Our corporate Sustainability policy establishes a standard approach for integrating sustainability practices across Lockheed Martin. Our Sustainability Management Plan (SMP) defines our specific goals and drives our sustainability progress towards our current set of defined core issues and sustainability priorities. In addition to our robust sustainability governance structure, each SMP goal has a defined management approach to support progress toward our goals.

To create the SMP, we first defined our core sustainability issues through an extensive process described on our Core Issues Assessment Process website. In 2020, we developed our 2025 SMP to guide our sustainability efforts over the following five years and, for some efforts, longer. Our 2025 SMP comprises four sustainability priorities that contain individual core issues and goals.

Our SMP goals are regularly reviewed through our sustainability governance structure and can be retired and/or updated, if necessary, based on our progress and the changing needs of our business. If specific changes to our goals and/or core issues are required, we engage the Sustainability Management Team and affected business areas and/or functions to analyze and modify appropriately. Additionally, our annual SMP process includes routine monitoring and measurement of progress toward core issue goals, and reviews of current business practices against relevant sustainability markers.

Each year, we report on our efforts to champion the core issues identified in our SMP and progress toward Lockheed Martin’s sustainability goals in our annual Sustainability Performance Report.

Counterfeit Parts Prevention

Achieve 100% completion rate of applicable training on the identification and reporting of counterfeit parts by 2025.

The Vice President and Chief Supply Chain Officer provides oversight of the Counterfeit Prevention program. Our corporate policy, Counterfeit Prevention, guides the prevention, detection and mitigation of counterfeit work across our company. Business areas can have additional procedures specific to their unique operations. Additionally, we have a Corporate Counterfeits Integrated Product team that includes quality assurance representatives from each business area to provide subject matter expertise and guide day-to-day prevention management. Lockheed Martin purchase orders contain terms and conditions on counterfeit mitigation provisions, and we require all acquisitions to begin with original equipment manufacturers and authorized distributors. See our Supplier Code of Conduct for a summary of these counterfeit parts expectations. Counterfeit prevention is included in contract purchasing system reviews conducted annually at rotating facilities and during need-based customer quality audits.

Energy Management

Our Go Green program drives operational improvements by reducing greenhouse gas emissions through energy efficiency and use of renewable energy. Our Environment, Safety, Health and Sustainability and facilities teams conduct on-site and off-site engineering assessments to identify renewable energy and efficiency projects. Findings are used to develop annual tactical plans and an iterative strategic plan with a three-year outlook, against which actual progress is measured and compared. This is called our Go Green gated capital cycle. Investing in capital and operational projects that improve resource efficiency is key to reducing emissions. This work is sanctioned by our Board of Directors, which receives performance updates at least twice per year from our Senior Vice President, Ethics and Enterprise Assurance and our Vice President, Environment, Safety, Health and Sustainability. In addition, members of executive and senior leadership across multiple functions and our business areas review, approve and support implementation plans, including required investment strategies. Multiple corporate policies guide our approach to green building standards, energy efficiency, strategic energy procurement and use of renewable energy. Our ISO 14001-certified enterprise Environment, Safety and Health Management System drives continuous improvement and commits all business areas to operating in a manner that protects the environment, conserves natural resources, prevents pollution, and reduces and actively manages associated risks. For more information, visit our Carbon Strategy website.

Annually increase carbon removal technology installation, investment and support through 2025.

The Sustainability organization partnered with the Lockheed Martin Ventures team to analyze new technology investment opportunities through a sustainability lens. Lockheed Martin Ventures makes strategic investments in companies that are developing cutting-edge technologies in core businesses and new markets important to Lockheed Martin. Opportunities were reviewed against sustainability criteria and business strategy elements to identify climate technology that aligns with our sustainability priorities, such as carbon removal. Additionally, the Sustainability organization is partnering with our Social Impact team to identify charitable contribution opportunities that align with our sustainability commitments, as well as ways to engage employees and enhance community resilience in locations where we operate. Within our engineering groups, we are evaluating carbon removal partnership opportunities.

