Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced water use by 18% in North America from 2006 to 2007.
• Reduced hazardous waste by 4% in North America from 2006 to 2007.
• Increased recycled nonhazardous waste by 97% since 2005 in North America.
• Thermo King facility in Suzhou, China cut total energy consumption by 15% and energy consumption per unit produced by more than 6%.

Social Achievements

• Employees donated 450 hours to various charities through the GIVE program.
• Security Technologies donated and installed a video surveillance system to a Ronald McDonald House.
• Hussmann sponsored a fundraiser for Mended Hearts, raising $7,500.
• Davidson, NC campus raised $182,130 for the United Way.

Governance Achievements

• Implemented an online Foreign Corrupt Practices Act training course for all salaried employees.
• Reached settlements with the SEC and DOJ relating to payments made by foreign subsidiaries.

Climate Goals & Targets

Environmental Challenges

• High energy costs
• Inconsistent air pressure at Hindustan Newsprint Limited
• High maintenance costs and high air consumption at a major automobile manufacturer

Mitigation Strategies

• Energy conservation projects at various facilities (e.g., Thermo King Louisville, Suzhou)
• Compressed air system audits and optimization for customers (e.g., Hindustan Newsprint, Paderborner Brauerei)
• Installation of ARO EXPert Series diaphragm pumps

Supply Chain Management

Responsible Procurement

• Environmental and social considerations for new suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G3

Certifications: ISO 14001, OHSAS 18001, VPP

Sustainable Products & Innovation

• Oil-free compressors
• Nitrogen generators
• Electric golf cars
• Microturbines
• Cordless tools
• Hussmann Innovator II doors
• Hussmann Protocol refrigeration system
• Hussmann Always*Bright LED lighting
• TriPac hybrid auxiliary idle reduction system

Awards & Recognition

• America's Most Admired Companies (Fortune magazine)
• Dow Jones Sustainability North America Index

Environmental Metrics

ESG Focus Areas

• Energy-efficient products and services
• Ethical business practices and sound governance
• Company profits and revenue management
• Greenhouse gas emissions
• Product impacts and stewardship

Environmental Achievements

• Reduced energy use, normalized by sales, by 6% from 2009 to 2010
• Reduced total (direct and indirect) GHG emissions by 8% (absolute) and 14% from 2009 to 2010
• Reduced permit exceedances by more than 75% from 2009 to 2010
• Reduced VOC air emissions by more than 50% at Lynn Haven, Florida manufacturing site
• 35% water usage reduction at Schlage plant in Tijuana, Mexico

Social Achievements

• 97% response rate in employee engagement survey
• 25% reduction in TRIR and 36% reduction in LTIR from 2008 baseline
• Launched Health Progress health and wellness program for U.S. employees
• 23,000 employees participated in Ingersoll Rand University training programs

Governance Achievements

• Board of Directors approved a revised charter for the Corporate Governance and Nominating Committee, adding sustainability efforts as a key responsibility
• Established Sustainability Strategy Council to set priorities and provide oversight on key social, community, and environmental issues
• All new hires received training on the Code of Conduct, and salaried employees received refresher training annually

Climate Goals & Targets

Environmental Challenges

• Wastes resulting from the movement of production lines between sites
• Reclassification of some waste
• Improvements in wastewater treatment systems resulting in increased nonhazardous sludge and wastewater disposed of as waste
• One employee fatality due to a fall from a ladder

Mitigation Strategies

• Implemented “Urgent Safety Action Plans” (USAP) at key locations
• Instituted a safety stand-down across the enterprise following the fatality
• Conducted additional training and awareness activities in service businesses
• Further focus on decreasing nonhazardous waste to meet 5-year goal

Supply Chain Management

Supplier Audits: 115 existing suppliers audited for sustainability in 2010

Responsible Procurement

• Business Partner Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory risks

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G3

Certifications: ISO 14001 (32 facilities), OHSAS 18001 (22 facilities)

Third-party Assurance: Third-party verification of all EHS data and GHG emissions data

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient air compressor systems
• Energy Star certified battery charger
• Schlage lock series with replaceable electronic reader
• Thermo King B100 battery-operated refrigeration unit

Awards & Recognition

• Inclusion on Dow Jones Sustainability World Index
• SAM Sector Mover and SAM Bronze Class awards
• Charlotte Business Journal award for best sustainability program

