Baseline The baseline for reporting is our 2014 performance data.

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1 Basis of Reporting Purpose This document outlines how we compile the sustainability performance data that is published in our Annual Report and Accounts and on our website. Background We have publically reported key HS&E performance metrics since 2003 and these have been published on our website since In 2014 we launched a new STEM target. In 2015 we launched new targets for Ethics, Employee engagement, Wellbeing and Suppliers in addition to revising our targets for Energy, GHG, Waste, Recycling and Safety. Details on these targets can be found on our website: Organisational boundary Our sustainability performance data is collected from our global operations and we aim to account for 100% of the data from the following entities:- o Wholly owned operations and subsidiaries o Majority 51%) o Minority 50%), where we have management control. We are in the process of integrating our Power Systems business into our HS&E management system. Energy, GHG, TRI and occupational illness, water use and solvent use data from Power Systems is excluded for All figures have been adjusted to reflect the disposal of our Energy gas turbine and compressor business in December Entities that were part of the Energy business but were not part of the disposal still continue to be included in our metrics. Treatment of acquisitions and divestments Acquisitions We aim to fully integrate any acquired entities into our data collection, consolidation and reporting processes within the first year following acquisition. Divestments Divested entities are excluded from further reporting of performance data unless they meet the criteria outlined under organisational boundary above. All current year and historical performance data, including normalising data (headcount and revenue), from the divested entity will be excluded from the consolidation process for the reporting year in which the divestment took place. Where this has a material impact on our disclosed performance metrics then the affected metrics will be restated. Reporting period The reporting period for our sustainability performance metrics is the same as our financial reporting period, from 1 January through to 31 December. Where it is not possible to provide complete data within this timeframe then actual data is collected for the period from January to October inclusive. This data is then adjusted to the full reporting period through the application of an appropriate adjustment factor. Baseline The baseline for reporting is our 2014 performance data. Data assurance Sustainability performance data is reviewed by the Rolls-Royce Internal Audit function. This is an independent part of our organisation that reports directly to the company s Audit Committee. Internal assurance provides a review of the systems, processes and competencies used to compile performance reports. In addition we have reintroduced external assurance over some of our data for We engaged KPMG LLP to undertake a limited assurance engagement using the assurance standards ISAE 3000 and ISAE 3410 over the GHG and TRI data in our 2014 Annual Report and Accounts. A summary of the work they performed is included within their assurance opinion. Data quality o The aim of our reporting processes is to provide data that is complete, accurate and relevant to our operations and that is not materially misstated. o For any data that is subsequently found to be materially in error following reporting, or where conversion factors (e.g. for GHG) may have changed, then this will be clearly indicated in the next report and the data re-stated for the purposes of baselines and trend analysis. o For the purposes of materiality, we aim for each reported performance metric to be within 5% of the true figure. Reporting o Where possible we report our performance metrics for a five year window in order to demonstrate our long-term performance and commitment to continual improvement. o For our HS&E data we report both absolute and normalised data in order to take account of the changing shape and growth of the company s business, to provide consistency in data collation and it also allows us to benchmark externally.