Offset 100% of carbon emissions resulting from business-related travel by 2025.

The business travel goal has been retired; we have shifted our focus to value chain engagements that will be more impactful across our more material Scope 3 categories. Learn more on our Carbon Strategy website.

Hazardous Chemicals/Materials

Annually reduce the amount of Lockheed Martin Priority Chemicals used per unit sold of Lockheed Martin’s top five (by sales) programs through 2025.

Annually reduce the amount of Lockheed Martin Priority Chemicals used per dollar of sales revenue across business areas through 2025.

Lockheed Martin has developed two internal corporate policies - Restrictions on the Use of Chemical Substances in Products and Processes and Global Product Chemistry Regulations - that together define our chemical stewardship and regulatory compliance efforts. The first policy includes lists of prohibited and targeted chemicals that are updated annually based on risk assessments, current usage evaluations and regulatory reviews. Lockheed Martin’s Global Supply Chain Operations, Engineering and Technology, Program Management, and Environment, Safety, Health and Sustainability (ESHS) organizations all have roles in leading and managing these procedures across the enterprise.

Resource and Substance Supply Vulnerability

Increase traceability of critical mineral resources and substances used in the supply chain, through data analysis and mitigation for signature programs by 2025.

As a downstream user of critical mineral resources, it is challenging to trace the upstream origins of all our product components — from raw material extraction, to manufacturers and suppliers, to final integration into products at our facilities. The responsibility for critical mineral resources is built into our supply chain strategy and overseen by our Vice President and Chief Supply Chain Officer. Due to the importance of critical mineral resources, we have a Director of Critical Materials Management with responsibility for overseeing this issue and a cross-functional working group chartered to explore solutions to supply and trace these critical mineral resources. We work to make purchasing decisions that reduce environmental and social risks in our value chain. For more information, visit our Supplier website.

Total Cost of Ownership

All business areas meet or exceed annual customer savings goals as defined in business area executive vice president scorecards through 2025.

We have a Supply Chain Council that meets monthly to guide affordability initiatives. The Supply Chain Council provides updates on enterprise-wide performance to our Chief Operating Officer, who reports periodically on Lockheed Martin’s competitive position in the market to the Board of Directors. Furthermore, the business areas come together quarterly to collaborate and leverage skills to advance affordability efforts. Business areas have specific affordability guidelines unique to their customers and programs, and our supply chain staff complete training on affordability objectives and tools. To engage our workforce we offer lunch and learn sessions open to all employees across the enterprise which include a broad array of supply chain affordability topics as well as training modules to select communities that provide tools and techniques to drive affordability results.

Artificial Intelligence

By 2025, 100% of artificial intelligence developers will have been trained in system engineering approaches to artificial intelligence (AI) ethical principles.

Our Code of Ethics and Business Conduct and our Ethical Development and Use of Artificial Intelligence internal corporate policy together guide Lockheed Martin’s ethical development and use of AI. In 2023, AI ethics was added to our updated Code of Ethics and Business Conduct and training materials were developed and beta tested. We created an Artificial Intelligence Ethics Subcommittee in 2020, under the direction of the Artificial Intelligence Executive Steering Committee, that oversees AI design, development, deployment and internal use aligned with our adopted principles for the responsible use of AI: responsible, equitable, traceable, reliable and governable. Lockheed Martin was one of the first large organizations to wholly adopt these principles developed by the U.S. Department of Defense and use them as the foundation for our AI program. This reflects Lockheed Martin’s strong history of ethical use of technology, our Code of Ethics and Business Conduct, and our core values. The Artificial Intelligence Ethics Subcommittee includes representatives from all business areas, Lockheed Martin’s Advanced Technology Laboratory and from our human resources, communications, legal, ethics and business transformation functions. The subcommittee meets monthly and reports quarterly to the Artificial Intelligence Executive Steering Committee. Both Lockheed Martin’s Chief Engineer and Senior Vice President, Engineering and Technology, and our Senior Vice President, Ethics and Enterprise Assurance, review performance on a periodic basis and serve as the highest levels of leadership responsible for ethical use of AI.