Environmental Metrics

ESG Focus Areas

• Operational Excellence
• Growth through Innovation, Emerging Markets and Services
• Progressive, Diverse and Inclusive Culture
• Energy Efficiency
• Climate Change
• Safety
• Talent Management
• Community Investment
• Supplier Sustainability

Environmental Achievements

• Reduced normalized energy consumption by 6.2% from 2011 to 2012
• Reduced normalized greenhouse gas emissions by 2.9% from 2011 to 2012
• Reduced normalized non-hazardous waste generation by 23.6% from 2011 to 2012
• Reduced normalized hazardous waste generation by 24.1% from 2011 to 2012
• Saving about 3,000 metric tons of CO2e per year by switching to Eco-Mate foaming agent
• Reduced energy use, normalized by net revenue, by approximately 6.2 percent over 2011 and absolute energy use by approximately 5.7 percent overall

Social Achievements

• Expanded employee resource groups for Women, African Americans, New Hires and Veterans
• Delivered customized diversity training to 680+ employees
• Restructured U.S. benefits coverage, resulting in $6 million in savings
• Donated more than $5.3 million in philanthropic gifts
• Employees volunteered more than 12,400 hours
• Improved delivery performance by more than 70 percent
• Improved quality performance by 20 percent
• End-user CSI scores improved 15 percent

Governance Achievements

• 100% of salaried employees completed Annual Compliance Training program and Code certification
• Nearly 400 hourly employees received ad hoc ethics training
• Established Sustainability Council and Center for Energy Efficiency and Sustainability (CEES)

Climate Goals & Targets

Environmental Challenges

• Slower economic conditions in many key markets around the world
• Did not achieve growth objectives
• Maintaining momentum in energy reduction as low-hanging fruit opportunities diminish
• Channel partner scores fell five percent (customer satisfaction)

Mitigation Strategies

• Focus on operational excellence, innovation and investments to develop new markets
• Centralized sourcing model
• Value stream work expanded to cover 30% of operations (planned expansion to 40% in 2013)
• Investing in growth markets and new products/services
• Continuous improvement in products, services and processes
• New approach to employee engagement with local manager accountability
• Evaluating sites not on track to meet recycling goals and establishing specific plans

Supply Chain Management

Responsible Procurement

• Business Partner Code of Conduct
• Centralized procurement
• Supplier diversity

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G3.1 Guidelines

Certifications: ISO 14001, OHSAS 18001, ISO 50001 (3 facilities)

Third-party Assurance: Third-party assurance for EHS data

Sustainable Products & Innovation

• Thermo King Precedent platform
• Ameristar home HVAC system
• Nexia™ Home Intelligence
• CenTraVac centrifugal chillers
• Eco-Mate foaming agent

Awards & Recognition

• 2012/2013 Dow Jones Sustainability Index (North America and World indices)
• 2012 U.S. EPA Climate Leadership Award
• Newsweek Green Rankings
• I-DESIGN award (India)

Environmental Metrics

ESG Focus Areas

• Energy Efficiency
• Environmental Health and Safety
• Product Stewardship
• Business Ethics
• Human Capital Management

Environmental Achievements

• Reduced normalized energy consumption by 36 percent over the last five years
• Reduced normalized GHG emissions by 36 percent over the last five years
• Achieved 100 percent of sites having validated EHS management systems (EHS MS)
• Reduced wastewater by 6 million gallons at Trane Clarksville, Tennessee
• Increased recycling at Trane Clarksville, Tennessee, including 30,000 aluminum cans
• Reduced non-hazardous waste-to-landfill by 11 percent at Trane Clarksville, Tennessee
• Reduced electricity usage by 4 percent at Trane Clarksville, Tennessee
• Club Car reduced energy use by 39 percent with a savings of $123,992
• Fleet vehicle replacements achieved fuel savings of over $2.3 million, a reduction of 682,000 gallons of fuel, and a 500-ton CO2 emission reduction

Social Achievements

• Realized an eight-point employee engagement score improvement during 2013
• Achieved top quartile performance against industry benchmarks for manufacturers in employee engagement
• Increased spend with diverse suppliers by 8.5 percent
• Ingersoll Rand India was ranked as the No. 1 “Dream Employer of the Year” in the Manufacturing industry and No. 4 overall across industries in India
• Launched flexible work program in North America and portions of Latin America, with over 1,000 employees participating

