Responsible Business Report 2020

CEO introduction

The financial year that ended back in March 2020 already feels like a long time ago, and I suspect it will be quite some time before we see another year like it.

Nevertheless, we remain very proud of the record traffic levels we handled safely in 2019-20, the challenge that presented in making ours a responsible business, and the great strides we made.

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Highlights from 2019-20

1 Target based on absolute scope 1, 2 and significant scope 3 GHG emissions, against a 2018 baseline
2 Based on our absolute scope 1 and 2 GHG emissions, 2019-20 vs 2018-19
3 Decarbonise aviation in the UK by 2050

Scene Setting

Going into 2020 we were excited to start celebrating the centenary of Air Traffic Control (ATC100); no one knew this would be such a historic year in itself, with the aviation industry changing fundamentally as a result of the Covid-19 pandemic and facing a struggle for its very survival.

Air Traffic Control has played a remarkable role in the making of the modern world, supporting our airlines in connecting us to places and people in a way that we never imagined 100 years ago. In normal times aviation contributes £52bn to the UK economy, supporting nearly 1m jobs. It will be even more important to our island nation’s global trading links, once we leave the EU.

Airspace is critical national infrastructure which must function safely and efficiently 24 hours a day, 365 days a year. Even at the height of the first lockdown, when there was virtually no traffic, we still kept our airspace alive, to keep critical medical supply lines open, and to repatriate homecoming travellers.

While we put a spotlight on the past, the technology and the people who made it happen, we are also looking to the future challenges and opportunities we face. We know that the future must be sustainable, as we seek to build back better in line with Government ambitions. Responsible business is an essential part of this journey.

Our employees push the boundaries to improve ATC and our ambitions for our responsible business programme are no different. We want to set a standard in reducing our environmental impacts. And we want to create the right, diverse and inclusive environment within our business for our employees to use their skills, experience and innovation to ensure our business continues to operate safely and efficiently, now and into the future.

In normal times aviation contributes £52bn to the UK economy, supporting nearly one million jobs

Our report describes some of the key highlights from 2019-20 and how we’ve been responding to Covid-19 from people across our organisation under the following Responsible Business headings;

  • Supported Employees
  • Healthy Environment
  • Good Business Practice
  • Strong Communities
  • Responsible Business, including:
    • Environment targets
    • Governance
    • Environment results

Supported Employees

Our business relies on the competencies, capabilities and experience of our employees. We are committed to providing a safe, inclusive and supported workplace to help employees thrive.

Dr Rae-Wen Chang

Chief Medical Officer

Dr Chang talks about our in-house Occupational Health Service and how it has responded to Covid-19...

As a far-sighted and people-focused organisation, NATS has for many years provided an in-house Occupational Health Service with Aeromedical expertise to all our employees across the UK and international offices.

Our people have benefited from an embedded and dedicated team who provide advice to individuals and managers, and we work closely with our Quality, Health, Safety and Well-being colleagues.

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Sian Bunyan

Quality Health Safety & Wellbeing Performance & Engagement Co-ordinator

Sian highlights some of the activities underway linked to employee wellbeing...

Our wellbeing has always been important to us but during this period it’s been at the forefront of everyone’s minds.

At the start of lockdown, since when all non-operational employees have been working from home, we have run weekly online Wellbeing Wednesday sessions giving people a chance to voice their concerns or simply say how they are feeling.

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Andrew Sivanesan

Data Science Specialist

Andrew reflects on what diversity and inclusion means to NATS’ employees...

NATS delivers world-leading services every single day thanks to a diverse workforce – including black, Asian and minority ethnic (BAME) people, foreign nationals, religious minorities and white minorities.

This year we established NATS’ multicultural employee network, globeAll, which aims to elevate the esteem of multicultural employees and their allies through networking and educational activities, and seeking to attract, engage and nurture multicultural talent.

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Helen Fuge

Head of Learning & Talent

Helen highlights the progress being made on diversity and inclusion...

