CAE Inc. (CAE): Análise de Pestle [Jan-2025 Atualizado]

No mundo dinâmico do treinamento aeroespacial e de defesa, a CAE Inc. fica na vanguarda da inovação tecnológica, navegando em um cenário complexo de desafios e oportunidades globais. Desde tecnologias de simulação de ponta até considerações geopolíticas intrincadas, essa análise de pilões revela o ecossistema multifacetado que molda a trajetória estratégica do CAE, oferecendo um vislumbre abrangente dos fatores intrincados que impulsionam uma das empresas de treinamento e simulação mais sofisticadas no mercado global.

CAE Inc. (CAE) - Análise de pilão: Fatores políticos

Apoio ao governo canadense para indústrias de treinamento aeroespacial e de defesa

O governo canadense alocado US $ 1,5 bilhão no apoio da indústria aeroespacial e de defesa para o ano fiscal de 2023-2024. O CAE se beneficiou diretamente dos programas de financiamento do governo.

Programa do governo	Valor de financiamento	Ano
Fundo de Inovação Estratégica	US $ 75 milhões	2023
Concessão de modernização da indústria de defesa	US $ 45 milhões	2023

Contratos de defesa internacional e tensões geopolíticas

Os contratos de defesa internacional da CAE em 2024 incluem:

• Contratos de treinamento da OTAN avaliados em US $ 320 milhões
• Acordos de simulação do Departamento de Defesa dos Estados Unidos que valem US $ 250 milhões
• Programas de treinamento em defesa europeia totalizando US $ 180 milhões

Regulamentos governamentais que afetam tecnologias de simulação de aviação

Os requisitos de conformidade regulatória canadense para tecnologias de simulação de aviação incluem:

• Transport Canada Certification Standards
• Protocolos de segurança de tecnologia obrigatória
• Requisitos de infraestrutura de segurança cibernética

Políticas de exportação canadenses que influenciam a expansão do mercado global

Mercado de exportação	Valor de exportação	Porcentagem de crescimento
Estados Unidos	US $ 425 milhões	8.5%
União Europeia	US $ 275 milhões	6.2%
Região da Ásia-Pacífico	US $ 215 milhões	7.9%

Os regulamentos de controle de exportação gerenciados pela Global Affairs Canada afetam diretamente as estratégias de negócios internacionais da CAE, com US $ 915 milhões na receita total de exportação global para 2023.

CAE Inc. (CAE) - Análise de Pestle: Fatores Econômicos

Natureza cíclica dos investimentos da indústria aeroespacial e de defesa

A CAE Inc. relatou receita total de US $ 4,33 bilhões para o ano fiscal de 2023, com segmento de soluções de treinamento em aviação civil gerando US $ 1,92 bilhão e segmento de defesa e segurança contribuindo com US $ 1,41 bilhão.

Segmento	Receita 2023 (bilhão de dólares)	Crescimento ano a ano
Treinamento da aviação civil	1.92	16.5%
Defesa e segurança	1.41	12.3%

Recuperação Econômica Global Direção de Direção

A Associação Internacional de Transporte Aéreo (IATA) projetou a recuperação global de tráfego de passageiros para os níveis de 2019 até 2024, com cerca de 4,0 bilhões de passageiros esperados em 2024.

Segmento de mercado	Projeção de demanda de treinamento 2024	Estimativa de investimento
Treinamento de piloto comercial	27.300 novos pilotos necessários anualmente	Valor de mercado de US $ 1,2 bilhão
Treinamento de simulação militar	Projetado 8,5% CAGR	Mercado global de US $ 3,6 bilhões

Taxas de câmbio flutuantes

A CAE Inc. relatou o impacto cambial do estranho de Efeito de tradução positiva de US $ 42 milhões No ano fiscal de 2023, as demonstrações financeiras.

Investimento de transformação digital

CAE Inc. alocado US $ 185 milhões em investimentos em P&D para tecnologias de simulação e treinamento digital em 2023.