Data Privacy and Protection

By 2025, 50% of Lockheed Martin employees will have been trained in data literacy and data-centric practices.

Data literacy is foundational to our data strategy and is included as an imperative in our Data Governance internal corporate policy. Lockheed Martin’s data strategy mission is to ensure that our business processes, systems and mission solutions generate high quality data that can seamlessly flow between our core business systems and be easily accessible to enable business area interoperability, real-time analytics, data-driven decisions and efficient delivery of zero-defect data products to our customers. Our data literacy efforts are championed by our corporate Chief Data and Analytics Officer and presented quarterly to the Lockheed Martin Data Council. Employees are engaged in multiple ways, including dedicated websites, a foundational e-learning assigned to employee populations and learning platforms that offer training on data topics. Our objective is to build a data-focused mindset, including skills and tools, through expanded learning opportunities available to all teams.

ACHIEVED: 100% of data objects were identified for common definition in the Lockheed Martin data strategy (Tier 1 Data) and 100% of certified data sources have data stewards assigned.

Our Data Governance internal corporate policy includes our data governance standards and details our data stewardship procedure. Our corporate Chief Data & Analytics Officer and Enterprise Data Governance Board are accountable for identification of Tier 1 Data and their associated definitions. Our Enterprise Data Governance Board also includes the chief data officers from each business area, as well as senior leadership representatives from legal, cybersecurity and corporate security. Members meet once per month and collaborate in leading our data governance programs, resources and tools. Each business area has complementary resources and processes to align systems, to adopt the corporate standards and to empower data stewards, those individuals entrusted with effective control and use of data and information assets.

Intellectual Property Rights

ACHIEVED: An intellectual property protection hierarchy has been deployed with tiered protection of intellectual property data assets based on their classification within that hierarchy.

Our Protection of Sensitive Information internal corporate policy and Intellectual Property internal corporate policy together provide the foundation for this intellectual property effort. We have a cross-functional working group for managing heightened protection categories for Lockheed Martin Proprietary Information that led the development of the new designation system. The working group is focused on implementation to support the intellectual property effort in collaboration with the business areas and their Intellectual Property Strategy Boards. The Intellectual Property Review Boards within each business area and Enterprise Operations review categories designated by Lockheed Martin-funded technology development programs and provide any needed support. Concerns that arise can be elevated to the Enterprise Intellectual Property Strategy Board, which is led by our technology and business development functions.

Harassment-Free Workplace

All Lockheed Martin employees participate in at least one bystander intervention training by 2025.

Lockheed Martin takes pride in our core values to do what’s right, respect others and perform with excellence. These core values are underpinned by our Code of Ethics and Business Conduct and our Harassment-Free Workplace policy and Nondiscrimination and Equal Employment Opportunity policy. We require all employees to complete annual harassment-free workplace training. Additional related training is required for specific employees based on function and level. Senior responsibility for this SMP goal is held by our Vice president, Global Diversity and Inclusion, with director-level responsibility for implementation.

Inclusion and Equity

All leaders have an inclusive leadership experience or complete one diversity and inclusion-associated action annually through 2025.

Our global diversity and inclusion strategy is built into the fabric of our core values and is imperative to our success. We know Lockheed Martin’s diverse and inclusive workforce enhances our collective power, and our ability to recognize, value and draw upon unique perspectives and experiences to drive innovation and solve our customers’ toughest challenges. Our strategy is underpinned by strong policies, which protect employees and exemplify the inclusive culture we strive to foster. Senior responsibility for this SMP goal is held by our Vice President, Global Diversity and Inclusion with director-level responsibility for implementation.

