Responsible Business Report 2021

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. Since 2020 there have been scientific strides made with new vaccinations and more widely available testing, and we have added these mitigation layers to our pandemic response.

We have maintained a low case rate while continuing a critical 24/7 operation, with early notification and contact tracing to reduce the risk of outbreaks among staff on-site. Our Occupational Health team provides tailored advice to individuals and managers. We understand operational and regulatory requirements, and act as a bridge with public health teams. We are fortunate to have a well-educated and considerate group of colleagues in NATS who also act as ambassadors in the community, thereby doing our part to control the Covid situation in the UK. It is important we make that link between individual responsibility, local action and supporting the safe resumption of international travel.

The pandemic has highlighted a myriad of challenges for people, whether working on site or remotely, juggling home-schooling or challenging domestic situations. As an employer, NATS strives to provide proactive support with integrated Human Resources, Occupational Health and Well-being services, to equip employees and managers with tools to help balance work and home responsibilities. The future of work is changing, and we are adapting as an organisation to look after our people while meeting our customer requirements.

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.

The challenge of maintaining and promoting safety and personal responsibility has provided many points of learning over a period of sudden and significant change. Working from home is different, less personal, and with reduced general interaction with the rest of the business. We have focused on the wellbeing of our staff, providing support through our Peer Support Programme and our Employee Assistance Programme (EAP) where staff can be open and honest around their wellbeing and mental health issues, and receive the help and support they need.

Our Wellbeing programme is designed to help individuals spot the early signs of wellbeing issues in themselves and others, helping us reduce the risk of long-term sickness absences, work related stress incidents and, importantly, reduce the stigma of wellbeing issues in the workplace.

Our ongoing focus on occupational health and safety was recognised by the Royal Society for Prevention of Accidents, with a tenth successive gold award, which means we are now the proud holders of a President’s Award.

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. Working in partnership with our employee networks, we have seen some positive action over the past year including the introduction of Equality Impact Assessments and ‘Let’s talk about race’ sessions, and our commitment to HeForShe. We have created Human Resources and Trade Union lead positions to support diversity and inclusion. We are continuing to raise awareness, review our processes and striving to ensure that our culture is truly inclusive.

We have identified clear benefits of the home working that was forced upon us by the pandemic and built on that in adopting our approach to more agile working into the future. This was already part of our action plan to address the gender pay gap where we are working to support our employees to work in ways which take into account their personal circumstances, preferences and needs.

With a recruitment freeze in place for most of the year, we continued to use this time to review and improve our recruitment and selection processes to ensure they are inclusive and fair, with a fresh eye on unconscious bias, consistent assessments and scoring frameworks and how we promote people.

We have also continued to support the development of our employees through the delivery of virtual training. This included the roll-out of ‘Team Effectiveness’ sessions and My Career, a new career development tool to help employees take control of their career path.

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. Building back better means we need to be sure that all changes we make are permanent and enduring, to give our customers predictability, irrespective of the traffic levels. We have established a specific initiative, the Operational Service Enhancement Project (OSEP), to provide these changes delivering benefits to both our customers and to the operation. To date this project has delivered various changes to airspace restrictions and the ‘standing agreements’ between sectors, delivering enabled fuel/CO₂ benefit, workload reduction and 3Di improvements.

The low traffic levels allowed us to develop and deliver more environmental training packages. Initially this was geared towards our operational colleagues but the interest from employees across the wider business has meant we have already expanded the availability of this training. Future, role specific, training packages will be rolled out during the Autumn 2021.

We have also been talking to our airline customers to ensure we support each other in our environmental aims. We have helped many of them already with flight planning improvements and found areas of the operation in which they would like to see improvements. One of these is an extension to the current night time fuel saving routes and we have started a review of these routes to see what may be possible.

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.

The need to reduce our environmental impacts and costs was firmly part of our plans prior to Covid. Now the pandemic has hastened discussions on the amount and type of property and accommodation the business will need in the future, particularly in the context of agile working, which will allow NATS to make better use of people and space. This can help us improve sustainability while reducing cost and the company’s carbon footprint. A more permanent element of remote working also potentially supports a reduction in car journeys. Creating a new, agile-ready office work environment offers the opportunity to ‘go green’, and we’re encouraging employees to make the most of the ‘new office and new start’ post-Covid.

The emissions intensity of running our business reduced markedly last year, although at many sites our CO­₂ emissions remained high, even with a skeleton workforce in place. To help address this we have been accelerating energy efficiency schemes with our landlords, and the feasibility of generating renewable energy at our larger sites. We will need to do more though, particularly as we replace ageing air traffic control equipment and we will be working with our investment teams to ensure we embed energy efficiency measures and the latest low CO­₂ emissions technology.