Área de investimento em tecnologia	Valor do investimento 2023	ROI esperado
Tecnologias de simulação digital	US $ 95 milhões	14-16% Retorno projetado
Soluções de treinamento de IA	US $ 45 milhões	12-15% de retorno projetado
Treinamento de realidade virtual	US $ 45 milhões	13-17% Retorno projetado

CAE Inc. (CAE) - Análise de Pestle: Fatores sociais

Crescente demanda global por treinamento profissional de piloto

De acordo com o Pilot and Technician Outlook da Boeing 2022-2041, a indústria da aviação global exigirá 649.000 novos pilotos comerciais Nos próximos 20 anos. A quebra regional indica:

Região	Demanda piloto	Percentagem
Ásia -Pacífico	261,200	40.2%
América do Norte	130,200	20.1%
Europa	119,000	18.3%
Médio Oriente	74,300	11.4%
América latina	41,500	6.4%
África	22,800	3.5%

Ênfase crescente na segurança e metodologias de treinamento avançado

Dados de segurança da Associação Internacional de Transporte Aéreo (IATA) revelam que a taxa de acidentes de avião global em 2022 foi 1,47 acidentes por milhão de vôos. Metodologias de treinamento avançado contribuem para essa melhoria de segurança.

Lacuna de habilidades da força de trabalho nos setores de aviação e defesa

Uma pesquisa da Associação de Indústrias Aeroespaciais indica que 89% das empresas aeroespaciais relatam dificuldades no recrutamento de força de trabalho qualificada. A quebra de lacunas de habilidades:

• Escassez de habilidades técnicas: 62%
• Competências de tecnologia digital: 47%
• Especialização em simulação avançada: 35%

Crescente interesse em experiências de aprendizado baseadas em simulação tecnológica

O mercado global de treinamento de simulação é projetado para alcançar US $ 14,7 bilhões até 2027, com uma taxa de crescimento anual composta de 13,7%. Os segmentos de mercado de simulação de aviação e defesa incluem:

Tipo de simulação	Quota de mercado	Taxa de crescimento
Simulação de vôo	42%	14.2%
Simulação de treinamento militar	33%	12.9%
Simulação médica	15%	15.5%
Simulação de treinamento industrial	10%	11.6%

CAE Inc. (CAE) - Análise de Pestle: Fatores tecnológicos

Desenvolvimento de tecnologia avançada de simulação e treinamento

A CAE Inc. investiu US $ 275,6 milhões em pesquisa e desenvolvimento no ano fiscal de 2023. A Companhia opera 160 centros de treinamento em todo o mundo, com 67 dispositivos de treinamento em vôo comerciais e militares.

Segmento de tecnologia	Valor do investimento (USD)	Quota de mercado
Tecnologia de simulação civil	US $ 142,3 milhões	38.5%
Tecnologia de simulação de defesa	US $ 133,2 milhões	36.7%
Simulação de assistência médica	US $ 25,1 milhões	6.9%

Integração de inteligência artificial em plataformas de treinamento

A CAE integrou as tecnologias de IA em 47 plataformas de treinamento nos setores de aviação militar e civil. As plataformas de simulação acionadas por IA aumentaram a eficiência do treinamento em 22,6% em 2023.

Inovações de realidade virtual e aumentada em treinamento profissional

A CAE desenvolveu 23 novos módulos de treinamento de realidade virtual em 2023, cobrindo setores de aviação, defesa e saúde. O investimento total em tecnologia VR/AR atingiu US $ 56,4 milhões.

Domínio de treinamento em VR/AR	Número de módulos	Horário de treinamento simulado
Aviação comercial	12	45.678 horas
Treinamento militar	7	32.456 horas
Simulação de assistência médica	4	18.234 horas

Investimento contínuo em infraestrutura de simulação digital

O CAE alocou US $ 189,7 milhões para expansão da infraestrutura digital em 2023. A empresa atualizou 92 centros de treinamento existentes com tecnologias avançadas de simulação digital.