Increase hiring of protected veterans and people with disabilities to meet or exceed annual Department of Labor targets through 2025.

Increase representation of women and people of color enterprise-wide by 2023.

We actively pursue increasing the representation of underrepresented groups within our workforce. One challenge we face is the lower participation of certain groups in the United States overall in science, technology, engineering and math (STEM) occupations, which account for more than 50% of Lockheed Martin’s employee occupations. For example, in the United States overall, 11.2% of aerospace engineers, 20.7% of software developers and 9.4% of mechanical engineers are women. However, we continue our efforts to increase representation within our workforce. While we have made progress, we still have work to do. Representation is one measurement of our overall progress toward a more diverse and inclusive workforce. Senior responsibility for this SMP goal is held by our Vice President, Global Diversity and Inclusion with director-level responsibility for implementation. For more information, visit our Diversity and Inclusion website.

Workplace Safety

Reduce the number of days away from work due to occupational injury or illness through 2025.

Establish a risk-based approach to serious incident and fatality prevention programs by 2025.

Lockheed Martin’s injury reduction program, called Target Zero, goes beyond compliance to ensure safe work conditions, promote workforce resiliency and enhance business value. We actively implement programs to reduce risk, prevent injuries and empower our employees to create a safer work environment. This helps us protect the foundation of our business and our greatest asset: our people. Lockheed Martin’s Environment, Safety and Health (ESH) corporate policy provides the overarching guidance for our Target Zero program. It is supported by a comprehensive set of procedures on different safety and health topics, including the framework for our Environment, Safety and Health Management System. Lockheed Martin’s Vice President, Environment, Safety Health and Sustainability is responsible for our Target Zero programs and chairs an ESH Leadership Council, which includes business area and functional representatives and sets direction and policy as well as strategy and priorities for the execution and evaluation of our injury reduction program performance. Performance on our safety metrics and initiatives are reported monthly to executive leadership and quarterly to the board of directors. Additionally, we have an internal performance dashboard that is updated monthly and available to all employees. All of this is underpinned by our ISO 45001-certified enterprise Environment, Safety and Health Management System.

Ethical Business Practices

Score at or below 35% of the total percentage of employees who observe misconduct within the past 12 months, but neither report it nor take action to address it by 2025.

Our Code of Ethics and Business Conduct and our Ethics and Business Conduct corporate policy provide the foundation for Lockheed Martin’s Ethics program, reinforcing our core values to do what’s right, respect others and perform with excellence. Training and policies support the program, clarifying the expectation for behavior and compliance while ensuring that employees know how to raise concerns. Our Board of Directors provides program oversight, reviewing metrics, initiatives and project status three times each year. In addition, Ethics Steering Committee from our business areas review similar information and provide oversight for their areas. Our Ethics program is reviewed annually as part of our entity level controls assessment to ensure that the program is relevant, comprehensive and effectively managed.

Anti-Bribery and Corruption

Achieve 100% completion of required employee training on gifts and business courtesies and international business practices annually through 2025.

At Lockheed Martin, we have zero tolerance for bribery and corruption. We will walk away from business engagements associated with improper conduct and that would violate U.S. and other applicable anti-corruption laws. Included in our comprehensive approach to anti-corruption compliance are our Gifts and Business Courtesies and International Business Practices business conduct compliance training modules. Our Gifts, Hospitality, Other Business Courtesies and Sponsorships policy and our Compliance with Anti-Corruption Laws policy provide specific guidance and procedures for the company. For example, the first policy outlines thresholds of permissibility, exception request processes and approval responsibilities associated with offering of certain business courtesies. We use an analytics tool to scan company data and flag questionable transactions for review, and any policy violations that may occur are reported to business area legal teams for remedial actions as well as to the senior vice president, general counsel and corporate secretary on a quarterly basis. Refer to the Lockheed Martin Code of Ethics and Business Conduct for more information on our anti-bribery and anti-corruption policies.