Elbit Systems – EHS Report 2021

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As part of Elbit Systems’ overall Sustainability Strategy – 2020, this report summarizes the key elements and achievements of our EHS (environment, health and safety) activities in 2020.

Global EHS Management System

Our global EHS management system covers 99.7% of Elbit System’s global business operations, which include sites where we have full operational control, as well as our activities at major customers’ sites (Scope 3). We facilitate compliance with applicable EHS regulations and our internal policies on EHS matters. We strive to improve our performance by collecting, analyzing and reporting indicators internally to management and to the board of directors and externally through our bi-yearly Sustainability Report. Our Company-wide system also provides us the opportunity to share learning across our global organization and engage employees throughout our operations in regular communications and activities.

Elbit Systems has established a Global EHS Policy endorsed by management, which guides our activities to advance environmentally friendly practices and to reduce the environmental impact of our operations. Our EHS Policy also supports our commitments to enhancing precautionary measures to protect our employees’ health and safety.

We maintain leading international standards on Environment and Occupational Health and Safety Management Systems. We are certified to ISO14001 and ISO45001 at our main sites, covering 82% of our employees, and are in process of certifying additional sites.

Managing Our Environmental Impacts Throughout Our Operation:

Elbit Systems recognizes the potential environmental impacts of our ongoing operations. We have a robust climate change strategy, which is based on a multi-disciplinary Company-wide risk management process. A committee made up of senior management from different areas of the organization, including finance, business units, facilities, procurement, security and the Chief Operating Officer (COO), gather on a yearly basis to identify and assess the main EHS risks and opportunities for the organization, including climate-related issues. The evaluation covers short- and long-term horizons, and as an output the team establishes action plans for the upcoming years. The main outputs from our risk management processes can be found in our CDP report in 2020 and will be further detailed in our 2021 disclosure.

As part of our global environmental, health and safety (EHS) management, we conduct environmentally friendly manufacturing activities and ongoing measurements to reduce electricity, water and fuel consumption.

In line with our commitment to continuously improve our EHS management, we monitor key metrics and establish long-term goals in several areas as shown below. For the first time, we have submitted our key environmental indicators and greenhouse gas report covering all scope emissions to be verified by a third-party independent auditor in accordance with ISO14064-3.
Moreover, the global EHS team sets global targets for most of our environmental indicators, which are approved during the EHS Management Review presentation to our board of directors.
It should be noted that the 2019 and 2020 absolute data proportionally increased due to the acquisition of IMI Systems Ltd. (IMI) in November 2018. This resulted in an almost 27% increase of our facilities, a 12% increase in our workforce, and had a corresponding impact on our EHS activities. The improvement in data collection and full integration of IMI´s indicators in 2020 also showed a slight increase between IMI sites between 2019 and 2020. In addition, in 2020, another facility in the USA (part of ESA – Elbit Systems of America) has proportionally increased our water and energy consumption, and therefore our GHG emissions as well.
The Coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization in March 2020. The Company took a number of actions to protect the safety of its employees as well as maintain business continuity and secure deliveries to customers and its supply chain. In many locations we were required to double our shifts, which, from an environmental perspective, has increased mainly our electricity consumption and our scope 2 and 3 emissions as detailed below.

1.Energy Efficiency

Our recent projects throughout the organization globally, such as improving air conditioning and lighting controls, LED lighting replacements and consistently maintaining our manufacturing operations to achieve maximum efficiency, have shown the following results on our energy efficiency:

Energy consumption in MWh

For electricity purchase, the target established for electricity efficiency in 2020 was a 4% reduction of kWh per employee per square meter (area) in comparison with the average from 2016 – 2018. In addition, we set a new goal to start generating 3.6MW of renewable energy in 2021 through the implementation of solar panels at two of our main sites in Israel. Despite IMI and the new site in USA increasing the absolute energy consumption (both scope 1 and 2 emissions), the intensity targets set for 2020 were achieved.

