Climate Change Data

Environmental Metrics

ESG Focus Areas

• Safety
• Environment
• People
• Community Investment
• Governance

Environmental Achievements

• Zero reportable spills in 2017
• Implemented GHG protocol for consistent reporting and tracking
• 29% energy savings in UK facilities with new heating control system
• Reused 70-90% of wooden panels from shipping crates in Chile

Social Achievements

• Launched first global inclusion and diversity (I&D) strategy and five-year roadmap
• 89% employee participation in annual opinion survey
• Implemented innovative fundraising program in South America, funding 9 social projects with 683 volunteer hours
• Partnerships with Actua (Canada), ComunidadMujer (South America), and STEM Learning (UK) to support STEM education

Governance Achievements

• Established global and regional sustainability committees
• Board of Directors comprised 14 members, with all but the CEO being independent
• Approved policies including Code of Conduct, Corporate Disclosure Policy, Board Diversity Policy, and others

Climate Goals & Targets

Environmental Challenges

• Reducing GHG emissions from fleet and facilities
• Increasing women's representation in leadership roles
• Minimizing spills and releases in operations

Mitigation Strategies

• GPS tracking of vehicles to improve driving behavior
• Replacing pickup trucks with eco-boost models
• Installing power packs in service trucks
• Implementing global I&D strategy and roadmap
• Implementing spill prevention controls and emergency response plans

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards

Sustainable Products & Innovation

• Caterpillar’s Tier 4 equipment
• Fuel-efficient and hybrid equipment
• Power solutions using alternative fuels

Environmental Metrics

ESG Focus Areas

• Safety and Health
• Inclusion and Diversity
• Employee and Leadership Development
• GHG Emissions and Energy Use
• Waste Management
• Spills and Wastewater
• Customer Safety
• Customer Performance and Loyalty
• Product Stewardship
• Responsible Supply Chain
• Community Investment
• Ethics and Governance
• Data Governance and Cybersecurity

Environmental Achievements

• Reduced absolute Scope 1 and 2 GHG emissions by 6% from 2020
• Increased GHG reduction target from 20% to 40% by 2027 from 2017 baseline
• Recycled 5,545 tonnes of non-hazardous and 2,562 tonnes of hazardous waste in 2021
• Reduced GHG emissions from freight by more than 600 tCO2e in 2021 through increased sea freight

Social Achievements

• Rolled out Global Health and Wellbeing program
• 12% reduction in total injury frequency globally compared to 2020
• Launched 6 new Employee Resource Groups
• 713 employee volunteer hours in STEM outreach programs
• More than 1,000 employees attended virtual training courses and completed over 71,000 digital courses

Governance Achievements

• 79% of employees completed annual Code of Conduct training
• Developed a global guideline for ethics investigations
• Conducted discrimination and harassment global maturity assessment

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on people, customers, communities and operations
• Workplace accident in Canada resulting in a fatality and injury
• Supply chain disruptions
• Climate change challenges

Mitigation Strategies

• Flexible work program
• Mental health support and training
• COVID-19 prevention protocols and vaccine disclosure policy
• Improved safety standards and training
• Increased investment in renewable energy, energy efficiency, and fleet improvements
• Development of alternative sourcing strategies
• Implementation of a formal flexible work model

Supply Chain Management

Supplier Audits: Approximately 2000 Tier 1 suppliers signed the Supplier Code of Conduct in 2021

Responsible Procurement

• Supplier Code of Conduct
• Scorecard for environmental and social factors

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water stress in South America

Transition Risks

• Climate policies impacting license to operate
• Stakeholder pressure to reduce emissions
• Increased operating costs from carbon pricing

Opportunities

• Increased demand for natural gas and other transition fuels
• Growth in metals mining for low-carbon technologies
• Opportunities related to electrification and autonomy

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Third-party Assurance: Deloitte (limited assurance on GHG metrics)

Sustainable Products & Innovation

• Caterpillar’s R1700XE Underground Load Haul Dump Truck
• D11 XE electric drive dozer

Awards & Recognition

• Canada’s Safest Logistics and Supply Chain Employer (4Refuel)
• Royal Society for the Prevention of Accidents’ Health and Safety Team of the Year (Finning UK)

Environmental Metrics

ESG Focus Areas

• People
• Environment
• Customers
• Communities
• Governance & Ethics

Environmental Achievements

• 60% reduction in the frequency of significant incidents in 2022 compared to 2021
• Increased procurement of renewable electricity for facilities in South America
• Implemented energy/GHG reduction initiatives at numerous facilities and operations, including switching to renewable electricity and replacement of aging or outdated machinery with more energy efficient equipment.
• Pilot project using hydrogenated vegetable oil (HVO) in workshop heaters and service vehicles in the UK.
• Idling reduction program for fleet in Canada.
• 3,725 tonnes of metal recycled in 2022

Social Achievements

• Launched CUBIQ™ Sustainability Dashboard for mining and construction customers, which sets a baseline for a company’s environmental goals, enabling them to measure and monitor their CO2 emissions, and recommends actions to improve operational efficiency.
• Reinforced support for STEM education for women and girls, Indigenous youth, and disadvantaged communities.
• Encouraged employee participation in mentoring and volunteerism.
• Improved safety performance among CRPs (Certified Refueling Professionals) at 4Refuel in 2022.
• Installation of Lytx cameras in 4Refuel trucks to improve fleet safety.

