Climate Change Data

Environmental Metrics

ESG Focus Areas

• Social Responsibility
• Diversity
• Environmental Stewardship

Environmental Achievements

• Met and exceeded clean air standards; first engine manufacturer to comply with tightened EPA diesel emission standards in 2002; significant reductions in NOx and PM emissions from off-highway engines (70% and 75% respectively between 1995 and 2004); Cummins engines released far less hydrocarbon and carbon monoxide than the maximum allowed by the EPA; 82 percent reduction in coolant and water consumption at Fleetguard’s Lake Mills Plant; reduction of 6,189 kWh per day in compressed air usage at MidRange Engine Plant resulting in significant emission reductions.

Social Achievements

• Named top corporate citizen for 2005 by Business Ethics magazine; named best place for Asian-Americans to work by Diversity Inc. magazine; included in the Dow Jones World Sustainability Index for 2005; donated more than $3.5 million in cash and product to help victims of Hurricane Katrina and the Asian tsunami; implemented “Every Employee, Every Community” initiative, with 2,000 employees volunteering 12,000 hours; $147 million spent with small business and minority-owned suppliers in 2004; offers healthcare and other benefits to non-spousal domestic partners; received 100 percent score on Human Rights Campaign's diversity index.

Governance Achievements

• Named to the 2005-2006 Dow Jones Sustainability World Index; corporate governance practices outperformed 76 percent of companies in the S&P 500 Index and 96 percent of companies in its Capital Goods peer group; implemented updated compliance courses on Code of Business Conduct; enhanced Ethics Help Line; updated Crisis Communications Plan; implemented Cummins Operating System (COS) to improve customer satisfaction and profitability; devoted significant resources to meeting Sarbanes-Oxley regulations.

Climate Goals & Targets

Environmental Challenges

• Meeting increasingly stringent emission standards; managing the cyclicality in end-user markets; managing joint ventures; aging sewer systems (Daventry Plant); managing variability in regulatory requirements worldwide for GHG emissions reporting; managing coolant disposal.

Mitigation Strategies

• Investing in emission reduction technologies (more than half of $2.4 billion spent on R&D in last 10 years); developing multiple emission solutions for different markets; collaborating with OEMs; implementing Six Sigma programs; sewer repairs and liner installation at Daventry Plant; improving data collection and measurement systems for GHG emissions; implementing coolant reuse program at Fleetguard’s Lake Mills Plant.

Supply Chain Management

Responsible Procurement

• Commitment to using qualified minority-owned suppliers; development of a supplier code of conduct (targeted for 2006)

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products; expansion of diesel engines into the marketplace

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Sustainable Products & Innovation

• Clean diesel engines; natural gas engines; electrically-assisted turbocharger; fuel cell systems; emission control aftertreatment systems

Awards & Recognition

• Business Ethics magazine's top corporate citizen award; Diversity Inc.'s best place for Asian-Americans to work award; Dow Jones Sustainability World Index inclusion; ESC Partnership Award for Innovative Energy Solutions; Cinergy Excellence in Sustainability Award; National Award Trophy for Excellence in Energy Management (Cummins India Ltd.)

Environmental Metrics

ESG Focus Areas

• Environment and Safety
• Social and Corporate Responsibility
• Corporate Governance
• Diversity

Environmental Achievements

• Development of a greenhouse gas emissions reduction target
• Inclusion in the U.S. Environmental Protection Agency’s (EPA) “Climate Leaders” program
• Achieved a 10% reduction in GHG intensity from 2000-2005
• 5.5% absolute GHG emissions reduction in 2005 versus 2000
• Reduced energy consumption and pollution levels through initiatives to reduce engine testing
• Reduced paint use by approximately 1,000 gallons and 800 pounds per year of VOC emissions at Cummins Cookeville Production Line
• Reduced hazardous wastes generated at six Wisconsin exhaust component manufacturing plants by 70%
• Cummins SLP reduced its electrical consumption by 5% (revenue adjusted) and ground water consumption by 15%
• Cummins Daventry Engine Plant collected more than 1,010 cubic meters of rainwater for use in operations

Social Achievements

• Development and global implementation of a Supplier Code of Conduct
• Participation in the Carbon Disclosure Project
• Creation of a corporate-wide Customer Support Excellence initiative
• Launch of a global effort to establish a common brand across all of Cummins
• Helping to strengthen the educational and employment foundation in central and southern Indiana
• Helping to improve the capabilities of the Purdue University engineering program
• Named the “Top U.S. Corporate Citizen” by Business Ethics magazine in 2005
• Every Employee, Every Community initiative allowing employees to volunteer on company time
• Cummins Mexico received the Environmental Excellence award