We have continued to focus on the new and existing diversity and inclusion challenges we face and how best to tackle them in the coming months and years.

We have made progress in raising awareness, reviewing processes, enhancing our employee networks and encouraging debate about inclusion and diversity. However, there is still more that can be done to change our culture and demographic.

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Healthy Environment

We are committed to protect our natural world, biodiversity and ecosystems. For over a decade we have reported on how we impact on the environment, including our progress on managing airspace efficiently and our reductions in greenhouse gas emissions and other resource use associated with running our buildings and infrastructure.

Juliet Kennedy

Operations Director

Juliet points to the opportunities a green restart brings to how we manage air traffic...

This is a once-in-a-generation opportunity – we will never have another chance like this to use our innovation, our expertise and our flexibility to change and adapt to deliver lasting improvement.

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Ian Jopson

Head of Sustainable Operations

Ian outlines our new net zero ambitions...

We announced in December 2019 our ambitions as a business to align with the UK’s net zero emissions target by 2050, with proximate goals for 2030 including a 35% reduction in emissions.

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Paul Turner

Manager 3Di Performance

Paul reviews our airspace environmental performance...

Airspace efficiency is an essential part of our service delivery. As a responsible business, providing the most direct routes at the best flight levels is not only a priority for our customers, but also one of the ways we play our part in addressing aviation’s contribution to climate change.

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Mark Balsdon

Head of Airspace Users Solution & Customer Management

Mark explains how we’re enabling renewable energy...

Our relationship with the renewables industry is very positive, but that’s not always been the case. Back in 2000, wind farm developers and their plans were a big risk to our operation, as ours were to theirs.

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Good Business Practice

Our business is built on partnerships with our customers, suppliers, peers and other stakeholders. These relationships are built on trust and our high standards of ethical behaviour and integrity.

Dr Jarlath Molloy

Senior Environmental Affairs Manager

Jarlath notes the sustainability benchmarking undertaken this year...

Building on our activities across the UN Sustainable Development Goals (SDGs), we undertook the Business in the Community (BitC) Responsible Business tracker this year, focusing on three categories.

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Stephen Rose

Head of Supply Chain Services

Stephen discusses the importance of supply chain relationships...

Since March, our major suppliers have played a significant role in helping support our actions to manage our finances and protect our business as we respond to the coronavirus pandemic.

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Louise Tomicic

General Manager Customer Affairs

Louise describes our engagement with airline customers...

At the start of 2020, our customers were anticipating record summer traffic figures. The impact of the pandemic is now continually changing the landscape for our customers.

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Strong communities

As a large company with multiple sites across the UK and overseas, we play a positive role in the socio-economic development of the communities in which we operate, creating highly skilled and paid roles, and secondary employment, as well as supporting a range of charities and other good causes.

Nick Worricker

Environmental Manager

Nick explains how our employees exceeded charity fundraising targets...

Our employees continue to support charities and causes they care about via our Payroll Giving scheme. 12% of employees donated £210,500 via the scheme and we’ve maintained our Gold quality mark award first received in 2017.

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James Deeley

Deputy Head of Sustainable Operations

James recounts the voluntary support employees have provided this year...

Our employees have done some amazing volunteering over the last year, especially during the Covid-19 pandemic.

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Martin Smith

Safety Manager

Martin describes our support for the Jon Egging Trust...

The very week before lockdown began, the NATS Jon Egging Trust (JET) volunteers held a Blue-Skies 2 session with young people from Robert May’s School, Odiham.

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Environment targets

Airspace

Regulatory performance targets on UK airspace efficiency are set by the Civil Aviation Authority (CAA) as part of our licence to provide en-route air traffic services. Since 2012, these have included financial incentives measured using our three-dimensional inefficiency score metric (3Di).

We believe we are the only air traffic organisation in the world to have financial targets focused on improving the overall network performance of airspace.

