.2% Organic growth

1,466.5

7.6% 20.4% 0.1% 10.1%

1

2

3

4

5

15%

10%

10%

10%

55%

2008 2007

Mainland Europe 15% 17%

Australia 10% 12%

UK 10% 13%

RoW 10% 11%

USA 55% 47%

1

2

3

4

5

1

2

3

4

5

44%

17%

13%

11%

15%

2008 2007

US Military/Govt. 44% 36%

Non US Military/Govt. 17% 21%

Commercial/GA Aerospace 13% 13%

Other communication 11% 12%

Aviation Services1 15% 18%

1

2

3

4

5

29% 36% 20% 15%

28% 41% 21% 10%

�. Two-thirds of Aviation Services revenue is for military and government contracts.

Calendar of events in 20083 January Complete purchase of autopilot specialist S-TEC

22 FebruaryComplete purchase of EW subsystem specialist Sensor and Antenna Systems, Lansdale

27 MarchAwarded FSTA air-to-air refuelling contracts worth US$�00m

7 AprilAcquire MMI Research – cellular communications for intelligence services

13 MayReach agreement to purchase M/A-COM

3 June Complete purchase of SPARTA – US intelligence and missile defence company

16 JulyUS$�0m LBT Transmitter production order for Sensor and Antenna Systems, Lansdale

11 AugustCobham selected to provide radio and audio integrated management system for A��0

15 SeptemberJeremy Wensinger appointed President Designate Cobham Defence Systems

29 SeptemberComplete purchase of M/A-COM – global leader in microwave systems

10 OctoberComplete purchase of GMS – HD video transmission specialist

3 DecemberGeneral (retired) Michael W. Hagee appointed a Non-executive Director


6 7

Vision, Strategy and Governance

Vision and Strategy In accordance with our vision, we plan to

deliver sustainable long term value by

building trust with our key stakeholders

by considering their economic, social and

environmental issues in our day-to-day

business activities. To do this we are

pursuing the following objectives:

• Embedding the principles of Corporate

Responsibility and Sustainability into our

corporate governance and strategy;

• Developing processes that help us

understand material changes in society,

technology and natural resources that can

affect our business;

• Connecting our business to serving a social

purpose in ways that engage, incentivise

and empower our employees;

• Developing robust data gathering processes

that collect and disseminate information

on metrics on our key business activities

internally and externally; and

• Developing and implementing strategies

that utilise our technology, innovation and

entrepreneurial strengths to add social and

environmental value while increasing our

top and bottom line.

These objectives align and support our

corporate vision and strategy and will allow

Cobham to grow and transform into an

integrated leading subsystems supplier of

innovative aerospace, defence and civil

technologies that protect lives and livelihoods

by keeping people safe and secure, enhancing

communication and decision-making

processes and enable aerospace and defence

platforms in all types of environments.

Corporate Responsibility and Sustainability has

a key role to play in delivering the key enablers

we have identified in our corporate strategy.

Growth

With respect to Growth, many of Cobham’s

key customers have an increasing focus on

sustainability and Cobham will respond by

focusing on enabling them to meet their

own objectives while meeting our own.

Application of our governance and values

will also enable us to enter emerging growth

markets with confidence.

Technology

With significant fiscal pressure on traditional

sources of military revenue, some of our

key customers are repositioning themselves

to focus on emerging growth markets such

as global security including energy and

environment. Cobham is well-positioned

to continue serving these customers with

its technology and designing products and

services with the environment in mind is a key

element of our strategy.

Talent

Competing for high-performance talent

will continue to be significant area of focus

and Cobham recognises that for the new

high performance talent, working for a

company that views sustainability as core is

becoming increasingly important. Changing

demographics and skills availability continue to

remain a considerable issue across science and

engineering sectors.

Transformation

Standardising our businesses processes and

fostering organisational learning is a key

component to supporting the transformation

effort. This includes how we address issues

like business ethics, compliance, health &

safety, environment and engaging with our

key stakeholders. Standardisation that builds in

our core values will also help to create a shared

sense of identity and enable us to build and

leverage our brand.

GovernanceDuring 2008, the emphasis has been on

developing our governance structure to expand

upon, among other things, the inclusion of

social and environmental dimensions in our

decision-making, to identify the material

issues we need to focus on and to develop our

strategies for taking these areas forward.

During 2008 we established a Corporate

Responsibility and Sustainability Committee to:

• Review the effectiveness of the Cobham’s

internal process and controls for identifying

risks and opportunities in relation to material

issues in relation to society, technology and

natural resources;

• Review and challenge Cobham’s

performance on managing these issues; and

• Monitor the integrity and effectiveness

of the Group’s communications on its

performance.

