Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Community Engagement & Investment
• Corporate Governance
• Cybersecurity & Data Privacy
• Diversity & Inclusion
• Environmental Responsibility
• Ethics & Compliance
• Human & Labor Rights
• Innovation & Efficiency
• Occupational Health & Safety
• Product Safety & Quality
• Stakeholder Engagement
• Talent Attraction & Retention
• Tax Transparency

Environmental Achievements

• Reduced GHG emissions by 15% (Goal Met)
• Reduced water consumption by 34% (Goal Exceeded)
• Reduced hazardous waste generation by 21% (Goal Exceeded)
• Increased waste recycling rate to 94% (Goal Exceeded)
• 88% elimination of chlorinated & brominated solvents (In Progress)

Social Achievements

• Launched ELEVATE: Women in Leadership program
• Launched a focused Diversity & Inclusion strategy
• Spent more than $495 million with first-tier diverse suppliers in the US

Governance Achievements

• Completed first materiality assessment
• Established an ESG Steering Committee
• Annual ethics and compliance training for all employees

Climate Goals & Targets

Environmental Challenges

• Global water supply risks due to droughts, competition for water, climate change, and infrastructure limitations
• Climate change affecting business through extreme weather and climate events
• Wide range of business and compliance risks, including those associated with corruption

Mitigation Strategies

• Established site-specific water goals and implemented water best management practices
• Conducting a comprehensive climate risk assessment (results to be disclosed in 2021 report)
• Implementing Carrier’s Enterprise Risk Management program to identify, assess, and mitigate risks

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Supplier Excellence program

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters disrupting operations

Transition Risks

• Global climate change and related regulations negatively affecting business
• Unusually cool or warm weather depressing sales

Opportunities

• Developing solutions and technologies that reduce energy consumption and GHG emissions

Reporting Standards

Frameworks Used: GRI Standards: Core option, SASB, TCFD

Certifications: ISO 9001:2015 (more than 95% of global manufacturing sites), ISO 14001 (37% of global manufacturing facilities), OHSAS 18001 (14% of global manufacturing facilities, plans to convert to ISO 45001)

UN Sustainable Development Goals

• SDG 1
• SDG 2
• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 14
• SDG 15
• SDG 16

Sustainable Products & Innovation

• Toshiba Carrier Variable Refrigerant Flow rooftop unit
• AquaEdge 19DV chiller
• OptiPoint BACnet thermostats
• Vector HE trailer refrigeration units
• NaturaLINE container refrigeration system
• Edwards Signature Optica smoke alarms
• Kidde TruSense alarms
• Edwards EST4 fire alarm system
• Supra TRAC-Mini controller

Awards & Recognition

• Frost & Sullivan Frost Radar® best practices award for EcoEnergy Insights

Environmental Metrics

ESG Focus Areas

• Climate change
• Community engagement and investment
• Corporate governance
• Cybersecurity and data privacy
• Diversity and inclusion
• Environmental responsibility
• Ethics and compliance
• Human and labor rights
• Innovation and efficiency
• Occupational health and safety
• Product safety and quality
• Stakeholder engagement
• Talent attraction and retention
• Tax transparency

Environmental Achievements

• Reduced greenhouse gas emissions by 17% (MTCO2e) exceeding the 15% target
• Reduced water consumption by 44% (gallons) exceeding the 25% target
• Reduced hazardous waste generation by 23% (MT) exceeding the 10% target
• Increased waste recycling rate to 94% exceeding the 90% target
• Avoided approximately 68 million metric tons of GHG emissions through high-efficiency products and avoided food waste

Social Achievements

• Achieved an employee engagement score of 74, 2 points above the benchmark
• Increased global women executives to 31% and U.S. People of Color executives to 25% in 2020
• Supported Feeding America, providing over 20 million pounds of food to those in need

Governance Achievements

• Appointed a ninth board member, further enhancing board diversity and competencies
• Maintained a robust ethics and compliance program with no material incidents of corruption or bribery
• Achieved a perfect score on the Human Rights Campaign Foundation’s 2021 Corporate Equality Index