3Di targets for the current Regulatory Period 3 (RP3), which runs from 2020 to 2024 are outlined in the figure below, although these may be subject to further review by the CAA who will redetermine the price control by the start of 2023 following Covid-19 impacts.

RPI 3Di CAA targets / Click to enlarge

As a result of some small changes to how the 3Di score is calculated and other minor improvements linked to each 5-year regulatory period, performance cannot be directly compared between RP3 and our last regulatory period (2015-2019). However, the scale of our ambition to improve airspace efficiency and the targets set by the Civil Aviation Authority that underpin it remains unchanged. Our 3Di targets are stretching and since their inception have been incrementally more challenging. We have managed to achieve this for the past eight years, despite the additional challenge of significantly increased traffic levels.

We seek to deliver a service that is as close to the CAA ‘par’ target as possible, while continuously reviewing opportunities to go beyond this and achieve a bonus score. All of our airspace projects under development are monitored to ensure we don’t unintentionally drift into penalty as a result of delivering a safety, capacity or other improvement.

A small 3Di tolerance band is set by the CAA, as the regulator recognises the 3Di score also influenced by variables and factors outside of our control, including the actions of our airline customers, airports, neighbouring air traffic organisations, the military and other airspace users. As well as focusing on what we control and how we can improve the resilience of our operations to influences such as the weather, we are incentivised to work collaboratively across the industry to deliver efficiency gains.

We also have non-incentivised airspace performance indicators adopted as part of the EC performance regulation. This includes ‘KEA’ which measures average horizontal en-route flight efficiency (based on the actual trajectory of flight). With the endorsement from our airline customers and our regulator, our primary focus remains on the 3Di metric which not only includes KEA within its construct, but goes beyond it in scope; to include additional areas of horizontal flight efficiency excluded by KEA, as well as all elements of vertical flight inefficiency, also not in KEA scope.

Separately, it is common for our airport towers, relating to the provision of airfield air traffic services, to include performance indicators, both financial and non-financial. These typically focus on improvements to continuous descent arrivals, which reduce both noise and emissions.

Our adoption of the UK aviation industry’s goal to reach net zero emissions by 2050 replaces our previous 10% commitment to reduce average CO2 per flight. As part of the Sustainable Aviation’s decarbonisation roadmap we have set out our expected contribution to reducing airspace CO2 emissions as a result of planned airspace modernisation, new controller tools and other initiatives in RP3 and beyond. We have also contributed to similar European and Global 2050 CO2 reduction roadmaps for aviation.

We recognise the external calls to ‘build back better’ following Covid-19, globally, nationally and within the aviation industry itself, and we have been re-constructing our RP3 plan to focus on customer benefits, as well as focusing on nearer term performance initiatives. These include reviewing airspace procedures and other small-scale improvements which can be implemented relatively quickly. We are also in the process of adopting more granular internal performance measures across our operations which we will set out in due course. We have now embedded our environmental team into our operational structure to support the priority to further elevate environmental improvements into day-to-day decision making.

Running our business

As a responsible business, we have committed to a trajectory that reduces the CO2 emissions from running our business to zero by 2050, achieving a 35% reduction in each emissions source (direct, indirect and those we influence) by 2030. We have also established a nearer term proximate target to 2025.

To achieve this, we have established a series of milestones within our 2030 business strategy, including:

  • The establishment of rolling regulatory period targets to ensure we remain on track to deliver the trajectory of reduction out to 2050, which are aligned to keeping global temperatures 1.5 degrees below pre-industrial levels.
  • Calculating a baseline for other non-direct emissions (such as business travel and other scope 3 emissions related to delivering our services) and establishing comparable reduction goals.
  • Working with our suppliers, customers, partners and other stakeholders to assess how they can support us in reducing emissions.
  • This year, 2020-21, we have committed to consume or self-generate renewable electricity and low carbon gas.
  • Since the launch of our environmental programme in 2008, we have delivered considerable savings in energy consumption. To help us meet our 35% target, and for further resource and cost efficiency reasons we are in the process of establishing near-term energy (kWh) targets.
  • Our internal strategy focuses on embedding responsibility for environmental improvement locally across our operations.

