Climate Change Data

Environmental Metrics

ESG Focus Areas

• Workplace safety
• Workforce development
• Environmental management

Environmental Achievements

• Reduced Toromont Cat’s Greenhouse Gas Emissions Intensity Ratio by 10% (exclusive of acquired operations)
• Kept over three million tonnes of equipment from the scrap yard through remanufacturing
• Increased landfill diversion by an average of 25% over three years in participating branches of Toromont Cat Central

Social Achievements

• Completed 51,000 hours of employee training in 2020 despite COVID-19 challenges
• Added virtual wellness workshops in partnership with industry leaders
• Minimized work disruptions for employees through training opportunities, work from home, and government programs

Governance Achievements

• Strong governance framework created value for stakeholders, enhanced long-term corporate sustainability, and reduced business risk
• Board’s ESG Committee oversees and monitors Toromont’s ESG programs
• Code of Conduct reviewed annually by the Board and amended as appropriate

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacted in-person training and some operations
• Limited supply of skilled workers
• Low representation of women in skilled trades

Mitigation Strategies

• Implemented online training and remote work resources
• Continued student apprenticeships and partnerships with vocational schools
• Participated in events promoting skilled trades to women and girls

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct enshrines key values and principles from corporate Code of Conduct

Climate-Related Risks & Opportunities

Opportunities

• Development of sales and service of battery electric, hybrid, and other alternative energy machines

Sustainable Products & Innovation

• Battery electric, hybrid, and other alternative energy machines

Awards & Recognition

• The Globe and Mail’s “Women Lead Here” feature

Environmental Metrics

ESG Focus Areas

• Safety
• Operational footprint (emissions, water, waste, hazardous materials)
• Sustainable products/services/technologies
• Training & development
• Recruitment & retention
• Diversity, equity & inclusion
• Indigenous engagement
• Accountability and aligning executive compensation
• Code of Conduct
• Paying our fair share of taxes

Environmental Achievements

• Reduced TRIR company-wide by 36% over the past 5 years, reduced lost-time injuries by 50% over the same period
• 80% of Toromont locations achieved a TRIR of zero
• Approximate total emissions for 2021 at 77,207 CO2 equivalent tonnes (Scope 1, 2 and limited 3), a 2.3% increase from 2020
• Continued to manage our fleet emissions by optimizing fleet dispatch, using telematics, operating with an anti-idling policy, and employing Auxiliary Power Units on service vehicles
• Minimized the release of nitrogen oxide and sulfur during generator and engine testing
• Maintained focus on reducing emissions, energy use and water consumption within facilities
• Reinforced commitment to landfill diversion by expanding Zero Waste programs
• Expanded the green procurement of office supplies and uniforms
• Provided training on safely handling hazardous materials
• Rebuilt 90 machines and remanufactured almost 4,400 components
• Discontinued CIMCO sales of all high GWP refrigerants
• Booked orders for energy-efficient machines and advanced technologies

Social Achievements

• Delivered 100,000+ hours of learning and development to employees
• Maintained average workforce tenure of 10+ years
• Increased apprenticeship positions by 31% from 2020
• Published first Indigenous Engagement Report
• Maintained joint ventures with Inuit, Innu and Cree First Nations
• Tied variable compensation of senior leaders to TRIR improvement
• Developed a performance-based long-term incentive program for introduction in 2022

Governance Achievements

• Annual bonus tied to personal objectives as well as company objectives including TRIR
• Confirmed employee adherence with Code of Conduct
• Paid taxes at an effective tax rate of 27.2%

Climate Goals & Targets

Environmental Challenges

• Climate change presents a risk and challenge to society, our markets and Toromont
• Competitive and undersupplied market for talent
• Need for continuous development of leaders

Mitigation Strategies

• Address climate-related risks and embrace solutions that create business opportunities
• Employ a variety of recruitment and retention strategies
• Advance and apply organizational design and leadership enablement strategies
• Implement new succession planning programs and tools
• Implement UKG-Pro HR Information System

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and services

Sustainable Products & Innovation

• Battery Electric Vehicles (BEVs)
• Electric rope shovels and electric hydraulic mining shovels
• CIMCO Net Zero Naturally family of energy-reducing refrigeration systems

Environmental Metrics

ESG Focus Areas

• Operational footprint (emissions, water, waste, hazardous materials)
• Sustainable products and services
• Circular economy
• Health and safety
• Building capacity (Recruitment, Learning and enablement, Retention, Diversity, equity and inclusion)
• Accountability and executive compensation
• Code of Conduct
• Cybersecurity and data privacy
• Paying our fair share of taxes

Environmental Achievements

• ~62,300 CO2 equivalent tonnes (Scope 1 and 2) were emitted in 2022 from measured operations
• 400+ trees were planted in the Toromont Forest
• Low waste programs along with various forms of recycling, and the use of paperless reporting helped to reduce our environmental footprint
• Water recycling systems were employed at 15 Battlefield locations
• 1st Caterpillar autonomous mining trucks were delivered in our territories
• $1.8B of revenue was generated in 2022 by providing product support for our customers, 16% more than in 2021
• 77% of Toromont Cat’s eligible installed base consists of connected assets
• 91% of CIMCO’s 2022 systems’ orders use natural, non-ozone-depleting refrigerants
• 13% year-over-year increase in the ratio of remanufactured components to total parts sales in 2022
• 137,000 square feet of new remanufacturing capacity is under construction in Bradford, Ontario
• 9.6% revenue growth was generated from the provision of used and rental equipment in 2022 over 2021