2 KPI: Rolls-Royce STEM education programme. Reach 6 million people through the Rolls-Royce STEM education programmes and activities by STEM is defined as science, technology, engineering and mathematics subjects (or global / country equivalent for these subjects). By reach we mean the people who are aware of our contribution or involvement, through visibility of our brand or interaction with our people, resources or partners. STEM education related performance data is collected from all sites across our global operations, with geographic responsibility for reporting specifically in: Asia Pacific Germany North America Norway UK The reporting period for the STEM metrics will be the same as our financial reporting period from 1 January through to 31 December. Data will be collected for the period 1 January 2014 to 31 December Data is collected using Excel based forms. Completion is mandatory for all STEM activities as defined by our Global Charitable Contributions and Social Sponsorships policy and procedure available via the Rolls-Royce Intranet. Data is collected globally, on a live basis, to generate quarterly figures for presentation in the annual report and on the company website. Data will be presented as an overall total of the number of people reached, with supporting data breakdown available by tier, people, and geographic location. Data will be presented by location because our programmes are governed, managed, reported and delivered in this way, and not by sector. We will measure this in 4 tiers and data will be collected and reported by the person responsible for each activity delivered: Tier 1: Exposed to Rolls-Royce brand in a STEM context engagement without active contact; including branded publications or articles (eg. size of readership) and branded events or venues (eg. number of visitors) Tier 2: Actively engaged through our people or resources where we have a simple STEM interaction, which may be in person (lecture or visitor to exhibition), or electronic (such as number of downloads, views, followers, retweets) Tier 3: Actively engaged in a one-off learning activity where we provide an The data is subject to verification at both a business level (at the point of submission) and quarterly by the Corporate Community Investment and Education Outreach team on behalf of the Executive Leadership Team, via the Group Charitable Contributions and Sponsorships Committee. As a part of the corporate verification process, the data is also subject to assurance from Internal Audit which provides a review of the systems, processes and competencies used to gather the data and compile performance reports. As the STEM target launched in 2014 we have no historical data as yet, however data will be provided on our Sustainability website from 2015 onwards.

3 interactive STEM learning opportunity, which is delivered either by Rolls-Royce or by a partner on our behalf (workshop or activity) Tier 4: Actively engaged in a sustained learning activity where we provide an interactive STEM learning opportunity over a period of time, directly or through a partner (such as a learning programme or course) KPI: Employee wellbeing. All sites to achieve Rolls- Royce employee health and wellbeing LiveWell accreditation by By people we mean young people or adults and we will measure these in the following groups: Children aged 5-10 years Children aged years 16 to 19 year olds Adult learners (including University students) Parents /Carers Teachers / Leaders By sites we mean any Rolls- Royce facility including non-production facilities with over 50 employees. Sites will be awarded Bronze, Silver or Gold levels of accreditation. Number of sites awarded LiveWell accreditation Number of people reached by LiveWell accreditation By reach we mean the number of employees working at a LiveWell accredited site. Rolls-Royce s LiveWell accreditation is applicable to global operations with greater than 50 employees. The reporting period will be the same as our financial reporting period, 1 January through 31 December. Data is collected via an excel workbook template which is provided to each site. The workbook contains a gap analysis tool and an action plan template. Sites will be required to complete the gap analysis tool at least annually. Where a requirement has been met, evidence must be provided to demonstrate how the requirement has been met. Workbooks will be uploaded to a designated secure internal site by the end of Q4 annually. The workbooks and evidence submitted will be verified by the Rolls-Royce Occupational Health Team and accreditation issued accordingly. Data will be presented as the total number of sites which have achieved LiveWell accreditation. Headcount data will be used to calculate how many people have been reached by the LiveWell accreditation programme. Data will be presented by site because LiveWell accreditation will be managed at this level. The LiveWell accreditation programme was launched in Q Performance data will be reported from 2016 to 2020 on the sustainability website and in the Annual Report and Accounts.

