Chemring : Annual Sustainability Report 2022

CONTINUING TO INNOVATE, PROTECT AND GROW

CHEMRING GROUP PLC

SUSTAINABILITY REPORT 2022

CONTENTS

CONTENTS

01 What we do

02 Sustainability overview

1. Introduction to sustainability

1. Health and safety

1. Environment

1. Independent Assurance Statement to Chemring Group PLC

1. Task Force on Climate-related Financial Disclosures ("TCFD") report

1. Our people

1. Ethics and business conduct

OUR PURPOSE

Chemring helps make the world a safer place. Across physical and digital environments, our exceptional teams deliver innovative technologies and products that detect and defeat ever-changing threats.

OUR VALUES

SAFETY	EXCELLENCE	INNOVATION
We place safety at the heart	We are focused on ensuring	We create world-class
of everything we do.	we consistently meet	solutions and develop
	high standards in all that	world-class thinking.
	we do.

DISCOVER MORE ABOUT CHEMRING AT CHEMRING.COM

WHAT WE DO

INNOVATION AND TECHNOLOGY IS AT OUR CORE

At Chemring we create market-leading technology solutions and develop world-class thinking to solve the most challenging problems.

Using our extensive science and engineering expertise, we turn ideas into reality, designing and developing critical solutions that protect and safeguard in an uncertain world.

We achieve this by innovating at every stage of the value chain, from research and development ("R&D"), through to design, manufacture and in-service support for our sensors and detection systems, countermeasures, precision engineering and energetic products.

Our customer base spans national defence organisations, security and law enforcement agencies, as well as commercial markets such as space, medical and transport. We support our customers in more than 50 countries across the globe.

CHEMRING IS ORGANISED INTO TWO STRATEGIC SECTORS

SENSORS & INFORMATION

Innovation is core to solving our clients' difficult problems.

With over 700 scientists, engineers and consultants, our Sensors & Information sector continues to invest in technologies that safeguard and protect in an uncertain world.

Operating across defence, national security, law enforcement and industrial domains, we enable our clients to deliver competitive advantage, defend their people, assets and information, and defeat their adversaries.

Our sensor technologies detect threats with a very high degree of confidence, be they explosive, biological, chemical, radio or cyber.

Our Roke business draws on a 60-year heritage of innovation in sensors, communications, cyber and artificial intelligence to innovate and apply these technologies in new ways.

We operate across the whole lifecycle providing advice, R&D, engineering, design and in-service support for our products and services.

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COUNTERMEASURES & ENERGETICS

Chemring is the world leader in the design, development and manufacture of advanced expendable countermeasures for protecting air and sea platforms against the growing threat of guided missiles.

We combine a deep understanding of platform signatures, missile seekers and chemical formulations to develop new countermeasures against evolving threats.

Our niche, world-class energetics portfolio provides high-reliability,single-use devices that perform critical functions for the space, aerospace, defence and industrial markets.

Every day, our products, services and experts assist customers, including NASA and SpaceX, to achieve mission success. This ranges from cutting-edge technology to enable our customers to launch rockets and satellites into orbit, to the provision of aircraft safety systems including oxygen mask deployment on commercial aircraft and ejector seats for aircrew egress.

Chemring Group PLC Sustainability report 2022

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SUSTAINABILITY OVERVIEW

COMMITTED TO

A SUSTAINABLE FUTURE

At Chemring we acknowledge and embrace our collective responsibility to contribute to a sustainable future. We have a strong and recognised obligation to ensure the responsible operation of our business and are fully committed to long-term sustainable value creation through safe, sustainable and ethical business conduct at all times. Our goal is to ensure that we protect our planet and our people, support our customers and their critical needs, and that we have a positive impact on the communities in which we operate.

Improving our sustainability performance plays a key role in the way in which we run our business today, and plan for the future as we manage our environmental, social and governance ("ESG")- related risk. Our sustainability goals are now directly linked to targets for remuneration and reward across our leadership teams.

