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While our sustainability management plan provides the framework for the integration of sustainability within our business, we focus on additional topics that are critical to reducing our environmental footprint, positively contributing to our communities and upholding our commitment to integrity.

Supporting Sustainable Development

At Lockheed Martin, our commitment to sustainability extends to the communities where we operate. We developed goals aligned to four United Nations Sustainable Development Goals with underlying targets that relate to Lockheed Martin’s mission and values. Our goal is to double our financial support to organizations that support these specific targets by 2030, including:

Quality Education:

Substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment and entrepreneurship.

Gender Equality:

Enhance the use of enabling technology, especially information and communications technology, to promote the empowerment of women.

Affordable and Clean Energy:

Expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries.

Peace, Justice, Strong Institutions:

Substantially reduce corruption and bribery in all their forms.

In 2021, we established a baseline of our existing support to organizations covering the selected Sustainable Development Goals targets. We collaborated with our finance team to centralize data on sponsorships and charitable contributions across all four business areas. We evaluated each organization receiving support against the four selected Sustainable Development Goals using a standard set of criteria to avoid double counting. We also ensured the organizations considered for this goal had a clear development-oriented mission. In 2021, Lockheed Martin provided approximately $12 million in support of organizations that supported Quality Education and Peace, Justice, Strong Institutions.

Human Rights

At Lockheed Martin, we believe good citizenship includes the protection and advancement of human rights.

Our commitment to being a good corporate citizen and respecting human rights underpins our Code of Ethics and Business Conduct and our Core Values to Do What’s Right, Respect Others and Perform with Excellence. This commitment applies to all employees, the Board of Directors and others who represent or act for us. Lockheed Martin’s activities are conducted in compliance with the laws and regulations of the countries in which we operate, except where such laws conflict with U.S. law, and our compliance with them is reinforced by our robust integrated assurance program and Board of Directors oversight of our enterprise risk management process.

We published our first Human Rights Report in 2021 to further enhance the availability and transparency of information on our human rights approach and the progress of our initiatives on human rights. The report provides a comprehensive overview of our human rights related governance, including board and management oversight of human rights matters, policies, principles and due diligence processes that guide our approach, and has information on our progress toward associated programs and goals.

ASSESSING HUMAN TRAFFICKING RISKS IN OUR SUPPLY CHAIN

In 2021, our Global Supply Chain Operations team continued to build on the human trafficking supply chain assessment completed in 2020. Along with updating the mapping of Lockheed Martin’s human trafficking risk across our supply chain, available via an internal dashboard, the team established an annual engagement of supply chain executives and developed guidance and educational materials for internal distribution. Materials included a summary of high risk regions for human trafficking, any changes year-to-year in risk levels and data on changes in the number of Lockheed Martin suppliers in these regions. The goal of this effort is to guide decision making around purchases and other supplier engagement activity. In 2021, the number of suppliers in high risk human trafficking regions declined by more than 30%. In addition to engaging senior decision makers on this important issue, we continued to engage our more than 5,000 supply chain professionals to raise awareness of human trafficking and the resources available to them to understand this risk when making decisions.

INTERNATIONAL INDUSTRY GROUPS SHARE BEST PRACTICES ON HUMAN RIGHTS SUPPLY CHAIN DUE DILIGENCE

Human rights due diligence is a growing area of importance across the aerospace and defense industry, and collaboration is a key element to making progress. Lockheed Martin is a member of several international industry and ethics groups such as the U.K.’s Institute of Business Ethics Defence Practitioners Group, the ADS Business Ethics Network and the International Forum on Business Ethical Conduct. These groups focus on raising the overall integrity of the aerospace and defense industry via collective action, and produce toolkits, principles and template documents for members to adopt, including materials on human rights due diligence.

