Material Factors

Why it is material: Inclusive growth and productive value creation for our stakeholders are key to our long-term viability.

Commitment: We are committed to delivering a sustainable and balanced triple bottom line of “People, Planet, Profit”.

Governance and Framework: 

Our strategic planning community reviews the Group’s strategy in the context of global trends and developments. We focus on operational excellence to ensure that we continue to add value to our stakeholders and have a positive impact on our communities. Productivity efforts are coordinated by the Group Continuous Improvement Office.

Approach:

Maintaining a Culture of Continuous Improvement

• Helps improve our processes which allows us to improve our productivity, protect our environment and enhance our economic performance

Digitalisation and Automation

• Helps reduce lead time, allow real time data monitoring and anomaly identification to predict potential problems

Contributing to Inclusive Growth and Value Creation

• Contributing to the local economy and developing local workforce and companies through knowledge transfer

Why it is material: We depend on a resilient and sustainable supply of goods and services to meet our business needs. We manage our suppliers ethically and work with them to ensure a responsible and resilient supply chain.

Commitment: We are committed to procuring goods and services sustainably and responsibly to meet our business needs.

Governance and Framework: The Group Chief Procurement Officer oversees our procurement community which champions the effective management of our supply chain guided by our Responsible Procurement Framework.

Approach: 

Our Responsible Procurement Framework is built on three pillars which are underpinned by five guiding principles.

Five Principles:

1. We are committed to ethical procurement
2. We do not compromise on the quality and safety of our products and services
3. We believe in cost-effective procurement practices
4. We safeguard the health and safety of workers
5. We protect the environment

Three Pillars:

1. Supplier Conduct
2. Supplier Management
3. Supplier Relationship

Why it is material: Our ability to harness disruptive technology and to direct our engineering expertise towards building innovative products and solutions allows new business growth and differentiates us from our competitors.

Commitment: We are committed to improving lives, and making the world more secure and sustainable through technology and innovation.

Governance and Framework: Our efforts to harness advanced technology and promote innovation that supports business growth are guided by the Board, particularly through its Research, Innovation, Technology and Enterprise (RITE) Committee.

The Innovation and Technology Committee comprising senior management representation from Group Technology Office, Group Engineering Centre and Group Strategy and Sustainability Office, provides guidance and support to the technology, engineering and strategic planning leaders of each business area.

Approach: 

We Recognise the Importance of R&D

• Believe in focused R&D investment that is in line with the strategy and product roadmaps that we have chartered for business growth

Our R&D Efforts are Driven and Coordinated

• R&D investments are identified by each business area to complement its business strategy, product focus and to develop its technological leadership

We Drive Synergy and Deepen Capability Building

• Focus on finding synergies in our existing products and services and enhancing our capabilities in key technological areas

We Broaden Our Outreach to Leverage External Capabilities

• Leverage on external capabilities through Open Lab, Corporate Venture Capital, Research Translation @ ST Engineering and Industry Collaboration to complement our in-house R&D

Why it is material: Climate change is an issue of urgency and importance. A low carbon business strategy is not only good for the environment, but also enables us to better respond to climate change related regulations and price volatilities of hydrocarbon resources.

Commitment: Climate change is an issue of urgency and importance. A low carbon business strategy is not only good for the environment, but also enables us to better respond to climate change related regulations and price volatilities of hydrocarbon resources.

Governance and Framework: Our environmental protection efforts are overseen by OEST – Environment team. The team supports the OESC Chairman who reports to the OESC Executive Sponsor. The OESC Executive Sponsor is currently our President, Commercial Aerospace who is a member of the Group EXCO.

