Responsible Business Report 2021

CEO introduction

As a responsible business, our priority over the past year has been to ensure that our company and our employees come out of the other side of the pandemic in good shape and well placed to support our customers in their recovery.

We have placed great focus on ensuring the physical and mental wellbeing of our people. All of our office-based teams have been working from home, while our operational teams have continued throughout the pandemic to safely deliver an air traffic service to the small number of aircraft that have been operating in UK airspace. 

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Highlights from 2019-20

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 response to Covid...

Our priority remains the health and safety of our employees, contractors and visitors at all our sites across the UK and overseas where we have people; including Gibraltar, the Middle East and Asia-Pacific regions.

This has driven an immense collective effort to ensure our workplaces are Covid-secure for colleagues who have to be on-site, and importantly that everyone has the knowledge and skills to reduce their infection risk as far as possible.

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Marie-Louise Chandler

Director of Quality, Health, Safety & Wellbeing

Marie talks about our focus on occupational health and wellbeing...

There is always a close link between Operational Safety and Occupational Health, Safety & Wellbeing. Over the past year that relationship has been even more important in managing the actual and potential consequences of the pandemic and achieving our primary aim to maintain a safe and healthy environment for everyone.

We did this through effective leadership by all levels of management, the active participation of all our employees and open and responsive communications channels.

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Chris Last

Human Resources Director

Chris describes our progress on diversity and inclusion…

We have continued to work on building a working environment that creates a safe space in which all our people are respected and valued for their individuality.

Diversity empowers innovation and we are committed to increasing representation from minority groups at management levels and in our wider workforce.

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We are committed to providing a safe, inclusive and supported workplace for our employees to thrive

Healthy Environment

For more than 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.

Graeme McCoy

3Di Environmental Focal Point and Group Supervisor

Graeme describes the work to improve airspace efficiency…

This past year has given us all a chance to look at the world of aviation through a different lens and allowed the operation to bring sustainability more into focus.

The low traffic levels have, unsurprisingly, led to a great improvement in airspace efficiency (see environmental performance), and highlighted areas where we believe improvements can be made for the long term as traffic returns.

 

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Paul Hughes

Head of Facilities Management

Paul talks about agile working and our work to reduce our business environmental impacts…

NATS’ role is to keep the UK aviation industry operating 24 hours a day, 365 days a year. To do this we operate a vast infrastructure of communications, navigation and surveillance sites across the UK, providing our air traffic control centres and airport units with the ability to talk to and see where aircraft are positioned in our skies.

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Jacob Young

Manager Operational Performance/Oceanic Group Supervisor

Jacob describes a historic development in oceanic airspace…

In the 1960’s the Organised Track Structure (OTS) was introduced in the North Atlantic – essentially an invisible high-altitude road network. The OTS allows flights to join a route system across the ocean, which helps maximise efficiency in a setting where there is no real-time aircraft surveillance data (radar).

The price of that efficiency is a reduction in the availability of optimal flight profiles, but there was no better solution available until the introduction of Space-based ADS-B, which determines aircraft position by satellite navigation in the same way as radar does over land.

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Mark Asquith

Director Investment and Portfolio Strategy, Technical Services

Mark talks about how Covid has impacted our planning and our benefits led improvement plans…

Our people, across Technical Services play a crucial role in designing and delivering our services and ensuring that our safety critical systems meet our customer and business needs.

We can all be proud of how we’ve responded to the pandemic with extraordinary speed and agility in order to ensure that we continued to protect some of the critical aviation infrastructure and set ourselves up to support traffic regeneration.

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Each year we report on the impact we make on the environment and the improvements we are making

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.

Anne Marie Black

Corporate PR & Charities Manager

Anne-Marie describes our ongoing work supporting charities…

Even in the face of the pandemic, our employees have continued to support charities and causes they care about via our Payroll Giving scheme, with more of them contributing more money than ever before.

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Robin Clarke

Community Relations Manager

Robin talks about aircraft noise and our first virtual consultation…

Understanding the perspective of communities affected by aviation is a central part of our work to be a responsible business. 