Governance Achievements

• Cummins’ corporate governance practices outperformed 90% of companies in the S&P 500 Index and 79% of companies in its Capital Goods peer group
• Full Board elected annually
• Executives and directors subject to stock ownership guidelines
• Company expenses stock option grants on its income statement
• Audit Committee comprised solely of independent outside directors
• Established a Supplier Code of Conduct in December 2005

Climate Goals & Targets

Environmental Challenges

• Meeting and exceeding clean air standards
• Becoming and remaining the first choice of customers
• Managing the impact on earnings of the cyclicality in end-user markets
• Managing travel risks for employees
• Ensuring that suppliers are committed to improvement through Six Sigma
• Balancing encouraging good behavior among suppliers with imposing unrealistic standards based on local norms and regulations
• Managing a potential avian flu pandemic
• Increasing energy costs

Mitigation Strategies

• Long-term investment in emission reduction technologies
• Customer Support Excellence (CSE) initiative
• Focus on positive cash flow and investment in the right technologies
• Moving to a single, global travel agency
• Six Sigma performance requirements for critical suppliers
• Supplier Code of Conduct with a focus on local laws and US laws against bribery and conflict of interest
• Pandemic Planning Team
• Forward contract purchases of utilities, securing electricity from GQCHP sources

Supply Chain Management

Supplier Audits: Nearly 5,000 letters of introduction sent to top suppliers (85% of total 2005 spend)

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Sustainable Products & Innovation

• Light-duty clean diesel engines
• Cummins Particulate Filter
• User-Friendly Filter
• Combined Heat and Power (CHP) systems
• Biogas system
• Natural gas engines

Awards & Recognition

• Dow Jones World Sustainability Index (2006)
• Business Ethics magazine’s “Top U.S. Corporate Citizen” (2005)
• Australian Government Business Achievement Award (2006)
• Environmental Excellence award (Mexico)

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Governance
• Environment
• Safety
• Diversity
• Corporate Responsibility

Environmental Achievements

• Achieved a 20% reduction in GHG intensity
• Met EPA's 2007 heavy-duty on-highway emissions standards
• Dodge Ram 6.7-liter Turbo Diesel engine meets EPA's 2010 emissions standards three years ahead of schedule
• Pledged to reduce corporate-wide greenhouse gas (GHG) emissions intensity by 25 percent by 2010, against a base year of 2005
• Reduced hazardous wastes generated by paint reformulations by 50%
• Reuses or recycles over 48 million pounds of material each year, with a corresponding GHG reduction of about 200 million pounds.

Social Achievements

• Launched Customer Support Excellence (CSE) initiative, training over 19,000 employees
• Spent $453.8 million with small business and minority-owned suppliers in 2007
• Received a perfect score on the Human Rights Campaign’s Corporate Equality Index every year since 2005
• Won the Australian Government Business Achievement Award for the advancement of women in the workplace
• More than 9,000 employees contributed more than 38,000 hours of community service through the EEEC program in 2007

Governance Achievements

• Revised Code of Business Conduct with emphasis on clarity and accessibility
• Introduced six online compliance training courses, with over 51,000 subscriptions offered
• Investigated 541 ethics-related complaints in 2007
• Completed a Six Sigma project to reduce the time to close ethics investigations
• Conducted 56 diversity audits at 30 sites in the US and Europe
• Created a Supplier Code of Conduct, with 99.5% response rate and 99.6% compliance

Climate Goals & Targets

Environmental Challenges

• Meeting increasingly stringent emissions regulations
• Managing risks associated with global operations (exports, travel, pandemics)
• Ensuring supplier commitment to improvement
• Maintaining safety standards across all facilities
• Addressing ethics violations and ensuring compliance

Mitigation Strategies

• Developed integrated technology solutions for emissions control
• Implemented a global travel agency and crisis communications plan
• Launched a focused effort to ensure supplier commitment to Six Sigma
• Implemented the Cummins Safety System based on OHSAS 18001
• Strengthened reporting and auditing processes, provided clearer safety policies at JV operations, and implemented a zero tolerance policy for safety violations
• Implemented a global team of trained Master Investigators to investigate complaints

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Sustainable Products & Innovation

• Cummins ComfortGuard Auxiliary Power Unit (APU)
• ISL G natural gas engines
• User-Friendly Filter
• ES Compleat Glycerin Premix coolant

Awards & Recognition

• Diesel Progress Newsmaker of the Year
• DiversityInc Top 50 Companies for Diversity
• DiversityInc Top Workplace for Asian-Americans
• Australian Government Business Achievement Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Corporate Responsibility
• Environment
• Safety
• Diversity
• Community Involvement
• Governance
• Ethics

Environmental Achievements

• Reduced greenhouse gas emissions significantly in recent years
• Decreased waste
• Improved energy efficiency
• First to certify to U.S. EPA’s 2010 emissions standards, three years ahead of schedule
• Reuse and recycle more than 50 million pounds of material each year through Cummins Diesel Recon
• Reduced facility greenhouse gas emissions 25 percent below 2005 levels by 2010 as part of the U.S. EPA’s Climate Leaders program.
• Jamestown Engine Plant went landfill free
• Cummins India Limited reduced wastewater effluents by 90 percent