The Corporate Responsibility and

Sustainability Committee is chaired by the

Chief Executive who has overall accountability

for Corporate Responsibility and Sustainability

matters affecting Cobham. Its members

include the Chief Operating Officer, the

Group Communications Director, the EVP

Cobham Corporate North America, the Chief

Legal Officer and the Director, Corporate

Responsibility and Sustainability. The

committee oversees the Business Ethics and

Compliance Committee which was established

in early 2008 and will oversee a Safety, Health

and Environment (SHE) Committee to be

established in 2009.

In addition we have reviewed our governance

documentation to further embed our

values and our strategy into the way we

do business. We have clearly set out the

Corporate Responsibility and Sustainability

roles and responsibilities of our key company

officers , our decision-making processes, our

performance evaluation processes and our

assurance processes. Corporate Responsibility

and Sustainability ranks equally in terms

of importance with our proven financial

performance management processes.

Vision

Strategic objectives

Enablers

1Be a leading subsystems supplier with a comprehensive range of distinctive technologies

Growth

Focus on the customer and performance management

Build on a significant and growing USA presence

Develop capabilities in emerging growth markets

Grow export business in home markets

Be an acquirer of choice

Technology

Invest in advanced, market driven technologies

Exploit core technologies in adjacent markets

Increase PV investment to 6% of Technology Divisions’ revenue

Create a vibrant technical community with strong external links

Develop products and services that consider the environment in their design

Talent

Develop key leadership and technology capabilities

Actively manage careers with opportunities across markets and internationally

Be an employer of choice – attracting, recruiting, retaining and motivating the best talent

Transformation

Create scalable Strategic Business Units able to incorporate acquisitions

Drive economies of scale across divisions

Share expertise and consistently apply core Cobham processes

Build and leverage the Cobham brand

To be the most trusted global partner for leading edge aerospace and defence technologies

2Be in the top three in each of our chosen markets

3Grow faster organically than the markets in which we operate

4Materially enhance growth through strategic acquisitions

5Develop a global market presence with a unified brand and identity

6Have an efficient organisation with a high performance culture and motivated people


8 9

Key Focus Areas

In 2008 we decided to consolidate our previous six key focus areas into three broader focus areas:

• Safety, Health and Environment (SHE) – Providing safe working conditions and practices for

our people and reducing our environmental footprint

• Business Ethics – Acting ethically and responsibly towards our key stakeholders

• Stakeholder Engagement – Proactively and systematically engaging our key stakeholders to

understand their concerns and changes in our operating environment

These three focus areas encompass and build on the six narrower focus areas we reported on

in the previous two years. Staff safety, carbon footprint, chemicals and hazardous materials

management, waste reduction and supply chain management are all now covered under SHE.

Anti-corruption now forms part of our broader Business Ethics focus area.

Our strategy is to standardise and systemise our management approaches in these focus areas

such that our performance can be effectively and efficiently monitored, challenged and enhanced.

A summary of our performance data can be found at the back of this report.

Safety, Health and Environment (SHE)

Overview

2008 was a year of significant change at

Cobham. The business was restructured and

consolidated into four operating divisions,

each comprising a number of market facing

strategic business units (SBUs), with several key

divisional leadership appointments and over

£� billion of new acquisitions. We are now in

the process of transforming Cobham into a

more integrated, market facing subsystems

supplier and services provider. As part of

this transformation, we have recognised an

opportunity to place more strategic emphasis

on SHE. This is in keeping with our belief that

our people are our most important asset. The

safety of our people, our customers and other

stakeholders is our highest priority.

Policy and StrategyWith the standardisation of our SHE

management approach, accountability

and responsibility for SHE remains with our

operational line management while overall

policy and strategy development will be

provided by the SHE committee reporting to

the Corporate Responsibility and Sustainability

Performance

i. Safety and Health

The occupational injury and illness incidence

rate in our fully owned subsidiaries was 260

injuries that resulted in three or more days

absence per �00 000 employees. This was

significantly lower than ��8 reported in 2007

and significantly below the UK Health and

Safety Executive’s manufacturing benchmark

of 7��. However, we recognise that we can do

more to reduce this rate. During 2009 and 20�0

we propose to:

• Implement a standardised SHE

management approach;

• Develop health and safety indicator metrics;

• Collect quarterly health and safety data;

• Identify trends in injury types and develop

preventative programmes; and

• Develop a more just and equitable reporting

culture to allow deeper understanding

around the full extent and causes of our

occupational injuries and illnesses.

It is with great regret and sadness that we

report the loss of life of a military flying

instructor and student when their Army Squirrel

helicopter, maintained by FB Heliservices (FBH)

in which Cobham has a �0% stake, crashed

during a low level flying exercise in North

Devon. The findings from the Board of Inquiry

have yet to be released.

ii. Environment

Energy and Carbon EmissionsOur energy efficiency (measured as energy

consumption per £m of turnover) improved

by 20% from �,�98 MWh/£m turnover in 2007

to �,206 MWh/£m turnover in 2008. This

represents a consistent year on year reduction

since 2006 and we are currently on target

to meet our planned �0% reduction in 20�0

against 2007 levels. These improvements in

this measurement have partly resulted from

the implementation of energy saving initiatives

within our businesses and partly by the

increase in our turnover during 2008.