Governance Achievements

• 100 percent of all salaried employees completed the Annual Compliance Training Program and Code Certification
• Established partnerships with national and global professional associations to attract and retain diverse talent

Climate Goals & Targets

Environmental Challenges

• Ergonomic risk factors continue to be a challenge for employees in factories and field service technicians
• Meeting aggressive five-year goals for reducing Total Recordable Incident Rate (TRIR) and Lost Time Incident Rate (LTIR)
• Maintaining momentum in reducing environmental footprint and maximizing operational efficiency

Mitigation Strategies

• Education, equipment and product redesign, and predictive analysis of at-risk work activities to mitigate ergonomic risk factors
• Reinforcing a zero-incident culture throughout the Company
• Refocusing and repositioning EHS groups to deliver injury reductions
• Implementing a structured Risk Identification and Control Program, a new EHS Framework BOS, standardizing EHS requirements globally, and improving capability to identify and mitigate ergonomic risk factors

Supply Chain Management

Supplier Audits: On-Site Assessments (OSA) for 7.31% of tier 1 suppliers

Responsible Procurement

• Business Partner Code of Conduct
• Conflict minerals program

Climate-Related Risks & Opportunities

Opportunities

• Providing energy efficient and sustainable solutions for customers

Reporting Standards

Frameworks Used: GRI 3.1 Guidelines (Application Level B+)

Third-party Assurance: Third-party assurance provider for EHS data

Sustainable Products & Innovation

• Trane Stealth™ air-cooled chiller
• Thermo King Precedent™ transport refrigeration system
• Ingersoll Rand Centac® C800 centrifugal compressor
• Trane TruComfort™ variable speed air conditioners and heat pumps

Awards & Recognition

• Listed on the Dow Jones World and North American Indexes
• Achievers 50 Most Engaged Workplaces
• FORTUNE’S World’s Most Admired list
• Ingersoll Rand India named “Dream Employer of the Year”
• Thermo King’s CryoTech range won the European Transport Award for Sustainability 2014
• Trane TruComfort 20 SEER product named No. 1 in Comfortech Product Showcase Awards

Environmental Metrics

ESG Focus Areas

• Greenhouse Gas Emissions and Climate Strategy
• Company Energy Use and Operational Eco-Efficiency
• Environmental Product Innovation
• Ethics
• Health and Safety
• Talent

Environmental Achievements

• Reduced total energy use, normalized by net revenue, by approximately 2.5 percent in 2014 and 6 percent from 2010.
• Reduced GHG emissions by 5.7 percent in 2014 and 28 percent from 2010 to 2014.
• Reduced absolute water withdrawals by approximately 6 percent, and by 12 percent on a normalized basis since 2010.
• Reduced absolute water withdrawals by approximately 17 percent, and by 23 percent on a normalized basis in water-stressed regions.
• Achieved a 27 percent absolute reduction in non-hazardous waste sent to landfill since 2010.
• Reduced the amount of hazardous waste generated by 1 percent in 2014 and 36 percent from 2010.

Social Achievements

• Achieved top-quartile employee engagement scores in 2014.
• 100 percent of salaried employees completed the Annual Compliance Training Program.
• Increased spend with diverse-owned businesses by 26 percent from 2013 to 2014.
• Employees volunteered more than 15,800 hours in 2014, a 28 percent increase over 2013.

Governance Achievements

• Established new, long-term 2020 sustainability targets in five areas encompassing governance, suppliers, operational footprint, customer outcomes, our people and corporate citizenship.
• Completed a corporate-wide review of Scope 1 and 2 GHG emissions for all owned and leased assets using the Greenhouse Gas Protocol accounting standards.

Climate Goals & Targets

Environmental Challenges

• Unsustainable demand for energy resources and its impact on greenhouse gas (GHG) emissions.
• Ergonomic risk factors in manufacturing and service operations.

Mitigation Strategies

• Continued to make progress in reducing the environmental footprint of our global facilities.
• Addressed ergonomic risk through equipment and product redesign, employee education and predictive analysis of at-risk work activities.
• Implemented a structured Risk Identification and Control Program and a new EHS Framework Business Operating System.