Social Achievements

• 80% of Toromont’s locations achieved a Total Recordable Injury Frequency Rate of zero in 2022 and our TRIR improved by 31% over 2021
• 50+ Toromont leaders completed Mental Health Certification training in 2022
• ~50% of our workforce participated in the Toromont Employee Share Purchase Plan in 2022
• 9% growth in our technician and apprentice population year over year
• 430 people were added to our workforce in 2022, a 7% increase over 2021
• 77,000 hours devoted to workforce training in 2022 including 40,000 hours for technicians and apprentices
• 11 years was the average tenure of Toromont employees in 2022 while our workforce grew 7%
• 15 years is the average tenure of our senior leadership team

Governance Achievements

• LTIP our new Long-Term Incentive Plan with three-year performance targets was implemented in 2022
• Annual bonus opportunities for senior leaders are tied to safety results and other important ESG outcomes
• 100% of Toromont employees read and sign our Code of Conduct
• 100% of employees received mandatory training in IT security awareness
• 26.6% was our effective corporate income tax rate in 2022

Climate Goals & Targets

Environmental Challenges

• supply chain shortages
• inflation
• scarcity of skilled labour
• lingering impacts of the Covid-19 pandemic
• Climate change regulatory risk that could impact operating costs
• Compliance risk related to environmental laws and regulations
• Climate change events can pose physical risks to our operations

Mitigation Strategies

• expansion and evolution of product and service offerings
• business continuity plans
• proactive manner to address more stringent regulations
• replacement strategy to improve fuel efficiency per kilometer driven
• intelligent software to optimize dispatch
• anti-idling policy
• Auxiliary Power Units on service trucks
• training and telematics to monitor and encourage responsible driver behaviour
• Investments in energy-efficient LED lights and low-flow toilets
• water recycling and steam methods to clean equipment
• optimized facility footprint
• selective catalytic reduction equipment
• waste reduction programs, recycling efforts
• paperless reporting systems

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Climate change events

Transition Risks

• demand for certain existing products and services may change and diminish over time
• carbon pricing

Opportunities

• meet customers’ needs for environmentally sustainable products and services

Reporting Standards

Frameworks Used: TCFD, SASB, ISSB

Sustainable Products & Innovation

• energy-efficient equipment
• machines that run on electric energy
• electric machines including forklifts
• hybrid lift equipment
• hybrid light towers, solar-powered construction signs, electric air compressors
• hybrid and Cat 300.9D VPS electric drive mini excavators
• fully autonomous mining trucks
• automated dozers, wheel loaders, excavators, skid steer and compact track loaders
• Automated Guided Vehicle systems
• power generation systems
• combined heat and power
• landfill gas-to-energy
• battery energy storage systems
• solar energy systems
• generators capable of running on 100% hydrogen fuel
• Net Zero Naturally line-up of refrigeration equipment

Awards & Recognition

• Local Leader in Greater Toronto (United Way)

Environmental Metrics

ESG Focus Areas

• Operational footprint (emissions, water, waste, hazardous materials)
• Sustainable products, services and technology
• Circular economy
• Health and safety
• Building capacity (Recruitment, Learning and development, Retention and engagement, Diversity, equity and inclusion)
• Accountability and executive compensation
• Code of Conduct
• Cybersecurity and data privacy
• Paying our fair share of taxes

Environmental Achievements

• Reduced Scope 1 and 2 emissions to approximately 56,500 CO2 equivalent tonnes in 2023.
• Planted 600+ trees in the Toromont Forest.
• Reduced environmental footprint through low waste programs and recycling.
• Employed water recycling systems at 17 Battlefield locations.
• Opened a new 143,000 sq ft Remanufacturing Centre in Bradford, Ontario

Social Achievements

• 84% of Toromont’s locations achieved a Total Recordable Injury Frequency Rate of zero in 2023, with overall TRIR improving by 25% over 2022.
• ~150 Toromont leaders completed Mental Health Certification training.
• 47% of the workforce participated in the Toromont Employee Share Purchase Plan.
• 7% growth in technician and apprentice population year over year.
• Total workforce increased by 5% in 2023 compared to 2022.
• ~110,000 hours devoted to workforce training in 2023.

Governance Achievements

• Maintained high-performance, decentralized culture.
• Linked executive incentive compensation to goals including sustainability matters.
• 100% of Toromont employees read and signed our Code of Conduct.
• 100% of employees received mandatory training in IT security awareness.
• Published first Report on Modern Slavery.

Climate Goals & Targets

Environmental Challenges

• Climate change regulatory risk impacting operating costs.
• Climate change events posing physical risks to operations.
• Compliance risk related to environmental laws and regulations.
• Competitive and undersupplied market for talent.

Mitigation Strategies

• Expansion and evolution of product and service offerings.
• Business continuity plans.
• Proactive compliance efforts.
• Detailed planning, smart investments, and ongoing communications to enhance ability to attract, develop, retain and engage a healthy and committed workforce.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Climate change events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Meeting customer needs for environmentally sustainable products and services

Reporting Standards

Frameworks Used: ISSB S1, ISSB S2

Sustainable Products & Innovation

• Diesel electric equipment
• Fully electric equipment
• Power assist technologies
• CIMCO thermal management solutions
• Cat MineStar™ Solutions

Awards & Recognition

• United Way Local Leader