The most significant contribution (86%) to our

carbon emissions during 2008 period originated

from aviation fuel consumption, with 60% of

this amount being provided to us by customers

for use in high-capacity passenger, freight and

aerial surveillance operations.

Excluding aviation fuel consumption, our

carbon emissions are derived from electricity

consumption (82%), natural gas (�6%) and

heating oil (2%). Energy efficiency, when

excluding aviation fuel, improved by �% on

2007 to �0�MWh/£m of turnover. However,

our absolute carbon emissions increased by

�0% from ��8,906 tonnes CO2 equivalent in

2007 to �8�,8�7 tonnes CO2 equivalent in 2008

which is attributed to the acquisitions we made

during 2008.

Waste and RecyclingCobham’s annual waste generation rose from

�,��6 tonnes in 2007 to �2,7�� tonnes for 2008.

This absolute increase in waste is attributed

to the 2008 acquisitions and under reporting

identified from previous years. Although our

waste efficiency metric (tonnage normalised

against £m turnover) deteriorated, our recycling

rates increased from 29% in 2007 to �7% in

2008. Forty-five percent of our solvent waste

and 60% of our paper and cardboard waste

were recycled. We will continue to focus on

waste reduction in order to achieve our 20�0

target. Improved internal communications,

metrics and tools and advice on performance

improvement will be key areas to improve our

performance in this important area.

Water UsageWater use increased in 2008 primarily due to

the acquisition of several multi-site businesses,

increased consumption arising from extended

production shift patterns and several one-off

events (e.g. dust suppression required during

factory demolition). As a result, our water

efficiency metric deteriorated from �62m�/£m

turnover in 2007 to 2�9m�/£m turnover in

2008. We are expecting our water use to

decrease in 2009 and we will continue to focus

on improving our water efficiency to achieve

our 20�0 target of a 20% improvement on

2007 levels.

committee. We have now revised our SHE

policy to strive towards the following key goals:

• Provide workplaces that are free of

occupational injury and illness for all our

employees, visitors and contractors;

• Enhance the well-being of our employees

and the local communities in which we

operate; and

• Minimise our impact on the local

and global environment arising from

our operations, activities, products

and services.

In order to achieve these goals, we have

developed a two year action plan for 2009 and

20�0 which comprises three key elements:

i Prioritising SHE;

ii Standardising our management approaches

to improve consistency and implementing

best practice in a way that will recognise

the strengths and development needs in

the different areas of our business; and

iii Piloting SHE initiatives across Cobham that

will improve our operating efficiency and

create top and bottom line value.


�0 ��

REACHCobham is fortunate to have a team of in-

house expert consultants at Cobham Technical

Services that have supported us in assessing

the impact of the European Union REACH

(Registration, Evaluation and Authorisation

of Chemicals) Directive across our business.

Through this work we have identified that the

majority of our businesses are downstream

users that use chemicals only for their intended

purposes (e.g. adhesives, paints, thinning

agents, lubricants etc) while only a small

number of our business units were required

to pre-register substances. We are working

with both our customers and supply chain to

identify the type and amount of substances in

our articles. Based on our work, we currently

consider that the most significant impact to

our business will be in relation to substances

being removed from the supply chain and we

are working with our suppliers to ensure they

can source suitable alternatives if necessary.

Performance Initiatives

Safety and Health

Following the introduction of strict regulations

by the US Environmental Protection Agency

on the use of hexavalent chromium (Cr

VI), Cobham Sensor Systems (Lansdale, PA,

USA) developed a cross-functional team to

comply with the new standards, minimize Cr

VI exposure to employees and to substitute

Cr VI primers with a non-chromium primer.

To minimize Cr VI exposure to employees

in the grinding/sanding area, a new room

was designed and implemented to include

several new downdraft tables, ductwork and a

collection system to minimize chromium Cr VI

exposure. In addition to the sanding/grinding

room, the paint shop was improved to meet

EPA requirements with the installation of a

new ventilation system also includes two

multi tier filter system that meet the filtration

efficiency requirements set forth by the

National Emission Standards for Hazardous Air

Pollutants (NESHAP).

Cobham Defence Communications (Blackburn,

UK) implemented �S as part of their Business

Improvement Programme to organise their

work areas, remove unnecessary health

and safety risks and improve morale and

productivity. The initiative introduced

numerous health and safety improvements,

translating into a 60% reduction in reported

accidents and incidents between 2007 and

2008. No lost time was recorded in the period,

and along with other business improvement

benefits, the programme realised almost £�

million in cash savings over the past year.

Cobham Aviation Services (RAF Kinloss, UK)

introduced in-house first aid training as a

cost-effective way to ensure its staff, maintain

the skills that could save lives in an emergency

situation. As aircraft maintenance specialists

working on large military platforms, Cobham

Aviation Services found it essential that staff

receive continuous up-to-date training by

becoming a satellite centre for all first aid

training at Kinloss and nearby Aberdeen.