Approach:

Shaping Our Culture

• We believe it is critical to cultivate an environmentally conscious culture and help shape our employees habits

Doing Our Part

• We adopt various carbon reduction initiatives to reduce our carbon footprint
• We use water efficiently and continue to pursue initiatives to optimise our water consumption
• We manage waste and effluent in accordance with local laws and regulations
• We strive to be a good neighbour and mitigate noise generated by our operations

Guided by Global Best Practices and Local Laws and Regulations

• We have robust environmental management systems that are based on well-established international standards e.g. ISO 14001
• We are working towards getting all our global units externally verified against ISO 14064-1

We take guidance from reputable sources

• Our sources include:

Why it is material: Delivering sustainable quality products and solutions is crucial to eliminating defects and waste, improving product safety and reliability, and maintaining the trust of our customers especially in the world’s transit to a low-carbon economy.

Commitment: We are committed to timely delivery, responsive support, and high quality and safety standards.

Governance and Framework: Our quality efforts are coordinated by the OEST Quality Committee.

Approach: 

We Promote a Quality Culture 

• Quality training modules are integrated into our new employee onboarding programme
• We established a System Safety Community of Practice (COP) to aggregate System Safety expertise across Business Areas.

We Adopt Global Quality Standards

• Majority of our operations are certified to ISO9001 Quality Management systems or equivalent
• Our business adopts various ISO standards in accordance with respective business or industry specialisations where these standards apply

We Offer a Suite of Sustainable Products and Solutions

• We consider ecological impact and apply circular economy principles in quality product development
• Our products, services and solutions focus on three key themes: reducing GHG emissions, solving urban and city issues, and the circular economy

Why it is material: Our lives and business are deeply intertwined with the communities we operate in. We strive to do good as we do well, so that we flourish and grow together.

Commitment: We are committed to being a good corporate citizen in the places where we operate.

Governance and Framework: Corporate community contributions are coordinated by the Corporate Social Responsibility Committee. We measure, report and communicate our corporate community investments and philanthropy efforts.

Approach: 

Our outreach efforts are guided by our CSR framework and our three focus pillars:

1. Improving lives through charitable gifts
2. Empowering lives through education
3. Transforming lives through technology and innovation

Why it is material: We are only as strong as our people. With a capable, motivated and agile workforce, we are able to strengthen our talent pipeline to pursue sustainable growth.

Commitment: We are committed to investing in people development and building a steady pipeline of STEM talent to help us achieve our aspiration of becoming a global technology, defence and engineering powerhouse.

Governance and Framework: 

• The Group Chief Human Resources Officer and the HR leadership team oversee the policies and facilitate the engagement on all people issues across the Group.
• The Group Chief Human Resources Officer reports directly to the Group President & CEO. He works closely with the Board, the EXCO and senior management to advise them on global best practices and the implementation of the Group’s people policies.
• Our Group Company Training Committee includes participation from STESU and provides skills upgrading and retraining programmes for our employees.
• Our Engineering Competency Management Framework identifies key competencies of various engineering domains, benchmarks existing technical capability and identifies areas for further development. This will facilitate stronger engineering career pathways in the Group.
• Our Compensation and Benefits Framework is reported to the Board’s Executive Resource and Compensation Committee. The Executive Resource and Compensation Committee has access to consultants to advise on market trends, and compensation and benefits matters. We also work closely with our employee unions on compensation and benefits issues. 

Approach:

Attract

• We attract and nurture talent by with a focus on engaging, assessing and hiring diverse and qualified candidates

Nurture

• We take care of our people
• We invest in their development

Retain

• We build a passionate and engaged workforce
• We leverage diversity, equity and inclusion
• We do not condone discrimination or harassment
• We reward performance

Why it is material: A safe and healthy workplace protects employees and workers from injury, stress and illness, which reduces absenteeism and turnover. In addition, it increases productivity and raises employee morale.

Commitment: We are committed to “Safety Before Profits”, and strive to create a safe and healthy workplace.

Governance and Framework: Our Total Workplace Safety & Health (WSH) efforts are coordinated by OEST-WSH. The team supports the OESC Chairman who reports to the OESC Executive Sponsor. The OESC Executive Sponsor is a member of the Group EXCO. The team comprises representatives from our various business areas and meets every quarter to discuss, coordinate and strategise on total WSH implementation and share best practices.