During 2021, Lockheed Martin participated in industry panel discussions on human rights and supply chain due diligence facilitated by the Institute of Business Ethics Defence Practitioners Group, along with ADS Business Ethics Network and International Forum on Business Ethical Conduct members. The purpose of these events was to share best practices and examples of how participating companies were addressing the challenges of conducting diligence at sub-tier levels, setting expectations in supplier codes of conduct, conducting risk assessments and selecting appropriate human rights standards and frameworks, as well as improving company statements and obligations required by the Modern Slavery Act 2015. The key value of these discussions was the recognition that companies were at different stages in their journey to address human rights supply chain due diligence, and that information shared can be used for benchmarking and identifying best practices. There was also a realization that to understand and address this topic fully, a multi-disciplinary team of ethics, procurement and sustainability professionals across the industry is needed to drive toward common standards and frameworks for conducting the required due diligence from evolving legislation.

Supply Chain Sustainability

Lockheed Martin has established sustainable supply chain programs that drive affordability and innovation across our value chain. In 2021, we focused on creating long-lasting, leading opportunities to enhance environmental stewardship and social responsibility. To learn more about our sustainable supply chain management and access available resources, please visit our Supplier website.

Lockheed Martin understands that what we do today shapes what the world will become tomorrow. Lockheed Martin’s supply chain sustainability strategy includes efforts that align with environmental, social and governance topics. We continuously evaluate and expand upon our efforts to strengthen our strategy while addressing emerging areas of concern to our stakeholders.

Do What’s Right

Environmental

ENERGY UTILIZATION
WASTE MANAGEMENT
GLOBAL PRODUCT CHEMISTRY REGULATIONS
Model Based Enterprise
Chemical Stewardship Strategy
Chemical Management Service Program
Global Regulatory Matters Publication
Packaging Guidelines
Respect Others

Social

SUPPLIER DIVERSITY
HUMAN RIGHTS
Small Business Strong
Conflict Minerals
Human Trafficking Supply Chain Risk Assessment
Uphold the Code
Perform with Excellence

Governance

INTELLECTUAL PROPERTY & DATA PROTECTION
EMERGING ISSUES & RISK ASSESSMENTS
Counterfeit Parts
Ethics Mentoring
CMMC Readiness
Intern Challenge
Supplier Sustainability Assessment

Supply Chain Sustainability Intern Program

For the past three years, Lockheed Martin has provided opportunities for students to engage in supply chain sustainability as part of our Supply Chain Sustainability Intern Program. Students in the program are placed on a team with other interns from across the business areas, and are assigned a sustainability challenge area. Each challenge is sponsored by a functional team at Lockheed Martin, such as Environment, Safety and Health or the Corporate Sustainability Office. The students work together to research the challenge and ultimately provide recommended solutions to the Supply Chain Council chair. The program sparks innovative ideas to improve our sustainable supply chain strategy, and provides impactful, real-world experience for students.

In 2021, we had 16 interns participate across six challenge areas. For 2022, plans are in the works to implement ideas that originated from the Supply Chain Sustainability Intern Program, including:

  • Supply Chain Sustainability Case Competition: Modeled after our successful Ethics in Engineering Case Competition, Lockheed Martin will host its first Supply Chain Sustainability Case Competition in 2022. This competition will bring students together each year to address a supply chain sustainability topic and provide solutions. The first competition is planned to focus on small businesses and disruptions, specifically how small businesses can proactively prepare for large disruptions in the future including climate change or pandemics. The judges will include small businesses from Lockheed Martin’s own supply chain. The event is planned for fall 2022 and focuses on eight universities with strong supply chain programs.
  • Supply Chain Sustainability Forum: As a member of the International Aerospace Environmental Group, in 2021, Lockheed Martin partnered with other participating leaders in the aerospace and defense industry to build a business case for establishing a new working group that focuses on environmental, social and governance engagement. In 2022, the working group plans to launch a Supply Chain Sustainability Forum with an initial focus on climate change.