Environment

Energy and Climate Change

Cobham business units continued with

various energy-saving improvements in

2008 that centred on lighting upgrades,

heating, machinery and re-evaluation of

cooling processes:

Cobham Technical Services (Leatherhead, UK)

took proactive steps to further manage and

reduce energy consumption through basic

and practical improvement activities. This

included installing a conformal draught-proof

silicon seal in the main building windows

which resulted in 26% savings in energy costs

per quarter, equivalent to 8.� tonnes of CO2.

The 2007 programme of installing T8 lighting

continued to deliver cumulative energy savings

with a reduction in average electricity usage

from �20,000kWh per month to approximately

70,000kWh per month.

Similar lighting upgrades were implemented

at Cobham Antenna Systems (Stevenage, UK)

in December 2008 with an approximate ��%

reduction in electricity costs being realised

within the first month of implementation.

An estimated ��6,000kWh of energy are

forecasted to be saved within the first year

from installation.

During 2008, Cobham Aviation Services in

Christchurch, UK trialled collection of waste

aviation fuel from across its operations for

use in the site’s oil heaters resulting in both

reduced heating oil costs and hazardous

waste disposal costs. The business also

commissioned trials to investigate the use of

heat harvesters and sun catchers to reduce

energy consumption and emissions. The heat

harvesters re-circulate hot air collecting at the

top of the hangars throughout the rest of the

building which effectively saves energy during

the winter. The trials have indicated that the

heat harvesters will reduce heating bills and

energy consumption by thirty to fifty percent.

The sun catchers, which are mirror-finished

aluminium pipes, reflect sunlight into buildings

to reduce lighting requirements, and are able

to reduce energy consumption and emissions

by twenty to thirty percent.

A major process improvement was put in

place by the SHE team at Cobham Defence

Communications in Blackburn and Exeter,

UK. The improvement focussed on the

evaluation and implementation of an

online Environmental Legislation Update

Service (ELUS) that created a bespoke legal

register providing structured summaries

of all applicable legislation that could be

automatically updated every month. Previously

this had required manual update of offline

written legal registers that was time consuming

and ineffective in maintaining up to date

monitoring of incoming legislation.

Waste Reduction and Recycling InitiativesIn December 2008, Cobham Sensor Systems

(Exeter, NH, USA) was awarded a $��.9 million

United States Air Force (USAF) contract

to refurbish damaged F-�6 jet fighter radar

antenna arrays and integrated network

equipment had been assemblies. Previously

this equipment was completely replaced and

the lead times were in the order of�8 to 2�

months. By refurbishing this equipment, lead

times were reduced to approximately � to 6

weeks and saved the USAF over $�6 million

while reducing the amount of electronic

equipment being disposed of as waste.

Cobham Aviation Services (Christchurch, UK)

has undertaken several initiatives including

joining the UK government’s National Industrial

Symbiosis Programme (NISP) and arranging

take-back schemes with suppliers for batteries,

toner and ink cartridges, paper and cardboard.

NISP connects organisations of all types

through exchange of materials, energy and

water and sharing of assets, logistics and

expertise. An example included the diversion

of � tonne of used target tow nets from landfill

for use by the local authority in its garden

allotments saving Cobham Aviation Services

the disposal costs and the local authority

the cost of purchasing new netting. Supplier

take-back schemes have already diverted

approximately � tonnes of waste resources

from landfill in 2008. The business is arranging

additional take-back schemes with suppliers for

other waste streams such as glass bottles and

fluorescent lights.

Cobham Sensor Systems (Lansdale, PA,

USA) completed a major site renovation

project in 2008. As part of this project, the

business recycled 2,�06 tonnes of asphalt

from improvements to its main parking lot,

improved its energy efficiency by switching to

T8 lighting, recycled 2.7 tonnes of fluorescent

bulbs and recycled 26 tonnes of metal scrap.

Cr VI Multi-functional Team at Cobham Sensor Systems in Lansdale, PA.

SHE Team at Cobham Defence Communications, UK

5S Team at Cobham Defence Communications in Blackburn, UK

RAF Kinloss First Aid Graduates


�2 ��

Business Ethics

Cobham has operated a Code of Business

Conduct (“Code”) for several years. In 2008

an updated Code was issued and a phased

approach to training on the new Code was

commenced. We believe that acting ethically

and responsibly towards our key stakeholders

creates fundamental value.

Additionally Cobham has signed up to and

fully supports Aerospace and Defence

Industries association of Europe’s Common

Industry Standards for European Aerospace

and Defence.

The Code sets out Cobham’s approach to legal

and ethical conduct and specifies employee’s

responsibilities. It covers matters of personal

integrity, employee relationships, relationships

with customers, suppliers, the community and

others, and possible breaches of the Code.