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Helen Fuge

Head of Learning & Talent

Helen talks about our support for STEM and apprenticeships…

We have continued to support the promotion of Science, Technology, Engineering and Mathematics (STEM) in schools and colleges delivering virtual STEM days and career insight sessions.

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We strive to play a positive role in the communities where we operate

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.

Stephen Rose

Head of Business Services

Stephen talks about responsible business in our supply chain…

As a responsible business, we work with suppliers to ensure that our high standards are reflected throughout the supply chain.

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Louise Tomicic

General Manager Customer Affairs

Louise provides an airline customer angle…

For our airline and airport customers, the past year has been devastating and the uncertainty continues for them even now, as a second summer season is under threat.

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Craig Foster

Manager Safety Performance

Craig discusses our priority on operational safety…

Safety is always our first priority and over the past year we’ve had to be increasingly agile as the pandemic unfolded, to maintain safe operations.

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Stuart Gray

Director, Group Treasury & Corporate Finance

Stuart talks about sustainability-linked finance…

In 2021, as part of the broader refinancing of its debt structure, NERL agreed a £400 million sustainability-linked revolving credit facility with a syndicate of six banks.

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Our business relationships are built on trust and high standards of ethical behaviour

Governance

Effective governance is essential to ensuring we set and meet our responsible business goals and we reinforce that from the top of the company.

Our Chief Executive is accountable for our responsible business policy. And, 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 covers our policies for employee relations, environmental performance, 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 Executive level Environment Steering Group manages environmental risks, compliance and oversight of environmental performance.

Our 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 ensure compliance with legislation and 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 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 responsible business issues subject to mandatory reporting. Some of these are addressed in our

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.

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 sustainability strategy sets out goals and milestones that will help us achieve our net zero emissions target and support the wider UK aviation industry to do the same. We expect our regulator to continue to focus on targeting the environmental efficiency of the service we provide, using the 3Di metric.

Community annoyance continues to be of concern and we work closely with airport operators, airlines, our regulator, the Department for Transport, ICCAN, ICAO and community representatives to help manage aircraft noise near airports.

Public disclosure and performance

Modern Slavery

Our annual describes the steps we have taken during the financial year to deal with modern slavery risks within our supply chain and business. NATS’ policy requires everyone within the organisation to prevent slavery and human trafficking and to comply with the requirements of the Modern Slavery Act 2015.

Gender Pay

We report annually on our gender pay gap under the UK Equality Act Obligations. Our latest Gender Pay Report relates to data up to April 2020 . For the first time since we started reporting in 2018, we have seen an improvement in our gender pay gap, (18.4% vs.18.9% for the previous year).

Our recent voluntary redundancy programme and continued reorganisation gives us an opportunity to redress some of the gender imbalance and agile working, which was already part of our action plan, is of course now the norm. We are also reviewing our selection and recruitment processes to ensure they are fair and inclusive, to help us attract a diverse range of talent.

CDP

We have sought a CDP (formerly the Carbon Disclosure Project) climate change rating annually since 2016 (except for 2019-20 due to Covid) and we are awaiting our 2020-21 rating. We have been awarded consecutive B grades in our last two submissions and our ambition is to achieve an A- rating in the near future.

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.

This information is also published in our Annual Report & Accounts and the Responsible Business reports. In addition, we report our airspace environmental performance using the 3Di metric on our website bi-annually, as part of our Condition 11 requirement.

GHG report

In order to ensure transparency and accuracy in the reporting of our environmental impacts our greenhouse gas emissions data is externally verified to the ISO 14064 standard. To achieve this requires us to prepare and publish a technical report outlining how our GHG emissions have been calculated on our website.

The verification statement and GHG report are updated annually to take account of updated performance information and any changes in approach, methodology, boundaries, etc. and published on our website.