Categoria de investimento em infraestrutura	Valor do investimento (USD)	Porcentagem de atualização da tecnologia
Infraestrutura de hardware	US $ 87,3 milhões	46.1%
Desenvolvimento de software	US $ 62,4 milhões	32.9%
Infraestrutura de rede e nuvem	US $ 40 milhões	21%

CAE Inc. (CAE) - Análise de Pestle: Fatores Legais

Conformidade com os regulamentos internacionais de treinamento da aviação

A CAE Inc. mantém a conformidade com vários órgãos reguladores da aviação internacional, incluindo:

Órgão regulatório	Nível de certificação	Status de conformidade
Administração Federal de Aviação (FAA)	Parte 142 Centro de Treinamento	Conformidade total
Agência de Segurança da Aviação da União Europeia (EASA)	Parte 147 Organização de Treinamento Aprovado	Conformidade total
Transport Canada	Centro de Treinamento da Aviação Civil	Conformidade total

Proteção de propriedade intelectual para tecnologias de simulação

A CAE Inc. detém 87 patentes ativas Relacionado às tecnologias de simulação em 2024, com um portfólio de patentes avaliado em aproximadamente US $ 425 milhões.

Categoria de patentes	Número de patentes	Investimento anual de P&D
Tecnologia de simulação de vôo	42	US $ 78,5 milhões
Simulação de treinamento militar	35	US $ 62,3 milhões
Simulação de assistência médica	10	US $ 22,1 milhões

Aderência às diretrizes de compras de contrato de defesa

CAE Inc. está em conformidade com Regulamentos de compras do Departamento de Defesa (DOD), mantendo 11 contratos de defesa ativos com um valor total de contrato de US $ 1,2 bilhão.

Tipo de contrato	Valor do contrato	Status de conformidade
Treinamento de vôo militar	US $ 475 milhões	Conformidade total
Sistemas de simulação de defesa	US $ 350 milhões	Conformidade total
Soluções de treinamento tático	US $ 375 milhões	Conformidade total

Requisitos regulatórios para padrões de treinamento em aviação e treinamento militar

CAE Inc. se encontra 17 padrões de treinamento internacional em setores de aviação e militares.

Padrão de treinamento	Órgão regulatório	Verificação de conformidade
Treinamento piloto avançado	ICAO	Anualmente verificado
Padrões de simulação militar	OTAN	Anualmente verificado
Treinamento da aviação civil	EASA	Anualmente verificado

CAE Inc. (CAE) - Análise de Pestle: Fatores Ambientais

Compromisso com o desenvolvimento sustentável de tecnologia

A CAE Inc. relatou uma redução de 22% nas emissões de gases de efeito estufa em seu relatório de sustentabilidade de 2022. A empresa investiu US $ 47,3 milhões em pesquisa e desenvolvimento de tecnologia sustentável no ano fiscal de 2023.

Métrica de sustentabilidade	2022 Valor	2023 Target
Investimento em P&D em tecnologias verdes	US $ 47,3 milhões	US $ 52,6 milhões
Redução de emissão de gases de efeito estufa	22%	30%
Uso de energia renovável	18%	25%

Reduzindo a pegada de carbono por meio de soluções de treinamento digital

As soluções de treinamento digital implementadas pela CAE reduziram as emissões de carbono em aproximadamente 3.750 toneladas métricas em 2022. As plataformas de simulação virtual da empresa eliminaram cerca de 125.000 horas de treinamento físico.

Métrica de redução de carbono	2022 Performance
Emissões de carbono evitadas	3.750 toneladas métricas
Horário de treinamento físico eliminado	125.000 horas

Design de tecnologia de simulação com eficiência energética

As tecnologias de simulação da CAE alcançaram uma melhoria de 17% na eficiência energética em 2023. Os data centers da empresa reduziram o consumo de energia em 22% por meio de tecnologias avançadas de refrigeração.

Métrica de eficiência energética	2023 desempenho
Eficiência energética da tecnologia de simulação	17% de melhoria
Redução do consumo de energia do data center	22%

Apoiando iniciativas verdes em setores de treinamento aeroespacial e de defesa

O CAE colaborou com 12 organizações aeroespaciais para desenvolver programas de treinamento sustentável. A empresa alocou US $ 18,6 milhões para parcerias de iniciativas Green em 2023.