4 KPI: Employee Engagement. Ensure our Sustainable Employee Engagement index is greater or equal to, the Global High Performance Norm* by * Provided by Towers Watson Global annual employee opinion survey using the Towers Watson ** methodology which defines Employee Engagement in terms of the way an employee Thinks, Feels and Acts in relation to work. In addition, providing the support employees need to do their work efficiently and effectively, this is called Enablement. And creating a healthful work environment one that supports employees physical, social and emotional well-being, this is referred to as Energy. Sustainable engagement is the combination of all these three factors. ** An independent global consulting firm that supports the delivery of the Employee Survey All permanent employees globally are invited to complete the survey. This includes employees at Rolls- Royce wholly owned subsidiaries but excludes Joint Venture organisations**. (**This is an exception to the general organisational scope and boundary definitions.) We will conduct an Employee Opinion survey annually from 2014 to 2016 (including 2016), covering the period from May to May. The data collected from the 2014 survey will be the baseline. The data is collected independently by Towers Watson *** and the survey process includes procedures to keep the results confidential. Employees complete the survey anonymously and Towers Watson will only create results reports for groups of at least 10 respondents. The data is presented using Towers Watson interactive report which presents the % favourable scores for each category and question. Data can be cut by any of the demographic questions used within the survey (for example, job level, tenure, age, gender.) Employees are invited to complete the survey anonymously. Most of the survey questions ask respondents to answer questions using a scale of Agree, Tend to Agree, Tend to Disagree, Disagree. Towers Watson then independently calculate the Sustainable Engagement score by taking an average of the favourable responses (Agree and Tend to Agree) to each of the questions relating to the three elements - Engagement, Enablement and Energy. Towers Watson hold over 400 benchmark norms, by country, industry, function and performance. They are created from surveys of 7 million employees per year. The Global High Performing Companies Norm is a unique norm comprised of a weighted average of employee results from organisations with highly engaged employees and also established long-term strong financial performance. The Global High Performance Norm is updated on an annual basis and the scores for the questions within the Norm that Rolls-Royce is compared against may change. This will be due to several factors the companies that comprise the Norm are reviewed annually and may be updated. Percentage of favourable responses may change as data is updated. Additional questions may be included in the Norm as the number of companies including the question reaches the level where the data is robust enough for inclusion in the Norm. KPI: Ethics employees. All employees completed Global Code of Conduct certification and mandatory ethics training by By employees we mean employees of Rolls-Royce and its wholly owned subsidiary companies. This includes employees who are on fixed term contracts with Rolls-Royce, but excludes contractors and agency workers who are not employed by Rolls- Royce. By mandatory we mean any training activity that the Company requires its employees to complete on an annual basis. The definition of in scope will vary depending on the certification or training activity. The in scope population will be defined by the Ethics team for each activity. Any employee who is absent from work due to long-term sickness, maternity or other extended leave, for the period over which the activity is required to be completed, is considered out of scope *** An independent global consulting firm that supports the delivery of the Employee Survey All certification and mandatory ethics training data is stored on the Company s Learning Management System (LMS). Employees who have regular access to the LMS are required to confirm that they have completed all certification and mandatory ethics training activities using the LMS. Alternative processes may be put in place to record participation in certification and training activities for employees who do not have access to the LMS. Data collected in this way will be uploaded to the LMS so that a full record of all certification and mandatory ethics training activities can be maintained. The percentage of employees who have completed Global Code of Conduct certification or mandatory ethics training will be calculated as follows: Completion rate (%) = Number of employees who have completed the activity Number of employees in scope for the activity Completion rates will be calculated at the end of the period over which the activity is required to x100