Effective governance is essential for ensuring we meet our responsible business goals

Environment targets

Airspace

As NATS is a monopoly provider of en-route air traffic control services across the UK, the Civil Aviation Authority (CAA) determines our costs and expected performance levels through rolling 5-year regulatory ‘price controls’. Since 2012, this has included financial performance targets on the efficiency of UK domestic airspace using a metric called 3Di (three-dimensional insight score). This was a world first, and we believe we are still the only air navigation service provider to have financial incentives based the efficiency of its overall airspace.

The 3Di metric encourages us to reduce aircraft fuel burn and emissions by improving aircraft trajectories across the UK. It does this by computing an efficiency score for every commercial aircraft, which across the year are averaged and compared to targets set by the CAA. Financial penalties or bonuses apply, depending on how we perform against targets which have historically been stretching as they get harder year-on-year and as traffic has increased. 3Di targets for the current price control period, called Regulatory Period 3 (RP3), which was set to run from 2020-2024 are outlined in the figure below.

3Di score targets Click to enlarge

 As an indicator that captures the overall efficiency of UK domestic airspace, 3Di is inclusive of others’ behaviours and actions. This includes NERL and other ANSPs, pilots, airlines, airports and danger area users amongst others. The metric also captures the impacts of traffic levels upon efficiency.

Due to the reduction in air traffic volumes because of Covid, the RP3 3Di targets are currently not relevant; unsurprisingly, for 2020 we recorded our most efficient 3Di score ever (see environmental results section). Our 3Di targets are expected to be redetermined by the start of 2023.

We also have non-incentivised airspace performance indicators adopted as part of the European Commission performance regulation. This includes ‘KEA’ which measures average horizontal en-route flight efficiency (based on the actual trajectory of flight). With the endorsement of 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 covered by the KEA metric.

Where we deliver tower air traffic control services to airport customers, it is usual to have local environmental targets and controls to work towards, both financial and non-financial. These typically focus on improvements to continuous descent arrivals, which reduce both noise and emissions, aircraft taxi time, or ensuring local noise restrictions are met.

We are part of the UK aviation industry’s goal to reach net zero emissions by 2050, which replaces our previous 10% commitment to reduce average CO2 per flight. As part of the Sustainable Aviation 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.

Running our business

In 2019 we adopted a net zero by 2050 target. Aware of the need to make early progress, we developed a series of interim targets to ensure the impacts from running our business are reduced in line with limiting temperature rise to 1.5°C above pre-industrial levels.

This year (Feb 2021), we recognised that we needed to make changes faster and earlier and chose to accelerate our net zero goal to 2035 across each of our GHG emissions sources. We have submitted our targets for validation by the Science Based Targets initiative (SBTi).

Bringing forward our net zero emissions goal means we need to achieve deeper reductions sooner. We have also set additional public targets to support our environmental ambitions.

Our targets:

  • NATS Holdings Limited commits to reduce absolute Scope 1, 2 and 31 (categories 1, 3, 4, 6 and 7) GHG emissions 41% by 2025/26 (financial year) from 2018-19 (financial year) base year2.
  • NATS Holdings Limited commits to at least A- grade CDP rating, annually from FY 2021-22 to 2025-26​. Measured annually after financial year end in March and reported to CDP in July.
  • NATS Holdings Limited commits to increase annual sourcing of renewable electricity from 93% in 2018 to 100% by 2030-2031 (Financial Year).

The first two of the above targets have been used as the basis of our new sustainability linked bank facility. They represent a comprehensive set of targets covering our material environmental impacts, including direct emissions from electricity and combustion of gas, fuel and oil, and what are often considered some of the hardest to manage e.g. commuting and business travel emissions.

Our approach to managing down our emissions is based on the following hierarchy;

  • Avoiding – policy decisions to stop carbon intense activities from happening (e.g. size and shape of our business, embedding carbon targets within all of our investment projects, developing minimum purchase standards, review of fleet)
  • Reducing – improving energy efficiency, reducing business and commuting travel emissions
  • Self-generating– installation of on-site renewable energy with energy security and cost co-benefits
  • Offsetting –Any residual CO2e emissions will need to be balanced with direct carbon removals until they can be replaced with zero carbon alternatives, to meet the net zero target.
  • Verifying –ensuring our data is robust and transparent by continuing to have it verified annually to the carbon reporting standard ISO14064.