Climate Goals & Targets

Environmental Challenges

• Global water supply risks due to climate change
• Inconsistent international, regional, and national requirements associated with climate change regulations
• Regulatory and budgetary uncertainty associated with government incentives

Mitigation Strategies

• Set a goal to achieve water neutrality in operations by 2030, prioritizing water-scarce locations
• Implementing sustainable energy-reduction initiatives and investing in energy efficiency projects
• Continuous product innovation to ensure products align with global and regional regulatory standards

Supply Chain Management

Supplier Audits: Approximately 1,100 suppliers invited to complete EcoVadis assessment (goal of 80% coverage of direct factory spend)

Responsible Procurement

• Supplier Code of Conduct
• Supplier Excellence program
• Supplier Diversity Program
• Conflict Minerals compliance program

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions

Transition Risks

• Regulatory changes to curtail high GWP refrigerants
• Increased building energy efficiency requirements
• Shift away from fossil fuels

Opportunities

• Increased demand for energy-efficient products and services due to rising temperatures
• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 14001, ISO 45001, ISO 9001:2015 (more than 95% of manufacturing sites)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 1
• SDG 2
• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 14
• SDG 15
• SDG 16

Various initiatives throughout the report contribute to these goals

Sustainable Products & Innovation

• High-efficiency HVAC and refrigeration systems
• Products using lower GWP refrigerants
• Carrier Infinity air purifier
• Vector eCool all-electric refrigerated trailer

Awards & Recognition

• TIME’s 100 Best Inventions of 2020 (OptiClean Dual-Mode Air Scrubber)
• Top Project of the Year award in the 2020 Environment + Energy Leader Awards program (EcoEnergy Insights)

Environmental Metrics

ESG Focus Areas

• Climate change
• Community engagement and investment
• Corporate governance
• Cybersecurity and data privacy
• Environmental responsibility
• Ethics and compliance
• Human and labor rights
• Inclusion and diversity
• Innovation and efficiency
• Occupational health and safety
• Product safety and quality
• Stakeholder engagement
• Talent attraction and retention
• Tax transparency

Environmental Achievements

• Customers avoided approximately 137 million metric tons of GHG emissions since 2020 due to high-efficiency products and avoided food waste.
• EcoEnergy Insights saved customers half a billion kilowatt-hours of energy in 2021.
• Indianapolis manufacturing site achieved zero waste to landfill certification.
• Increased hazardous waste recycled by nearly 50% compared to 2020.
• Reduced Scope 1 and 2 GHG intensity by approximately 8% relative to 2020.

Social Achievements

• Engagement Score of 74 (at benchmark) in 2021 Pulse survey.
• Inclusion Score above benchmark in 2021 Inclusion, Diversity & Belonging Pulse survey.
• Global women executives increased from 20% in 2015 to 32% in 2021.
• U.S. People of Color professionals increased from 18% to 24% from 2015 to 2021.
• Launched Culture and Engagement Learning Series to equip people leaders.
• Launched “You Said. We Did.” internal communications campaign.
• Launched New People Manager Program.

Governance Achievements

• 88% of board directors are independent.
• 97% attendance at board meetings in 2021.
• 100% attendance at board committee meetings in 2021.
• Executive incentive compensation tied to progress against ESG goals.
• No supermajority shareowner voting requirements.

Climate Goals & Targets

Environmental Challenges

• Absolute Scope 1 and 2 GHG emissions increased by approximately 9% in 2021 due to business growth.
• Absolute water consumption increased relative to 2020.
• Supply chain risks due to material price volatility, availability, and potential disruptions from extreme weather events.
• Potential impacts of climate change on operations (rising sea levels, changing storm patterns, temperature changes).
• Inconsistent international, regional, and national requirements associated with climate change regulations.

Mitigation Strategies

• Investing in capital and operational investments and renewable energy to reduce absolute GHG emissions.
• Investing in carbon offset projects.
• Implementing best management practices to reduce water consumption (leak management, low-flow fixtures, water recycling).
• Implementing a responsible supply chain program and assessing key factory suppliers against program criteria.
• Developing climate-related scenario analysis to identify risks and opportunities and assess the company's resiliency.