Model-Based Enterprise Supplier Capabilities Assessment

In place of our supplier sustainability assessment in 2021, we reached out to approximately 1,700 suppliers to understand their model-based engineering capabilities and drive awareness of Lockheed Martin’s efforts towards digital twin concepts. For each supplier that participated in the survey, we provided a benchmark report on where they stood in comparison to their peers. Engagement with our supply chain on this topic enables suppliers to proactively invest and prepare to align with Lockheed Martin’s future requirements. Utilizing digital twin concepts will ultimately streamline our processes, reduce waste and strengthen operational efficiency.

Cybersecurity Small Business Pathfinder Program

In 2021, Lockheed Martin launched a new program providing cybersecurity support to an initial selection of small businesses based on specific criteria. This innovative, leading program includes 50 small businesses that will receive third-party expertise for one year in the areas of phishing attempts, training and perimeter vulnerability scanning. In 2022, we plan to launch a second round of services for these suppliers to continue to directly enhance their cybersecurity programs. After this initial cohort, we will look to expand the opportunity to additional suppliers based on risk and current cybersecurity posture.

Social Impact

Through charitable contributions, sponsorships and employee volunteerism, we can improve the lives of those who defend freedom, cultivate the future science, technology, engineering and math workforce and strengthen the resiliency of communities.

In 2021, we contributed nearly $32 million to:

  • Cultivate a science, technology, engineering and math workforce of the future from diverse backgrounds by partnering with non-profit organizations who equip students with knowledge, skills and access to science, technology, engineering and math education and career pathways.
  • Improve the lives of those who volunteer for military service and their families to ensure they are well-supported in facing hardships and enabled to thrive during and after military service.
  • Build resilient communities to strengthen preparedness, hasten recovery and suffer less disruption and long-term environmental and socially adverse impacts.

Cultivating the Future Science, Technology, Engineering and Math Workforce

U.S. and partner nations rely on a highly trained, highly capable science, technology, engineering and math talent to counter threats to global security and maintain a technological advantage. Our company’s entire value chain—from upstream suppliers to global customers—benefits from removing academic and financial barriers to student access to, and achievement in, science, technology, engineering and math fields, which includes improving representation from minorities, women and non-binary students.

Support for Military Service Members, Veterans and their Families

Those enlisted in all forms of military service, and their families, represent a key stakeholder group for our company. Veterans comprise more than one-fifth of our total U.S. employee population. With our non-profit partners, we support the active-duty force and their families with programs that help improve their mental and economic well-being.

LOCKHEED MARTIN SCIENCE, TECHNOLOGY, ENGINEERING AND MATH SCHOLARSHIP PROGRAM

Lockheed Martin launched the Science, Technology, Engineering and Math Scholarship Program in 2018 as part of investment in the next generation of science, technology, engineering and math talent, removing financial barriers to postsecondary education for students from diverse backgrounds. The program annually awards $10,000 to 200 recipients. To date, the program has awarded 596 student recipients at more than 80 schools. In 2021, nearly 50% of recipients identified as female and 60% identified with underrepresented racial and ethnic demographic groups.

GIRLS INC.

Our five-year partnership with Girls Inc., a non-profit organization, focuses on middle school and high school students and aims to inspire all girls to be strong, smart and bold to strengthen their interest and confidence in pursuing science, technology, engineering and math education and careers. Lockheed Martin helps provide year-round after-school programming, weekend activities and other hands-on experiences that expand upon and support girls’ science, technology, engineering and math learning and engagement. Participating students interact with women and men in science, technology, engineering and math careers, including dedicated Lockheed Martin volunteers, and come to view these careers as realistic options for themselves and essential to improving our world.

AFGHANISTAN RELIEF

Lockheed Martin moved swiftly with multiple non-profit groups to provide more than $555,000 to support military service members, veterans and their families and other individuals entering the U.S. following the military departure from Afghanistan. The American Red Cross Service to the Armed Forces supported evacuation efforts for service members, U.S. State Department members and their families and Afghan refugees. Another partner, Headstrong, provided free confidential mental health treatment for military members, veterans and their families through its network of 280 clinical providers in all 50 states.