TOTAL ELBIT
These columns self-calculate

2 Water and Waste Generation Efficiency

Elbit Systems is committed to avoiding environmental pollution, primarily water and soil pollution. In addition, our continuous improvement to achieve minimum waste of resources and maximum operational efficiency, has led to our adoption of numerous activities to improve water and waste management. For example, these measures include smart metering to detect water leaks and monitor consumption, implementation of water recycling processes and water efficient installations in washrooms, waste reduction at source, re-use of packaging materials and recycling programs covering all waste streams.

The water consumption target is a 20% reduction of m3 per employee in comparison with the average from 2016 – 2018. We did not reach this target in 2020 mainly due to the IMI acquisition and improved data collection after full integration of KPIs in 2020. We note that IMI uses proportionally more water in its production process in comparison with our other facilities. That explains the increase in water consumption and waste generation in 2019 and 2020.

All water consumption at our operations is drawn from municipal water supplies.

Information on waste disposal collection, particularly non-hazardous waste, was challenging in previous years. We have streamlined our global efforts to obtain and report precise information. We are also enhancing our recycling programs regularly. These programs cover several waste streams: paper, plastic, cardboard, metals, oils, emulsions, wood and electronic waste. A small amount of waste is classified as hazardous, and we dispose of it safely and in accordance with applicable regulations.

With a solid 2019 database, we have decided to establish 2020 goals, to reduce absolute hazardous and landfilled waste generation by 5%, and increase our recycling rates by 5%. We are very pleased to share that our recycling rates grew beyond our target, increasing almost 300%. On the other hand, we did not reach landfill and hazardous waste targets in 2020 mainly due to the IMI acquisition and improved data collection after full integration of KPIs in 2020. We note that IMI proportionally generates more waste in comparison with our other facilities.

3. Greenhouse Gas (GHG) Emissions Efficiency

Our GHG report from 2020 include Scope 1, Scope 2 and Scope 3 emissions, and are verified by a third-party independent auditor in accordance to ISO14064-3. Our global GHG activities are divided according to the following scope levels:

• Scope 1 (direct emissions) – emissions are those from activities owned or controlled by our organization:
  • LPG consumption emissions
  • Gasoline consumption emissions
  • Aviation fuel consumption emissions
  • Diesel consumption (for diesel generators) emissions
  • Fuel consumption (for cars – business travel) emissions
  • Refrigeration operating emissions (AC systems for office and Communication Rooms)

We have also included at 2020 GHG emissions report refrigeration operating emissions under scope 1. This activity was always present yet not reported due to difficulties in obtaining the information, which we have overcome in 2020. This change in how our inventory is calculated contributed to an increase of absolute scope 1 emissions.

• Scope 2 (energy indirect) – emissions released into the atmosphere that are associated with our consumption of purchased electricity, heat, steam and cooling:
  Electricity (generation factor)

• Scope 3 (other indirect) – emissions that are a consequence of actions that occur at sources we do not own or control and are not classified as Scope 2 emissions:
  • Electricity T&D and WTT (associated with grid losses, the energy loss that occurs in getting the electricity from the power plant to the organization).
  • Water use
  • Paper consumption
  • Business Travels emissions
  • Waste disposal – landfill
  • Waste disposal – recycling (paper, mineral oils, plastics, wood, metals, WEEE and mixed waste)

UK Government conversion factors for greenhouse gas (GHG) reporting were used in all calculations, except from CO2 emission factors of electricity generation and T&D, that were based on information provided by the International Energy Agency (IEA) and electricity generation from DURAD and Negev Energy, private companies in Israel that provide electricity from low-carbon sources – based on natural gas, instead of the national grid that is primarily coal-sourced, to several of our sites.

In order to report GHG emissions, we used market-based emissions factors from the private suppliers and location-based emission factors from the IEA for other locations where we purchase electricity from the national providers. Therefore, our GHG emissions report has both location and market-based information, as per the GHG Protocol guidance.