Supply Chain Management

Supplier Audits: 80% of direct factory spend assessed against sustainability criteria in 2021 using EcoVadis.

Responsible Procurement

• Supplier Code of Conduct
• EcoVadis risk assessment
• Sustainability integrated into supplier documentation
• Minimum EcoVadis score of 45 for Carrier Preferred Suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water scarcity
• Rising sea levels

Transition Risks

• Regulatory changes (e.g., refrigerant restrictions)
• Market shifts (e.g., increased demand for energy-efficient buildings)
• Increased costs of compliance

Opportunities

• Development of energy-efficient products
• Expansion of sustainable cold chains

Reporting Standards

Frameworks Used: GRI Standards: Core option, SASB, TCFD

Certifications: ISO 9001:2015 (95% of manufacturing sites), ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 1
• SDG 2
• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 14
• SDG 15
• SDG 16

Carrier's initiatives contribute to these goals through various programs and operations.

Sustainable Products & Innovation

• NaturaLINE container refrigeration unit
• Vector eCool (electric refrigeration system for trailers)
• High-efficiency HVAC systems
• Low-GWP refrigerant solutions

Awards & Recognition

• Fast Company’s 2021 World Changing Ideas (Lynx platform)
• Tech Breakthrough’s 2021 AI and IoT awards (EcoEnergy Insights)

Environmental Metrics

ESG Focus Areas

• Climate change
• Environmental responsibility
• Innovation and efficiency
• Product safety and quality
• Cybersecurity and data privacy
• Stakeholder engagement
• Talent attraction and retention
• Occupational health and safety
• Inclusion and diversity
• Human and labor rights
• Community engagement and investment
• Ethics and compliance
• Corporate governance
• Tax transparency

Environmental Achievements

• Reduced Scope 1 and 2 emissions from 2021 levels
• Reduced energy intensity by approximately 21% compared with 2021
• Reduced water withdrawal by approximately 11% compared with 2021
• Three additional manufacturing sites achieved zero waste to landfill certification in 2022
• High-efficiency and lower GWP refrigerant products enabled customers to avoid more than 212 million metric tons of GHG emissions since 2020

Social Achievements

• Pulse survey results showed Engagement Score was 76 and Inclusion Score was 74, both above benchmarks
• Supported more than 1,100 civic, cultural, economic and social welfare organizations through the Carrier Matching Gifts Program
• Purchased $312 million of products and services from first- and second-tier small and diverse-owned businesses in the United States – a 55% increase in two years
• Recordable injuries decreased by 35% compared with 2021

Governance Achievements

• Elevated primary responsibility for Carrier’s ESG program, goals and objectives, including climate-related matters, to our Board of Directors
• Amended Corporate Governance Principles and committee charters to further refine the Board’s oversight of ESG

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Climate change impacts
• Cybersecurity threats
• Competitive landscape
• Human capital management challenges
• ESG and sustainability disclosure landscape is rapidly evolving

Mitigation Strategies

• Implemented an enterprise risk management program
• Developed alternative sourcing strategies
• Expanded security awareness training and automated phishing simulations
• Implemented an Enterprise Defender program
• Investing in sustainable design, including energy-efficient solutions, lower global warming potential (GWP) refrigerants and more electric technologies
• Leveraging service and digital solutions to optimize performance
• Annually discloses progress toward climate change goals

Supply Chain Management

Supplier Audits: 59% of Carrier’s product spend assessed against sustainability criteria in 2022 using EcoVadis

Responsible Procurement

• Supplier Code of Conduct
• Supplier Quality Manual
• Standard Terms and Conditions
• Sustainability and human rights principles embedded in procurement

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Natural disasters

Transition Risks

• Regulatory changes
• Market shifts
• Disruptive technologies

Opportunities

• Development of energy-efficient products
• Growth in heat pump market
• Expansion of renewable energy solutions

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards, TCFD

Certifications: ISO 14001, ISO 45001, ISO 9001:2015 (95% of manufacturing sites)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 10
• SDG 11
• SDG 12
• SDG 13
• SDG 14
• SDG 15
• SDG 16

The report details how various initiatives contribute to these goals throughout the document.