Supply Chain Management

Supplier Audits: 80% of spend assessed on a quarterly basis for risk

Responsible Procurement

• Business Partner Code of Conduct
• Conflict Minerals Program

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI 3.1

Third-party Assurance: ERM Certification and Verification Services

Sustainable Products & Innovation

• Thermo King truck and trailer refrigeration product with lower GWP refrigerant
• Trane screw chiller with lower GWP refrigerant
• Trane air-cooled scroll chiller with lower GWP refrigerant
• EcoWise™ portfolio of products

Awards & Recognition

• FORTUNE World’s Most Admired Companies
• Dow Jones Sustainability World and North American Indices
• 2014 Quality Guarantee Enterprise of Jiangsu Province
• 2014 National Irish Safety Organisation award
• Manufacturing Institute’s STEP Award
• 2014 Dream Employer to Work For Award
• Corporate Responsibility Magazine’s “100 Best Corporate Citizens” list
• Bloomberg’s The Best 401(k) Plans
• Achievers 50 Most Engaged Workplaces™
• Greenhouse Gas Emissions Award (Monterrey, Mexico)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Greenhouse Gas Emissions
• Refrigerants
• Water Management
• Waste Management
• Diversity and Inclusion
• Occupational Health and Safety
• Supplier Diversity
• Supply Chain Transparency
• Product Reliability
• Social Impact
• Ethical Business Conduct
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions from operations by 37% since 2013
• Avoided 11 million metric tons of CO2e emissions globally from products since 2013
• Increased energy efficiency by 15.6% since 2013 (two years ahead of 2020 target)
• Reduced water use by 8% in water-stressed regions in 2017
• Reduced non-hazardous waste to landfill by 32% since 2013
• Increased recycling rate by 5% since 2013
• Doubled the size of the EcoWise™ portfolio of low-global warming potential refrigerant products

Social Achievements

• Became the first in the industry to join the Paradigm for Parity Coalition, pledging gender parity in corporate leadership by 2030
• Joined CEO Action for Diversity & Inclusion
• Achieved a perfect score of 100% on the Human Rights Campaign Foundation’s Corporate Equality Index
• Purchased $411 million in goods and services from diverse-owned businesses (11% increase from 2016)
• Reported $205.1 million global spend with women-owned businesses
• Employees volunteered more than 25,000 hours
• Ingersoll Rand Foundation donated more than $8 million in philanthropic gifts

Governance Achievements

• Maintained strong compliance record with environmental, health, and safety regulations
• Implemented a robust Business Partner Code of Conduct for suppliers
• 97% of controllable spend suppliers agreed to the Business Partner Code of Conduct

Climate Goals & Targets

Environmental Challenges

• Persistent inflation
• Managing GHG emissions from refrigerants
• Reducing water consumption in water-stressed areas
• Minimizing waste sent to landfills
• Ensuring supplier compliance with ethical and environmental standards

Mitigation Strategies

• Strong volume, productivity, and price management to offset inflation
• Investment in low-global warming potential refrigerant technologies and proactive engagement with government agencies and suppliers
• Implementation of water conservation programs at sites in water-stressed regions
• Initiatives to increase recycling and reduce waste sent to landfills
• Implementation of the Preferred Supplier List Program and Supplier Council to promote ethical and sustainable practices among suppliers
• Use of a seven-step strategic sourcing process including a Supplier Diversity Matrix

Supply Chain Management

Supplier Audits: 100% of new direct material suppliers screened using social and environmental criteria

Responsible Procurement

• Business Partner Code of Conduct
• Preferred Supplier List Program
• Supplier Council
• Seven-step strategic sourcing process

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes related to refrigerants and energy efficiency
• Market shifts towards renewable energy

Opportunities

• Development of energy-efficient products and services
• Investment in renewable energy technologies

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 50001 (four sites), LEED (four sites), GreenGlobe (one site)

Third-party Assurance: Independent third-party assurance for environmental and safety data

UN Sustainable Development Goals

• Goal 2 (Zero Hunger)
• Goal 5 (Gender Equality)
• Goal 6 (Clean Water and Sanitation)
• Goal 7 (Affordable and Clean Energy)
• Goal 11 (Sustainable Cities and Communities)
• Goal 13 (Climate Action)

Alignment of 2020 Sustainability Goals with 11 of the 17 SDGs

Sustainable Products & Innovation

• EcoWise™ portfolio of low-global warming potential refrigerant products
• Products incorporating variable-speed technology for heating in low-temperature environments

Awards & Recognition

• 7th consecutive year on the Dow Jones Sustainability Index
• 6th consecutive year on Fortune World’s Most Admired Companies
• 4th consecutive year on Corporate Responsibility Magazine’s 100 Best Corporate Citizens
• 3rd consecutive year on FTSE4Good Index Series
• A- on 2017 CDP Global Climate Change Report