5 Our target is to increase the annual completion rates for mandatory annual ethics certification and training year on year with a 100% completion rate achieved by for the activity. be completed. KPI: Reduce energy use From our facilities. Reduce energy use by 30% normalised by revenue by Rolls-Royce facilities (excludes test & development) Our sustainability performance data is collected from our global operations and we aim to account for 100% of the data from the following entities:- o Wholly owned operations and subsidiaries o Majority 51%) o Minority 50%), where we have management control. For 2014 our HS&E metrics continue to exclude data associated with our Power Systems business as we are still in the process of integrating this business into our HS&E management system. All figures have been Where it is not possible to provide complete data with the usual financial reporting period from 1 January to 31 December then actual data is collected for the period from January to October inclusive. This data is then adjusted to the full reporting period through the application of an appropriate adjustment factor. Businesses are provided with comprehensive company standards and guidance for HS&E performance reporting (which are maintained within our certified Quality and HS&E Management Systems) so as to ensure the consistency and reliability of the data. Such standards are periodically reviewed and refined following the outcomes from internal audit and assurance work. Environmental data is reported to whole numbers or at least 2 significant figures. A web-based HS&E Performance Reporting System is used to collect Energy Use data from each individual site on a monthly basis. We collect the amount of energy consumed in kilowatt-hours (kwh) for our facilities and in support of our manufacturing activities. This includes grid electricity; electricity supplied by combined heat and power plant (CHP), on-site generated electricity, natural gas, landfill gas, fuel oils, solid fuel, liquefied natural gas (LNG) and liquefied petroleum gas (LPG). It is then expressed both as an absolute figure in megawatt-hours (MWh) and as an intensity in megawatt-hours per million pounds sterling of group revenues* (MWh/ m). The reported figures exclude the energy usage associated with the testing of our products. This data is collected on a site by site basis for the period from January through to October inclusive. The data is consolidated to an overall figure for the company and then adjusted to reflect the full reporting period through the application of an adjustment factor. This is the average of the energy ratio (see below) calculated for each year from 2009 through to 2013 inclusive. Energy ratio = Energy use for the whole year Energy use for January through to October inclusive The reported figure is subsequently reviewed during the next reporting cycle and, where this results in a material change, the figure is restated to reflect the actual figure for the whole reporting period. * Group revenues refer to the headline revenue reported by the company and may be found in the consolidated income statement in the Annual Report and Accounts.

6 KPI: Reduce greenhouse gas emissions. Reduce greenhouse gas emissions by 50% absolute by We calculate the amount of greenhouse gas emissions for the reporting period from our facilities, our manufacturing activities, product testing and power generation. For the purposes of statutory reporting, it is expressed both as an absolute amount in kilotonnes of carbon dioxide equivalent (ktco 2 e) and as an intensity in kilotonnes of carbon dioxide equivalent per million pounds sterling of group revenues (ktco 2 e/ m). The reported emissions cover Scope 1* and Scope 2 ** only. adjusted to reflect the disposal of our Energy gas turbine and compressor business in December Entities that were part of the Energy business but were not part of the disposal still continue to be included in our metrics. All figures relating to greenhouse gas emissions associated with power generation have been adjusted to include the emissions associated with our facility in Italy: Trigno Energy s.r.l. Where it is not possible to provide complete data with the usual financial reporting period from 1 January to 31 December then actual data is collected for the period from January to October inclusive. This data is then adjusted to the full reporting period through the application of an appropriate adjustment factor. Businesses are provided with comprehensive company standards and guidance for HS&E performance reporting (which are maintained within our certified Quality and HS&E Management Systems) so as to ensure the consistency and reliability of the data. Such standards are periodically reviewed and refined following the outcomes from internal audit and assurance work. Environmental data is reported to whole numbers or at least 2 significant figures. A web-based HS&E Performance Reporting System is used to collect Greenhouse gas emissions data from each individual site on a monthly basis. We calculate the amount of greenhouse gas emissions for the reporting period from our facilities, our manufacturing activities, product testing and power generation. For the purposes of statutory reporting, it is expressed both as an absolute amount in kilotonnes of carbon dioxide equivalent (ktco 2 e) and as an intensity in kilotonnes of carbon dioxide equivalent per million pounds sterling of group revenues (ktco 2 e/ m). The reported emissions cover Scope 1* and Scope 2 ** only. The first stage in the process is to collect the amount of energy consumed in kilowatt-hours (kwh) for our facilities and in support of our manufacturing activities. This includes grid electricity; electricity