Footnotes

1 Description of scope 3 emissions categories included within net zero targets

  1. Purchased goods and services,
  2. Fuel and energy related activities
  3. Upstream transportation and distribution
  4. Waste generated in operations
  5. Business travel
  6. Employee commuting

2 NATS emitted 40,321 tCO2e emissions in the baseline year, from all scope 1, 2 GHG emissions and scope 3 category 1, 3, 4, 6, and 7 GHG emissions

At the beginning of 2021 we chose to accelerate our net zero goal from 2050 to 2035

Environment results

Summary of 2020-21 performance

Our environmental performance continues to improve, both in terms of the impact of running our business and our management of air traffic at airfields and in airspace we are responsible for.

Estate Performance

We have a good track record, having reduced electricity consumption across our estate by over 35% since 2006. Through the pandemic, as our non-operational workforce moved largely to working from home, we were able to reduce the size and number of buildings we occupy which resulted in a 13% reduction in gas use and a 10% reduction in electricity last year. As we move into 2021 and embrace more agile working, we will continue to scale back the buildings in our portfolio and realise more energy savings from those we continue to occupy. Electricity consumption is and always has been the largest contributor to our estate emissions (see our most recent baseline) and it is understandably a continued area of focus in our drive towards net zero.

NATS Emission infographic

NATS baseline emissions 2018/19 Click to enlarge

Electricity consumption kWh from 2006 – 2019 Click to enlarge

Emissions resulting from commuting have fallen by 88%, largely as a result of the shift to homeworking and recognising that it is an indirect impact from running our business we have used the eco-act, homeworking emissions methodology to calculate and include emissions from homeworking in our 2021 disclosure. This emission source is also part of our net zero target and will continue to feature in future disclosure.

The above changes, as well as an almost complete stop of business travel, have resulted in a 45% reduction in total emissions from our baseline year in 2018/19.

Estate emissions reductions since baseline Click to enlarge

We have completed our second year of procuring green gas certificates for all-natural gas supplied, and purchased renewable electricity for over 96% of total electricity consumed during the year (up from 93% last year).

The combination of these actions has contributed to us being identified as a European Climate Leader by the Financial Times 2021 - for our environmental performance since 2014, a listing we will look to maintain in future years.

We have continued to expand the scope of our environmental management system too with new additions to the NATS operational portfolio; Barkston Heath, Woodvale and St Athan all achieving ISO14001 certification in the last year. They join 19 other sites across the UK, including all civil airport towers with certification to ISO14001:2015, and audited by DNV.

Airspace Performance

The reduction in traffic levels as a result of Covid has had a profound impact on the efficiency of the UK domestic network. We saw arrival holding almost entirely vanish, direct routeing increase, and constraints impacting the vertical flight efficiency largely disappear.

continuous-climb-achievement

Continuous climb achievement (%) Click to enlarge

Continuous climb is a measure of airspace efficiency between 0- 10,000ft across the UK. A flight has achieved a continuous climb if it performs a smooth continuous climb without levelling off. We saw a 15% increase in fuel efficient climbs following Covid. Figure represents monthly averages for all departures across 22 (Sustainable Aviation) airports.

Horizontal track efficiency (KEA%) Click to enlarge

Horizontal track efficiency is a proxy measure of efficiency in the horizontal plane of flight, measuring how direct a flights path is across our airspace (100% is achieved by every aircraft taking the most direct track over the earth). Figure represents monthly averages of all flights within UK domestic airspace.

Continuous descent achievement (%) Click to enlarge

Continuous descent is a measure of arrival fuel and noise efficiency near to airfield level in the UK (local height definitions apply). Performance levels have been able to be maintained over the past year. 100% is achieved when every aircraft achieves a continuously descending profile without levelling off. Figure represents monthly averages of all arrivals across 22 (Sustainable Aviation) airports.