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Greenhouse Gas Emissions
• Refrigerants
• Water Management
• Waste Management
• Supplier Diversity
• Employee Diversity & Inclusion
• Employee Well-being
• Human Rights
• Ethical Business Conduct
• Supply Chain Sustainability
• Product Life Cycle Management
• Community Engagement
• Innovation

Environmental Achievements

• Reduced GHG emissions associated with operations by 238,281 metric tons CO2e (31%) over the past five years
• Achieved a 35% reduction in GHG footprint from own operations (two years ahead of schedule)
• Reduced water use by 38% in water-stressed regions since 2013
• Increased total energy efficiency by 23% over the past five years
• Reduced non-hazardous waste to landfill by 40% in intensity
• Reduced GHG refrigerant footprint of products by 52%
• Initiated on-site solar installations at three manufacturing sites
• Signed a power purchase agreement (PPA) to replace 32% of US electricity use with green energy

Social Achievements

• Increased spend with women-owned businesses by 23% to $253 million
• Launched “Ying Ai Yi Nian,” a Senior Care Program in China
• Implemented new programs to eliminate unconscious biases in the workplace
• Women’s Leadership Program graduated 140 women since 2012
• Team Leader Development Program graduated nearly 900 individuals
• Employee engagement scores remain at top-tier levels
• First in industry to join Paradigm for Parity and CEO Action for Diversity & Inclusion
• Purchased $448 million in goods and services from diverse-owned businesses

Governance Achievements

• Refreshed Code of Conduct, making it digitally accessible and interactive
• Established executive-level global Business Integrity Council and region-level councils
• Implemented annual anti-harassment training for all salaried employees
• Implemented role-based anti-corruption training

Climate Goals & Targets

Environmental Challenges

• Persistent inflation and tariffs
• Supply chain disruptions (implied)
• Meeting ambitious sustainability targets

Mitigation Strategies

• Pricing actions and operational excellence initiatives to offset costs
• Investments in product and service innovation
• Strategic acquisitions
• Proactive engagement with suppliers
• Continuous improvement programs

Supply Chain Management

Supplier Audits: On-site assessments (OSA) of approximately 1,500 suppliers over a three-year period; 90% of controllable spend suppliers agreed to BPCoC

Responsible Procurement

• Business Partner Code of Conduct (BPCoC)
• Preferred Supplier List Program
• Seven-step strategic sourcing process
• Supplier Diversity Program

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events

Transition Risks

• Mandates on and regulation of existing products and services
• Increased cost of raw materials

Opportunities

• Increasing demand for energy efficiency
• Growing urban populations

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISO 50001 (four sites), LEED (three sites), GreenGlobe (two sites)

Third-party Assurance: Third-party assurance provider (details not specified)

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 13 (Climate Action)
• SDG 5 (Gender Equality)
• SDG 4 (Quality Education)
• SDG 2 (Zero Hunger)
• SDG 11 (Sustainable Cities and Communities)

Initiatives aligned with SDGs through various programs and targets (details provided in report)

Sustainable Products & Innovation

• EcoWise™ portfolio
• Energy-efficient HVAC systems
• Products with next-generation, low-GWP refrigerants

Awards & Recognition

• Dow Jones Sustainability Index (8th consecutive year)
• Fortune World’s Most Admired Companies (6th consecutive year)
• Human Rights Campaign Foundation Corporate Equality Index (2nd consecutive year)
• FTSE4Good Index Series (4th consecutive year)
• Thomson Reuters Global Diversity Index
• Corporate Knights Global 100 Most Sustainable Corporations Index
• US Chamber of Commerce Foundation’s Best Environmental Stewardship Award
• Green Builder Media’s Eco-Leaders Award
• 2018 China CSR Forum’s Best Innovative Public Welfare Program Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Diversity and Inclusion
• Supply Chain Sustainability
• Community Engagement

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 36% since 2013
• Reduced emissions intensity from refrigerants in operations by 50% since 2013
• Reduced non-hazardous waste to landfill by 31% since 2013
• Reduced water use at sites in water-stressed areas by 39% since 2013
• Avoided more than 20 million metric tons of CO2e from products since 2013