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.

For several years we have been working with airline customers to develop a vision for the Oceanic region where the requirement for an OTS is reduced as far as possible. However, the discussions have always been limited to ‘what if’ scenarios with restricted scope for change.

Following the integration of ADS-B, significantly reduced separation standards and improved controller toolsets, we were able to take a giant step forward by initiating days where zero tracks have been published. On ‘OTS Nil days’, customers have been able to flight plan their most optimal routes without being constrained by the track structure. Initial feedback from operators has been nothing but positive!

Only with ADS-B in place could we consider the reduction and longer-term removal of the track structure, with the added benefit of providing enhanced safety barriers.

Now we have proved that we can technically and procedurally introduce this OTS Nil option, we are working closely with airline customers to offer a more permanent solution. The initiative which started in March 2021 is looking closely at the fuel and CO₂ benefits of OTS Nil and will help determine where we go from here.

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. As part of our response we paused most of our investment portfolio to support cost control measures amid massive national uncertainty over how long the pandemic would last. Now, as we emerge from the worst of the crisis, we are making sure our modernisation portfolio, for both systems and airspace, focuses on delivering transformation including fuel and emissions benefits for our airline customers, while the wider industry is focused on longer term goals such as sustainable fuels and electric aircraft.

We have a rolling investment programme with agreed short term priorities and a longer term investment roadmap, with clear environmental, safety and cost benefits. That includes building agility and responsiveness into the capital investment programme on which we consult our customers.

Our IT infrastructure has played a fundamental role in supporting the business in operating effectively and reliably over the past year of largely remote working, and our investment in this will be equally important in supporting continued agile working, further reducing the travel needs of our staff.

The acceleration of the UK’s net zero goals will require us to think differently and even radically, while at the same time always assuring safety. This will bring challenges, for example what we can rationalise and how can we deliver more with less; and what forms of sustainable energy we can build into our systems and infrastructure.  Our Research & Development team is already researching future solutions to help drive us towards a lower carbon future.

With the capabilities that exist within our teams, we are well placed to support the transformation needed towards net zero.

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 than ever before contributing more money than ever before. Last year 571 employees (12%) donated £228,390 via the scheme to 267 different charities, from Cancer Research UK and the Trussell Trust to Help the Aged, Mind and Hampshire Fire & Rescue.

The Footprint Fund, a grant scheme for which our employees nominate their chosen charities, was suspended due to Covid related budget restrictions, but individuals still carried on running marathons, completing burpee challenges and climbing virtual mountains to raise funds.

Some employees gave their time on furlough to helping out, volunteering for food banks, and making kit bags and scrubs for the NHS, among others. Some of our peer support colleagues volunteered in their spare time with the NHS, training and upskilling so they can now offer psychological support in the coming months via a dedicated helpline to assist our key workers on the frontline.

The past year has been particularly challenging for charities, and that includes our corporate sponsored charities, Aerobility and the Jon Egging Trust (JET). Our volunteers helped Aerobility put on a successful ‘Armchair Airshow’, a first of its kind in the world. We also supported Aerobility’s Aviators Ball @ Home, which raised £45k for the charity.

With JET, a charity set up to support vulnerable young people realise their potential, we have developed a series of videos where NATS employees share tips about resilience and communication in challenging times. JET is sharing these as part of a wider online initiative designed to reach and support many more young people.

Understanding the perspective of communities affected by aviation is a central part of our work to be a responsible business. We listen to the wide range of views and feed these back into the business, so colleagues understand the societal impacts of the day-to-day and longer-term decisions we make.

Over the past year we have worked with London Luton Airport (LLA) on a consultation about changing the airport’s arrival routes to separate them from Stansted’s. Because of the pandemic, we had to rethink consultation with the public when we couldn’t meet them face-to-face.

We designed an innovative digital-led consultation with a centrepiece 3D virtual exhibition where visitors could explore and engage with exhibits to help them understand our proposals. By the end of the consultation there had been over 11,000 unique visitors, far more than we would ever hope to achieve with a face-to-face exhibition. The consultation was also supported by multiple webinars for a range of different audiences. Recognising that not everybody is online, we undertook extensive mapping to these ‘digitally excluded’ communities ensuring that they knew about the consultation and how to respond to it. We continue to work closely with our operational colleagues and airport customers to support airport noise forums and other community initiatives, to help raise awareness of how we manage airspace and the work we are doing to modernise it, which will bring with it noise and CO₂ emission benefits.

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.

The pandemic presented barriers to our usual practical support for work experience, but we are committed to supporting this activity in the future and are currently considering virtual options for delivery, which also offers the potential to engage a wider audience.