supplied by combined heat and power plant (CHP), on-site generated electricity, natural gas, landfill gas, fuel oils, solid fuel, liquefied natural gas (LNG) and liquefied petroleum gas (LPG). The amount of energy consumed for product development and testing is also captured and includes the above energy types, along with aviation fuel and diesel. For power generation we capture the amount of grid electricity and natural gas used during the operation of our commercial gas-fired power stations. We also capture emissions of greenhouse gases from our processes, for example, hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs). These are collected as actual emissions and are measured in kilogrammes. This data is collected on a site by site basis for the period from January through to October inclusive. The second stage is to convert the amount of energy consumed from kwh to kilogrammes of carbon dioxide equivalent (kgco 2 e) through the application of recognised emission conversion

7 factors. This is undertaken on a site by site basis prior to consolidation. The methodology used during the conversion is outlined in The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition) valid as at 31 December For reporting purposes, the results are subsequently converted to kilotonnes of CO 2 e. The emission conversion factors are taken from the latest version of internationally recognised sources, namely: Defra s Greenhouse Gas Conversion Factor Repository Greenhouse Gas Protocol Initiative World Resources Institute calculation tool: GHG emissions from Purchased Electricity. Some sites will use more accurate emission conversion factors taken from their respective country s National Inventory Report or provided to them by their National Government/Agency/Regulator. The overarching principle around the selection of the most appropriate conversion factor to use in the calculation is the determination of the most accurate figure for greenhouse gas emissions for the particular location. The final stage of the process is to consolidate the emissions from each individual site into an overall figure for the group and to then adjust the total amount of emissions to the full reporting period through the application of an adjustment factor. This is the average of the emissions ratio (see below) calculated for each year from 2009 through to 2013 inclusive. Emissions ratio = Greenhouse gas emissions for the whole year Greenhouse gas emissions for January through to October inclusive The reported figure is subsequently reviewed during the next reporting cycle and, where this results in a material change (see below), the figure is restated to reflect the actual figure for the whole reporting period. Emission conversion factors for a particular year may be updated in subsequent years. In such cases historical figures are recalculated each year using the latest available factors. Where this results in a material change to the reported figure then it will be restated. KPI: Reduce solid and liquid waste. Reduce total solid and liquid waste by 25% normalised by revenue by Our sustainability performance data is collected from our global operations and we aim to account for 100% of the data from the following entities:- o Wholly owned operations and subsidiaries o Majority *Scope 1 accounts for direct GHG emissions from sources that are owned or by the company. **Scope 2 accounts for indirect emissions associated with the generation of imported / purchased electricity, heat or steam. Where it is not possible to provide complete data with the usual financial reporting period from 1 January to 31 December then actual data is collected for the period from January to October inclusive. This data is then adjusted to the full reporting period through the application of an appropriate adjustment factor. Businesses are provided with comprehensive company standards and guidance for HS&E performance reporting (which are maintained within our certified Quality and HS&E Management Systems) so as to ensure the consistency and reliability of the data. Such standards are periodically reviewed and refined following the outcomes from internal audit and assurance work. Environmental data is reported to whole numbers or at least 2 significant figures. A web-based HS&E Performance Reporting System is used to collect Production waste data from each individual site on a monthly basis

8 KPI: Increase recycling. Zero waste to landfill ** by ** Excluding hazardous waste. Incineration with energy recovery only. Excluding hazardous waste. Incineration with energy recovery only. o 51%) Minority 50%), where we have management control. For 2014 our HS&E metrics continue to exclude data associated with our Power Systems business as we are still in the process of integrating this business into our HS&E management system. All figures have been adjusted to reflect the disposal of our Energy gas turbine and compressor business in December Entities that were part of the Energy business but were not part of the disposal still continue to be included in our metrics. Our sustainability performance data is collected from our global operations and we aim to account for 100% of the data from the following entities:- o Wholly owned operations and subsidiaries o Majority We collect the amount of waste produced by our operations. It is expressed