Social Achievements

• Maintained world-class employee engagement scores
• 96.1% of top, diverse talent and leadership retained
• Increased global spend with diverse-owned businesses to $532 million
• $8.4 million in philanthropic giving
• 36% of employees globally participated in community or sustainability initiatives

Governance Achievements

• Board Diversity: 33% women
• Board-level oversight of sustainability with quarterly reviews
• 100% of salaried employees completed annual Code of Conduct training

Climate Goals & Targets

Environmental Challenges

• Reducing the environmental footprint of products during the use phase
• Managing Scope 3 emissions
• Ensuring supplier compliance with sustainability standards

Mitigation Strategies

• Investing in product-related R&D to reduce GHG emissions
• Developing low-GWP refrigerant alternatives
• Implementing a supplier sustainability reporting platform
• Conducting on-site assessments of supplier ESG practices

Supply Chain Management

Supplier Audits: On-site assessments of approximately 1,500 suppliers over a three-year period

Responsible Procurement

• Business Partner Code of Conduct
• Supplier Sustainability Expectations
• Preferred Supplier Program

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events

Transition Risks

• Regulatory changes
• Increased cost of raw materials

Opportunities

• Increased demand for energy efficiency
• Growing urban populations

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, CDP

Certifications: ISO 50001, LEED, GreenGlobe

Third-party Assurance: Third-party assurance provider (name not specified in report)

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 13 (Climate Action)
• SDG 2 (Zero Hunger)
• SDG 5 (Gender Equality)
• SDG 4 (Quality Education)
• SDG 11 (Sustainable Cities and Communities)

Initiatives aligned with SDGs through energy efficiency, GHG emission reduction, food security, gender equality, education, and community development

Sustainable Products & Innovation

• EcoWise™ portfolio
• Next-generation chillers with low-GWP refrigerants

Awards & Recognition

• Dow Jones Sustainability Index
• World Environment Center Gold Medal Award
• Fortune World’s Most Admired Companies
• Many others

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Greenhouse Gas Emissions
• Diversity and Inclusion
• Gender Parity
• Workforce Diversity
• Employee Well-being
• Supply Chain Sustainability
• Product Life Cycle
• Circular Economy
• Corporate Citizenship
• Governance
• Ethics
• Risk Management
• Human Rights
• Occupational Health & Safety

Environmental Achievements

• Reduced greenhouse gas emissions by more than 54,681 metric tons of CO2e compared to 2019.
• Reduced energy consumption by nearly 8% compared to 2019.
• Reduced operational emissions intensity by 7.3% compared to 2019.
• 17 manufacturing sites achieved zero waste to landfill in 2020.
• Reduced customer carbon footprint by more than 7.7 million metric tons of CO2e globally compared to 2019.

Social Achievements

• Maintained world-class employee engagement score of 80.
• 97.2% of key talent retained.
• Increased spend on diverse-owned businesses by 11.1% year-over-year.
• $1.4M in Helping Hand funding awarded to employees for COVID-19 relief.
• 49% of employees globally participated in virtual community or sustainability initiatives.

Governance Achievements

• 100% of U.S. salaried employees received anti-corruption training.
• Launched new Leadership Principles.
• Executive incentive compensation linked to environmental sustainability and diversity goals (starting 2021).

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19 shutdowns.
• Reducing Scope 3 emissions (product use).

Mitigation Strategies

• Developed Trane Technologies Critical Supplier Designation to help suppliers meet production needs.
• Implemented various energy efficiency initiatives and refrigerant management systems.
• Set ambitious 2030 Sustainability Commitments, including the Gigaton Challenge.

Supply Chain Management

Supplier Audits: 1,500 suppliers audited for sustainability and business risks over three years.

Responsible Procurement

• Business Partner Code of Conduct (BPCoC)
• Supplier Sustainability Expectations
• Preferred Supplier Program
• On-Site Assessment (OSA) audits

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events

Transition Risks

• Mandates on and regulation of existing products and services
• Increased cost of raw materials

Opportunities

• Increased demand for energy efficiency
• Changing weather patterns
• Growing urban populations

Reporting Standards

Frameworks Used: GRI Standards (Core option), SASB Standards (Electric & Electronic Equipment and Industrial Machinery & Goods industries), TCFD Recommendations

Certifications: ISO 14001, ISO 45001, ISO 50001 (5 sites), LEED (3 sites), Green Globe (3 sites)

Third-party Assurance: Third-party assurance provider (name not specified in report)

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 13 (Climate Action)
• SDG 5 (Gender Equality)
• SDG 4 (Quality Education)
• SDG 2 (Zero Hunger)

Initiatives contribute to these goals through energy efficiency, emissions reduction, gender parity, STEM education, and community support.