Sustainable Products & Innovation

• High-efficiency and lower GWP HVAC systems
• Electric building and cold chain technologies
• Natural refrigerant technologies
• Abound and Lynx platforms

Awards & Recognition

• No. 9 of 100 Most Sustainable Companies (Barron’s, 2022)
• Carbon Clean200 (Corporate Knights, 2022)
• Best Places to Work for LGBTQ+ Equality (Human Rights Campaign Foundation, 2022)
• Prime ESG Corporate Rating (ISS ESG, 2022)
• ESG Leader Rating (MSCI ESG Ratings, 2022)
• America’s Most Responsible Companies (Newsweek, 2022)
• ESG Industry Top-Rated Company (Sustainalytics, 2022)
• 2022 CSO50 award winner (Global Product Cybersecurity Program)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Stewardship
• Waste Management
• Sustainable Innovation
• Workforce Diversity & Inclusion
• Employee Well-being
• Health & Safety
• Corporate Social Responsibility
• Responsible Supply Chains
• Ethics & Compliance
• Governance

Environmental Achievements

• Reduced Scope 1 emissions by 18%, with 27,574 tCO2e directly attributed to emission-reduction projects.
• Reduced operational emissions by 28,009 tCO2e (7%).
• Reduced energy consumption by 8% compared with 2021.
• Reduced refrigerant leaks by 40% relative to the previous year.
• Reduced emissions from natural gas consumption by 15% relative to 2022.
• 14 manufacturing sites achieved zero waste to landfill certification since 2020.
• Recycled more than 54,000 metric tons (87%) of industrial waste.
• Reduced overall waste generation by 9,488 metric tons (13%) compared with 2022.

Social Achievements

• Engagement and inclusion scores exceeded benchmark on Pulse surveys (76 and 74 respectively).
• 5% reduction in voluntary employee turnover compared with 2022.
• 30% decrease in recordable injuries compared with 2021.
• Invested over $10 million in charitable giving and matching gifts.
• Nearly 12,000 employee volunteer hours logged in 2023.

Governance Achievements

• Introduced Leading People The Carrier Way, an extension of The Carrier Way focusing on talent development and leadership.
• Implemented Hiring The Carrier Way to align talent acquisition with company values.
• Established an internal capital expenditure fund targeted at reducing GHG emissions and energy consumption.
• Expanded security awareness training and automated phishing simulations.

Climate Goals & Targets

Environmental Challenges

• Shortage of HVAC technicians.
• Climate change impacts (extreme weather, energy demand).
• Supply chain disruptions.
• Cybersecurity threats.

Mitigation Strategies

• Opened a Technical Training Center to train HVAC technicians.
• Developed energy-efficient and electric heating solutions.
• Implemented an enterprise risk management program.
• Expanded security awareness training and implemented an Enterprise Defender program.

Supply Chain Management

Supplier Audits: 80%+ of direct supplier spend covered by sustainability screening

Responsible Procurement

• Supplier Code of Conduct
• Sustainability screening
• EcoVadis assessments
• Carrier Alliance program

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Growth in renewable energy solutions

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards, TCFD

Certifications: ISO 9001:2015 (98% of manufacturing sites), ISO 14001 (22 facilities), ISO 45001 (20 facilities)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 8 (Decent Work and Economic Growth)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)

Carrier's initiatives contribute to these goals through energy efficiency, sustainable products, responsible supply chains, and community engagement.

Sustainable Products & Innovation

• Energy-efficient heat pumps
• All-electric refrigeration units
• Connected technologies
• Products using lower GWP refrigerants

Awards & Recognition

• Barron’s 100 Most Sustainable Companies
• Carbon Clean200
• EcoVadis Silver Medal
• Forbes World’s Best Employers
• Fortune World’s Most Admired Companies
• Human Rights Campaign Foundation Corporate Equality Index
• ISS ESG Prime ESG Corporate Rating
• MSCI ESG Ratings ESG Leader Rating
• Newsweek America’s Most Responsible Companies
• Sustainalytics ESG Industry Top-Rated Company
• TIME World’s Best Companies