The Group pursues and will reward the highest

standards of ethical behaviour in all aspects of

its business. Ethical behaviour is an asset to

be valued, optimised and realised. This is more

than a matter of compliance. Our leaders lead

by example and ethics and integrity is a way of

business at Cobham.

As of year end 2008 over one third of our

employees have received ethical awareness

training and the remainder are due to receive

such training in 2009. Our training programme

will continue to be developed such that

business ethics issues are communicated and

training provided at every level in Cobham.

Compliance training on selective topics will

be provided. Training is provided through a

mixture of on-line training, written briefings

and face to face and video/DVD presentations.

Business ethics and compliance officers

(“BECOs”) have been or will be appointed to

each Cobham business unit who are primarily

responsible for implementation of the Code

within his or her business unit. We plan to

appoint Divisional ethics officers to whom the

BECOs can look for support and guidance.

We operate help-lines for employees to call

in the event of issues and each call (or other

contact) is reviewed by the Business Ethics

and Compliance Committee. Each complaint

is fully investigated and the results reported

to the complainant (where their identity is

known). The audit committee of the Board

reviews the process for calls to the help-line on

a regular basis with the chair of the Business

Ethics and Compliance Committee.

We continue to develop systems, plans and

tools to:

a Track corrective actions to completion.

b Actively manage and promote ethical

behaviour in employee performance

management systems.

c Assess employee awareness of the Code

and adherence to the values in the Code.

In 2009 we plan:

• Further updates to the Code and to

translate it into other languages;

• To consolidate to one global help line

provider with local country codes;

• To upgrade our reporting system to a

new provider to facilitate a company

wide confidential case tracking system

thus enabling us to track cases in a variety

of ways;

• To look at ways to report the results of

investigations and disciplinary action taken.

• Further deployment of our desire for all

Cobham’s employees to live up to the Code

and to act with integrity at all times.

Stakeholder Engagement

ApproachFor Cobham to fullfil its corporate vision of

becoming the most trusted global partner

for leading edge aerospace and defence

technologies, we need to build long-standing

relationships with our key stakeholders,

listening to and understanding their concerns,

responding after careful consideration and

developing partnerships where this adds value

to our business.

We already engage with many of our key

stakeholders (i.e. our shareholders, customers,

our employees, our suppliers, our regulators,

the wider investment community, potential

recruits and potential business partners) but

we recognise that this is not yet undertaken in

a way that fully enables us to proactively and

systemically assess our operating environment,

to identify changes in society, technology and

resources that have the potential to create new

risks and new opportunities.

As part of our plan going forward we

propose to develop our policy and strategy

in this area to develop systemic processes

and tools that proactively engages our key

stakeholders in an open, culturally sensitive

and appropriate manner, involves stakeholders

in determining the issues material to our

business, seek out the views of less influential

stakeholders, communicates effectively

and creates partnerships that have mutually

beneficial results.

Key Stakeholder Issues

Climate ChangeCobham recognises that the climate is

changing and that this change is likely to

impact our business in terms of physical,

regulatory and competitive risks as well as

providing us with significant commercial

opportunities. Many of our customers and

investors recognise these impacts, risks and

opportunities and the need to transition to a

low carbon economy.

In order to keep our stakeholders informed

of our progress in this area we have

committed to participating in the 2009

Carbon Disclosure Project that will set out

our understanding that these changes will

have on our business and what we plan to

do in response. Our submission will provide

information on our first carbon footprint and

how we will use this as a basis for developing

our climate change strategy during 2009.

Cobham applies its core technology in

adjacent markets such as wind and solar

power. Our slipring technology is used by

some of the world’s largest wind turbine

manufacturers (e.g. Enercon, Siemens and

Vergnet) and we are adapting our antenna

technology to provide unique solar panel

tracking systems. Civil defence agencies have

utilised our satellite communications expertise

to provide temporary satellite communication

links following severe weather events when all

other conventional systems have failed (e.g.

Hurricane Katrina). We anticipate increased

opportunities to apply our technology and

innovation to opportunities in renewable

energy, communications, monitoring and

surveillance resulting from the impacts of

climate change.

Cluster Munitions and Anti-Personnel MinesIn the lead up to the signing of the Convention

on Cluster Munitions in Oslo in December

2008 we received several queries from

the investment community regarding our

involvement with these weapons. In response

to these queries we can confirm that Cobham

does not make or sell cluster munitions or

anti-personnel mines and we are committed

to complying with the national legislation of

the countries where we are present, as well

as with any relevant international regulations

or conventions that our operations are legally

bound to comply with. We do not condone

the use of any weapons which result in the

maiming or loss of civilian life. We are active in

developing both detection and neutralisation

equipment that mitigates the risks to both

forces and civilians arising from unexploded

cluster bomblets, anti-personnel mines and

improvised explosive devices (IEDs).