Waste Management

Our goal for waste is to reduce waste per occupant by 11% by 2025 compared to a 2016 baseline. We can achieve this goal through source reduction, reuse and recycling.

These efforts reduce waste sent to the landfill and for incineration. Waste streams contributing to the goal include hazardous and non-hazardous waste, universal waste and other waste streams such as office furniture. In 2021, we achieved a 5% reduction of waste per occupant.

Waste management and disposal activities are governed by our internal corporate procedure Waste Disposal and Recycling. Performance is reported to our Vice President, Environment, Safety and Health on a quarterly basis and to the Board of Directors two times per year. A corporate-wide Waste Reduction Working Group meets monthly to collaborate on waste reduction efforts and share related best practices. For example, in 2021 the Waste Reduction Working Group initiated two landfill-diversion waste audits at our Waterton, CO, and Stratford, CT, facilities, and our first annual Zero Waste Challenge. For more information on waste management at Lockheed Martin, please visit our Environment, Safety and Health website.

Hazardous Waste

Lockheed Martin has a robust process for the management and disposal of hazardous waste generated by our operations. Our Waste Disposal and Recycling corporate procedure describes the minimum requirements for hazardous waste generation, storage, transportation and disposal, and is applicable to all Lockheed Martin operations. This procedure is implemented to protect the environment, ensure regulatory compliance and minimize risk. All Lockheed Martin operations are required to use hazardous waste transporters and disposal facilities that have undergone rigorous assessments and received approval by the Corporate Environment, Safety and Health team. These assessments look at factors such as hazardous waste disposal facility operations, design and environmental controls, permitting and regulatory compliance, management systems, financial and insurance data and transportation and safety metrics. Approved hazardous waste transporters and disposal facilities are reassessed on a regular basis.

Total Waste Recycled 50%
Total Waste to Landfill 29%
Additional methods including incineration (with energy recovery), incineration (without energy recovery) and other disposal methods 21%

ZERO WASTE CHALLENGE

The Zero Waste Challenge recognizes projects and teams demonstrating innovation, commitment and leadership in waste reduction. We had 19 submissions among our Aeronautics, Missiles and Fire Control and Rotary and Mission Systems business areas. Winners received recognition from Environment, Safety and Health leadership as well as a sustainable prize of their choice. One winning project was a non-chromated inhibiting material substitution effort resulting in a reduction of more than 13,000 pounds of hazardous waste annually at our Marietta, GA, facility.

Water Management

The impact of water availability is a localized risk. Some regions are already experiencing water stress, while others have abundant water and are expected to continue to maintain a reliable supply into the future.

In 2019, we conducted a water supply risk analysis to identify our facilities in the highest water stressed regions and those predicted to be in stressed regions out to 2040. In 2021, we used this analysis, along with a ranking of our highest water using facilities, to prioritize and execute water balances and associated water conservation activities. We’ve completed five water balance analyses at facilities in Fort Worth, TX, Waterton, CO, Palmdale, CA, Sunnyvale, CA, and Marietta, GA. In addition to mapping where water sources originate, how it is used in these facilities and how it is discharged, the analyses identify opportunities for efficiency. These opportunities will receive additional scrutiny, with an emphasis towards calculating water efficiency projections based on the true cost of water. This means considering not just the cost of the water, but also the cost associated with pre-treating, pumping, heating and disposing of the water.

Go Green Gated Capital and Water Efficiency

Water efficiency projects are also considered during the Go Green gated capital cycle discussed in the Energy Management section of this report. For example, in 2021 three water-saving Go Green projects were completed:

  • Cooling tower filtration system at our Missiles and Fire Control facility in Troy, AL, which avoids 6,307,200 gallons of water per year.
  • Ambient air nitrogen vaporizers at our Rotary and Missions Systems facility in Bridgeport, CT, which avoids 26,400 gallons of water per year.
  • Cooling tower upgrades at our Space facility in Sunnyvale, CA, which avoids 43,000 gallons of water per year.

