Climate Change Data

Environmental Metrics

ESG Focus Areas

• Emissions reduction
• Recycling
• Minimizing environmental footprint
• Employee safety
• Diversity initiatives

Environmental Achievements

• Implemented several strategies to reduce emissions, recycle, and minimize environmental footprint

Social Achievements

• Actively seeks to support diversity initiatives in its hiring and employment practices
• Sixty percent (60%) of our executive officers are female and our executive team represents three different national origins.
• Several of our businesses have onsite medical clinics for employees and their families.
• Our companies offer several health and welfare programs to employees to promote fitness and wellness and preventative healthcare.
• Our employees are offered a confidential employee assistance program that provides professional counseling to employees and their family members.

Governance Achievements

• Board of directors recently reviewed the Company’s historical commitment to principles of corporate and social responsibility.
• The Board and its committees will continue to assist the Company in its oversight of corporate social responsibilities, significant public policy issues, health and safety, and climate-change related trends.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic causing significant economic disruption globally, impacting sales, production, workforce, and supply chain.
• Brexit and its potential impact on UK and EU operations.
• Intense competition in both hydraulics and electronics markets.
• Fluctuations in raw material prices and potential supply chain disruptions.
• Risks related to sustainability, corporate social responsibility, and reputation.

Mitigation Strategies

• Implemented multiple cost-saving measures (reduced consultants, adjusted labor base, reduced spending)
• Monitored Brexit situation and planned for potential impact (identified mitigating factors)
• Continued investment in R&D and new product development
• Increased certain purchased parts inventories to mitigate potential supplier constraints
• Took significant measures to ensure the health and safety of employees during the pandemic.
• Continued to work with stakeholders to address the global pandemic.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental stewardship
• Employee safety
• Diversity initiatives

Environmental Achievements

• Implemented several strategies to reduce emissions, recycle, and minimize environmental footprint
• Advancing projects to reduce the global impact of operating activities
• Moving electronics manufacturing to lead-free processes

Social Achievements

• Developed and launched a Career Development Program
• Renewed Leadership Development programs
• Several businesses have onsite medical clinics for employees and their families
• Offer several health and welfare programs to employees to promote fitness and wellness and preventative healthcare
• Employees are offered a confidential employee assistance program

Governance Achievements

• Board of directors recently reviewed the Company’s historical commitment to principles of corporate and social responsibility
• Board and its committees will continue to assist the Company in its oversight of corporate social responsibilities, significant public policy issues, health and safety and climate-change related trends

Climate Goals & Targets

Environmental Challenges

• Supply chain disruption and potential inability to procure goods
• Inflationary pressures on operating costs (labor, supplies, transportation)
• Supply shortages for particular materials delaying production or increasing manufacturing costs
• Disruption to workforce from the COVID-19 pandemic
• Constraints on ability to source certain electronic and other components
• Increased costs for supplies and rising fuel costs increasing transportation costs
• Potential impacts of climate change on operations
• Intense competition in both Hydraulics and Electronics segments

Mitigation Strategies

• Increased procurement efforts and production schedule adjustments
• Implementing price increases to offset increased costs
• Alternative delivery arrangements for supply chain disruptions
• Reallocating resources, attending job fairs, and increasing wages to minimize impact of competitive labor markets
• Monitoring laws, regulations, and executive orders regarding COVID-19 requirements
• Developing shared operations strategies across companies to leverage manufacturing capabilities
• Driving “in the region, for the region” manufacturing to shorten lead times, reduce inventory, optimize cost and mitigate risks
• Continuously driving improvements in operational performance leveraging Lean Six Sigma best practices and automation

Supply Chain Management

Responsible Procurement

• Supply chains comply with Conflict Minerals standards

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency of extreme weather causing disruption to production and distribution

Transition Risks

• New legislation or regulations and customer requirements related to sustainability
• Restrictions, caps, taxes, or controls on greenhouse gas emissions

Awards & Recognition

• John Deere Supplier Innovation Award for 2020

Environmental Metrics

ESG Focus Areas

• Emissions reduction
• Recycling
• Minimizing environmental footprint
• Employee safety
• Diversity initiatives

Environmental Achievements

• Implemented several strategies to reduce emissions, recycle, and minimize environmental footprint (details not quantified).

Social Achievements

• Actively seeks to support diversity initiatives in its hiring and employment practices.
• Several of our businesses have onsite medical clinics for employees and their families.
• Our companies offer several health and welfare programs to employees to promote fitness and wellness and preventative healthcare.
• Our employees are offered a confidential employee assistance program that provides professional counseling to employees and their family members.

Governance Achievements

• The board of directors recently reviewed the Company’s historical commitment to principles of corporate and social responsibility.
• The Board and its committees will continue to assist the Company in its oversight of corporate social responsibilities, significant public policy issues, health and safety and climate-change related trends.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to global economic conditions, including inflation, changes in the cost or availability of energy, transportation and other necessary supplies and services, as well as the impact of tariffs.
• Supply chain disruptions due to the COVID-19 pandemic, including periodic shutdowns in China and workforce absenteeism.
• Increased costs for supplies and transportation.
• Sharp decline in demand for electronics products in the health and wellness end market.
• Constraints related to sourcing certain electronic and other components.

Mitigation Strategies

• Periodic purchases, future delivery purchases, long-term contracts, sales price adjustments and certain derivative instruments to mitigate increased costs.
• Alternative delivery arrangements for supply chain disruptions.
• Production schedule adjustments and product redesigns to address component shortages.
• Restructuring activities to improve global cost structure.
• Procurement efforts to mitigate supply chain constraints.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency of extreme weather could cause increased incidence of disruption to the production and distribution of our products.

Transition Risks

• Legislation or regulations that potentially impose restrictions, caps, taxes or other controls on emissions of greenhouse gases.

Sustainable Products & Innovation

• ENERGEN™ product (hydraulic cartridge valve with the capability to convert hydraulic flow into electrical power)
• CVT ecoline™ family (products focused on increasing the energy efficiency of hydraulic systems)

Awards & Recognition

• John Deere Supplier Innovation Award (2020)
• Systems and Components Trophy – Engineers Choice from DLG (2022)