35% reduction in kWh from 2016-2019 / Click to enlarge

Governance

Our governance ensures we set and meet responsible business ambitions.

Our Chief Executive is accountable for our responsible business policy. In addition, in accordance with their accountabilities under the UK Corporate Code, our Board takes an active interest in the policy and its implementation as part of their strategic responsibility for the culture of the company. Oversight from the NATS Executive includes our environmental performance, employee relations, anti-bribery and corruption, prevention of modern slavery and human trafficking through various strategy, risk and governance sub-committees.

A Benefit Delivery Panel is responsible for overseeing delivery of projects in support of environmental targets, while an Environment Strategy Steering Group manages environmental risks, compliance and ground-based impacts.

A people and organisation strategy is reviewed by the Board twice a year and an Oversight Group monitors our commitment to minimising the risk, and proactively addressing any suspicions of modern slavery and human trafficking in our business activities and supply chain.

We have adopted a number of management systems to mitigate business risks, many of which are certified, such as: ISO9001 (quality), ISO14001 (environment), ISO27001 (information security), ISO55001 (asset management) and OHSAS18001 (health and safety). Governance processes are in place to ensure oversight for these management systems.

Our most material issues have been identified taking account of the views of our customers, suppliers and employees, including key performance areas subject to regulatory targets and key responsible business issues subject to mandatory reporting. Some of these are addressed in our Annual Report & Accounts and our Customer Report.

Policies and priorities

Our responsible business policy sets out our core principles as they relate to human rights, ethics, protecting our natural world, working with communities and transparent reporting.

Given our material impacts and risks, we have set targets to improve our environmental performance, both in the airspace we manage and from running our business. We also continue to monitor and pursue social and governance initiatives, including how our business can further support the UN sustainable development goals. A new sustainability strategy sets out goals and milestones that will help us achieve our net zero emissions target, as well as support the wider UK aviation industry do the same. We also expect our regulator to continue to focus on targeting the environmental efficiency of the service we provide, using the 3Di metric. Community annoyance remains a key concern and we continue to work closely with airport operators, airlines, our regulator, the Department for Transport, ICCAN, ICAO, other bodies and community representatives to manage aircraft noise near airports.

Public disclosure and performance indicators

Public disclosure of our performance includes the following channels and metrics:

CDP

For the second consecutive year (2018-19), we have been awarded a B grade by CDP (formerly the Carbon Disclosure Project) for our management of our greenhouse gas emissions. NATS was the first air traffic service provider in the world to introduce an environment programme in 2008. We have made good progress, which this accreditation from CDP acknowledges, but there is no doubt that much more needs to be done as we work towards our commitment as part of the Sustainable Aviation coalition to reach net zero emissions as a UK industry by 2050. Due to the impacts of Covid-19 on our business, we chose not to participate in CDP reporting for 2019-20.

Licence reporting requirements

NATS’ en route licence sets out a number of reporting requirements, including an annual update to the CAA (Condition 10) on our environmental performance, but is not published. However, the environmental KPIs reported are published elsewhere e.g. in the Annual Report & Accounts and the Responsible Business reports. In addition, we report quarterly (Condition 11) on our airspace environmental performance metric 3Di on our website.

GHG report

As part of our commitment to consistent and transparent reporting of our environmental impacts we undertake external verification of our greenhouse gas emissions to the ISO 14064 standard. Achieving this requires us to prepare and publish a detailed technical report outlining how our greenhouse gas emissions have been calculated. The GHG report is updated annually to take account of any changes in our approach, methodologies, models, boundaries, etc. and published in parallel with our Annual Report & Accounts and Responsible Business report.

Modern Slavery

NATS, and everyone within the organisation, are committed to preventing slavery and human trafficking in our corporate activities and to complying with the requirements of the Modern Slavery Act 2015. Our annual Slavery and Human Trafficking Statement is here.