Some of the businesses worst hit by lockdown in the southern region are Small and Medium sized Enterprises. The Solent Hub launched an initiative for businesses, across all sectors, to help each other through this difficult time, which involved large levy-paying businesses such as NATS, pledging a proportion of their unspent levy funds to transfer to smaller businesses to fund apprenticeship training.

NATS will be pledging £100,000 of unused levy funds to SME’s across the Solent region to cover the cost of apprenticeship training for smaller businesses, giving them a boost to their businesses to better support their survival and growth prospects.

As a responsible business, we work with suppliers to ensure that our high standards are reflected throughout the supply chain. Our Supplier Charter, which is published on our website, sets out our commitments, and our expectations of suppliers around ethics, conduct, health and safety, fair treatment of employees and contract staff, corporate & social responsibility, and the environment.

Our suppliers are key to how we deliver our services and run our business and the way in which we work together can help us work towards our net zero emissions targets. For example, we are working closely with our fleet provider to reduce the CO₂ emissions from our pool, allocated, and service vehicles and future purchases will be subject to a cap on vehicle CO₂ emissions.

In addition to removing higher CO₂ emission vehicles, we have introduced hybrid models and electric cars to the available fleet. Where charging facilities exist at our customer’s airports, we solely use electric vehicles airside.

Over the coming months, we will be engaging with other suppliers on how they can help us achieve our targets.

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.

The ever-changing environment has meant they have had to adapt their businesses weekly and sometimes daily, operating cargo flights and modifying their fleets and routes. With the seasonal demand for summer 2021 not materialising as hoped, we now expect to see an extended holiday period, with increased demand into the autumn months of the year.

We conduct regular bi-lateral sessions with our customers and host a monthly look-ahead discussion to ensure we are aligned in our thinking and planning, and can work together to navigate the situation and prepare to meet the challenges of the future. Longer term, we are working to improve how we engage with them, to provide the information they need, when they need it and to give us insights that help our long-term business planning.

In December, we met with our customers to discuss our Service and Investment Plan for 2021, sharing the good progress made on our technology infrastructure replacement programme and discussing the way forward for our investment plan in a post-Covid environment.

In support of this, we have introduced a Technical Customer Advisory Board to enhance our dialogue further, with more time to explore options and share ideas and thoughts between us and our customers. As a result of Covid, the next price control period will now run from 2023 – 2027 and we are in the process of consulting with our customers on what this period will look like.

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.

Airspace is part of the UK’s critical infrastructure and to keep UK and North Atlantic airspace open and our employees safe, we made our operations and facilities ‘Covid secure’ and moved non-operational employees to remote working. Reduced staffing in the operation, due to reduced traffic, and measures to socially distance employees in the operations room had to be balanced against the needs for team-working and normal procedures that rely on social interaction. Normal patterns of work were disrupted, challenging operational vigilance and situational awareness. The low levels of traffic, and consequent reduced numbers of safety incidents, also disrupted meaningful comparisons with previous years, and therefore trend identification.

We used the existing measures and procedures within the Safety Management System as far as reasonably possible and adapted and complemented these for the changed circumstances. For instance, we placed greater emphasis on local expertise in managing the unique circumstances being experienced at our operational units, working with them to ensure that the required assurance evidence was available in a timely manner and that lessons and best practices were shared across the units.

Our positive working relationship with our regulator and stakeholders was also important and we worked closely with them to develop tailored and proportionate responses to regulation designed for more normal times.

We are continuing proactively to identify emerging risks resulting from the prolonged and ongoing period of reduced traffic. Activities at our centres, and the airports where we provide a service, include modelling different scenarios for traffic return and maintaining controller competency levels using, for example, simulator training and awareness programmes.

The primary safety priority for 2021-22 will be to achieve or improve upon our safety targets through a period of (possibly rapid) change post Covid.

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. The key performance indicators (KPIs) for this facility relate to our scope 1 and 2 emissions, scope 3 emissions (i.e. categories 1, 3, 4, 6 and 7) and the group’s CDP rating.

The annual targets for CO₂ emissions reductions from running our business are currently being validated by the Science Based Target initiative (SBTi) and will reflect the group’s broader net zero 2035 ambition. The CDP target score is A-, which is higher than our most recent score of B (for 2019). Our performance against these targets could lead to an adjustment to the credit margin for any loans drawn under this facility.

Our decision to enter into a sustainability-linked facility and to include challenging KPIs reflects the strong desire within the company and with external stakeholders, including airport/airline customers, providers of finance and the public, to improve our environmental performance even further. We see this as the first step towards a broader reflection of responsible business within our financing arrangements.