Cobham Technical Services (Leatherhead,

UK) has developed a dual sensor mine

detector (Minehound VMR2) that can

detect metalled and non-metalled

landmines. Its primary use is for humanitarian

clearance of anti-personnel mines and has

been trialled in several countries including

Cambodia, Bosnia and Angola with excellent

results. The development project was

part funded by the UK Department for

International Development (DifD).

Cobham Slip Ring Technology

Use of Cobham SATCOM technology by Sichuan earthquake relief team.


��

A vehicle-mounted detection and

neutralisation system, known as ‘Zeus’, has

been developed by Cobham Analytic Solutions

(Arlington, VA, USA). The system uses a

laser to neutralise surface and near-surface

ordnance from a vehicle at distance thereby

reducing the risk of explosion to ordnance

clearance personnel when approaching these

sometimes unstable explosive objects.

People DevelopmentTalent development is one of the core values

of Cobham and to this end we continue to

invest in the skills and personal development

of our workforce. Our approach to sustained

employee development and retention is a major

factor in our success. Our recruitment, training

and development methodology is one of the

four key enablers (Growth, Technology, Talent

and Transformation) in driving our corporate

vision and overall business strategy. The “Talent”

aspect allows us to focus our effort in achieving

three key human resource objectives:

1 Develop key leadership and technology

capabilities;

2 Actively manage careers with opportunities

across markets and internationally; and

3 Be an employer of choice.

To meet these objectives Cobham has a

structured talent management strategy

with three components. The first component

is our Leadership and Management

development framework geared to ensuring

an influx of talent in the leadership pipeline.

This includes three key programmes

comprising the following:

• Divisional High Potential (DHP) programme – identifying and developing personnel

capable of becoming direct reports to

divisional presidents or higher within a �

year timeframe;

• Senior Development Programme (SDP) – identifying and developing personnel

capable of becoming senior leaders within

the business; and

• Executive Development Programme (EDP) – providing ongoing talent development

to the most senior management in the

organisation.

Our Mission Critical Workforce (MCW)

programme is aimed at developing employees

in various areas such as engineering, life cycle

management, procurement, finance, supply

chain and human resource functions.

This structured framework enables employees

to advance their careers and have access

to progress opportunities in their areas of

expertise without the pressure of switching

professions in order to reach senior

management levels within the business. This is

also a vital employee retention strategy that

ensures employees are constantly offered

ongoing streams of opportunity along with

provision of a support structure that identifies,

aligns and develops their core competencies

with those of the business.

Underpinning the whole structure, the third

component focuses on recruiting new talent

in the form of graduates and apprentices. In

2008, Cobham continued its commitment to

investing in the skills of young people within

our sector through our Apprentice Scheme

and Graduate Programme. We are one of the

few companies to have increased the numbers

in our programmes during the recent financial

crisis because we recognise that developing

the technical and management skills of our

young people will enable us to continue

in developing state of the art, advanced

aerospace and defence technologies.

Our Apprentice Scheme has been highly

successful because it is founded on the

recognition that future success and long

term business continuity requires strategic

investment in the skills of young people.

Currently, the scheme operates in Dorset,

UK with �7 apprentices and maintains a

close relationship with Bournemouth and

Poole College of Further Education which is

located near two of our larger UK operations

at Cobham Mission Equipment (Wimborne,

UK) and Cobham Aviation Services

(Christchurch, UK).

Our graduate programme now employs over 2�

graduates across the UK having started initially

with just four graduates in 200� at Cobham

Mission Equipment (Wimborne, UK). The

programme is a structured, closely monitored

scheme that focuses on the professional and

educational development of the participants

over a two to three year period.

Graduates typically complete several

placements of six to nine months duration

each in various business functions and

projects as well as attending training

programmes to assist them in widening their

skill sets and building on individual strengths.

As a result, graduates are able to shape their

own long term career aspirations in line with

Cobham’s requirements.

During 2008, graduates took training in IT,

Finance and Accounting to provide them

with important commercial awareness skills.

Similarly non-technical graduates were also

able to gain exposure to more technical areas

of the business by undertaking placements

at a business unit or site level where most

manufacturing and product development

takes place.

Zeus

Cobham Talent Management

Leadership & Management Mission Critical Workforce

Engi

nee

rin

g

Life

Cyc

le M

anag

emen

t

Pro

cure

men

t

Fin

ance

Sup

ply

Ch

ain

Hu

man

Res

ou

rces

EDP

SDP

DHP

External Partners

Cobham HR Portal

Support Infrastructure

Graduates and Apprenticeships

Cobham Competencies


�6 �7

As a corporate member of the Royal

Aeronautical Society, Cobham is fully

committed to providing support to graduates

who wish to work towards gaining professional

registration qualifications such as C.Eng,

CIPD and CIMA etc., while others prefer to

experience various business disciplines before

committing to developing their career within

any one area.

Training

In 2008, a total of approximately �6�,000 hours

were spent training our employees in personal

development, SHE, technical and professional

development, inductions and management

skills. Of this, over �0% was related to technical

and professional development.

