Foreword

The report positions the UK defence sector as critical to national security, economic stability and technological leadership amid rising geopolitical and climate-related risks. It argues that sustainability and security are interlinked, noting that climate impacts, resource scarcity and geopolitical instability can exacerbate conflict risks. The sector highlights existing investments in decarbonisation, cleaner technologies and innovation, while stressing the need to maintain operational effectiveness, safety and sovereign capabilities alongside sustainability objectives.

Background

The UK Defence ESG Charter is presented as a collaborative, voluntary framework developed by ADS and its members to drive consistent ambition and action on environmental, social and governance (ESG) issues. Senior leaders across the sector have signed the Charter to demonstrate commitment at the highest organisational level. The Charter is designed to be flexible and adaptable as ESG priorities evolve, while providing a common structure for continuous improvement and credibility. ADS acts as the secretariat, supporting coordination, collaboration and knowledge sharing across the sector.

Responsible business fundamentals

The Charter does not replace individual company ESG strategies. Instead, it establishes shared expectations for responsible business conduct across the defence value chain. Signatories commit to strong governance, ethical business practices and regulatory compliance, including anti-bribery measures, export controls and responsible product trading.
Key commitments include prompt payment of suppliers, respect for human and labour rights, improved workforce health and safety, compliance with Modern Slavery requirements, and responsible resource management. Signatories also commit to building business resilience, supporting employee wellbeing, engaging constructively with government and industry on supply chain resilience, and acting as responsible employers in line with UK law.

Commitments – Climate transition and clean tech

The Charter identifies decarbonisation and clean technology as a core pillar. The sector commits to supporting the UK’s net zero by 2050 target by reducing emissions across operations and the wider value chain, including scope 1, 2 and 3 emissions. Actions include developing more climate-aware and environmentally sound products, advancing clean and innovative technologies, and strengthening supply chain resilience. Particular emphasis is placed on managing the environmental impact of critical minerals and materials through improved traceability and responsible sourcing, while ensuring defence operational and sovereign requirements are met.

Commitments – Societal impact

The societal pillar focuses on workforce, skills and community outcomes. The sector commits to addressing the UK’s STEM skills gap by attracting, developing and retaining a diverse workforce. This includes improving diversity, equality, inclusion and representation at all levels. Signatories also aim to deliver lasting positive social impact through outreach programmes, education initiatives and partnerships that address intergenerational skills shortages. Building and strengthening partnerships with local communities, the armed forces, academic institutions and other stakeholders is highlighted as central to enhancing both economic and social value.

Commitments – Governance and ethics

Given the highly regulated nature of the defence sector, the Charter reinforces the need for the highest standards of governance and ethics. Commitments include maintaining cyber resilience to protect critical national infrastructure and operational independence. The sector will continue to work with stakeholders to uphold strict and effective export control systems, including careful assessment of risks associated with existing and potential end customers. Governance commitments also support economic growth, competitiveness and the development of sovereign capabilities and skills critical to national defence and security.

Next steps

The Charter will be made available for adoption across the UK defence supply chain, including SMEs. ADS and inaugural signatories will support wider uptake through tailored resources, guidance and practical support. Progress will be evidenced through case studies, transparency from individual signatories and an annual progress report. Over time, a data governance framework will be developed to track collective and individual progress across material ESG areas.