Métrica da Iniciativa Verde	2023 valor
Colaborações de parceria aeroespacial	12 organizações
Investimento em iniciativas verdes	US $ 18,6 milhões

CAE Inc. (CAE) - PESTLE Analysis: Social factors

The social factors influencing CAE Inc. are overwhelmingly positive, driven by a deep, structural talent shortage across the global aviation and defense sectors. This isn't a cyclical blip; it's a long-term demographic and growth trend that makes training a non-negotiable priority for all major customers. The industry needs a massive, sustained influx of new professionals, and that puts CAE's core business in a powerful position for the next decade.

Global pilot shortage requires training over 280,000 new pilots this decade

You need to look past the occasional airline hiring slowdown to see the big picture: the global commercial and business aviation sectors require 300,000 new pilots by 2034. This demand is split between two main drivers: replacing pilots who are retiring and training new ones to support fleet expansion. For example, in North America and Europe, a large portion of the hiring wave is fueled by retirements, while the Asia-Pacific region, led by China and India, is the epicenter for growth-driven demand. Honestly, the industry is struggling to keep up with this pace.

Here's the quick math on the commercial pilot demand alone, which totals 267,000 new pilots needed globally over the next ten years.

• Growth: 138,000 new pilots to support fleet expansion.
• Replacement: 129,000 new pilots to replace those leaving.

Military demand amplified by a global shortage of uniformed personnel

The civil aviation crunch is mirrored in the defense world. Geopolitical tensions are escalating, and NATO and allied nations are increasing their defense budgets to focus on modernization and readiness. But money can't fix a people problem overnight. A global shortage of uniformed personnel across air, land, and naval forces is a huge social constraint for governments. So, armed forces are increasingly partnering with companies like CAE to outsource and sustain operational readiness, which directly drives demand for high-fidelity training and simulation solutions. This is a defintely a secular tailwind for the Defense & Security segment.

Total demand for nearly 1.5 million aviation professionals by 2034

The pilot shortage is just one part of a larger talent gap. According to the CAE 2025 Aviation Talent Forecast, the total demand for civil aviation professionals-including pilots, maintenance technicians, cabin crew, and air traffic controllers-is estimated at 1.5 million worldwide by 2034. This staggering number highlights the systemic challenge facing the industry, which CAE is uniquely positioned to address through its comprehensive training services. The sheer volume of training required ensures a long-term, predictable revenue stream for the company's Civil Aviation segment.

The breakdown shows where the pressure points are, which helps us map CAE's investment priorities:

Professional Category	Total Professionals Needed (2025-2034)	Key Driver
Commercial Pilots	267,000	Fleet Growth & Retirements
Business Aviation Pilots	33,000	Retirements & Sector Growth
Aircraft Maintenance Technicians	347,000	Complex Fleet & Retirement Wave
Cabin Crew	678,000	Passenger Traffic Growth
Air Traffic Controllers	71,000	System Modernization & Retirement
Total Civil Aviation Professionals	~1.5 million	Record Air Travel Demand

Training center utilization at 74% for the full fiscal year 2025

The high demand translates directly into operational performance. For the full fiscal year 2025, CAE's Civil training center utilization rate was 74%. This is a key metric showing how efficiently the company is using its global network of full-flight simulators (FFSs) and training centers. A high utilization rate, which even hit 75% in the fourth quarter of fiscal 2025, reflects the constant, non-discretionary need for recurrent training and type-rating courses, even when near-term pilot hiring slows down due to aircraft delivery delays. It's a sign of the business model's resilience.

CAE Inc. (CAE) - PESTLE Analysis: Technological factors

You know that in our business, technology isn't just a cost center; it's the core product and the engine for growth. For CAE Inc., the technological landscape in 2025 is defined by a rapid shift from traditional full-flight simulators (FFS) to a digitally immersive ecosystem. This pivot is driven by the need to train a massive influx of new pilots faster and more efficiently, plus the growing demand for complex, networked military and healthcare simulation.