Diversity and Equality

Cobham’s workforce rose by almost �0% from

2007 to 2008. The proportion of men to

women has continued to improve since 2006

with the ratio falling by almost 8% from 2.�� in

2006 to 2.�7 in 2008.

As is typical in the developed economies of

the world, Cobham’s workforce is an ageing

workforce with the number of employees

aged �� and younger falling as a proportion of

our total workforce with those aged between

�6 and over increasing. This trend is expected

to increase as the baby boomer generation

retires and pensionable age increases.

It is important that we continue to monitor

these trends in our workforce to ensure that

we maintain the right balance of experience,

skills and succession planning necessary

to maintain our leadership positions in our

chosen markets.

Corporate Philanthropy and Community InvolvementCobham’s engagement in the community

extends from corporate level to business

unit level. Our corporate effort focuses on

supporting national and international causes

that support our service men and women and

development of a sustainable aerospace and

defence industry. Throughout 2008, Cobham

continued to be a corporate sponsor and

partner of the following organisations:

• Soldiers, Sailors, Airmen and Families Association (SSAFA) Forces Help – a

national UK charity committed to helping

and supporting both current and ex-service

personnel as well as their families;

• The Science Museum in London, UK – an

education centre bringing science to life for

thousands of young people;

• The Institution of Mechanical Engineers Schools Aerospace Challenge – an annual

challenge to win a place on a residential

course at the School of Engineering,

Cranfield University, UK to learn about the

aerospace industry; and

• Young Engineers – a national charity

inspiring young people to develop an

interest in engineering as a future career.

Our graduate trainees are encouraged in

community involvement through undertaking

charitable team-building events and advising

young people in relation to careers in

aerospace and defence such as the Royal

Aeronautical Society career day and the 2008

Skills Festival.

Our operating businesses are also encouraged

to involve themselves in their local

communities and to support local charities.

A few examples of their involvement are

detailed as follows:

Cobham Sensor Systems (Bolton, MA, USA)

supported soldiers spending the festive

season in Iraq away from their loved ones.

�00 employees put together a care package

of food, toiletries, playing cards, books and

other festive treats making sure �00 soldiers

had a present from the folks back home. The

business unit also responded to the Wounded

Warriors Family Support charity, helping

to build a library for US Marines deployed

at Camp Al Taqaddum in Iraq. Donations

of personal items requested by the charity

Vettes to Vets, supported by the North Shore

Corvettes Club, have also been sent to the

Bedford Veterans Administration Hospital.

Employees at Cobham Surveillance

(Waterlooville, UK) Cobham employees have

been getting on their bikes in a bid to raise

money for charities close to their hearts

by participating in the �� mile London to

Brighton bicycle race raising over £�00 for the

British Heart Foundation.

Brian Potts and Keith Holland of Cobham

Antenna Systems (Marlow, UK) raised over

£�80 for CLIC Sargent, a local children’s cancer

charity. This was a superb team effort, with

Brian cycling from London to Oxford in � hours

�2 minutes while Keith took charge of the

fund-raising.

Cobham Life Support (St Petersburg, FL, USA)

was one of the six Silver Sponsors of a major

black tie event for a Florida hospice that cares

for over 200,000 terminally ill patients each year.

A review of the charities being supported by the

business units identified that the Hospice was

having by far the greatest impact on the lives of

its employees and their families.

A team of ten women from Cobham Defence

Communications (Blackburn, UK) took part in

Cancer Research UK’s Race for Life. Through a

combination of walking, jogging and running

the five kilometre course at Witton Park

in Blackburn on the �rd of June, these ten

women demonstrated their heart warming

commitment to fighting cancer. The ladies

raised £2,�00 to help the charity continue its

pioneering work to help those affected by the

illness and continue their research into possible

ways to beat the condition.

The total amount donated for charitable

purposes during 2008 was £8�,�9� compared

to £67,7�� in 2007. No contributions were

made to political organisations.

Data Verification

Cobham is committed to providing reliable

information regarding its Corporate

Responsibility performance. Data verification

has taken place since 200�. This was initially an

internal programme checking compliance with

corporate standards, monitoring systems and

raw data. During 2008 the organisation moved

to an external assurance process focussing

on the effectiveness of SHE management

systems and performance data. Fourteen

business units drawn from all divisions across

the USA, UK and Australia (representing �9%

of our turnover) participated in the 2008

audit programme. Business units are required

to provide an action plan to address any

recommendations made. The action plans are

reviewed regularly at corporate level.

Data is reconciled to account for

acquisitions and disposals, and changes

in foreign exchange rates.