3Di performanceClick to enlarge

UK flight efficiency performance, as measured by 3Di. A zero score represents zero inefficiency. Figure represents monthly averages of all flights in UK domestic airspace.

The improved tactical delivery to flights post Covid led to the lowest scoring 3Di days and months we have ever seen, with the average score being up to 50% lower than in pre-Covid times.

The NERL target for calendar year 2020 was 27.8 (threshold for bonus and penalty being 26.4 and 29.2 respectively) and the actual performance registered was 23.9. It was clear that the performance regime quickly became void for such low traffic levels and did not provide any additional incentives to NERL. As a result, NERL proposed to set aside the performance incentive scheme for the current RP3 period, during which traffic has been and is forecast to continue to be significantly below the levels against which the financial incentives were originally calibrated.

Our challenge now is to facilitate the expected increase in air traffic in the months and years ahead, while providing the most fuel-efficient flight profiles possible. Our role in supporting the industry to build back better is to ensure the improvements we can make retain some of the recent gains seen in airspace efficiency.

Across the reporting period we continued to develop and implement specific changes to improve airspace efficiency. As a result of these improvements and the actions of air traffic controllers in supporting improved tactical performance, we have helped enable almost 40,000 tonnes of CO2 emissions savings, representing savings of £3.5 million in fuel costs for airlines.

Description* FY 2020-21
(or CY 2020)
FY 2019-20
(or CY 2019)
FY 2018-2019
(or CY 2018) Baseline Year
Service performance and resilience      
3Di (calendar year) 23.9 29.0 -
Environmental performance      
Scope 1 (location-based tonnes CO2e) 3,706” 3,477 4,094
Scope 1 (Direct emissions from the consumption of gas-green gas / biogas (market based) 2 2^ -
Scope 2 (location-based tonnes CO2e) 12,500” 15,301 16,561
Scope 2 (market-based tonnes CO2e) 668 1,064 21,024
Total scope 1 + 2 (location-based tonnes CO2e) 16,206” 18,778^ 20,655
Total scope 1 + 2 (market-based tonnes CO2e) 670 1,066^ 21,024
Total scope 1 + 2 intensity metric (location-based tonnes CO2e per £m of revenue) 19.7” 21.0 23.3
Scope 3 categories 1, 3, 4, 6 and 7 emissions (tonnes CO2e) 6,111” 15,878^ 19,666
Total scope 1, 2 and 3 categories 1, 3, 4, 6, 7 (tonnes CO2e) – location based 22,317” 34,656 40,321
Percent reduction of CO2e against 2018-19 baseline towards net zero 2035 target (scope 1 and 2 emissions)** -22% -9% -
Percent reduction of CO2e against 2018-19 baseline towards net zero 2035 target (scope 3 categories 1, 3, 4, 6, 7)** -69% -19% -
Percent reduction of CO2e against 2018-19 baseline towards net zero 2035 target (Scopes 1, 2 and 3 categories 1, 3, 4, 6, 7)** 45% 14% -
Scope 3 category 11 emissions (tonnes CO2) 7,146,000” 24,405,000  
Avoided / modelled enabled ATM-related CO2 reduction in tonnes)*** 39,785” 30,379^  
Water consumption (m3) 45,091” 54,500 64,285
Energy consumption (gas + electricity) MWh 63,864” 71,686 71,262

“ Verified to ISO 14064

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

* The Responsible Business statement and the environment metrics reported above have been prepared in accordance with non-financial information reporting guidance from the Financial Reporting Council, the European Commission, the Climate Disclosure Standards Board and the Task Force on Climate-related Financial Disclosures. An operational control approach is taken to non-financial information using the same boundary as NATS Holding Limited.

** Our net zero target applies to total scope 1 and 2, plus and 3 (categories 1, 3, 4, 6, 7) CO2e location-based emissions by 2035, using a 2018-19 baseline.

*** Modelled enabled ATM-related CO2 reductions represent the saving in CO2 emissions 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 at www.nats.aero/environment/cr

We continue to improve our environmental performance in the way we run the business and ATC operation

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