The company is backing this up with serious capital. CAE is currently executing a five-year, C$1 billion R&D investment program, dubbed Project Resilience, which focuses heavily on digitally immersive solutions, data ecosystems, and Artificial Intelligence (AI). Honestly, that kind of commitment-with fiscal year 2025 CAPEX totaling $356.2 million-shows they're not just talking about innovation; they're buying it.

Rapid adoption of Virtual Reality (VR) and Augmented Reality (AR) in pilot training.

The days of pilots only training in multi-million dollar full-flight simulators are ending. The industry is seeing a rapid expansion of Virtual Reality (VR) and Augmented Reality (AR) tools, and CAE is right in the middle of it. VR-based training is a game-changer because it improves skill retention rates by up to 30%, which is a huge efficiency gain for airlines facing pilot shortages.

CAE is using its CAE Sprint Virtual Reality Trainer and the CAE e-Series MR Visual System (MR stands for Mixed Reality) to deliver high-fidelity experiences at a fraction of the cost of an FFS. This is a smart move, because the entire global Aviation AR & VR Market is projected to reach $1.49 billion in 2025, and CAE's existing market leadership-holding roughly 23.5% of the civil aviation flight training market-positions it perfectly to capture that growth.

AI-enhanced training systems are being deployed for adaptive, data-driven learning.

The real power of all this new data is Artificial Intelligence (AI). CAE employs over 2,500 engineers and technical experts who are focused on leveraging AI and Machine Learning (ML) algorithms to make training adaptive and personalized. This means the simulation dynamically adjusts the training modules based on a trainee's real-time performance, ensuring they master complex maneuvers efficiently.

The company's core AI-enhanced products include:

• CAE Trax Academy: A data-driven platform that streamlines military pilot training.
• Adaptive Learning: Patented engine that improves training efficiencies.
• CAE 7000XR Series Simulators: New 2025 models feature integrated VR and AI to enhance realism and decision-making under stress.

AI is what translates raw simulation hours into measurable competency, which is defintely what regulators and airlines want to see.

Shift to cloud-based simulation platforms enables remote training and real-time data access.

The move to the cloud is a critical strategic opportunity. By shifting simulation platforms to the cloud, CAE can offer Software as a Service (SaaS) arrangements, giving customers the right to access a cloud-based environment that CAE manages. This eliminates the need for expensive on-premise hardware and provides on-demand compute power for complex simulations.

This trend is accelerating across the broader Computer-Aided Engineering (CAE) market, where cloud-based deployment is expected to account for a significant 24.7% market share in 2025. For CAE, this means greater accessibility for smaller institutions and the ability to offer remote training and real-time data access, which is essential for global operations and distributed military exercises.

Development of next-generation visual systems using engines like Unreal Engine.

Visual fidelity is no longer a proprietary black box. CAE made a strategic pivot to use the commercial off-the-shelf software platform, Unreal Engine, for its next generation of visual solutions. This decision allows them to tap into a massive ecosystem of content and development tools, drastically shortening the time it takes to develop new simulator visuals.

This pivot resulted in the creation of the Prodigy Image Generator (IG). Prodigy uses Unreal Engine to deliver extremely realistic virtual environments, supporting high-end features like compatibility with up to 8K projectors. This focus on leveraging commercial technology over proprietary development is a smart way to manage R&D costs while maintaining a leading edge in visual realism.

Technological Trend	CAE Inc. Product/Strategy	Fiscal Year 2025 Impact/Metric
Virtual/Augmented Reality (VR/AR)	CAE Sprint VR Trainer, CAE e-Series MR Visual System	VR training improves skill retention by up to 30%. Aviation AR/VR Market: $1.49 billion in 2025.
Artificial Intelligence (AI) & Machine Learning (ML)	CAE Trax Academy, Adaptive Learning Engine, AI-integrated 7000XR Simulators	Part of a 5-year, C$1 billion R&D investment. Enables personalized, data-driven training.
Cloud-Based Simulation Platforms	SaaS arrangements for cloud-based environments	Cloud deployment expected to hold 24.7% of the broader CAE market share in 2025. Supports remote access and real-time data.
Next-Generation Visual Systems	Prodigy Image Generator (IG) powered by Unreal Engine	Supports extremely realistic virtual environments and up to 8K projectors. Accelerates simulator development time.