Additionally, funding for an air scrubber project at our Aeronautics facility in Palmdale, CA, that will avoid an estimated 450,000 gallons of water annually, was earmarked for 2022.

ENVIRONMENT, SAFETY AND HEALTH EXCELLENCE AWARDS RECOGNIZING WATER CONSERVATION

As part of the Lockheed Martin 2021 Environment, Safety and Health Excellence Awards, an Aeronautics facility submitted an efficiency project with significant water savings. By installing an energy management control system that manages chlorine meter flush systems at specific building locations, the facility was able to maintain chlorine levels while eliminating unnecessary discharge into the sewer. The project saves approximately five million gallons of water, with a projected simple payback of nine months. The standard best practice going forward is to install these energy management control system-controlled stations at the facility where applicable.

Remediation

With heritage operations dating back to the early 20th century, Lockheed Martin has built its success on long-standing innovation and business excellence as well as strategic acquisitions.

Some of our operations conducted over the years, although in compliance with relevant laws at the time, resulted in soil or groundwater contamination. Where remedial actions are warranted, Lockheed Martin works collaboratively with regulatory agencies and communities to remedy the effect of the contamination. Currently, we have 73 active remediation projects across our operations. You can read more about our commitment to remediation on our Lockheed Martin Remediation website.

Not only are we committed to taking effective remedial actions, but we also aim to make our remediation projects sustainable wherever possible. We do this by using innovative technological solutions like disposing of contaminants with waste to energy incineration and renewing the activated carbon that acts as a filter in many of our treatment plants by safely burning off contaminants. At several of our remediation sites in water-stressed areas, in cooperation with regulators we treat contaminated groundwater to such a high standard that the local water agency can then direct it into the potable water supply, providing water to over half a million homes in those service areas.

PROTECTING WILDLIFE IN POTRERO CANYON, CA

From the 1960s and early 1970s, Lockheed Propulsion Company operated a facility at Potrero Canyon in Beaumont, CA. Cleanup operations began at the site in 1986 and evolved as regulation of new chemicals expanded the remediation needed. In 2002, 1,4-dioxane and perchlorate were in the process of becoming regulated chemicals in California, resulting in testing at the site. These compounds were identified in the groundwater as a result of this and subsequent testing and remediation planning was initiated. After considering several remediation alternatives, Lockheed Martin was able to propose an effective solution that minimized disturbance of the site. The California Department of Toxic Substances Control approved this solution. Lockheed Martin constructed a system to treat 1,4-dioxane from one groundwater extraction well, and natural biodegradation provided by the native wetlands habitat was deemed highly effective at treating perchlorate. The use of this natural remediation process provided environmental benefits of minimizing the environmental footprint when compared to more traditional remediation technologies and processes. Lockheed Martin also installed a solar-powered pump to direct water from a well into existing topographic depressions. These depressions can provide a permanent water source for the tricolored blackbird, which is native to the area and classified as threatened in California.

INNOVATIVE REMEDIATION TECHNOLOGY

In New York, we are piloting a new treatment technology for per- and polyfluoroalkyl substances. This new treatment system consists of a portable, containerized, continuous water treatment system that relies on a natural phenomenon called foam fractionation to separate the per- and polyfluoroalkyl substances from impacted water. The natural physiochemistry of per- and polyfluoroalkyl substances compounds allow them to adhere to fine air bubbles and be removed from the environment. The system can remove and concentrate per- and polyfluoroalkyl substances from 660,000 gallons of water to a single cup of per- and polyfluoroalkyl substances concentrate, with no extra waste generated, making it a highly sustainable solution.

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