Sustainable Products & Innovation

• Advancer truck and trailer unit (30% better fuel efficiency than market average)
• Sintesis Balance fully electric HVAC unit

Awards & Recognition

• Dow Jones Sustainability North America Index (10 consecutive years)
• Fortune's list of World's Most Admired Companies
• Forbes' list of America's Best Employers for Diversity
• And many others (see Awards & Rankings section)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Operational Excellence

Environmental Achievements

• Reduced operational Scope 1 and 2 market-based emissions by 25% from a 2019 baseline
• Reduced Scope 3 GHG emissions by 5.3% per cooling ton compared to 2019 baseline
• 22 locations achieved zero waste to landfill, representing over 50% of manufacturing locations
• Reduced water usage by 18% versus 2019 baseline in water-stressed regions

Social Achievements

• Increased women in senior leadership positions by 15%
• Increased racially or ethnically diverse salaried team members in the U.S. from 17.4% to 18.4%
• Donated over $11 million to charitable organizations
• Employees completed 30,041 volunteer hours

Governance Achievements

• Linked executive compensation to environmental and social sustainability goals
• Updated leadership principles to reflect prioritization of ESG topics
• 100% of U.S. salaried employees received anti-corruption training

Climate Goals & Targets

Environmental Challenges

• Global inflationary pressures
• Supply chain disruptions
• COVID-19 related labor challenges

Mitigation Strategies

• Aggressive management of global challenges through Business Operating System
• Continued investment in business innovation
• Modernizing fleet with hybrid vehicles

Supply Chain Management

Supplier Audits: 209 suppliers assessed for environmental impacts in 2021; 93% of direct material spend evaluated

Responsible Procurement

• Business Partner Code of Conduct
• Sustainable Procurement Policy
• Supplier Sustainability Expectations
• Preferred Supplier Program

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Growth in clean energy markets

Reporting Standards

Frameworks Used: GRI Standards: Core option, SASB, TCFD, WEF Stakeholder Capitalism Metrics

Certifications: ISO 50001 (5 sites), LEED (3 sites), Green Globe (3 sites)

Third-party Assurance: Third-party assurance for environmental, health, and safety data and GHG emissions data

UN Sustainable Development Goals

• SDG 5: Gender Equality
• SDG 7: Affordable and Clean Energy
• SDG 13: Climate Action

2030 Sustainability Commitments align with these SDGs; initiatives detailed throughout the report

Sustainable Products & Innovation

• EcoWise portfolio
• Advancer Hybrid refrigerated transport units
• Sintesis Balance Unit
• Trane Catalytic Air Cleaning system

Awards & Recognition

• EcoVadis Gold medal
• Listed on the S&P Dow Jones Sustainability North America and World Indices
• JUST Capital Top 100 Listing
• FTSE4Good

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Gigaton Challenge
• Leading by Example
• Opportunity for All

Environmental Achievements

• Reduced operational emissions intensity for Scope 1 and market-based Scope 2 by 43% from a 2019 baseline.
• Achieved a 20% reduction in Scope 3 product-use emissions intensity (emissions per cooling ton).
• Reduced water usage by 22% vs our 2019 baseline in areas classified as water-stressed.
• 31 of our sites globally achieved or maintained zero waste to landfill status (82% of manufacturing facilities).

Social Achievements

• Increased women in leadership from 24.6% to 26.2% in 2022.
• Increased racially or ethnically diverse salaried employees from 18.4% to 19.6% in 2022.
• Completed 62,274 volunteer hours by employees globally (96% increase from 2019 baseline).
• Increased employee volunteer hours by 100% in 2022.

Governance Achievements

• 100% of salaried employees received Code of Conduct training.
• 100% of salaried employees received anti-corruption training.
• ESG metrics tied to executive compensation.

Climate Goals & Targets

Environmental Challenges

• Global supply chain disruptions affecting fleet modernization and material sourcing.
• Maintaining adequate technical workforce in Thermo King dealerships.

Mitigation Strategies

• Implementing hybrid vehicles and preparing for a fully electric fleet.
• Launching Express Service Bootcamp and work-study programs to train technicians.

Supply Chain Management

Supplier Audits: 95% of direct material spend subject to on-site assessments in 2022; 100% of new suppliers screened using environmental criteria.