Social Achievements

• Strengthened commitment to corporate responsibility
• Created a Corporate Responsibility organization
• Named to the Dow Jones World Sustainability index for the fourth consecutive year
• Named one of the “World’s Most Ethical Companies” for 2009
• Ranked 42nd in the 2009 DiversityInc Top 50 Companies for Diversity
• Cummins Power Generation in Fridley, Minn., was named Minnesota’s Outstanding Philanthropic Organization in 2008
• Earned a 100 percent rating for the fourth consecutive year from the largest U.S. advocacy group for gay, lesbian, bisexual and transgender employees
• Cummins South Pacific was named 2008 Employer of Choice for Women
• Selected as one of the “100 Best Places to Work in IT” by IDG Computerworld for the second consecutive year
• Awarded the 2008 Circle of Excellence Award by the Indiana Minority Supplier Development Council
• Received the “Amigo Estrella Award” from the National Society of Hispanic MBAs Indianapolis chapter for a second consecutive year
• Cummins Darlington (U.K.) Engine Plant won the Institution of Mechanical Engineers/ U.K. Resource Centre for Women in Science, Engineering and Technology Award for Diversity and Inclusion
• Employees gave financial aid to earthquake and flood victims
• Improved employee safety metrics (incidence rate, severity case rate, lost work days rate)

Governance Achievements

• Cummins received the highest possible rating for its corporate governance practices from GovernanceMetrics International (GMI)
• Implemented a robust global Internal Audit department
• Introduced 10 online compliance training courses with a 96 percent completion rate
• Investigated 682 ethics-related complaints in 2008
• Conducted rigorous diversity audits at Cummins’ facilities
• Released a new Supplier Code of Conduct translated into 14 languages
• Developed a training package to orient Cummins employees who serve as directors of joint ventures

Climate Goals & Targets

Environmental Challenges

• Global economic recession negatively affected fourth quarter performance in 2008
• Increasing energy costs
• Complex export controls
• Potential risks associated with global operations (political, economic, ethical, manufacturing, market, people management)
• Increasing customer expectations
• Changing demographics
• Increasing regulations

Mitigation Strategies

• Took several steps, including a significant workforce reduction, to respond to the global recession
• Implemented numerous energy efficiency projects
• Developed a comprehensive policy on exports
• Employs a diverse workforce to deal with global challenges
• Uses Six Sigma tools to improve customer satisfaction and reduce costs
• Actively engages with regulatory bodies
• Updated Business Case for Diversity to address challenges

Supply Chain Management

Supplier Audits: More than 2,800 suppliers comply with our Supplier Code of Conduct

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Opportunities

• Developing new power technologies and products to meet the needs of a carbon-constrained economy
• Growing current businesses and developing new ones to deliver products and services that meet global power needs with less carbon usage

Reporting Standards

Frameworks Used: GRI

Sustainable Products & Innovation

• 6.7L turbo diesel engine
• Natural gas engines
• Biodiesel compatible engines
• User-Friendly filter
• Crankcase Ventilation Filtration products
• Nanofiber Media Direct Flow engine air filter
• Filter in Filter
• Diesel Exhaust Fluid (DEF)

Awards & Recognition

• Dow Jones World Sustainability Index
• World’s Most Ethical Companies
• GovernanceMetrics International rating of 10.0
• Cummins China top corporate citizen award
• Fortune 500 rankings
• LLEAP Gold Award for Design Leadership
• Best in class for Enterprise Quality Management
• CII National Award for Excellence in Energy Management
• PACE Award
• Frost & Sullivan awards
• Greentech Environmental Excellence Award
• DiversityInc Top 50 Companies for Diversity
• Minnesota’s Outstanding Philanthropic Organization
• 2008 Employer of Choice for Women
• 100 Best Places to Work in IT
• Circle of Excellence Award
• Amigo Estrella Award
• Institution of Mechanical Engineers/ U.K. Resource Centre for Women in Science, Engineering and Technology Award

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Exceeded greenhouse gas reduction goal in 2010 by achieving a 28% reduction since 2005 (exceeding the 25% target).
• Reduced water consumption at Cummins facilities by 281 million gallons since 2008.
• Reduced hazardous waste produced during manufacturing by 36% and landfill waste by 11% (normalized to employee hours) since 2008.
• Produced 90,000 EPA-certified engines with Selective Catalytic Reduction (SCR) aftertreatment for North American markets through March 2011.
• Remanufactured 50 million pounds of Cummins product in 2010, keeping it out of landfills.

