Risks & opportunities

Climate change

The Group continues to be exposed to a number of risks, including climate change, and has an established, structured approach to identifying, assessing and managing these. The risk committee has accountability for the system of risk management and reports regularly to the board on the key issues facing the business and the mitigating actions taken in order to manage them. The Group’s consistent strategy and long-term programmes require that the sources of risk are identified and are kept under continuous review.

How we manage our principle risks and uncertainties are described in more detail in our Annual Report.

Environmental impact of products and operations

Products and markets

The Group recognises that its products and business operations have an impact on the environment, particularly in relation to climate change. Rolls-Royce is determined to be part of the solution to these challenges and continues to make significant investment in innovative solutions for the aviation, marine and energy markets. Environmental challenges present a significant business opportunity and are being addressed through the enhancement of current product ranges and affordable research and development into low carbon technologies such as nuclear, fuel cells and tidal energy.

Operations

We are committed to reducing the environmental footprint of our operational activities. In the past 10 years we have invested £2.7 billion on new plant and infrastructure to improve efficiency, lower operating costs and reduce environmental impact. This has led to a substantial reduction in energy consumption and greenhouse gas emissions. We intend to reduce these emissions further in the years to come.

Governance

A robust governance structure headed by the Environment Council directs and monitors improvements in the environmental performance of products. The Environmental Advisor Board provides independent expert advice on all matters pertaining to environmental sustainability.