Cobham Graduates at the 2008 Royal Aeronautical Society (RAeS) career day in London

Cobham graduates participate in the Three Peaks Challenge raising funds for Youth Cancer Trust

Carol Officer, Norma MacPherson, Julie Bentley, Caroline Mather, Debbie Monk, Irene Connor, Jackie Kelly, Manda Heald, Karen Stickland and Pauline Cowperthwa


�8 �9

Performance

Sustainability Indicator 2008 2007 2006

Economic

Turnover £�,��6.�m £�,06�.�m £�,0��.7m

Trading Profit £2��.6m £�98.8m £�86.�m

Dividends (Pence) �.9�� .�00 �.7�0

Wages and Salaries £�7�.�m £27�.2m £27�.6m

Pensions £2�.�m £��.�m £�6.�m

Social

Employees: Total �2,78� 9,0�0 8,�9�

Graduates (UK only) 2� �� 6

Apprentices (UK only) �7 �6 ��

Gender diversity ratio: (Male/Female) 2.�7 2.�9 2.��

Age diversity ratio (%): <2� 6.2% 7.6% �0%

26-�� 8.�% 2�.6% 2�.�%

�6-�9 �8% �9.8% �6.�%

�0-�9 26.2% 2�% 22%

<�9 9.�% 7% �%

Staff Safety: Major Injury Incidence Rate (No of injuries resulting in �

or more days absence per �00,000 employees)260 ��8 720

Number of Reportable Injuries �� 7�

Lost working days �,6�8 �,��7 �,�76

Community giving total (GBP) 8�,�9� 67,7�� 77,8�6

Environmental

Energy Consumption: Total (GWh) �,8�� ,67� �,89�

Electricity �.�% �.�% �%

Natural Gas 2.9% 2.�% �.7%

Aviation fuel 9�.6% 9�% 9�.�%

Energy Efficiency: (MWh/£m turnover) �,206 �,�99 �,892

Carbon footprint: Scope � Direct emissions (tonnes CO2 equivalent) ��6,226 - -

Scope 2 Indirect emissions (tonnes CO2 equivalent) ��,2�� - -

Scope � Indirect emissions (tonnes CO2 equivalent) 292,29�

Waste generated (tonnes) �2,�6� �,677 �,�9�

Waste efficiency (tonnes/£m turnover) 8.2 �.7 �.�

Water consumption (m�) �90,2�2 �77,8�8 287,728

Water efficiency use (m�/£m turnover)� 2�9 �� 92

� Aviation fuel used in leased aircraft or provided to us by customers for use in their operations. Other fuel sources are negligible and have been omitted for this reason.

Staff Safety (No of injuries resulting in 3 or more days absence per 100,000 employees)

548

720

2007

2006

2008 260

Age Proportions

24%26%

7%

9%

8%

6%

22%

18%

39%

41%

<25

26 to 35

36 to 49

50 to 59

>59

2008

2007

2006

10%

25%

37%

22%

6%

Gender Diversity

2008

2007

2006

70.3%

71.5%

71.2%

29.7%

28.5%

28.8%

Males Females

Training Hours Breakdown

Personal Development

Technical/Proffessional

Safety, Health, Environment

Management

Induction

12%

15% 19%

6%

14%

14%

42%

54%

13%

11%

2007

2008


20 2�

Performance

Annual Energy Use Comparison (G Wh)

Aviation Fuel

1840

1674

2008

2007

18932007

Electricity

100

74

2008

2007

742007

Gas

52

38

2008

2007

302007

Waste Recycled/Not Recycled as Proportion to Total Waste (Tonnes)

2008

2007

2006

47.2%

39.5%

28.2%

52.8%

60.5%

71.8%

Waste Recycled Not Recycled

Water Efficiency (m3/£m)

1622007

1892006

2008 259

Energy Efficiency (M Wh/£m Turnover)

1,498

1,892

2007

2006

2008 1,206

Waste Efficiency (Tonnes/£millions Turnover)

2007

2006

2008

5.3

5.7

8.2

Lost Working Days

1,317

1,576

2007

2006

2008 1,638

Number of Reportable Injuries

54

73

2007

2006

2008 33

2008 Accidents by Type

Repetitive strain

Manual handling

Contact with stationary object

Contact with moving object

Fall from height

Exposure to harmful substance

Contact with moving parts

Explosion

Electricity

Other (includes slip/trip/fall at same level)

34%

10%

7%5%5%

4%

4%

15%

15%

2008

1%

Designed and produced in England by Generator (Creative Energy) Ltd – Telephone: +�� (0)��2� 6��9�� e-mail: [email protected]

Whilst every effort is made to ensure the accuracy of the information contained in this brochure, no responsibility can be accepted for any errors or omissions.

All photography is copyright and is used with thanks to the respective owners.

When you have finished with this report, please pass it onto other interested parties or remove the cover and dispose of it in your recycled paper waste .

For further information:

Corporate Responsibility and Sustainability DepartmentCobham plcBrook RoadWimborneBH21 2BJ

E: crs@cobham .com

This paper contains �0% recycled fibres and is bleached in a totally chlorine free process. The virgin fibre content of this paper is elemental chlorine free and comes from managed forests.

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