Social Achievements

• Embedded 11 full-time Corporate Responsibility leaders in business units and across the globe.
• Conducted regional Corporate Responsibility conferences worldwide.
• Over 27,000 employees (62% of workforce) donated 110,757 hours in 2010 through the Every Employee Every Community program.
• Successfully implemented Affirmative Development Project globally.
• Launched a major effort to increase contractor safety in 2011.

Governance Achievements

• Added a 10th member to the Board of Directors.
• Reduced the average time to close Code of Conduct cases from 24 days in 2009 to 15 days in 2010.
• Investigated 814 Code of Conduct-related complaints in 2010.
• Raised targets for business with diverse suppliers in the U.S. and Canada.

Climate Goals & Targets

Environmental Challenges

• Emissions compliance in a tightening regulatory environment.
• Global water supply issues.
• Waste management and recycling.
• Energy efficiency.
• Contractor safety.
• Managing risk in a rapidly growing and globalizing company.

Mitigation Strategies

• Developed and implemented the Enterprise Environmental Management System (EMS) and Health, Safety and Environmental (HSE) Council.
• Implemented energy efficiency capital projects across seven themes, saving $20 million annually.
• Increased recycling initiatives, improving combined recycling of all materials by more than 25% compared to 2009.
• Implemented water conservation measures across various sites.
• Launched a major driver safety initiative and a new contractor safety program.
• Developed Business Continuity Plans for over 100 locations.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct (covering child labor, employee rights, workplace safety).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services.

Reporting Standards

Frameworks Used: CDP, FTSE4Good

Certifications: ISO 14001

Third-party Assurance: Bureau Veritas

Sustainable Products & Innovation

• Remanufactured engines and parts
• Natural gas engines
• SCR-based engines
• Energy-efficient generators

Awards & Recognition

• World’s Most Ethical Companies (Ethisphere Institute)
• America’s Safest Companies (EHS Today)
• Top Companies for Diverse Managers and Women (Diversity MBA Magazine)
• Best Employers for Healthy Lifestyles (National Business Group on Health)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions intensity by 27% (adjusted for revenue) between 2005 and 2015.
• Recycled nearly 90% of waste generated.
• Reduced total water use by approximately 24% on an absolute basis over the past five years.

Social Achievements

• More than 27,000 Cummins employees worked on community service projects in 2012, a 68% increase over 2011.
• Launched an environmental education campaign in India to reach 75,000 school children.
• Increased the number of women in professional jobs at Cummins facilities in India from 4% in 2004 to 27.5% in 2011.

Governance Achievements

• Released an updated Cummins Code of Business Conduct in January 2013.
• Completed a Compliance and Ethics survey to assess ethical behavior globally.
• Investigated 1,196 Code of Business Conduct-related complaints in 2012.

Climate Goals & Targets

Environmental Challenges

• Global economic slowdown impacting demand in the second half of 2012.
• Water scarcity challenges in India and Mexico.
• Waste management in some facilities.

Mitigation Strategies

• Reduced workforce by about 1,300 people.
• Implemented various water conservation initiatives in Mexico and India.
• Developed a global waste management strategy focusing on reduction, recycling, and avoidance of disposal.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (e.g., Super Storm Sandy)

Transition Risks

• Changes in emissions regulations

Opportunities

• Development of energy-efficient products and alternative fuels

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Third-party Assurance: Bureau Veritas Certification (BVC)

Sustainable Products & Innovation

• Natural gas engines
• Combined heat and power systems
• Remanufactured engines and parts

Awards & Recognition

• Dow Jones Sustainability Index
• Newsweek's Top 500 Green Rankings
• World's Most Ethical Companies
• 100 Best Corporate Citizens
• InformationWeek 500

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Sustainability
• Energy Efficiency
• Water Management
• Waste Management
• Social Responsibility
• Governance

Environmental Achievements

• Exceeded energy use reduction goal by 27% compared to 2005 baseline (adjusted by sales)
• Exceeded GHG emissions reduction goal by 25% compared to 2005 baseline (adjusted by sales)
• Met direct water use reduction goal five years early in 2015 (33% reduction compared to 2010 baseline, adjusted by hours worked)
• Achieved water neutrality at 15 water-scarce sites
• Increased recycling rate to 90.4% in 2015

Social Achievements

• Cummins Environmental Challenge: 21,600 employees donated 72,600 hours on 88 projects, reducing 36,819 GHGs and planting 77,820 trees
• Annual June Environmental Month celebration of environmental stewardship

Governance Achievements

• Safety, Environment and Technology Committee of the Cummins Board of Directors advises on environmental and technological strategies, including climate change

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (water scarcity in certain regions)
• Changes in regulation (fuel/energy taxes, emission reporting obligations, product efficiency regulations)
• Changes in physical climate parameters (change in precipitation patterns, extreme weather events)
• Changing consumer behavior (preference for competing products)
• Fluctuating socio-economic conditions in emerging markets