both as an absolute amount in tonnes and also as an intensity in tonnes per million pounds sterling of group revenues (tonnes/ m). Production waste includes both solid and liquid waste that is sent off site for disposal, recovery or recycling. It excludes catering waste, demolition/construction waste and the disposal of surplus equipment. Solid waste that is sent for disposal is segregated by the following waste streams: landfill; incineration and incineration with energy recovery, with each stream being split by hazardous and non-hazardous waste. Solid waste sent for recycling is segregated by paper; cardboard; wood; plastic and glass. Metal waste is collected separately and is split by aluminium; ferrous; nickel; titanium and other alloys. Liquid waste is segregated by the following waste streams: disposal; recovery and recycling with each stream being split by fuels; oils; sludges; solvents and others. This latter category covers the disposal of waste acids and alkalis from our chemical processing facilities. Filter cakes are classified as a solid waste and not liquid waste. This data is collected on a site by site basis for the period from January through to October inclusive. The data is consolidated to an overall figure for the company and then adjusted to reflect the full reporting period through the application of an adjustment factor. This is the average of the waste ratio (see below) calculated for each year from 2009 through to 2013 inclusive. Waste ratio = Production waste for the whole year Production waste for January through to October inclusive The reported figure is subsequently reviewed during the next reporting cycle and, where this results in a material change, the figure is restated to reflect the actual figure for the whole reporting period. Non-hazardous waste to landfill is also reported as a discrete metric in addition to reporting of total production waste. It is expressed in tonnes and, where appropriate, as a percentage of total solid waste. Where it is not possible to provide complete data with the usual financial reporting period from 1 January to 31 December then actual data is collected for the period from January to October inclusive. This data is then adjusted to the full reporting period through the application of an appropriate adjustment factor. Businesses are provided with comprehensive company standards and guidance for HS&E performance reporting (which are maintained within our certified Quality and HS&E Management Systems) so as to ensure the consistency and reliability of the data. Such standards are periodically reviewed and refined following the outcomes from internal audit and assurance work. Environmental data is reported to whole numbers or at least 2 significant figures.

9 Water consumption. Solvent use. o 51%) Minority 50%), where we have management control. For 2014 our HS&E metrics continue to exclude data associated with our Power Systems business as we are still in the process of integrating this business into our HS&E management system. All figures have been adjusted to reflect the disposal of our Energy gas turbine and compressor business in December Entities that were part of the Energy business but were not part of the disposal still continue to be included in our metrics. A web-based HS&E Performance Reporting System is used to collect recycling of solid waste data from each individual site on a monthly basis. We calculate the percentage of solid waste produced by our operations that is subsequently recycled. Recycling is defined as the reprocessing of waste materials into products, materials or substances whether for the original or other purposes, for example, glass, metals, plastics, paper. It also includes the reprocessing of organic materials but does not include its incineration with energy recovery or its reprocessing into materials that are to be used as fuels or for backfilling operations. The recycling rate is calculated as follows: Total amount of solid waste sent to a third party for recycling Recycling rate (%) (tonnes) = Total amount of solid waste sent for disposal, recovery or recycling (tonnes) x 100 We collect the amount of water consumed by our facilities and in support of our manufacturing activities. This includes both the amount of mains supplied water (potable/municipal) and water abstracted from within the site boundary (from wells, boreholes or surface water). The data is generally collected in cubic metres and converted to megalitres. It is subsequently expressed as both an absolute amount and as an intensity in megalitres per million pounds sterling of group revenues (megalitres/ m). We collect the amount of solvents used in support of our manufacturing activities. This includes the amount of halogenated solvents used for degreasing, non-halogenated solvents