Governance Achievements

• Improvements to the ethics program, including adopting global guidelines for investigations and consistent application of processes to ensure employee concerns are appropriately investigated and addressed.
• Enhanced cybersecurity measures, including a retainer with a third-party cybersecurity technology company and continuous review of security controls.

Climate Goals & Targets

Environmental Challenges

• Increased absolute GHG emissions in 2022 due to increased business activity.
• Potential risks of spills from equipment servicing activities and chemical storage.
• Increased operating costs due to carbon pricing and climate policies.
• Acute climate events impacting operations and customer operations.
• Water stress/drought potentially impacting operations in South America.

Mitigation Strategies

• Coordinating a change of power supply contracts to renewable energy to achieve a 40% emissions reduction by 2027.
• Implementing strict procedures to prevent and manage spills.
• Implementing energy/GHG reduction initiatives.
• Developing products and services to help customers decarbonize their operations.
• Developing enhanced service offerings and adapting business models to capture opportunities related to the energy transition.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Acute climate events (forest fires, extreme weather)
• Increasing climate stressors in South America (water stress/drought)

Transition Risks

• Climate policies impacting license to operate
• Stakeholder pressure to reduce emissions
• Increased operating costs from carbon pricing

Opportunities

• Developing products and services for natural gas and other transition fuels
• Positioning as a low-emissions partner to the copper and lithium mining industries
• Developing enhanced service offerings and adapting business models for the energy transition
• Helping customers achieve emission reduction goals through performance solutions
• Building climate-resilient infrastructure

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISO 45001

Third-party Assurance: Deloitte (limited assurance on GHG metrics)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 13 (Climate Action)

Finning's activities directly support these SDGs through promoting STEM education, providing equipment and energy solutions, reducing emissions, and investing in technology and training.

Sustainable Products & Innovation

• CUBIQ™ Sustainability Dashboard
• Electric drive trucks

Environmental Metrics

ESG Focus Areas

• GHG emissions reduction
• Climate change
• Sustainability
• Ethics
• Governance
• Cybersecurity
• People

Environmental Achievements

• Target to reduce absolute Scope 1 and 2 GHG emissions by 40% by 2027 (from a 2017 baseline)
• Significant contribution to the circular economy through component remanufacturing

Social Achievements

• Ongoing leadership and team assessments, employee pulse surveys, and employee experience surveys to improve employee engagement
• Various learning and development options for employees, including diversity, equity and inclusion training

Governance Achievements

• Annual review of the Code of Conduct by the Board and senior management
• Establishment of Global and Regional Ethics Committees to address Code violations
• Whistleblower Policy to enable confidential reporting of Code violations

Climate Goals & Targets

Environmental Challenges

• Cybersecurity threats
• International operations risks (political and economic instability, regulatory changes, currency fluctuations)
• Economic volatility and cyclical industry conditions
• Government regulation changes
• Climate change (transition and physical risks)
• Relationship with Caterpillar (supply chain disruptions, product allocation)
• Key personnel retention
• Competition
• Growth initiatives execution
• Long-term product support contracts management
• Complex power and energy systems contracts management
• Defined benefit pension plan funding
• Insurance coverage adequacy
• Repurchase commitments and guarantees
• Future warranty claims

Mitigation Strategies

• Comprehensive cybersecurity program, security controls, training, and incident response plan
• Close monitoring of foreign investment risks, mitigation strategies for each operating region
• Diversification of business, focus on resilient product support, cost optimization, and expansion into used equipment and power systems
• Compliance programs in each business unit, Board committees oversight
• Strategy to manage climate change risks and opportunities, GHG emissions reduction target
• Close collaboration with Caterpillar to mitigate supply chain issues, utilization of rental assets and remanufacturing capabilities
• Human resources initiatives (training, succession plans, compensation programs)
• Superior product quality, service capability, distribution network, and customer relationships
• Rigorous project management process
• Careful contract bidding, cost monitoring, and preventative maintenance
• Processes and controls to manage complex contracts, cost monitoring, and proactive mitigation actions
• Investment strategy to match assets and liabilities, Board oversight
• Insurance program, risk analysis, and professional advisor recommendations
• Quarterly review of guarantees, provisions for potential losses
• Annual review of warranty offerings, product improvement programs, and insurance

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct (addresses environmental, ethical, and social expectations)

Climate-Related Risks & Opportunities

Physical Risks

• Acute climate events (forest fires, extreme weather)
• Increasing climate stressors in South America (water stress/drought)
• Employee health and safety risks

Transition Risks

• Climate policies impacting license to operate
• Stakeholder pressure to reduce emissions
• Increased operating costs

Opportunities

• Energy transition (transition fuels, metals for low-carbon economy)
• Electrification/autonomy
• Process efficiency
• Internal GHG emissions reduction
• Climate-resilient infrastructure

Reporting Standards

Frameworks Used: TCFD, SASB, GRI

Certifications: Cyber Security Essentials Plus (UK & Ireland)

Sustainable Products & Innovation

• Lower emissions equipment
• Renewable power solutions
• CUBIQ™ Sustainability Dashboard