Mitigation Strategies

• Robust energy efficiency program (central energy efficiency capital fund, Energy Champions program)
• Environmental data collection and tracking system
• Technology roadmaps to meet new GHG and fuel efficiency standards
• Comprehensive structure to measure, report, and reduce GHG emissions and energy use
• Broad research and development program investing in new technologies and fuels
• Watershed assessments to facilities identified as at risk, water conservation measures, increased water storage capacity, low/no water use processes

Supply Chain Management

Supplier Audits: 450 suppliers representing 40% of total spend engaged

Responsible Procurement

• Transportation management programs
• Disposable packaging waste requirements
• Responsible mineral sourcing requirements
• Prohibited materials disclosures
• Energy/water management programs

Climate-Related Risks & Opportunities

Physical Risks

• Inadequate or unreliable water supplies
• Operational disruptions due to extreme weather events

Transition Risks

• Changes in regulation
• Changes in consumer behavior
• Uncertainty surrounding new regulation

Opportunities

• Increased demand for fuel-efficient products
• Opportunities driven by renewable energy regulation
• Opportunities driven by product efficiency regulations and standards
• Opportunities driven by fuel/energy taxes and regulations
• Opportunities driven by emission reporting obligations
• Opportunities driven by air pollution limits
• Opportunities driven by international agreements

Reporting Standards

Frameworks Used: CDP, GRI, Greenhouse Gas Protocol

Certifications: ISO 50001 (9 sites certified in 2015, 7 more planned for 2016)

Third-party Assurance: Third-party limited assurance (GHG Cummins 2015 - CDP GHG Verification Statement Limited)

Sustainable Products & Innovation

• More than 70 products or product updates in 2015 addressing emissions and fuel efficiency
• Natural gas engines
• Electrical Waste Heat Recovery Turbine Expander

Awards & Recognition

• Robert W. Campbell Award (2014)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Economic
• Governance
• Safety
• Diversity

Environmental Achievements

• Exceeded 2015 energy and greenhouse gas reduction goals.
• Reached 2020 water goal five years early.
• Achieved a 36 percent reduction in energy intensity and a 36 percent reduction in GHG intensity (both adjusted for sales) from the 2005 baseline year.
• Reduced direct water use by 41 percent (adjusted for hours worked) since 2010.
• Recycled 90% of waste generated.
• Achieved “Zero Disposal” status at five sites.

Social Achievements

• Record 80% of eligible employees participated in community engagement.
• Implemented a new strategic vision for employee engagement.
• Expanded community engagement globally.
• Improved workplace conditions at a center for adults with disabilities in China.
• Increased retention rate between mentors and mentees in Big Brothers Big Sisters program.

Governance Achievements

• Increased participation in recruiting efforts to improve diversity.
• Investigated 1,851 reported code violations.
• Updated Cummins’ Supplier Code of Conduct.
• Implemented a safety pledge card campaign.

Climate Goals & Targets

Environmental Challenges

• Weak international sales due to market challenges.
• Need to reduce workforce by approximately 2,000 people.
• Maintaining progress on environmental goals despite increasing facility footprint.
• Addressing inconsistent emissions standards enforcement in some countries.
• Workplace violence incident.

Mitigation Strategies

• Restructured several operations to reduce costs and streamline operations.
• Continued investment in new products, technology, and strategic partnerships.
• Used tools and resources from programs like ISO 50001 and DOE’s SEP program to achieve environmental goals.
• Working with regulatory agencies to develop and enforce tougher emission standards.
• Implementing safety pledge card campaign and improving safety training.

Supply Chain Management

Supplier Audits: Thousands/year

Responsible Procurement

• Supplier Code of Conduct
• Conflict minerals policy
• Diversity procurement initiatives

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Renewable energy initiatives

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 50001, ISO 14001, OHSAS 18001

Third-party Assurance: Bureau Veritas Certification (BVC)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 11 (Sustainable Cities and Communities)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)

Various initiatives contribute to these goals through emissions reduction, renewable energy adoption, community development, and job creation.

Sustainable Products & Innovation

• Single Module aftertreatment system
• SmartAdvantage Powertrain
• Stop-start technology for buses
• Regenerative dynamometers

Awards & Recognition

• World’s Most Ethical Companies
• Dow Jones Sustainability Index
• CDP Climate Disclosure Leadership Index
• Gartner Top 25 Supply Chain Company
• Perr Innovation Award

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Achieved a 3.4 million metric ton annual run rate of CO2 reduction toward the company’s goal of a 3.5 million metric ton run rate per year. This equates to a goal of 15 million metric tons from baseline year or 1.6 percent.
• Reduced energy intensity by 25% at their global facilities and operations.
• Recycled 89.5% of the total waste generated at the global facilities and operations.
• Completed 94 capital projects with a total investment of $11.5 million and annual cost savings of $3.6 million.