The goal established for GHG emissions efficiency in 2020 was a 12% reduction of emissions per employee per area (tCO2e / employee /1000 m2) in comparison with the average from 2016 to 2018. Despite the overall increase in our emissions in 2019 and 2020 due to the IMI acquisition and a new site in USA, we managed to reached the normalized target established.

Elbit´s direct Volatile Organic Compounds (VOC) emissions are only relevant for a few of our operations in Israel. In 2020, we had a total of 92 tons of direct VOC emissions. We engage with the Israeli Government reporting requirements for companies for the emissions permit report and Pollutant Release and Transfer Register (PRTR), which is a database or inventory of pollutants released to air, water or soil by factories, and/or transferred off-site for treatment or disposal. Among all information described, our VOC emissions are reported on this platform on a yearly basis. 

Occupational Health and Safety

Elbit Systems operations include a range of development, manufacturing, testing, logistics and support activities. Protecting our employees through consistent attention to occupational health and safety is fundamental to the way we work. As a responsible employer, our goal is to maintain a healthy working environment for our employees. As such, we are committed to leading precautionary standards as well as implementation of emergency preparedness systems at all sites. We strive to enhance the safety of our employees, minimize risks, prevent hazards and maintain a safe environment at each facility.
Elbit Systems employs thousands of employees globally. Mandatory health examinations are conducted routinely for employees that work under conditions that may pose potential health issues. We offer employees the opportunity to participate in designated health insurance programs.

We closely monitor all accidents and safety-related incidents at our operations. Since 2019, we have added contractors’ accidents to our monitoring to better understand and prevent such events. Lost-time Injury Frequency Rate (LTIFR) is calculated by the number of lost-time injuries per million hours worked in a fiscal year. We are pleased to note that we had no fatalities for the reported years.

Sustainable Innovation in Our Products and Services

Elbit Systems has significant ongoing investment in breakthrough technological solutions that help protect the environment.

We implement a clear sustainable innovation methodology in our development and manufacturing processes that support environmental protection, mainly in the choice of materials and components, type of energy utilization, weight, quality and other relevant factors. Some of those processes have a direct impact on environmental aspects, for example:

• Building materials – source the lightest and most durable materials, for example fiberglass – which allows greater time and distance propulsion and corresponding energy efficiency.
• Building materials – some UAS (unmanned aircraft systems) parts are produced by three-dimensional printing, for example aluminum parts, reducing both the UAS’ fuel consumption, chip processing, as well as waste generation.
• Lead-free structural walls – a dedicated model was implemented for airborne lead-free platforms with the understanding that in the near future lead-based materials will not be allowed to be used.
• Removal of carcinogenic and/or hazardous components from our products, including paints and microchips. We comply with RoHS and REACH standards and with customer’s requirements.
• Propulsion – hybrid engines
• Electrical energy sources:
  • Lithium-ion batteries – Most of Elbit’s electric UAVs are now based on rechargeable lithium-ion batteries, a cutting-edge technology above all other available solutions in the market. The batteries consist of suitable cylindrical standard in 18650 configurations, and control card BMS (Battery Management System). The role of the BMS is to provide electrical protection to the battery, store its database and transmit the data to the aircraft computer during the mission.
  • Fuel Cells type PEM (Proton Exchange Membrane) – an electrochemical device that converts the chemical energy of the reactants directly into electrical energy. The fuel cell is fed with hydrogen coming from the storage system and hydrogen supply, a “state of the art” solution for propulsion and motion.
  • Solar panels – This technology is improving consistently, our flexible solar cells with GaAs technology and “Rider 10” platform, have already improved by approximately 30% the utilization of a single cell.
• Simulators – realistic training solutions for air, naval and land forces training and homeland security provide environmental impacts reduction, such as fuel consumption reduction. As an example, one hour of simulator training can save 4000 liters of aviation fuel. In partnership with the Israeli Air Force we have been gradually increasing the proportion of training in simulators over time. In 2015 we started with 3% of training hours, in 2020 we reached 14%, and we strive to improve by establishing a goal to reach 30% of all training in simulators by 2026. We estimate an average of 10 million liters of aviation fuel savings due to the use of simulators in 2021 and approximately 22,908.2 tCO2e.