10 KPI: Reduce total reportable injury rates. Reduce total reportable injury (TRI) rate to 0.3 per 100 employees by 2020, to achieve first quartile performance. Rolls-Royce facilities Our sustainability performance data is collected from our global operations and we aim to account for 100% of the data from the following entities:- o Wholly owned operations and subsidiaries o Majority 51%) o Minority 50%), where we have management control. For 2014 our HS&E metrics continue to exclude data associated with our Power Systems business as we are still in the process of integrating this business into our HS&E management system. All figures have been adjusted to reflect the used for degreasing and other organic solvents. The data is generally collected in kilogrammes and converted to tonnes. It is expressed both as an absolute amount in tonnes and as an intensity in tonnes per million pounds sterling of group revenues (tonnes/ m). Organic solvents are defined as any volatile organic compound having, at a temperature of K (~20 o C), a vapour pressure of 0.01kPa or more. (Or having a corresponding volatility under the particular conditions of use). Where it is not possible to provide complete data with the usual financial reporting period from 1 January to 31 December then actual data is collected for the period from January to October inclusive. This data is then adjusted to the full reporting period through the application of an appropriate adjustment factor. Businesses are provided with comprehensive company standards and guidance for HS&E performance reporting (which are maintained within our certified Quality and HS&E Management Systems) so as to ensure the consistency and reliability of the data. Such standards are periodically reviewed and refined following the outcomes from internal audit and assurance work. A web-based HS&E Performance Reporting System is used to collect Total reportable injuries data from each individual site on a monthly basis Safety data is reported to 2 significant figures. We collect the number of new cases of an occupational disease and work related ill-health that are diagnosed within the reporting period. This is then expressed as an incidence rate per 100 employees *. They are defined as: Occupational disease a disease with specific diagnostic criteria related to occupation, for example, Hand-Arm Vibration Syndrome (HAVS); noise-induced hearing loss (NIHL); asbestos related diseases and dermatitis. Work related ill-health a medical condition which on the balance of probabilities is primarily caused by work, for example, stress and Work Related Upper Limb Disorder (WRULD). The incidence rate is calculated as follows: Total number of new cases of occupational disease + work related ill-health Incidence rate = x 100 Average number of company employees over the reporting year Total reportable injuries We collect the number of work related lost-time and total reportable injuries that occurred within the reporting period. This is then expressed as an incidence rate per 100 employees. They are defined as: Total reportable injuries fatalities, lost-time injuries, restricted work cases and medical treatment cases (including any case of loss of consciousness). Lost-time injuries work-related injuries, including those occurring away from our premises whilst on a business assignment, resulting in absence of at least one complete working day/shift, not including any home to work commuting incidents. Lost-time injuries do not include Restricted Work Injury Cases. The incidence rates are calculated as follows: Lost-time injury Number of lost-time injuries x 100

11 KPI: External suppliers aligned to our own ambitions. All suppliers aligned to our own ambitions. 1. All suppliers agree adherence to the revised Global Supplier Code of Conduct by Strategic supplier adherence to the revised Supplier Code will be monitored by Strategic suppliers supported in annual Carbon Disclosure Project submissions by Strategic suppliers supported to reduce their energy and waste by By suppliers we mean all who provide products or services related to Rolls- Royce contracts or purchase orders. By own ambitions we mean similar standards, practices and policies as Rolls-Royce, including but not limited to ethical behaviour and risk management. By strategic suppliers we mean business critical or high risk suppliers, as identified through Rolls- Royce purchasing processes. By Global Supplier Code of Conduct we are referring to the Global Supplier Code of Conduct (2015 edition), as freely available to view or download from the Rolls- Royce Global Supplier Portal: By Carbon Disclosure Project we are referring to the CDP Worldwide Climate Change programme. More disposal of our Energy gas turbine and compressor business in December Entities that were part of the Energy business but were not part of the disposal still continue to be included in our metrics. The definition of in scope will vary depending on the activity. The Global Supplier Code of Conduct is applicable to all suppliers and partners who supply product or services related to Rolls- Royce contracts or purchase orders. This is applicable across the Group. rate = Total reportable injury rate = Average number of company employees over the reporting year Number of total reportable injuries Average number of company employees over the reporting year x 100 * Employees include both those that are permanent employees and those that are on fixed term contracts. It excludes temporary workers and contractors. The average number of group employees may be found in the notes to the consolidated financial statements in the Annual Report and Accounts. This target was launched in We will report progress against this target internally on a sixmonthly basis and externally in our Annual Report and Accounts on an annual basis.

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