Social Achievements

• Not disclosed

Governance Achievements

• Board-level oversight of climate-related issues.
• Safety, Environment and Technology Committee of the Board of Directors met four times in 2017.
• Incentives provided for the management of climate-related issues, including monetary rewards and recognition programs.

Climate Goals & Targets

Environmental Challenges

• Technology substitution of existing products with lower emissions options.
• Reduced demand for goods due to shifts in consumer preferences.
• Potential for inadequate or unreliable water supplies.
• Supplier delivery delays.
• Increased OEM vertical integration.

Mitigation Strategies

• Investment in new products and technologies, including electrified powertrains.
• Scenario planning to understand potential future outcomes.
• Water conservation measures, increased water storage capacity, and deployment of low/no water use processes.
• Development of alternative sourcing strategies.
• Continued innovation and critical examination of business practices.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of conduct featuring climate change KPIs
• Responsible mineral sourcing requirements
• Prohibited materials disclosures

Climate-Related Risks & Opportunities

Physical Risks

• Inadequate or unreliable water supplies

Transition Risks

• Technology substitution
• Reduced demand for goods due to shifts in consumer preferences
• Increased OEM vertical integration

Opportunities

• Development and expansion of low-emission goods and services
• Responsible material consumption
• Energy efficiency and renewable energy

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol

Certifications: ISO 50001

Third-party Assurance: Bureau Veritas North America, Inc.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Electric Truck AEOS
• Fuel-efficient engines
• Natural gas engines
• Engines that run on renewable fuels
• Single Module aftertreatment system
• HE250WG turbocharger

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance
• Economic

Environmental Achievements

• Surpassed 2020 goal of achieving an annual run rate reduction of 3.5 million metric tons of CO2, reaching 4.3 million metric tons.
• Achieved a 50% reduction in water intensity (water use adjusted for hours worked) compared to the 2010 baseline.
• Achieved a 29% reduction in energy intensity (energy adjusted for hours worked) compared to the 2010 baseline.

Social Achievements

• Launched Cummins Powers Women, a $11 million global grant commitment to advance women and girls.
• Improved health and safety metrics: 17% improvement in Contractor Incidence Rate, 9% improvement in employee Major Injury Rate, and 7% improvement in Incidence Rate.
• Exceeded $2 billion in global spending with suppliers who self-identify as diverse.

Governance Achievements

• Rolled out online training on sexual harassment to 32,000 employees and provided face-to-face training to top leaders.
• 33,499 employees completed Cummins’ Ethics Certification, including all board members.
• Investigated 2,215 Code of Conduct cases.

Climate Goals & Targets

Environmental Challenges

• Achieving the last few incremental improvements toward Cummins’ 2020 energy goal.
• Regulatory barriers and absence of waste management suppliers hindering recycling goal.
• Maintaining water intensity reduction performance while expanding.

Mitigation Strategies

• Implementing a recovery plan for 2019, increasing investment in energy efficiency and renewable energy projects.
• Working on high impact projects including implementation of total waste management suppliers and contracts with new recycling and recovery suppliers.
• Expanding work with sites in a water management program, including support of regenerative test cell projects and strategic capital funding for water reduction projects.

Supply Chain Management

Supplier Audits: 423 Eyes Open Audits

Responsible Procurement

• Supplier Code of Conduct
• Eyes Open Audits

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001, OHSAS 18001, ISO 50001

Third-party Assurance: Bureau Veritas

UN Sustainable Development Goals

• No Poverty
• Responsible Consumption and Production
• Affordable and Clean Energy
• Industry, Innovation and Infrastructure
• Decent Work and Economic Growth
• Quality Education
• Climate Action
• Gender Equality
• Clean Water and Sanitation
• Partnerships for the Goals

Sustainable Products & Innovation

• PowerDrive hybrid electric powertrain solutions
• Electric systems for city buses
• Electric powered mini excavator

Awards & Recognition

• Dow Jones Sustainability Indices
• Newsweek Green Rankings
• Barron's 100 Most Sustainable Companies
• FTSE4Good Index
• World's Most Ethical Companies
• America's Top Corporations for Women's Business Enterprises
• Corporate Equality Index
• Forbes Best Employers
• DiversityInc Top 50 Companies for Diversity
• Forbes Best Employers for Diversity
• Forbes Best Employers for Women

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced GHG emissions by 41% from 2010 baseline (intensity)
• Achieved 27% reduction in energy intensity from 2010 baseline
• Increased renewable energy share to approximately 5% of global electricity needs through on-site solar and VPPA
• Recycled 93% of global waste generated