We also recognise that our ESG credentials are an increasingly important factor in our ability to attract and retain first-class people. Engaged, motivated, empowered and appropriately skilled employees are integral to our success as we build a sustainable company of which all our stakeholders can be proud.

PURPOSE

Chemring helps make the world a safer place. Across physical and digital environments, our exceptional teams deliver innovative technologies and products that detect and defeat ever-changing threats.

STRATEGY

To be a leading provider of critical and innovative technologies that detect and protect people, platforms, missions and information against constantly changing threats.

APPROACH

The long-term success of Chemring can only be enhanced by a positive interaction with all of our stakeholders. An engaged and constructive approach is therefore important to us. Following the stakeholder materiality assessment that was undertaken in 2021, our approach is now focused on the following key topics and associated areas of focus.

HEALTH AND SAFETY

- Control of major accident hazards - Injury prevention

- HSE risk management

- Occupational and process safety

Read more on pages 07 to 08

	MAKING THE
	WORLD A SAFER
PEOPLE	PLACE

• Culture
• Diversity and inclusion
• Employee wellbeing and engagement
• Employee learning and development

Read more on pages 19 to 27

Our commitment to protection goes beyond our customers and immediate stakeholders, it includes our planet and broader society and is underpinned by our values and behaviours.

VALUES

ENVIRONMENT

• Emission reduction
• Waste generation and hazardous materials management
• Energy usage
• Water consumption

Read more on pages 09 to 18

ETHICS AND BUSINESS CONDUCT

• Operational Framework and Code of Conduct
• Compliance oversight and risk management
• Whistleblowing
• Anti-briberyand corruption

Read more on pages 28 to 29

SAFETY

We place safety at the heart of everything we do

EXCELLENCE

We are focused on ensuring we consistently meet high standards in all that we do

INNOVATION

We create world-class solutions and develop world-class thinking

02 Chemring Group PLC Sustainability report 2022

As of 2022, Chemring Group PLC received an MSCI ESG Rating of AAA.*

PROGRESS IN 2022

Chemring's purpose is to help make the world a safer place and Russia's invasion of Ukraine has tragically highlighted the critical role that the defence and security industry plays in preserving peace, democracy and freedom in the western world. It has reinforced the argument that for sustainability to thrive, it requires global stability at its foundations. We are proud of the role that Chemring plays in providing that stability and are equally focused on ensuring that we manage and progress our own sustainability agenda, and in particular our ESG-related risks.

It has been another busy year in which we have built on the good progress made during FY21.

Our ESG strategy over the current and future years will seek to identify those areas where our activities can have most impact. Plans are now in place to continue this journey and to ensure that we meet the growing disclosure requirements of our stakeholders and demonstrate our ability to successfully address ESG-related issues.

ESG HIGHLIGHTS

HEALTH AND SAFETY

Total recordable injury frequency rate 0.78 (2021: 0.67)

High-potential incidents: 13 (2021: 9)

Technical Safety and Occupational, Health, Safety and Wellbeing Committees formed

PEOPLE

100% of our senior leaders have participated in diversity, equity and inclusion workshops

All new graduates and apprentices will take part in a UK-wide Early Careers development programme which started in November 2021

• The use by Chemring Group PLC of any MSCI ESG research LLC or its affiliates
  ("MSCI") data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Chemring Group PLC by MSCI. MSCI services and data are the property of MSCI or its information providers, and are provided 'as-is' and without guarantee. MSCI names and logos are trademarks or services marks of MSCI.

ENVIRONMENT

Green House Gas ("GHG") and carbon emissions flat (<1% difference year-on-year)

Carbon reduction plans being implemented in every business

Sustainability Committee formed to shape, monitor and ensure future progress

ETHICS AND BUSINESS CONDUCT

Updated Code of Conduct and training issued

Continued implementation of Chemring Compliance Portal Operational assurance process enhanced

DISCOVER MORE ABOUT SUSTAINABILITY: CHEMRING.COM/SUSTAINABILITY/COMMITTED-TO-A-SUSTAINABLE-FUTURE

Chemring Group PLC Sustainability report 2022

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