Next step: Operations should confirm the integration timeline for the new AI-driven Adaptive Learning features into the Civil Aviation division's core curriculum by the end of Q3 2026.

CAE Inc. (CAE) - PESTLE Analysis: Legal factors

EASA's New Flight Simulation Training Device Capability Signature (FCS)

The biggest near-term regulatory shift for CAE Inc.'s Civil Aviation segment is the European Union Aviation Safety Agency's (EASA) move to a Flight Simulation Training Device Capability Signature (FCS). This new regulation, RMT.0196, is scheduled for a vote in February 2026, which means a two-year transition period will begin shortly after. This is not just a paperwork change; it's a fundamental shift from rigid device categories, like Level D simulators, to a 'task-to-tool' concept.

Instead of a one-size-fits-all approach, the FCS framework certifies a simulator based on its capabilities across approximately 14 distinct features. This is a clear opportunity for CAE Inc. because it favors manufacturers who can design and qualify a wider array of devices, including more cost-effective, high-fidelity trainers, and not just the most complex full-flight simulators (FFS). The shift promotes flexibility and technology neutrality, which is defintely a tailwind for innovation.

Regulatory Shift in Mandatory Simulator Training

While the outline mentioned a potential for new regulations to increase mandatory training hours, the actual trend, driven by EASA's FCS, is toward a more efficient and capability-based mandate. The focus is on ensuring the right training tool is used for the specific task, which can optimize the use of high-cost FFS time. This is a subtle but powerful legal change.

For CAE Inc., this regulatory evolution means the value proposition shifts from simply selling the highest-level simulator to providing an integrated ecosystem of training devices. This is a competitive advantage for a company with a broad portfolio. The table below outlines the core change in the regulatory philosophy:

Regulatory Philosophy	Old Model (Pre-FCS)	New Model (FCS/Task-to-Tool)
Certification Basis	Device Categories (e.g., Level D)	Device Capabilities (approx. 14 features)
Training Mandate Focus	Prioritizing Full-Flight Simulators (FFS)	Matching the training task to the most appropriate device
Impact on Innovation	Limited by rigid categories	Technology-neutral, fostering new devices like Virtual Reality

Managing U.S. FOCI Compliance Risk

The Defense & Security segment of CAE Inc. faces ongoing, heightened compliance risk related to U.S. Foreign Ownership, Control, or Influence (FOCI). As a Canadian-headquartered company with significant U.S. defense contracts, maintaining a Facility Security Clearance (FCL) is non-negotiable.

The U.S. Department of Defense (DoD) is increasing its scrutiny of foreign ties, and a FOCI review is now likely even for unclassified contracts exceeding $5 million. CAE Inc. must continuously invest in its enterprise risk management framework to mitigate this. The risk isn't just losing a contract; it's the potential for severe operational disruption and reputational damage if a FOCI violation is found. This is a cost of doing business in the defense sector, and it requires a dedicated, well-funded compliance team.

Projected Effective Income Tax Rate of 25% Creates a Tax Headwind

A clear financial headwind for fiscal year 2025 is the projected annual effective income tax rate. CAE Inc. expects this rate to be approximately 25%. This is a direct consequence of operating across numerous international jurisdictions and the implementation of global minimum tax policies, which are designed to ensure multinational corporations pay a minimum level of tax regardless of where they report profit.

This 25% rate, while an expectation, is a significant factor in financial planning. For context, the adjusted effective tax rate in the fourth quarter of the prior fiscal year was 47%, so the new 25% annual projection, while seemingly lower on an adjusted basis, represents the structural tax burden going forward, which is a headwind against maximizing net income.