Social Achievements

• Lowest Incidence Rate in company history
• Improved Occupational Illness Frequency Rate to 0.013
• Improved Lost Time Injury Frequency Rate to 1.045
• Increased women leaders in the workforce to 25%
• 1.4 million people impacted by Every Employee Every Community (EEEC) projects
• Over 550,000 hours of mandatory and non-mandatory training completed through Cummins Learning Center

Governance Achievements

• Expanded Board of Directors to 13 members, including five women and five from diverse backgrounds
• Established a new program—Cummins Advocating for Racial Equity (CARE)

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19 pandemic
• Water use in water-stressed areas (43% of total water use)
• Climate change risks and opportunities
• Cybersecurity threats

Mitigation Strategies

• Implemented 153 emission reduction initiatives
• Developed alternative sourcing strategies
• Science-based targets for GHG reduction
• Holistic cybersecurity approach including advanced technologies, governance, training, and innovative programming

Supply Chain Management

Supplier Audits: Top 80% of suppliers audited

Responsible Procurement

• Cummins Supplier Code of Conduct, which includes environmental, social, and governance guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Water scarcity

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and electrified powertrains

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001, ISO 45001, ISO 50001

Third-party Assurance: Apex

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Electrified powertrains, electrolyzers

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate action
• Diversity, equity and inclusion
• Community engagement
• Occupational health and safety
• Organizational resiliency

Environmental Achievements

• Reduced GHG emissions by 31% from 2018 baseline.
• Reduced VOC emissions by 45% from 2018 baseline.
• Achieved a 4.1% waste reduction as a percent of revenue from 2018 baseline.
• Reduced water consumption by 12.7% from 2018 baseline.
• Opened near net-zero logistics center in the U.K.

Social Achievements

• Delivered more than 45,000 vaccine shots globally.
• Cummins Powers Women impacted the lives of an estimated 26 million women and girls.
• Cummins Advocating for Racial Equity (CARE) invested $23.9 million to address systemic racism.
• Record $35.7 million in global community giving.
• More than 186,000 employee volunteer hours.

Governance Achievements

• Increased female representation on the board to 38.5%.
• Implemented a new initiative around Potential Serious Injuries and Fatalities (PSIF).
• Investigated 1,575 ethics cases.

Climate Goals & Targets

Environmental Challenges

• Global supply chain disruptions.
• COVID-19 pandemic.
• Achieving aggressive water reduction goals.
• Meeting aggressive waste reduction goals.

Mitigation Strategies

• Developed innovative solutions to manage supply shortages and ensure supplier continuity.
• Implemented a Safe Work Playbook.
• Launched Cummins Water Works initiative.
• Implemented initiatives to reduce packaging waste, process-derived waste, and general refuse.
• Expanded use of collaborative robots.

Supply Chain Management

Supplier Audits: Nearly 400 Eyes Open Audits in 2019

Responsible Procurement

• Supplier Code of Business Conduct

Climate-Related Risks & Opportunities

Opportunities

• Decarbonization as a growth opportunity

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISO 14001, ISO 45001, ISO 50001

Third-party Assurance: Apex

UN Sustainable Development Goals

• Goal 1
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 12
• Goal 13
• Goal 17

Cummins initiatives touch 17 goals with a special focus on 10 where it has the biggest impact.

Sustainable Products & Innovation

• Fuel agnostic engines
• Hydrogen-fueled engines
• Near-zero emission natural gas engine
• Fuel cells
• Electrolyzers
• Battery-electric technologies

Awards & Recognition

• S&P Dow Jones World and North American Sustainability Indices
• Forbes Best Companies for Diversity
• Ethisphere World’s Most Ethical Companies
• Prince Charles’ Terra Carta Seal
• Human Rights Campaign Foundation’s Corporate Equality Index
• Frost & Sullivan Institute’s Enlightened Leadership Best Practices Recognition
• EcoVadis Silver Medal for Sustainability Achievement
• Sustainalytics Industry Top Rated Badge
• Newsweek’s Most Responsible Companies
• Disability Equality Index Best Places to Work
• Wall Street Journal’s Management Top 250
• Barron’s America’s Most Sustainable Companies
• 3BL Media’s 100 Best Corporate Citizens

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity & Inclusion
• Community Engagement
• Health and Safety
• Governance
• Supply Chain Sustainability
• Human Rights

Environmental Achievements

• 31% absolute total GHG reduction (including acquisitions)
• 35% absolute reduction in GHG emissions from plants and facilities (excluding acquisitions)
• 15.6% reduction in water consumption (including acquisitions)
• 10.5% absolute total waste reduction (excluding acquisitions)
• 34% overall reduction in VOC emissions compared to 2018 baseline (including acquisitions)
• Second largest solar installation at Rocky Mount Engine Plant