We monitor the use and performance of our sustainable innovation products at our customers’ facilities. Also, there is an ongoing effort to upgrade the mid-life of our products, thus maintaining their efficiency and improving performance.

The sustainable aspects of end of product life are also managed. We often “re-purchase” the product for reuse or recycle of the product as a whole or its raw materials. In cases where products cannot be returned to us, we support implementation of the best disposal alternatives in compliance with local regulations.

For over five decades, Elbit Systems has achieved sustainable growth and market leadership through innovation. Elbit Systems implements its Open Innovation strategy through Incubit Ventures – a deep-tech, early-stage Incubator and through Elbit Systems’ Corporate OPIN collaboration team for more mature startups. Several examples of sustainability innovation projects being developed by the technology start-ups in which Elbit Systems has invested, which include:

• NewRocket: Developing advanced, environmentally friendly rocket engines based on innovative gel-propellant technology, NewRocket provides a new alternative to both solid rockets that once ignited cannot be controlled or shut down and reignited, and to liquid rockets, that are difficult to maintain and rely on very toxic or cryogenic propellants. NewRocket’s gel-propellant rocket engines combine the best of both solid and liquid rockets – they are safe and simple to use, yet feature high performance and controllability. This gel is a green fuel in accordance with European standards.
• Cens: Developing breakthrough technology to increase the energy and power of super-capacitors and lithium ion batteries by connecting carbon nanotubes (CNT) with various electrode materials to create highly conductive 3-dimensional structures, CENS is set to meet the increasing demands of electronics, transportation, medical device and defense markets. CENS technology enables significantly greater utilization of CNT properties – including much improved power and energy: The CENS CNT-particle clusters provide super-capacitors with about 50% more power than equivalent type cells produced with conventional CNT mixtures; thereby enabling desirable features such as fast charging, longer cycle life, and better reliability.
• FlyWorks: breakthrough propellant technology which is hybrid and combines electric and petrol engines in a unique way to achieve a longer duration of drone flight. The new “fuel cells” created (based on magnesium hydrid – H2) only expel water, which reduces pollution and does not require additional protection for the generators.
• Greenvibe: An IP protected method to measure very accurately the concrete strength, temperature, humidity and conductance, in real time and provide projections on the exact curing dynamics and strength development. After the construction is done, the system continues to monitor the structure’s health.

All the factors above provide resource efficiency benefits and GHG emissions reductions during their use phase to your customers and consumers, and therefore can be considered as low carbon products.

Additional start-ups in which Elbit Systems has invested focus on the safety aspects, for example:

• Spectralics: develops a thin film optics which will be adjacent to the vehicle’s windshield to create a highly wide field of view and an infinite focal depth, both of which are necessary in order to create an immersive and natural augmented reality experience on the vehicle’s windshield.
• Sealartec: Autonomous launch and recovery system for manned and unmanned surface vehicles and vessels.
• Ultrawis: Remote control of tower cranes that today are operated manually from a top tower cabin, with on ground verbal coordination. This leads to a large number of fatal accidents, inefficient operations, and projects delays. Utrawis’s Solution is based on Elbit Systems’ technology and 14 registered patents.
• ReSight: Capture the physical surroundings and embed augmented reality content in it, by building a live, crowdsourced, 3D semantic map from all the users while not compromising their privacy. This enables developers to build persistent, robust, and multi-user experiences at scale. This technology is being developed with the purpose, among others, to provide support inside buildings to emergency response teams.