Report Structure and Material Aspects

This report highlights successes, challenges and performance data for the company in priority sustainability areas. It is prepared in accordance with Global Reporting Initiatives (GRI) G4 guidelines, and we self-declare the report "in accordance" with the guidelines at the core option, noting the Disclosures on Management Approach and at least one indicator for each identified material aspect.

Materiality assessments guide our report content by identifying aspects that are important to our company and our stakeholders. Material aspects, as defined by GRI, are those that “... reflect the organization’s significant economic, environmental, and social impacts; or substantively influence the assessments and decisions of stakeholders.” Throughout this report we use the word “material” as defined by GRI, rather than as defined by the U.S. Securities and Exchange Commission or under securities laws.

In 2017, we conducted a materiality assessment survey with employees representing different levels within the organization. The objective of the survey was to determine the relative importance and impact of certain topics and how well we manage them at Northrop Grumman from the perspective of employees. For each topic that was previously identified as material, the respondents rated (on a scale of 1 to 5) the importance of each topic to four different stakeholder groups: customers, investors, employees and society.

Respondents also rated each topic for:

  • Importance to the long-term success of the business.
  • Significance of impact on the environment, economy and society.
  • Management effectiveness.

Our incentive compensation metrics and goals, both financial and nonfinancial, measure our success in demonstrating the underlying behaviors that drive strong, sustainable program performance. In 2018, we intend to broaden our materiality survey to include external stakeholders, which will help ensure that our reporting efforts reflect environmental, social and governance priorities. Our materiality assessments will continue to inform our selection of metrics and establishment of goals that support value creation for all our stakeholders and reflect our stakeholders' priorities.

Topics Important to Northrop Grumman and Our Stakeholders

  • Corporate Citizenship
  • Customer Satisfaction
  • Data Privacy and Security
  • Engagement
  • Diversity and Inclusion
  • Environmental Sustainability
  • Ethics and Integrity
  • Financial Performance
  • Health and Safety
  • Product and Service Quality
  • Program Performance
  • Regulatory and Legal Compliance
  • Research and Development and Innovation
  • Supply Chain
  • Talent Management

Employee Perspectives on Materiality

  1. 1

    Strong, sustainable program performance is a key value creation driver for all our stakeholders.

  2. 2

    health and safety is considered a top-five issue for employees.

  3. 3

    environment is in the top five issues for which the company can have significant impacts.

  4. 4

    ETHICS AND INTEGRITY, DATA PRIVACY AND SECURITY, AND REGULATORY AND LEGAL COMPLIANCE continue to be important to respondents across the board.

  5. 5

    talent management and r&d and innovation is highlighted as important to business success. Investments in “Talent management” and “R&D and innovation” strategies are key to our near- and long-term growth.