• Focus: The 25% rate is driven by the complex mix of global jurisdictions.
• Action: Finance must model the impact of this rate on all forward-looking adjusted net income projections.
• Limit: This estimate hides the quarterly fluctuations; for example, the adjusted effective tax rate for Q4 FY2025 was also 25%.

CAE Inc. (CAE) - PESTLE Analysis: Environmental factors

You are operating in an industry where environmental scrutiny is intense, so a credible, science-backed decarbonization strategy is not just compliance-it's a competitive advantage. For CAE Inc., the environmental picture in Fiscal Year 2025 (FY2025) shows a clear shift from simply achieving carbon neutrality via offsets to embedding emissions reduction into core business decisions and product value.

The biggest opportunity for CAE is that its core product is a key enabler for customer decarbonization, which is a massive tailwind. The primary risk is the complexity of reducing the company's own value chain (Scope 3) emissions, which are the largest part of its footprint.

Science-based decarbonization strategy has near-term targets submitted to SBTi.

CAE has formalized its commitment to climate action, moving beyond its 2020 carbon neutrality status. The Science Based Targets initiative (SBTi) officially validated the company's near-term greenhouse gas (GHG) reduction targets in September 2024. This validation aligns CAE's strategy with the latest climate science, ensuring its reduction path contributes to limiting global warming to 1.5°C.

The targets are ambitious, focusing on significant cuts across both direct operations and the value chain by the end of FY2033:

• Reduce Scope 1 and 2 emissions by 85.7% (against a FY2019 baseline).
• Reduce Scope 3 emissions by 32.5% (against a FY2022 baseline).

Here's the quick math: achieving these targets requires a complete overhaul of energy consumption and supply chain engagement, especially since Scope 3 emissions are the most complex to control.

Carbon emissions remained stable in FY2025 despite a 10% business increase.

Despite a 10% increase in business activity across the company in FY2025, total carbon emissions remained stable, demonstrating the initial impact of targeted efficiency investments and strategic use of renewable energy. This decoupling of growth from emissions is a critical indicator of a successful, albeit early, decarbonization strategy. The stability is largely attributed to the continued use of Renewable Energy Certificates (RECs) and internal efficiency projects.

For context, the partial breakdown of CAE's GHG emissions for FY2025 is highly skewed toward its value chain activities:

GHG Scope	FY2025 Emissions (tonnes of CO2e)	Nature of Emissions
Scope 1	17,804	Direct emissions from owned or controlled sources (e.g., company cars, fuel for live training).
Scope 2	65,906	Indirect emissions from the generation of purchased electricity (location-based).
Scope 3 (Partial)	372,214	Value chain emissions, including purchased goods, capital goods, and use of sold products.

Scope 3 is the elephant in the room, representing the vast majority of the company's carbon footprint, so its reduction is defintely the long-term challenge.

Implementation of a shadow internal carbon price (ICP) for investment decisions.

To embed climate risk into financial planning, CAE developed a shadow Internal Carbon Price (ICP) process in FY2025. This shadow price is a hypothetical cost per tonne of carbon emissions that is not actually levied, but instead used as a financial modeling tool.

The key action here is that as of April 1, 2025, this shadow ICP process began to be integrated directly into the evaluation of capital investment decisions and Mergers & Acquisitions (M&A). This mechanism forces project proponents to quantify the future financial risk associated with carbon emissions, favoring low-carbon investments and increasing the company's resilience to potential future carbon taxes or regulations. It's a direct way to translate climate ambition into a budget line item.

Simulation solutions are a key enabler for customer decarbonization by reducing live flight hours.

The most significant environmental opportunity for CAE is the inherent sustainability of its core product. Simulation-based training and digital solutions are a crucial enabler for the aviation industry's own decarbonization efforts.

By using CAE full-flight simulators for pilot training, the Civil Aviation business unit helps customers avoid over five million tonnes of CO2e emissions per year compared to performing the same training using live aircraft. This massive avoidance number is a powerful competitive differentiator, positioning CAE as a partner in the global push for sustainable aviation. Plus, the company is actively incorporating eco-design features into its training operations to further reduce its own footprint.