IPC International Community magazine an association member publication
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IPC COMMUNITY 91 FALL 2024 Unique Challenges in the Mil/Aero Industry While supply chain management and sustain- ability are common concerns across industries, the mil/aero sector faces distinct challenges. This article delves into three critical areas where these challenges are exemplified: regulatory dis- closure and reporting, value chain resilience, and resource efficiency and waste management. Recommended actions for companies support- ing the industry are also included. 1. Regulatory disclosure and reporting ESG-focused regulations are proliferating globally, as evidenced by a growing trend requir- ing disclosures on climate and environmental impacts, such as the European Union Corpo- rate Sustainability Reporting Directive (CSRD), European Union Corporate Sustainability Due Diligence (CSDDD), U.S. Securities and Exchange Commission Climate Rule, and California SB 253-Climate Corporate Data Accountability Act, and SB 261-Climate-Related Financial Risk Act. Capability and expectations are also increas- ing with respect to reporting on the traceability of chemicals and materials throughout supply chains to address issues like greenhouse gases (GHG), per- and poly-fluoroalkyl substances (PFAS), and other materials that may potentially put a nation at risk. There are many challenges in the mil/aero industry with respect to ESG regu- latory disclosure and reporting. Some report- ing is exempt [Kyoto Protocol 1997] primarily based on national security concerns. Many sys- tems required to collect and maintain assur- ance-based data are manual, if they exist at all. Additionally, the move from proposed regula- tions to final regulations often creates delays in company actions because timelines are not fixed enough to drive the desired actions for disclo- sure and reporting. Opportunities to improve traceability for reg- ulatory and reporting disclosures are numer- ous. The "black box" of military climate-based emissions, for example, will not be more fully understood without addressing exemptions so that standard operation and war-time emissions are better estimated and known. The U.S. mili- tary, cognizant of the dangers posed by climate change, has stated in its 2021 Climate Adaption Plan how it plans to address climate-related threats across five lines of effort: 1. Climate-informed decision-making 2. Train and equip a climate-ready force 3. Resilient built and natural installation infrastructure 4. Supply chain resilience and innovation 5. Enhance adaptation and resilience through collaboration System innovation for disclosure and report- ing abounds, but standardization and harmoni- zation of metrics still need to be developed to provide consistency and efficiencies required to truly understand ESG impact. Sovereign nations play a critical role in determining what is and is not reported and disclosed with respect to mil/ aero activities. As demand increases from all types of stakeholders, only time will tell what will remain as voluntary disclosures and reporting vs. what will shift to mandatory. Stanley Merritt