Case study: How Lockheed Martin combats corruption
Lockheed Martin is a publicly traded global security and aerospace company principally engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems, products, and services. Lockheed Martin has zero tolerance for corruption Tweet This! and works diligently to make sure that its business operations are free of corruption and that it does not engage with corrupt actors.
This case study is based on the 2019 Sustainability Report by Lockheed Martin published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Lockheed Martin regularly joins with other corporations, governments, and citizens throughout the world in reaffirming its commitment to preventing and combating all forms of bribery and corruption. In order to combat corruption Lockheed Martin took action to:
- empower employees with anti-corruption awareness resources
- launch an enhanced third-party compliance tool
- promote automated corruption monitoring
- foster knowledge sharing
Subscribe for free and read the rest of this case study
Please subscribe to the SustainCase Newsletter to keep up to date with the latest sustainability news and gain access to over 2000 case studies. These case studies demonstrate how companies are dealing responsibly with their most important impacts, building trust with their stakeholders (Identify > Measure > Manage > Change).
With this case study you will see:
- Which are the most important impacts (material issues) Lockheed Martin has identified;
- How Lockheed Martin proceeded with stakeholder engagement, and
- What actions were taken by Lockheed Martin to combat corruption
Already Subscribed? Type your email below and click submit
What are the material issues the company has identified?
In its 2019 Sustainability Report Lockheed Martin identified a range of material issues, such as occupational health and safety, customer privacy, diversity and equal opportunity, customer health and safety. Among these, combating corruption stands out as a key material issue for Lockheed Martin.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Lockheed Martin engages with:
| Stakeholder Group |
| Employees |
| Customers |
| Investors and analysts |
| Community leaders |
| Suppliers |
| Academic institutions |
| NGOs |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Lockheed Martin held six stakeholder workshops and conducted surveys with over 90 participants, including more than 60 employees and 30 external stakeholders.
What actions were taken by Lockheed Martin to combat corruption?
In its 2019 Sustainability Report Lockheed Martin reports that it took the following actions for combating corruption:
- Empowering employees with anti-corruption awareness resources
- Lockheed Martin empowers its employees with anti-corruption awareness resources and the ability to report any questions or concerns for conduct that would violate Lockheed Martin’s anti-corruption policy. Some of these resources include:
- Lockheed Martin’s Supplier Code of Conduct, which Lockheed Martin updated in 2019. The Code expresses Lockheed Martin’s ethical expectations of suppliers and is referenced in all purchase orders. Lockheed Martin expanded its expectations for pollution prevention, equal employment opportunity, and a drug-free workplace.
- Gifts Decision Tree is an interactive guide for employees that covers giving and receiving gifts, hospitality, and other business courtesies.
- CPS-730 is Lockheed Martin’s corporate policy statement on Compliance with Anti-Corruption Laws.
- In addition to these tools, employees can engage their local Ethics Officer, the Corporate Ethics Office, Human Resources, or Lockheed Martin’s Legal team for guidance, to ask questions, and to raise concerns without fear of retaliation. All Lockheed Martin employees are required to take regular Business Conduct Compliance Training (BCCT).
- Launching an enhanced third-party compliance tool
- Lockheed Martin’s Anti-Bribery and Corruption team has developed a new workflow tool to improve management of anticorruption due diligence on third parties, such as suppliers, teammates, and business ventures. This tool will allow Lockheed Martin to standardise due diligence across the business areas and reduce review time by its legal team. It will also allow Lockheed Martin to more efficiently document all the information that is considered when deciding whether to proceed with engaging a third party, given the likely degree of compliance with its anti-corruption requirements.
- Promoting automated corruption monitoring
- Lockheed Martin launched an improved tool for automated anti-corruption monitoring. The tool allows Lockheed Martin to analyse flagged transaction records from more data sources, improving both accuracy and efficiency. The result is more efficient use of human review time and analysis of flagged transactions, which in turn allows for rapid and focused attention on specific flagged transactions. The tool also enables Lockheed Martin to better identify the public officials and countries with which it most frequently engages, and which groups of employees might benefit from refresher training on gifts and business courtesy so that they are well-equipped to create plans for mitigating associated risks.
- Fostering knowledge sharing
- Individually and as a leader with industry groups, such as the Defense Industry Initiative on Business Ethics and Conduct, Lockheed Martin provides collaborative support and experience to assist others in strengthening their own ethics and compliance programmes. Lockheed Martin also regularly shares its ethics and compliance resources and best practices at public events, industry conferences, and other interactive venues.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 205-1 Operations assessed for risks related to corruption
2) Disclosure 205-2 Communication and training about anti-corruption policies and procedures
3) Disclosure 205-3 Confirmed incidents of corruption and actions taken
Disclosure 205-1 Operations assessed for risks related to corruption corresponds to:
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.5
Disclosure 205-2 Communication and training about anti-corruption policies and procedures corresponds to:
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.5
Disclosure 205-3 Confirmed incidents of corruption and actions taken corresponds to:
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.5
78% of the world’s 250 largest companies report in accordance with the GRI Standards
SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.
Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.
7 GRI sustainability disclosures get you started
Any size business can start taking sustainability action
GRI, IEMA, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom (venue: London School of Economics)
- Exclusive FBRH template to begin reporting from day one
- Identify your most important impacts on the Environment, Economy and People
- Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP.
- Benchmarking methodology to set you on a path of continuous improvement
See upcoming training dates.
References:
1) This case study is based on published information by Lockheed Martin, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) https://www.globalreporting.org/standards/gri-standards-download-center/
Note to Lockheed Martin: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.