Social Achievements

• 73% of employees participated in the Every Employee Every Community program
• Cummins Powers Women impacted 1 million+ women and girls
• Cummins Advocating for Racial Equity (CARE) helped 730 Black-owned enterprises
• Cummins Water Works generated approximately 5.9 billion gallons in annual water benefits
• Increased diversity on Cummins Leadership Team (nearly half women, a third people of color)

Governance Achievements

• 10 of 11 board members are independent directors
• Annual review of ESG strategy and challenges by the full Board
• Implementation of a new environmental justice policy
• Record year for global patents (623)

Climate Goals & Targets

Environmental Challenges

• Incorporating Meritor Inc. acquisition added complexity to achieving PLANET 2050 goals
• Supply chain disruptions
• Achieving water goal will be a challenge
• Increasingly complex projects to achieve fuel economy savings
• Cybersecurity threats

Mitigation Strategies

• Investing in energy efficiency improvements at new locations
• Global sustainability management programs
• Aggressive preventative maintenance programs, fixing leaks, optimizing processes
• Developing alternative water sources and re-using water
• Modernized email security technology, improved management controls, employee training

Supply Chain Management

Supplier Audits: 154/year (2022)

Responsible Procurement

• Supplier Code of Business Conduct
• Eyes Open Audits
• High-risk supplier identification and mitigation program

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Growth opportunity in decarbonization

Reporting Standards

Frameworks Used: GRI, CDP, TCFD, SASB, UNGC

Certifications: ISO 14001, ISO 45001, ISO 50001

Third-party Assurance: Apex

UN Sustainable Development Goals

• Goal 1
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 11
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 17

Cummins initiatives contribute to these goals through various programs and strategies

Sustainable Products & Innovation

• Fuel-agnostic engine platform
• X15N natural gas engine
• Fourth-generation hydrogen fuel-cell engine
• Electrolyzer technology
• Battery electric systems

Awards & Recognition

• Indiana Governor’s Award for Environmental Excellence
• World’s Most Ethical Company
• S&P Dow Jones World and North American Sustainability Indices
• Forbes Best Companies for Diversity
• Forbes Best Employers for Women

Environmental Metrics

ESG Focus Areas

• Climate Change Mitigation
• Community Engagement (Education, Equity, Environment)
• Diversity, Equity & Inclusion
• Health and Safety
• Supply Chain Sustainability
• Ethics and Compliance

Environmental Achievements

• Reduced Scope 1 and Scope 2 GHG emissions by 31% from 2018 baseline.
• Reduced absolute water use in facilities and operations by 14.7% compared to 2018 baseline.
• 91% of waste recycled, composted or recovered.
• Completed 24 onsite solar projects, reducing over 14,486 metric tons of CO2e annually.
• Cummins Water Works generated approximately 6.9 billion gallons in annual water benefits, surpassing the company's global water consumption.

Social Achievements

• 79% EEEC participation rate (61,000+ employees volunteered 343,000 hours).
• 3.2 million people impacted by community giving in 2023.
• Launched Cummins READY to support STEM education and lifelong learning.
• Cummins Powers Women served more than 1.5 million women and girls since 2018.

Governance Achievements

• Maintained an ESG rating of AAA by Morgan Stanley Capital International.
• Received the 2023 NACD Award for exemplary board practices related to DE&I.
• 138,962 Ethics and Compliance training course completions.
• 2,570 ethics investigations closed.

Climate Goals & Targets

Environmental Challenges

• Slower than anticipated adoption of new zero-emissions technologies.
• Increased GHG emissions in 2023 due to increased engine volumes and acquisitions.
• Increase in safety incidents (Incidence Rate and Severity Case Rate).

Mitigation Strategies

• Executing Destination Zero strategy (customer-driven, multi-solution approach).
• Investing $1.4 billion in R&D for new products and technology improvements.
• Implementing robust change management plans to support new business integrations and safety excellence.
• Developing a comprehensive plan to address the increase in safety incidents, focusing on safety culture, leadership accountability, and risk reduction.

Supply Chain Management

Supplier Audits: 206 Eyes Open Audits in 2023 (34% increase from 2022)

Responsible Procurement

• Supplier Code of Conduct
• Supplier diversity program ($3.6 billion directed toward diverse suppliers in 2023)
• Make Your Mark initiative

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Growth in zero-emissions solutions

Reporting Standards

Frameworks Used: GRI, CDP, TCFD, SASB, UNGC

Third-party Assurance: Apex

UN Sustainable Development Goals

• Goal 1
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 11
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 17

Report details how initiatives contribute to each SDG.

Sustainable Products & Innovation

• Cummins HELM™ platform
• Accelera™ by Cummins products (batteries, fuel cells, electrolyzers)
• Next-generation X15 engine

Awards & Recognition

• Morgan Stanley Capital International ESG rating of AAA
• 2023 NACD Award
• 100 Best Corporate Citizens
• America’s Most Just Companies