Gender Pay

We aspire to be an organisation that is recognised as a truly inclusive and diverse employer; our key areas of focus for this year (20-21) are agile working, inclusive people practices, inclusive behaviours and ownership of our action planning across our business, ensuring that gender diversity actions are owned by those who can influence change. Our annual Gender Pay Report is here.

Environment results

Summary of 2019-20 environmental performance

We delivered a number of airspace changes with CO2 savings in 2019-20, including small scale changes to the design of airspace and improvements to the tactical delivery of flight trajectories, which delivered over 30,000 tonnes of CO2 savings to users. A summary of the projects carried out last year, and the associated savings, are expanded on in our annual GHG report.

At the end of the financial year we had reduced ATM CO2 emissions by 7% per flight; this was short of our voluntary target, set in 2008, to reduce emissions by 10% per flight by 2020, primarily due to the delay to airspace modernisation, particularly in the south east of England. Alternative options were considered, with priority given to small scale initiatives that did not affect noise and leaving more complex opportunities to feed into our 2020-2025 plan, which is also now under review. Details of the voluntary target can be found in NATS’ 2009 ‘NATS and the Environment’ report.

We did not meet our 2019 KEA target, but neither did we expect to at the outset of RP2 (in 2015) as we did not believe the top down targets were achievable at a UK or EU-wide level, and this proved to be the case. Our focus continues to be on both horizontal and vertical flight efficiency in both the en-route and approach phases of flight, using the 3Di metric (see our environmental targets). Controller interventions, ATC tools and airspace modernisation can improve efficiency in terminal airspace, including reducing airborne holding and increasing continuous descent arrivals, which tangibly reduces fuel burn and CO2 emissions for our airline customers and noise which impacts airport communities, but these vertical improvements are not captured by the KEA metric as discussed in an earlier section.

While our energy consumption remained broadly stable between financial years, the purchase of renewable electricity and low carbon gas for the full year reduced our carbon footprint related to these sources of emissions by 91%. Our water and waste impacts, while not material from a carbon perspective, have continued to reduce.

Description FY 2019/20
(or CY 2019)
FY 2018/19
(or CY 2018)
Service performance and resilience    
3Di (calendar year) 29.0 29.2
Environmental performance    
Direct / scope 1 emissions (location-based tonnes CO2e) 3,477 4,094
Direct / scope 1 emissions (market-based tonnes CO2e) 1,306 -
Indirect / scope 2 (location-based tonnes CO2e) 15,301 16,561
Indirect / scope 2 (market-based tonnes CO2e) 1,064 21,024
Total direct and indirect / scope 1 + 2 emissions (location-based tonnes CO2e) 18,779 20,654
Total direct and indirect / scope 1 + 2 emissions (market-based tonnes CO2e) 2,370 25,118
Total direct and indirect / scope 1 + 2 emissions intensity metric (location-based tonnes CO2e per £m of revenue) 21.0 23.3
Total direct and indirect / scope 1 + 2 emissions intensity metric (market-based tonnes CO2e per £m of revenue) 2.7 28.4
Progress against 10% enabled ATM-related CO2 emissions reduction target 7.0% 6.9%
Avoided / scope 4 emissions (modelled enabled ATM-related CO2 reduction in tonnes) 30,737 121,788^
Water consumption (m3) 54,500 75,750^
Energy consumption (gas + electricity) MWh 71,686 71,262

^ restated due to inclusion of additional information, improvements to modelling accuracy and data quality.

Modelled enabled ATM-related CO2 reductions represent the saving in COemissions from improvements to the ATM network, such as technical changes which enable us to provide more fuel-efficient flight profiles, based on projections of the volume of flights likely to take advantage of the improvements. The enabled reduction in emissions is reported in full in the year in which the improvement is made. This is modelled based on industry best practice and is outlined in detail in our GHG report, available here.

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