Responsible Procurement

• Business Partner Code of Conduct
• Supplier Sustainability Expectations
• Preferred Supplier Program
• Risk-based due diligence
• On-Site Assessment audits

Climate-Related Risks & Opportunities

Physical Risks

• Extreme heat
• Extreme cold
• Extreme precipitation
• Flood
• Wildfire
• Drought

Transition Risks

• Technology substitution and obsolescence
• Exposure to emerging GHG emissions regulation and taxation

Opportunities

• Increased demand for low-emissions products and services

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD, WEF Stakeholder Capitalism Metrics

Certifications: ISO 50001 (5 sites), LEED (3 sites), Green Globe (3 sites)

Third-party Assurance: Independent third-party assurance for environmental, health, and safety data and GHG emissions data

UN Sustainable Development Goals

• SDG 5: Gender Equality
• SDG 7: Affordable and Clean Energy
• SDG 13: Climate Action

The company's 2030 Sustainability Commitments align with these SDGs through initiatives related to gender parity, renewable energy, and climate action.

Sustainable Products & Innovation

• EcoWise portfolio chillers
• Smart thermostats
• Electric heat pumps
• Electrified transport refrigeration units
• CITY Advantage chillers and heat pumps
• Thermo King Precedent S-750i

Awards & Recognition

• CDP Climate Change A rating
• CDP Water B rating
• EcoVadis Gold Medal
• FTSE4Good
• Sustainalytics top percentile rankings
• JUST 100 List ranking

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Gigaton Challenge

Environmental Achievements

• Reduced operational emissions intensity for Scope 1 and market-based Scope 2 by 59% vs 2019.
• Reduced water usage by 26% versus our 2019 baseline in areas classified as water-stressed.
• Achieved 39 locations operating as zero waste to landfill in 2023, including 85% of our manufacturing facilities; decreased non-hazardous waste to landfill by 66% vs 2019.
• Reduced absolute energy use from our operations by 4% since 2019, even as demand and production increased.
• 15.2% reduction in emissions per thermal ton for Scope 3 product use from our 2019 baseline.

Social Achievements

• 96.4% key talent retention rate in 2023
• 90.4% company-wide voluntary retention rate in 2023
• 39% increase in tuition support participation compared to prior year.
• 92,517 hours volunteered by our team members in 2023; a 192% increase from our 2019 baseline year
• 25.2% of all management positions are held by women
• 37.2% of our U.S. workforce identifies as racially or ethnically diverse

Governance Achievements

• Achieved gender parity on our Board of Directors
• 100% of salaried team members completed Code of Conduct training in 2023
• Zero suppliers identified as having actual or potential negative environmental impact.

Climate Goals & Targets

Environmental Challenges

• High transportation costs and carbon emissions caused by transporting waste from factories to recycling centers.
• Increasing water scarcity in operating regions.
• Addressing the skilled labor gap and building a diverse service technician workforce.

Mitigation Strategies

• Expanded solutions to recycle single-stream cardboard and wood, or use waste-to-energy operations when physical recycling outlets are unavailable.
• Annual localized water reduction targets to advance toward our commitment to net-positive water in 2030.
• Launched the Trane Technician Apprenticeship Program (TAP) to address the skilled labor gap and build a diverse service technician workforce.

Supply Chain Management

Supplier Audits: 100% of new direct material suppliers screened using environmental criteria through the Supplier System Assessment process in 2023

Responsible Procurement

• Business Partner Code of Conduct
• Supplier Sustainability Expectations
• Preferred Supplier Program

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Growth in clean energy markets

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD, UNGC, WEF Stakeholder Capitalism Metrics

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Third-party limited assurance on select environmental, health and safety, and GHG data

UN Sustainable Development Goals

• SDG 5: Gender Equality
• SDG 7: Affordable and Clean Energy
• SDG 13: Climate Action

The company's 2030 Sustainability Commitments align with these SDGs through initiatives related to gender parity, renewable energy, and emissions reduction.

Sustainable Products & Innovation

• EcoWise portfolio chillers
• Electric heat pumps
• Electrified transport refrigeration units

Awards & Recognition

• CDP Climate score: A
• CDP Water score: B
• One of the 2024 World’s Most Ethical Companies®
• Ranked 56th on the JUST 100 List
• Industry Rank: 1st in the Building Materials & Construction industry