Approach: 

We Adopt Global Health and Safety Standards 

• Material business units are certified to ISO 45001 and comply with national and industry-specific codes of practices and legal requirements
• Internal and external verifications are conducted regularly
• WSH is incorporated into our Supplier Code of Conduct, which includes a mandate that suppliers must comply to our Environment, Health and Safety (EHS) policy or face disciplinary action

We Focus on a Collective Total Workplace Safety and Health

• Operational areas are checked regularly for hazardous materials, noise, and general air quality
• General health screening, mental health support and return to work (from injuries) programmes are provided for employees

Health and Safety is Embedded in Our Culture

• We adopt a “Zero Accident” mentality
• We have trainings, awareness campaigns and other initiatives and SOPs in place to embed a culture of WSH vigilance among our employees

We Leverage Technology and Design Safety into our Work Processes

• Leveraging technologies like our digital Workplace Incident Reporting System and our electronic Compliant Statutory Management System, we seek to innovate and improve the efficiency, accuracy, and traceability of our WSH systems

Why it is material: Cybersecurity is an enabler for our businesses. Digital technology and highly connected economies and businesses bring new vulnerabilities from a proliferation of cyber threats.

Commitment: We are committed to protecting our data and systems including those entrusted to us by adopting best practices in cybersecurity and complying with all applicable data protection laws and regulations in the countries we operate in.

Governance and Framework: Cybersecurity in the Group is overseen by the Group Cybersecurity Committee and supported by the Group Information Security Office (GISO) and chaired by the Group Chief Information Security Officer.

The Group Data Governance Committee focuses on data governance and protection and comprises representatives from our business areas and Group Headquarters (HQ) functions.

Approach: 

We focus on “People, Process and Technology” 

• Regular training for our employees on cybersecurity threats, data privacy and handling, relevant regulations, and best practices
• Conducting regular reviews of our digital footprints and carrying out regular cybersecurity exercises
• Implement a multi-layered security framework to ensure there are relevant preventive, detective and recovery measures.

We Prepare for Contingencies

• Established Group escalation process in event of a cyber and/or data breach
• Implemented disaster recovery system in place across our core business operations that is designed to enable the recovery of data and the continuation of vital IT infrastructure
• Continuously review and enhance measures

Why it is material: Good governance refers to having the appropriate people, policies and processes to manage the business and affairs of the company to enhance long-term stakeholder value whilst upholding high standards of compliance and ethical business practices.

Commitment: We are committed to conducting our business in a responsible manner, and comply with all applicable laws and regulations including export control, data privacy, trade sanctions and embargoes.

Governance and Framework: The Risk and Assurance (R&A) function oversees matters relating to governance, risk and compliance. It has put in place a regulatory compliance framework to continually train our global workforce on our Code of Business Conduct and Ethics. The department also works with relevant functions and operations to strengthen compliance.

Approach:

Our Leaders Keep Abreast of Best Practices and Key Risk Trends

• Regular training to enhance collective knowledge and skills
• Regular updates to GSBC and formulation of action plans to address macro-economic risks, opportunities and threats to the Group where we operate in

We Are Guided by Our Code of Business Conduct and Ethics

• Forms the foundation of the Group’s commitment to ethical business conduct and regulatory compliance

We Have Zero Tolerance for Fraud and Corrupt Practices

• Reinforced by our detailed policies and compliance procedures

We Comply with All Applicable Export Control Regimes

• Complies with all applicable laws, regulations, trade sanctions and embargoes
• Group Export Control Policy is applicable to all our businesses
• Adopts a risk-based approach to monitor transactions

We Empower our Employees to Uphold Business Ethics and Integrity

• The Group has detailed policies, training and compliance procedures for our employees
• Whistleblowing channels have been established for our employees and other stakeholders